METROVACESA: 1Q’20 RESULTS (ANÃLISIS BANCO SABADELL)
1Q'20 vs. 1Q'19 ResultsSales: € 81.4 M (+181.7% vs. +182.3% BS(e));
EBITDA: € -2.7 M (vs. €-2.5 M BS(e));
Net Profit: € -6.2 M (€ -4.6 M in 1Q'19 vs. € -3.59 M BS(e));
The 1Q’20 results (released this morning) are in line with what we expected, whereas the presale data was slightly weaker. The sharp sales growth is due to the company’s ramp-up and also includes land sales worth € 49 M. Home sales, which were mostly deliveries originally scheduled for 2019 that saw delays, came at a gross margin of 16% (below the 18% recorded in 2019).
The presale data showed 263 units (vs. 407 in 4Q standalone), with good months of January and February, but clearly hit by Covid-19 in March. LTV as of the end of the quarter was 3% (in line).
The LTV ratio as of the end of the quarter was 3% (in line with expectations). On the quarter, cash generation reached € 25 M (reflecting the land sales, which hardly add any margin but plenty of cash, and the home deliveries).
We do not expect a significant market impact. The pre-sales figure is below the necessary level to meet our medium-term expectations (263 units vs. 500-600 units on a quarterly basis), although this is not a surprise, as March was hit by the health crisis.
We believe that current levels already price in a very negative scenario, trading at a 71% discount to NAV’19 for a company practically without debt, but the truth is that with the land market at a standstill and with clearly bearish home sales prospects, we do not see drivers in the share price in the short and medium-term. BUY. T.P. Under Revision.
Metrovacesa SA, formerly Metrovacesa Suelo y Promocion SA, is a Spain-based real estate developer. The Company specializes in construction and sale of sustainable housing, both single-family and multi-family residential properties. Its activities also include promotion, urbanization and parceling of real estate in general, as well as real estate management for own benefit or on behalf of third parties. Its asset portfolio includes more than 6 million square meters of building land across Spain, as well as already developed properties in cities, such as Malaga, Almeria, Cordoba, Barcelona and Madrid, among others.
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