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METROVACESA: FY2020 RESULTS (ANÁLISIS BANCO SABADELL)

4Q'20 vs. 4Q'19 Results
Sales: € 37.4 M (-38.7% vs. -11.8% expected);
EBITDA: € 2.6 M (€ -16.6 M in FY2019 vs. € 4.78 M expected);
Net Profit: € -81.2 M (€ -4.6 M in FY2019);
FY2020 vs. FY2019 Results
Sales: € 146.1 M (-14.1% vs. -4.4% expected);
EBITDA: € -9.0 M (€ -9.9 M in FY2019 vs. € -6.83 M expected);
Net Profit: € -163.5 M (€ -4.5 M in FY2019 vs. n/a expected);
Poor results both in pre-sales and in deliveries, although the latter came in within the company’s guidance range. The results were also impacted by the non accounting of a land plot in Valdebebas sold in 1Q’20 (the buyer has not complied with the payment calendar), meaning that there have been hardly any land sales on the year, and by an impairment due to a lower asset appraisal (with no impact on cash).
Deliveries totalled 312 units in 4Q’20 standalone (vs. 336 units BS(e)), meaning 601 units on the year totalling € 130 M (+106%). The developer margin came in at 18%, in line with expectations.
The pre-sales figure is what we like the least in these results, only 242 units on the quarter on a standalone basis, clearly below the figures MVC should reach to meet at least 2,000 units/year (>500 units/quarter) and below AEDAS’ levels over the same period (397 units). The company estimates that 80% of the deliveries planned in 2021 are already pre-sold, setting the estimated range between 1,300 and 1,700 units (vs. 1,450 units BS(e)).
Land sales totalled € 16 M (mostly in 4Q standalone). The EBITDA figure is negative because the low number of deliveries is not enough to cover overhead costs.
The asset valuation generates a € -137 M impairment that results in € 163 M losses in FY2020 and a -8% drop in NAV to € 16.48/sh. The share price is trading at a -63% discount vs. that level and thus, despite these weak results we believe it is already factoring in a sufficiently adverse scenario. We reiterate our BUY recommendation. Target Price: € 9.20/sh. (upside 52.57%)