Metrovacesa increases its operating results in 2023, with 13% growth in revenue and 62% growth in EBITDA

• In 2023, revenues totalled 586.5 million euros (13% more than in the previous year), with an improvement in the developer gross margin to 22% of sales, despite the volatility of construction costs. 

• EBITDA reached 74.2 million euros (+62%), the highest figure since its IPO. On the other hand, adjusted profit (excluding depreciation in the value of assets) was positive by 48.6 million euros, +26% compared to 2022. 

• The strength of the demand for new-build housing is confirmed, with a 9% growth in the pre-sales backlog to  1,084 million euros and 3,332 homes. This provides great visibility for the coming years, with 82% of the deliveries planned for 2024 and 57% for 2025 already sold.  

• The company has been much more active in land rotation in 2023. On the one hand, selling land worth 84.1 million euros, with a margin of 20%. On the other hand, with investment in land purchases to the value of 90 million euros.  

• Metrovacesa has completed a very good year in 2023, meeting its objectives and plans, despite a volatile environment due to interest rates and inflation. Our strong cash generation profile is confirmed, combined with selective investments in land acquisition, which reinforce our business model as a long-term sustainable developer,” said Jorge Pérez de Leza, CEO of the developer. 

Madrid, 28 February 2024. Metrovacesa, Spain’s leading real estate developer with more than 100 years of history and 141 projects under development nationwide, today presented its financial results for 2023. The company has obtained the best figures since its IPO in key variables such as revenues, EBITDA and adjusted profit (excluding asset impairment).  

At the end of 2023, the company’s EBITDA rose 62% compared to the previous year to 74.2 million euros. The EBITDA margin stood at 12.7%, an increase of 4 percentage points compared to 2022.  

These figures reflect the fact that the company recorded revenues of 586.5 million euros at 31 December 2023, 13% more than in 2022. The keys to 1,675 homes were handed over during the year, with an average price of 300,000 euros. Despite the context of construction cost inflation in the last two years, the developer has managed to increase the gross developer margin from 21.2% to 22.0%. 

 In terms of land sales, the company recorded revenues in 2023 of 84.1 million euros, with a positive gross margin of 20%. This figure shows a revitalisation of demand for commercial land, especially in emerging segments other than offices, such as the sale of a student residence project in Oria and another land in Madrid for the development of a hotel, also in Madrid.  

The income statement recorded an impairment of 65.1 million euros, as a result of the latest asset valuation, mainly due to the commercial portfolio, which declined in value by 9.6% due to the rise in interest rates and the lower demand for office assets. On the other hand, the residential portfolio recorded a revaluation of 3.8% on a like-for-like basis. This impairment item is of a non-recurring nature and has no impact on cash generation, but makes the net result for the year negative. 

Adjusted profit (excluding asset impairment and taxes) for FY2023 was positive at 48.6 million euros, up 25.9% year-on-year. In addition, the NAV per share was 13.33 euros, suggesting that the shares are trading at a deep discount to the NAV of the assets.  

In relation to cash flow generation, Metrovacesa ended the year with 131.6 million euros of operating cash flow generated, meeting its annual target range. For 2024, the developer expects to obtain a similar cash generation, in a range between 100 and 125 million euros.  

Metrovacesa ended the year with net debt of 332 million euros, representing a loan-to-value ratio of 13.8%, which remains below the sector average. Likewise, the cash position reached 232 million euros at the end of the year. 

Housing demand remains firm despite higher mortgage costs  

During 2023, demand for newly-built housing remained firm throughout the year. In this context, Metrovacesa closed 2023 with a pre-sales backlog of 3,332 homes representing a future turnover of 1,084 million euros, up 9% on the previous year. During 2023, 1,836 homes were sold in reservations and contracts, representing growth of 11% compared to 2022, excluding homes destined for the build-to-rent segment. In the fourth quarter of 2023, pre-sales grew by 36% compared to the same period last year.  

The pre-sales backlog provides great visibility for the income statement in the coming years, with 82% of the expected deliveries in 2024 and 57% of the deliveries in 2025 already sold. It is thus moving closer to its medium-term target of around 2,000 units per year. 

 With regard to developments under construction, Metrovacesa started work on 2,078 homes during the year, and closed 2023 with a cumulative total of 4,517 units under construction or completed. In addition, the developer’s current total portfolio under commercialization amounts to 6,385 units, which represents the potential for deliveries over the next three years. 

 Increased land acquisition in 2023  

During 2023, the developer increased its investment activity, allocating 90 million euros to the acquisition of land for close to 1,900 homes, with expectations of very attractive margins and returns. The company’s strategy is to complement its existing land portfolio in selective locations where there is a strong demand for housing and a shortage of land for residential development.  

Some examples of operations were the strategic acquisition in Los Cerros, a land for more than 1,000 homes, making it the largest owner in this new emerging area in the southeast of Madrid, or the acquisition of fully permitted land in Malaga and Granada. 

Attractive shareholder return strategy 

The company’s operational strength enabled it to pay out a total of 100 million euros in dividends last year, including the interim dividend of 50 million euros, paid in December 2023. To this figure will be added the proposed dividend, still to be determined, which will be submitted for approval at the next general shareholders’ meeting at the end of April and which is expected to be payable in the second quarter of this year.     

Thus, Metrovacesa’s attractiveness to its shareholders should be highlighted thanks to the combination of its strong cash flow generation, its dividends and its policy of investing in new land with interesting medium-term yields.