Metrovacesa records revenues of 165.1 million euros and EBITDA of 9.7 million euros in the first half of the year

• The company delivered 572 homes in the first half of the year, although, in line with the planned completion schedule, most deliveries of units in 2023 are expected to be concentrated in the second half of the year.

• The number of pre-sales grew to 483 homes in the second quarter, 14% higher than in the same period of 2022 and 17% higher than in the first quarter of 2023.

• Almost all of the homes planned for 2023 and a very high percentage of those for 2024 have already been pre-sold, which gives a high level of visibility on the volume of deliveries for the coming years.

• The company confirms its annual targets, both in operational terms and in terms of free cash flow generation (between 100 and 150 million euros in 2023).

Madrid, 26 July 2023. Metrovacesa, Spain’s leading real estate developer with more than 100 years of history and 150 projects under development nationwide, today presented its financial results for the first half of 2023. The company has ratified its full year targets, both operational and financial. This confirms the strength of the company’s business and the robustness of its balance sheet.

From a market perspective, housing demand in Spain remains at healthy levels. Despite the increase in mortgage rates in recent months, the positive GDP growth and employment figures are the basic factors behind this performance of the real estate market. All this in a context in which both housing prices and construction costs are increasing at more moderate rates than in previous quarters, in a context of greater stability.

For Jorge Pérez de Leza, CEO of Metrovacesa, “the residential market is holding up better than expected a few months ago, and in fact Metrovacesa’s commercial sales have improved compared to previous quarters. This gives us a lot of confidence to maintain our growth strategy, maintaining the forecasts for launches and the start of construction of new developments for this year. In any case, we are closely monitoring the evolution of both interest rates and job creation rates, key factors for the current situation to be maintained”.

In terms of the income statement, in the first six months of 2023 the developer achieved €165.1 million in revenues, mainly from the residential business. This figure is 33% lower than that achieved in the same period of the previous year, but is in line with the company’s internal targets and business plan, as the bulk of housing deliveries in 2023 are expected to take place during the second half of the year. The developer gross margin rose to 22.2% (1.1 percentage points higher than in H1 2022). The company’s EBITDA amounted to EUR 9.7 million (compared to EUR 23.2 million in the first half of the previous year). The income statement recorded a net loss of EUR 35.3 million, mainly due to accounting adjustments in the valuation of assets. The downward revision of valuations, which are not related to the operating business and which do not entail cash outflows, are mainly for land for tertiary use.

The cash flow generated in the first half of the year was 26.5 million euros, in line with forecasts. Precisely the strong cash flow generation has allowed Metrovacesa to pay its shareholders a total of 472 million euros in dividends from 2019, applying the policy of distributing at least 80% of the gross operating cash flows of each year. So far in 2023, the company has already distributed a dividend of 50 million euros (0.33 euros per share).

In terms of deliveries, Metrovacesa delivered 572 homes in the first six months of the year. These figures are within the company’s internal forecasts, given that, in the current financial year, deliveries will be particularly concentrated in the second half of the year: there are a total of 725 units whose construction has already been completed and which will be deeded in the coming months. The company therefore ratifies its operational targets set at the beginning of the year.

With regard to land sales activity, demand has improved, both for residential and tertiary land. Metrovacesa has a portfolio of land sales amounting to 52 million euros at June 2023, through private contracts, most of which is expected to be formalised before the end of the year and therefore included in the income statement for 2023.

It should be noted that Metrovacesa’s business is also supported by a very solid financial situation. The company’s net debt at 30 June 2023 stood at 301.6 million euros. On the other hand, the company’s leverage ratio (loan to value) stood at 12%, remaining below the reference range set by the developer (between 15% and 20%) and the sector average.

Strong operational visibility

The number of pre-sales in the first half of the year was 908 units, at an average price of €325,000 per home. It is particularly noteworthy that, in the second quarter of the year, pre-sales were 17% higher than in the first quarter of 2023 and 14% higher than in the same period of 2022.

The company’s total pre-sales continue to grow, reaching 1,124 million euros, with a total of 3,507 homes. The number of homes under construction reached 4,109, while the number of units being marketed exceeds 6,750, which represents a potential income of 2,200 million euros.

All these figures ratify the high visibility and predictability of revenues and free cash flow generation for the next three years, and confirm that the company is on track to achieve the objective of delivering around 2,000 units per year in the medium term.