Corporación Inmobiliaria Vesta Reports Third Quarter 2022 Earnings Results

MEXICO CITY, Oct. 20, 2022 /PRNewswire/ -- Corporación Inmobiliaria Vesta S.A.B. de C.V., ("Vesta", or the "Company") (BMV: VESTA), one of the leading pure-play industrial real estate companies in Mexico, today announced results for the third quarter ended September 30, 2022. All figures included herein were prepared in accordance with International Financial Reporting Standards (IFRS) and are stated in US dollars unless otherwise noted.

Q3 2022 Highlights

• Vesta continues to benefit from significant rent increases across its portfolio, with in-place rents increasing 11.8% year on year while the vacancy rate has further declined, reaching record high total portfolio occupancies of 96.1%. This is a reflection of meaningful nearshoring and e-commerce growth tail winds.
• Vesta again reported outstanding leasing activity for the 3Q22, reaching 3.8 million sf of GLA of which 1.0 million sf resulted from new leases with best-in-class companies such as Oxxo, Home Depot and DSV, among others. Importantly, leases signed by Home Depot in Tijuana and by DSV in Guadalajara were for buildings still under construction. This trend has continued as Mexico industrial real estate vacancies remain at all-time lows; 3Q22 renewals reached 2.8 million sf with seven year weighted average lease terms and a 6.1% positive spread. Vesta renewed important leases during the quarter including Nestlé, Vesta's largest tenant, which was renewed for a five-year term that matures in December 2028.
• During the quarter Vesta acquired 8.7 acres of land in central Mexico City, further increasing its presence within key metropolitan areas which is directly aligned with the Company's Level 3 Strategy. This exceptional inner-city location is particularly attractive to global logistics and e-commerce companies, with related high returns expected.
• Vesta delivered an additional 169,984 sf in Queretaro and began construction of five new buildings during the third quarter 2022: two in Ciudad Juarez representing 529,389 total sf, two in Guadalajara totaling 735,907 sf and one 81,158 sf expansion in Queretaro with existing client Safran.  Projects under construction reached 3.2 million sf reflecting an estimated US$ 188.9 million investment with a 10.0% return on cost.
• Third quarter financial results reflect strong operational performance with an 11.0% year on year revenue increase to US$ 45.5 million, from US$ 41.0 million in 3Q21. This increase is primarily due to US$ 4.90 million from new revenue-generating contracts and a US$ 2.47 million favorable inflationary impact. 3Q22 NOI and EBITDA margins reached 94.9% and 85.0%, respectively.
• The Company further reinforced its balance sheet during 3Q22, closing a US$ 200 million sustainability-linked revolving credit line with a 160-basis point plus SOFR interest rate including a Green Building Certification target associated with the Company's Gross Leasable Area ("GLA").
• Vesta received LEED certification for its Vesta Park Guadalajara Mercado Libre building and its Vesta Park Puebla PepsiCo building was LEED Silver certified during the third quarter 2022, aligned with the Company's long-term commitment to green buildings as part of its ESG strategy.
• 3Q22 NAV per share increased by 10.6% to US$ 2.79, from US$ 2.53 in 3Q21, also aligned with Vesta's Level 3 Strategy, while pretax FFO increased 18.3% to US$ 26.9 million compared to US$ 22.7 million in 3Q21. 3Q22 pretax FFO per share increased 19.1% to US$ 0.0391, from US$ 0.0328 in 3Q21.

• Net Operating Income (NOI) increased 12.0% to US$ 43.2 million in 3Q22, compared to US$ 38.5 million in 3Q21. The 3Q22 NOI margin was 94.9%, an 88-basis-point increase due to a year-on-year decrease in properties generating rental income costs.
• EBITDA increased 8.0% to US$ 38.7 million in 3Q22, as compared to US$ 34.3 million in 3Q21. 3Q22 EBITDA margin was 85.0%; a 115-basis-point increase due to a higher gross profit year on year.
• 3Q22 pre-tax funds from operations (pre-tax FFO) increased 18.3% to US$ 26.9 million, from US$ 22.7 million for the same period in 2021. Pretax FFO per share was US$ 0.0391 for the third quarter 2022, compared with US$ 0.0328 for the same period in 2021; a 19.1% increase. 3Q22 after tax FFO was US$ 20.4 million, compared to US$ 16.1 million in 3Q21. This increase was due to increased EBITDA and a lower current tax in 3Q22.
• 3Q22 total comprehensive gain was US$ 62.3 million, versus US$ 4.0 million in 2021. This increase was primarily due to an increase in investment property valuation and lower income tax expenses in 3Q22.
• The total value of Vesta's investment property portfolio was US$ 2.58 billion as of September 30, 2022; a 13.9% increase compared to US$ 2.26 billion at the end of December 31, 2021.

For a full version of Corporación Inmobiliaria Vesta Third Quarter 2022 Earnings Release please visit: https://vesta.com.mx/investors/financial_information

CONFERENCE CALL INFORMATION:

Vesta will host a conference call on Friday, October 21, 2022 to discuss these results at 10:00 a.m. Eastern Time / 9:00 a.m. Central Time (Mexico City Time).

To access the call, please dial:
US, toll-free: +1 877-423-9813
International, toll: +1 201-689-8573
Mexico, toll-free: +1 800-522-0034

A replay will be available from 1 p.m. on October 21 until November 4, 2022 and can be accessed by dialing:
US, toll-free: +1 844-512-2921
International, toll: +1 412-317-6671
Replay ID: 13733491

About Vesta

Vesta is a best-in-class, fully integrated real estate company that owns, manages, acquires, sells, develops and re-develops industrial properties in Mexico. As of September 30, 2022, Vesta owned 194 properties located in modern industrial parks in 15 states of Mexico totaling a GLA of 32.3 million ft² (3.00 million m²). The Company has multinational clients, which are focused on industries such as e-commerce/retail, aerospace, automotive, food and beverage, logistics, medical devices, and plastics, among others. For additional information visit: www.vesta.com.mx.

Note on Forward-Looking Statements

This report may contain certain forward-looking statements and information relating to the Company that reflects the current views and/or expectations of the Company and its management with respect to its performance, business and future events. Forward looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and may contain words like "believe," "anticipate," "expect," "envisages," "will likely result," or any other words or phrases of similar meaning. Such statements are subject to a number of risks, uncertainties and assumptions. Some of the factors that may affect outcomes and results include, but are not limited to: (i) national, regional and local economic and political climates; (ii) changes in global financial markets, interest rates and foreign currency exchange rates; (iii) increased or unanticipated competition for our properties; (iv) risks associated with acquisitions, dispositions and development of properties; (v) tax structuring and changes in income tax laws and rates; (vi) availability of financing and capital, the levels of debt that we maintain; (vii) environmental uncertainties, including risks of natural disasters; (viii) risks related to the outbreak and spread of COVID-19 and the measures that governments, agencies, law enforcement and/or health authorities implement to address it; and (ix) those additional factors discussed in reports filed with the Bolsa Mexicana de Valores. We caution you that these important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in this presentation and in oral statements made by authorized officers of the Company. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise except as may be required by law.

SOURCE Corporación Inmobiliaria Vesta, S.A.B. de C.V.