Homex Fourth Quarter and Full Year 2010 Results in Line with Yearly Guidance

CULIACAN, Mexico, Feb. 28, 2011 /PRNewswire/ -- Desarrolladora Homex, S.A.B. de C.V. ("Homex" or "the Company") [NYSE: HXM, BMV: HOMEX] today announced financial results for the Fourth Quarter and Full Year ended on December 31, 2010 (1).

As previously stated, effective January 1, 2010, and in accordance with INIF 14, Homex recognizes its revenues, costs and expenses when the Company has transferred the control of the home to the homebuyer. Homes under construction are now considered as inventory until they are titled.

We have presented 4Q09 and full year 2009 figures on the same basis as 4Q10 and full year 2010, since INIF 14 requires that all periods be presented on a consistent basis, giving effect to the new accounting standard.

Financial Highlights

• Total revenue in the 2010 fourth quarter increased 12.6 percent to Ps. 6.1 billion (US$493 million) from Ps.5.4 billion (US$438 million) for the same period in 2009. For the full year 2010, revenues rose 12.7 percent to Ps.19.7 billion (US$1.6 billion) from Ps.17.5 billion (US$1.4 billion) in 2009.

• In the fourth quarter of 2010, the total number of titled homes increased 11.7 percent when compared to the fourth quarter of 2009, driven by 27.4 percent quarter-over-quarter growth in INFONAVIT's collected units. For the full year 2010, the total volume of titled homes rose 3.9 percent.

• Gross margin for the fourth quarter of 2010 was 31.2 percent compared to 30.3 percent during the fourth quarter of 2009. 4Q10 gross margin, adjusted for the application of MFRS D-6 "Capitalization of Comprehensive Financing Cost," increased 451 bps to 34.5 percent compared to 29.9 percent during the same period of last year, as a result of higher average prices in the affordable entry-level segment and as a result of the increased use of the aluminum mould technology.

• Adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) during the recent quarter was Ps.1,149 million (US$93 million), a 23.5 percent increase from the Ps.930 million (US$75 million) reported in the fourth quarter of 2009, evidenced by year-over-year improved profitability.  For the full year, adjusted EBITDA grew 12.8 percent to Ps.4,154 million (US$335 million) from Ps. 3,681 million (US$297 million).

• Adjusted EBITDA margin increased 168 basis points to 18.8 percent in the fourth quarter of 2010 from 17.2 percent in the fourth quarter of 2009. Adjusted EBITDA margin for the full year 2010 remained without change at 21.1 percent compared to 2009.

(a) Adjusted EBITDA is not a financial measure computed under Mexican Financial Reporting Standards (MFRS). Adjusted EBITDA as derived from our MFRS financial information means MFRS net income, excluding (i) depreciation and amortization; (ii) net comprehensive financing costs ("CFC") (comprised of net interest expense (income), foreign exchange gain or loss, valuation effects of derivative instruments and monetary position gain or loss), including CFC, capitalized to land balances, that is subsequently charged to cost of sales; and (iii) income tax expense and employee statutory profit-sharing expense. See "Adjusted EBITDA" for reconciliation of net income to Adjusted EBITDA for the fourth quarter and full year of 2010 and 2009.

(b) US$ values estimated using an exchange rate of Ps.12.3817 per US$1.00 as of December 31, 2010 Common share/ADR ratio: 6:1

Commenting on fourth quarter and full year results, Gerardo de Nicolas, Chief Executive Officer of Homex, said:

"During 2010, we enjoyed macro-economic stability in Mexico and Brazil, driving consumer confidence and housing demand in both markets.  In this context, Homex was able to deliver solid revenue growth of 12.7 percent and adjusted EBITDA margin of 21.1 percent for the year, both in line with our 2010 guidance, and once again a testament to our execution efficiency.  Importantly, our revenue growth during the year also reflects the contribution from our Infrastructure and International divisions, an important demonstration of our ability to expand our revenue base along opportunistic and affiliated business lines."

"In 2011, we continue to be ideally positioned to grow our business and gain market share in Mexico, where we are committed to maintaining our leadership position.  Our focus will continue to be in our core business, the affordable entry-level market.  At the same time, we will be consolidating our presence in Brazil, a market in which we have a positive outlook for the year, based on lessons learned during 2010 in our pilot project.  Similarly, we are confident that our Tourism division will also benefit from improved economic conditions and credit markets around the world."

"Finally, we will continue to streamline our construction process and focus on managing SG&A and our receivables to reduce our capital requirements, all in a continuing effort to deliver solid, sustainable and profitable growth."

Detailed Financial Reports

The Company produces a detailed earnings report that provides information regarding Operating and Financial results. This detailed information is considered part of this earnings announcement and is available in full with this earnings release via the Company's website at http://www.homex.com.mx/ri/index.htm through email distribution or the Company's filings with the SEC and the CNBV.

(1) Unless otherwise noted, all monetary figures are presented in thousands of Mexican pesos and in accordance with Mexican Financial Reporting Standards (MFRS). Fourth quarter and full year 2010 and 2009 figures are presented without recognizing the effects of inflation per the application of MFRS B-10 "Effects of inflation." The symbols "Ps." and "$" refer to Mexican pesos and "US$" refers to U.S. dollars. U.S. dollar figures in this release are presented only for the convenience of the reader and are estimated, using an exchange rate of Ps12.3817 per US$1.00. Fourth quarter and full year 2010 financial information is unaudited and subject to adjustments.

Percentage change expressed in basis points is provided for the convenience of the reader. Basis points figures may not match, due to rounding.

SOURCE Desarrolladora Homex, S.A. de C.V.