Homex Announces 2010 Guidance
CULIACAN, Mexico, Dec. 14 /PRNewswire-FirstCall/ -- Desarrolladora Homex, S.A.B. de C.V. (Homex or the Company) (NYSE: HXM, BMV:HOMEX) today announced its guidance for 2010. For the coming year, the Company expects to achieve sound revenue growth in the range of 12 to 14 percent and EBITDA margin(1) in the range of 21 to 22 percent. Revenue and EBITDA guidance for 2010 are stated considering the application of INIF 14. Homex' expectations are supported by its leadership in the homebuilding industry and expertise in the affordable entry-level and low middle income segments, where demand continues to outpace the supply of new homes available for purchase. At the same time, Mexican mortgage financing dynamics continue to be favorable, particularly for the lower income segment, supported by the strength and resources of INFONAVIT and FOVISSSTE, dedicated mortgage financing institutions.
The Company said that, effective January 1, 2010, Homex will no longer recognize its revenues, costs and expenses based on the percentage-of-completion method, and will begin to recognize them based on applicable rules under INIF 14 where revenues, costs and expenses are to be recognized when the Company has transferred the control to the homebuyer. Homes under construction will then be considered as inventory until they are titled. Homex estimates that 2009 revenues would have a variation up to 15 percent under the INIF 14 accounting rule and shareholders equity a variation between 18-20 percent.
During 2010, Homex expects challenging macroeconomic conditions to prevail across Mexico; nonetheless, the Mexican economy has started to show its first signs of a recovery, as GDP growth for the third quarter of the year expanded quarter-over-quarter a seasonally adjusted 2.9 percent. Moreover, economic outlook consensus for Mexico points to a GDP growth of approximately 2 to 5 percent for 2010 versus a 7.5 percent GDP contraction expected for 2009. Inflation has continued to ease, reaching its lowest level for the year at 4.5 percent as of November 2009, thus reducing pressure in the purchasing power of Mexican families.
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