Consorcio Ara SAB de CV (ARA) Q2 2024 earnings summary

Executive summary

• Revenues in 2Q24 reached P$1.89 billion, up 2.7% year-over-year, with 1,506 homes sold at an average price of P$1,196,200, a 2% increase.

• Housing development contributed 95.5% of total revenues; positive free cash flow of P$375.3 million was generated.

• Affordable Entry-Level and Middle-Income segments saw strong revenue growth, while Residential segment declined due to Acapulco's hurricane impact.

• S&P Global Ratings confirmed long-term issuer rating of 'mxAA-' with a stable outlook, citing low leverage and strong liquidity.

Financial highlights

• 2Q24 operating income was P$209.2 million (margin 11.1%), down 1.7% YoY; net income was P$186.2 million (margin 9.9%), up 3.0%.

• EBITDA for 2Q24 was P$288.9 million (margin 15.3%), up 4.3% YoY.

• Gross profit in 2Q24 was P$502.7 million (margin 26.6%), up 3.2% YoY.

• 1H24 revenues were P$3.48 billion, stable YoY; net income for 1H24 was P$329.9 million, down 3.2%.

• EPS for the twelve months ended June 2024 was P$0.532, a 4.2% decrease YoY.

Outlook and guidance

• Management targets continued revenue growth and positive cash flow for the second half of 2024.

• Market maker contract with BTG Pactual extended for another year to support share liquidity.