• Total Revenue: $252 million for the full year 2024, a 17.7% increase year-over-year.
• Fourth Quarter Revenue: $65.2 million, a 16.5% increase from the previous year.
• Adjusted NOI Margin: 94.6% for the full year 2024.
• EBITDA Margin: 83.5% for the full year 2024.
• FFO: $160.1 million for the full year 2024, a 25.2% increase from $127.9 million in 2023.
• Fourth Quarter FFO: $41.7 million, up from $32.6 million in the fourth quarter of 2023.
• Portfolio Occupancy: 93.4% total portfolio occupancy in the fourth quarter 2024.
• Cash and Cash Equivalents: $484 million as of December 2024.
• Total Debt: $847 million as of December 2024.
• Net Debt to EBITDA: 3.2x.
• Loan-to-Value: 21.4%.
• Share Repurchase Program: $42.3 million by year-end 2024, representing 1.9% of total outstanding shares.
• Dividend: MXN 0.38 per ordinary share paid on January 15, 2025.

• Warning! GuruFocus has detected 10 Warning Signs with CHCT.

Release Date: February 19, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Corporacion Inmobiliaria Vesta SAB de CV (MEX:VESTA) reported a 17.7% year-over-year increase in total revenue, reaching $252 million, surpassing revised guidance.
• The company achieved a full-year adjusted NOI margin of 94.6% and an EBITDA margin of 83.5%, indicating strong profitability.
• Vesta's FFO increased by 25.2% to $160.1 million in 2024 compared to $127.9 million in 2023.
• The company secured a $545 million global syndicated sustainability-linked credit facility, enhancing financial flexibility.
• Vesta's focus on dollar-denominated contracts resulted in 89% of 2024 revenues being in U.S. dollars, providing a competitive advantage.

Negative Points

• The company anticipates a more muted performance in 2025 due to ongoing industry challenges and uncertainties.
• There were delays in the delivery of certain buildings at the Apodaca project due to upgrades and expansions, impacting near-term timelines.
• The stabilized portfolio occupancy in the North region decreased, with some markets like Tijuana and Ciudad Juarez experiencing a slowdown in demand.
• The company faced higher costs related to rental income properties, including real estate taxes, insurance, and maintenance expenses.
• Vesta's pretax income decreased to $81.2 million from $99.8 million in 2023, primarily due to lower gains on revaluation of investment properties and increased discount rates.

Q & A Highlights

Q: Can you provide insights on the leasing activity for the Apodaca buildings in Monterrey, given the excess capacity in the market? A: Lorenzo Manuel Berho Corona, CEO: Monterrey is a key market for Vesta, and we are fully leased with major clients like Amazon and Walmart. We have three buildings under construction in Apodaca, expected to be completed in the second quarter. Despite minor delays due to upgrades for sustainability, we are confident in leasing these buildings due to their quality and strategic location.

Q: What caused the decrease in stabilized portfolio occupancy in the North region? A: Lorenzo Manuel Berho Corona, CEO: While Monterrey remains stable, Tijuana and Ciudad Juarez have experienced a slowdown in demand, affecting occupancy. However, we are confident in our high-quality buildings and expect demand to pick up, allowing us to lease these properties effectively.

Q: Can you elaborate on the development and tenant interest in the Bajio region, particularly in Queretaro and Guadalajara? A: Lorenzo Manuel Berho Corona, CEO: Guadalajara is attractive for electronics and e-commerce sectors, and we plan to expand our park there. In Queretaro, we see positive demand signs and are fully leased. We are starting new constructions to meet anticipated demand, especially from sectors like aerospace and manufacturing.

Q: How does the current uncertainty affect your Route 2030 strategy and land acquisition plans? A: Lorenzo Manuel Berho Corona, CEO: Our Route 2030 plan accounts for 2025's uncertainties. We remain disciplined in acquiring prime land with high barriers to entry, ensuring long-term value. We are positioned to capitalize on opportunities as the economic cycle evolves.

Q: How do you see the weakness in northern markets impacting your Bajio markets, and how does this affect your development pipeline? A: Lorenzo Manuel Berho Corona, CEO: Each market has unique dynamics. Northern markets focus more on manufacturing and exports, while Bajio is more diverse. We remain disciplined in development, focusing on quality and strategic opportunities, ensuring we are well-positioned across all markets.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.