Income Statement Summary
Total Revenue
Total revenue decreased from Ps.1,221 million in 2019 to Ps.1,069 million in 2020, down 12.4%, mainly due to: i) the 12.3% contraction in lease revenue, attributable to the impact of the COVID-19 pandemic, which resulted in the vacating of certain premises and the application of discounts to the most affected tenants; and, ii) the sale of an adjacent property at Sendero Tijuana in 2019 for Ps.22 million.
Operating Costs and Expenses
In 2020, operating costs and expenses totaled Ps.580 million, 22.6% higher compared to Ps.473 million in 2019, mainly explained by the Ps.118 million increase in operating expenses, driven by the combined effect of the capitalization with Promecap Acquisition Company, the listing on the Mexican Stock Exchange and the allowance for doubtful receivables; and, to a lesser extent, the net Ps.12 million investment property costs due to the sale of the adjacent land plot at Sendero Tijuana in 2019.
(millions of Mexican pesos)
(millions of Mexican pesos)
Operating Income
During 2020, the Company recorded an operating loss of Ps.158 million compared to a Ps.1,427 million operating income in 2019, due to the combined effect of lower revenue and higher operating costs and expenses, as well as the recognition of Ps.649 million loss from investment property valuation, compared to a Ps.715 million gain in 2019, arising from the impact of the pandemic on the financial and real estate markets, as this caused a significant revaluation of shopping centers and land plot. Excluding the effect of investment property valuation, operating income was Ps.491 million (-31% vs. Ps.712 million in 2019).
Consolidated Net Income
2020 consolidated net loss was Ps.404 million compared to a net income of Ps.535 million in 2019, as lower net financial expenses and the tax benefit recorded were not enough to offset the operating loss.
(millions of Mexican pesos)
(millions of Mexican pesos)
Key Financial Figures
NOI
NOI (on a cash flow basis) decreased from Ps.1,014 million in 2019 to Ps.687 million in 2020, down 32.2%, in line with the lower revenue (>29.7% YoY or >-Ps.336 million) due to incentives granted to tenants, higher vacancy compared to the previous year, and lower collection, resulting from the COVID-19 pandemic.
Adjusted EBITDA
Adjusted EBITDA amounted to Ps.718 million in 2020, decreasing 14.1% over Ps.836 million in 2019. The decrease is mainly due to the 12.3% contraction in lease revenue and the impact on operating income, which was partially offset by the non-recurring expenses and other non-cash charges, which increased from Ps.33 million in 2019 to Ps.170 million in 2020.
(millions of Mexican pesos)
(millions of Mexican pesos)
Debt
Following the settlement of short-term outstanding credit lines with Banco Invex, Banco Sabadell, and Banco Bancrea, gross debt at year-end 2020 decreased slightly by 0.1%, from Ps. 5,945 million at year-end 2019 to Ps. 5,939 million.
Likewise, net debt decreased to Ps.2,491 million, down 56.1% compared to the Ps.5,681 million recorded in 2019, mainly due the higher cash balance.
| 4Q20 | 4Q19 | % Ch. | |
|---|---|---|---|
| Gross debt | 5,939 | 5,945 | (0.1%) |
| Net debt | 2,491 | 5,681 | (56.1%) |
Net debt is gross debt less cash and cash equivalents (of which 89% is in
U.S. dollars).
The debt of Trust 2715 is not consolidated into Acosta Verde’s Financial
Statements. The Company has a 50% stake; however, the debt belongs
100% to Acosta Verde. It is recognized in the Financial Statements at 50%
due to the funding structure.
Balance Sheet Summary
Cash
As of December 31, 2020, cash reached Ps.3,302 million, growing more than 100% compared to the same period last year, given the capital increase (+Ps.3,725 million, which is equivalent to USD$200 million, at an exchange rate of Ps.18.6245) resulting from the acquisition of 37.98% of the Company’s capital stock by Promecap Acquisition Company, S.A.B. de C.V. in February 2020.
Accounts Receivable
Reflecting the effects of the health contingency on the Company’s collection rate, accounts receivable increased 98.1%, from Ps.36 million at the end of 2019 to Ps.71 million at the end of 2020. In this regard, the allowance for doubtful receivables was Ps.48 million as of December 31, 2020.
(millions of Mexican pesos)
(millions of Mexican pesos)
Construction in Progress
As of December 31, 2020, the balance of construction in progress was Ps.521 million, increasing more than 100% versus Ps.115 million in the same period 2019, on the back of the investments made in the Plaza Sendero Santa Catarina and Plaza Sendero Ensenada projects under development in that year.
Tenant Incentive Accruals
The balance of incentives that were provided to our tenants to help them overcome the challenging environment totaled Ps.120 million at the end of 2020 of which Ps.56 million (46.9%) were short-term and Ps.64 million were long-term (equivalent to 53.1%). It is worth noting that this item was created as of 2020 due the COVID-19 crisis, therefore the balance is nil in 2019.
(millions of Mexican pesos)
Investment Properties
At the end of 2020, the balance of investment properties amounted to Ps.12,757 million, a 4.8% decrease compared to the Ps.13,407 million posted at the end of 2019, derived from the impact of the pandemic on financial and real estate markets, as this caused a significant revaluation of the Company’s shopping centers.
Total Liabilities
As of December 31, 2020, total liabilities amounted to Ps.8,092 million (-7% YoY), where 7% are current liabilities and 93% non-current liabilities (vs. 14% and 86% in 2019).
This increase is explained by: i) the 53% decrease, to Ps.581 million, in current liabilities, mainly as a result of the settlement of a related party obligation for USD$24 million and of credit lines with Invex, Sabadell, and Bancrea; and, ii) the increase of Ps.69 million, or 1% YoY, in non-current liabilities, which totaled Ps.7,511 million, related to the arrangement of new credit facilities and debt reclassifications.
(millions of Mexican pesos)
(millions of Mexican pesos)
Stockholders’ Equity
At the end of December 2020, Stockholders’ Equity totaled Ps.9,613 million, up 48.7% compared to the same period 2019, driven by the capital increase related to the investment made by Promecap Acquisition Company in February 2020. Thus, as of December 31, 2020, the capital structure was comprised of 45.8% liabilities and 54.2% equity, compared to 57.3% liabilities and 42.7% equity at the end of 2019.
(millions of Mexican pesos)