9 May 2018 – Expansión
Despite recording losses of €8 million during the first quarter of the year, the property developer is maintaining its objective of closing the year in profit.
Neinor Homes closed the first quarter of the year flat in financial terms, with sales of €19 million and net losses of €7.9 million, but it is preparing to crank up the pace with the handover of 1,000 homes during the course of the year, primarily during the last six months, which will allow it to close the year in the black.
Moreover, in order to maintain the pace of deliveries from 2022 onwards, the firm has closed agreements to purchase “non-finalist land” (plots without building permits) for €194 million, on which it will be able to build 1,400 homes. “This land has very advanced planning in place and is without risk. The payment will only be made for these plots if all of the licences are granted within the planned timeframe”, explained Neinor.
These purchase agreements follow the €7.5 million invested in three finalist plots acquired during the first quarter of the year for another 120 homes. With these plots, the firm now owns a portfolio of land with capacity for 14,000 homes. In terms of Capex, Neinor is planning to spend €430 million on its construction projects, which implies 1% less than budgeted.
The property developer’s CEO, Juan Velayos (pictured above), says that this year is going to be “significant” in terms of revenues and he adds that, of the 1,000 home handovers scheduled for 2018, 90% have already been pre-sold. “The rest, which are the best units, will be sold once they have been handed over”, he said.
Following the punishment from analysts in February, when Neinor announced a reduction in its delivery targets to 1,000 units in 2018 compared with 1,374 planned initially and to 2,000 in 2019 from 3,000 planned originally, the property developer now wants to reassure the market. It confirmed that the 31 developments that are going to be handed over in 2019 are already underway and have received their licences. “We have very high visibility over our revenues”, added the director. Specifically, Neinor’s order book includes almost 2,500 pre-sold homes, which corresponds to sales of around €828 million.
Velayos said that, with the projects underway, the company is going to reverse the weight of the different businesses and revenues will now be generated by the delivery of homes.
Neinor’s shares (…) ended trading yesterday down by 2.31% to €16 per share.
Original story: Expansión (by Rebeca Arroyo)
Translation: Carmel Drake