EARNINGS RELEASE 1Q19 3 - investor...

1Q19 EARNINGS RELEASE

3

1Q19 Earnings Release

2 / 18 ri.caduinmobiliaria.com

CADU REPORTS ANNUAL GROWTH RATES OF 11.2% AND 8.2% IN REVENUE AND NET INCOME DURING 1Q19

HIGHLIGHTS (OPERATIONAL & FINANCIAL)

1Q19 Consolidated Revenue posted a 11.2% annual growth, reaching MXN 785 million, vs. MXN 705 million in the same period last year

During 1Q19, Net Income totaled MXN 116 million, an 8.2% YoY growth when compared to the MXN 107 million of 1Q18. The Net Margin stood at 14.8%

As of March 31, 2019, ROE climbed 30 bps., reaching 18.7%, compared to the 18.4% of

1Q18

EBITDA increased by 3.9%, from MXN 156 million in 1Q18 to MXN 162 million this quarter. EBITDA Margin attained a 20.7% rate in 1Q19

During 1Q19, we did not record any home sold with subsidy, while 253 titled homes with

subsidies were registered in 1Q18 (18.7% of total homes sold in that period)

The average sale price increased from MXN 477 thousand in 1Q18 to MXN 481 thousand in 1Q19, a 0.9% annual increase

1Q19 sales mix was comprised of 81.9% from Affordable Entry-Level homes, while the remaining 18.1% came from the joint participation of middle-income and residential segments

Cancun, Quintana Roo, Mexico, April 25, 2019. – Corpovael, S.A.B. de C.V. (BMV: CADUA), a leading home builder in the development of affordable entry-level, middle-income and residential homes in Mexico, announced today its results for the first quarter 2019. The figures presented in this report are expressed in nominal Mexican pesos (MXN), are preliminary and non-audited, prepared in accordance with IFRS and current interpretations, and may include minor differences due to rounding.

http://ri.caduinmobiliaria.com/













*Considering 342,022,974 outstanding shares in 1Q19 and 1Q18.

KEY INDICATORS (MXN million)

Indicator 1Q18 1Q19 ∆%

Homes sold (units) 1,351 1,583 17.2% Average Sale Price (thousands) 477 481 0.9%

Home sold revenue 645 762 18.2% Other revenue 61 23 (62.3%) Commercial land plot sales - 2 - Construction Services 61 21 (66.0%) Total Revenue 705 785 11.2% Operating Income 135 135 (0.1%) EBITDA 156 162 3.9% EBITDA Margin (%) 22.2 20.7% (1.5 pp.) Net Income 107 116 8.2% Net Margin (%) 15.2 14.8% (0.4 pp.)

FCFF 76 (94) (>100.0%) Interest Coverage 4.4x 3.1x (1.3x) Total Debt / EBITDA LTM 2.6x 3.0x 0.4x Net Debt / EBITDA LTM 1.5x 2.4x 0.9x Leverage (Total Liabilities/Equity) 0.9x 1.0x 0.1x EPS* (MXN) 0.30 0.33 12.1%

BALANCE SHEET INDICATORS (MXN million)

FINANCIAL INDICATORS

Indicator 1Q18 1Q19 Indicator LTM 1Q18 LTM 1Q19

Cash & Cash Equivalents 1,161 766 ROE 18.4 18.7

Accounts Receivable 433 548 ROA 9.5 9.3

Inventory 5,777 7,317 EBITDA (MXN million) 1,059 1,206

Other Assets 653 1,029 Net Income (MXN mill.) 762 894

Total Assets 8,025 9,660 EPS 2.12 2.44

Bank Debt 1,972 3,036 Working Capital Cycle

(days) 628 772

Local Notes 766 620

Total Debt 2,738 3,656

Other Liabilities 1,141 1,223

Total Liabilities 3,878 4,879

Stockholders’ Equity 4,146 4,780












Message from the CEO

Dear investors:

I am pleased to let you know that we started year 2019 on a stable footing, recording a double-digit growth rate in home sold revenue. During the quarter, we were able to tap into our business model flexibility, focusing efforts to meet the demand surge in affordable entry-level homes at our core market, Quintana Roo. The foregoing allowed us to displace a good portion of the completed inventory in this segment. Furthermore, the highly-dynamic origination of mortgage loans from National Housing Institutes help us to offset the lower volume of units sold in the middle-income homes segment.

In this sense, we maintain a positive outlook, as the Mexican Federal Institute for Workers’ Housing “INFONAVIT” recently announced the launch of a new program aimed at increasing the credit limit granted to its low-income affiliates, thus seeking to bolster the sector, despite the low budget of subsidies exercised as of the date of this report.

1Q19 results post an MXN 762 million home sold revenue, compared to that of MXN 645 million in 1Q18, mainly explained by a higher volume of titled homes in the affordable entry-level segment, whose revenue increased 42.1% YoY. Separately, the average sale price remained in line with 1Q18, increasing from MXN 477 thousand to MXN 481 thousand this quarter, a slight 0.9% annual increase.

EBITDA and Net Income reached MXN 162 million (+3.9% YoY) and MXN 116 million (+8.2% YoY), respectively. EBITDA Margin stood at 20.7% and Net Margin at 14.8%, due to the incremental contribution of the affordable entry-level segment in the sales mix. The Company's ROE was 18.7% as of 1Q19, 0.3 pp. more on an annual basis.

It is relevant to note that during this period we did not record any revenue from homes sold with subsidies, positively compared to 1Q18, when the registered proportion was 18.7%.

Wrapping up, we are optimistic on the implementation of our business model, amid a more favorable backdrop, given the soaring consumer confidence, stable inflation and reference rates, as well as the agile execution observed from the heads of National Housing Institutes, whom we plan to work closely, to continue offering adequate homes, of high added-value, for the benefit of Mexican families.

Finally, I am pleased to inform our investors that we are moving forward with the enhancement of our corporate practices, mainly those related to work environment, for the benefit of our associates, as well as in sustainability, to protect and support the environment and communities where we interact day by day.

Pedro Vaca Elguero,

Chairman & CEO












1Q19 Company’s consolidated revenue was MXN 785 million, increasing 11.2% vs. the MXN 705 million of 1Q18, driven by a higher volume of titled homes, mainly following the strong demand recorded in the Affordable Entry-Level segment in Quintana Roo. 97.2% of the 1Q19 consolidated revenue was originated from homes sold, 0.2% from commercial land plot sales and the remaining 2.6% from construction services.

91%

9%

1Q18

Homes sold Commercial land plot sales

Residential land plot sales Construction services

97.2%

0.2%2.6%

1Q19

Homes sold Commercial land plot sales

Residential land plot sales Construction services

OPERATING RESULTS

Total Revenue (MXN million) 1Q18 1Q19 ∆$ ∆%

Homes sold 645 762 118 18.2%

Other Revenue 61 23 (38) (62.3%)

Commercial land plot Sales

- 2 2 -

Residential land plot Sales

- - - -

Construction services 61 21 (40) (66.0%)

Total 705 785 80 11.2%

CONSOLIDATED REVENUE

11.2%

MXN 705 million MXN 785 million


















477 481

1Q18 1Q19

Average Sale Price (MXN thousands)

The revenue mix by housing segment was as follows:

NOTE: Affordable entry-level homes are those in a price range under MXN 500 thousand, middle-income homes are those within an MXN 500 thousand to MXN 2.5 million range, and residential homes are those exceeding the MXN 2.5 million mark. Within the residential segment, those with prices above the MXN 8 million are classified as “luxury homes”, such as Allure’s.

Homes sold revenue totaled MXN 762 million in 1Q19, a 18.2% annual increase when compared to that of MXN 645 million in 1Q18, driven by a 42.1% expansion in the affordable entry-level homes sold revenue.

68%

32%

1Q18

Affordable Entry-Level Middle-Income

MXN 645 million

82%

18%

1Q19

Affordable Entry-LevelMiddle-Income and Residential

MXN 762 million

Homes Sold Revenue (MXN million) 1Q18 1Q19 ∆$ ∆%

Affordable Entry-Level Homes Cancun 115 171 56 48.9% Playa del Carmen 206 304 97 47.1% Guadalajara 76 75 (1) (1.0%) Mexico Valley 20 7 (13) (62.9%) Aguascalientes 1 2 2 295.2% Ciudad Juarez 22 65 43 197.3% Total Affordable Entry-Level 440 625 185 42.1% Middle-Income Homes Cancun 127 55 (72) (56.8%) Mexico Valley 78 48 (30) (38.5%) Total Middle-Income Homes 205 103 (102) (49.8%)

Residential Homes Cancun - 35 35 - Total Residential Homes - 35 35 - TOTAL 645 762 118 18.2%

Homes Sold Revenue

18.2%

Average Sale Price

0.9%




















During 1Q19, the average sale price reached MXN 481 thousand, vs. MXN 477 thousand in 1Q18, representing an annual increase of 0.9%. The decrease in the average sale price growth trend follows the generation of higher sales in the affordable entry-level segment.

The following table shows the average sale prices by housing segment:

Average Sale Price by Product (MXN thousands) Housing Product 1Q18 1Q19 ∆$ ∆% Affordable Entry-Level 352 408 56 15.8% Middle-Income

2,028 2,187 159 7.8% Residential - 11,541 11,541 - Total 477 481 4 0.9%

Homes and Subsidies (Units)

CADU TOTAL 1Q18 1Q19 ∆ ∆%

With Subsidy 253 0 (253) (100.0%) Without Subsidy 1,098 1,583 485 44.2%

Total 1,351 1,583 232 17.2%

During 1Q19, the number of titled homes with subsidies was nil, a 100% decrease when compared to the 253 homes in 1Q18.

In 1Q19, the proportion of homes sold with subsidies was 0.0%, following the no use of subsidies during the quarter.

401451

477

462

581 698

481

3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19

Average Sale Price (MXN thousands)

253

-

1Q18 1Q19

Homes sold with and without subsidy (units)

18.7%

81.3% 100.0%

1Q18 1Q19

Homes sold with and without subsidy (%)

With Subsidy Without Subsidy

Homes Sold with Subsidies













FINANCIAL PERFORMANCE Income Statement

Revenue and Cost of Sales Breakdown (MXN million)

Concept 1Q18 % 1Q19 %

Homes sold revenue 645 91.4% 762 97.2%

Land plot sales revenue - - 2 0.2%

Construction services 61 8.6% 21 2.6%

Total revenue 705 100.0% 785 100.0%

Cost of homes sold 429 66.5% 517 66.5%

Cost of land plots - - 1 0.0%

Cost of construction services 56 92.7% 20 95.5%

Total Cost of Sales 486 68.8% 537 68.5%

Cost of sales amounted to MXN 537 million in 1Q19, up 10.6% when compared to the MXN 486 million recorded during 1Q18. The cost-to-revenue ratio decreased 0.4 pp., due to the decrease of revenue from construction services, which are featured by their tight margins.

During 1Q19, gross income went up by 12.6% when compared to the MXN 220 million in 1Q18, totaling MXN 247 million.

Selling, General, and Administrative Expenses (SG&A) recorded MXN 112 million, representing 14.3% of the total consolidated revenue, a 2.3 pp. increase when compared to that of 12.0% in 1Q18, due to the fixed component of SG&A and the subpar 1Q19 revenue vs. the LTM quarterly average revenue, as well as the incorporation of new projects.

220 247

1Q18 1Q19

Gross Income (MXN million)

12.6%

12.0% 14.3%

1Q18 1Q19

SG&A / Revenue (%)

Cost of Sales

SG&A

Gross Income

2.3 pp.


















1Q19 EBITDA was MXN 162 million, 3.9% higher than the MXN 156 million recorded in 1Q18. EBITDA margin was 20.7% in 1Q19

Operating income was almost flat vs. 1Q18, reaching MXN 135 million.

In 1Q19, financial expenses totaled MXN 8 million, slightly increasing by 1.0% YoY.

1Q19 Income tax provision was MXN 15 million.

156 162

1Q18 1Q19

EBITDA (MXN million)

3.9%

135 135

1Q18 1Q19

Operating Income (MXN million)

(0.1%)

EBITDA Integration (MXN million)

Concept 1Q18 1Q19 ∆$ ∆%

EARNINGS AFTER TAXES (EAT)IMPUESTOSIMIMPUESTOS

107 116 9 8.2% (+) Current income tax 27 15 (12) (44.2%)

EARNINGS BEFORE TAXES (EBT) 134 131 (3) (2.3%)

(+) Capitalized CFR 18 24 6 33.9%

(+) Non-Capitalized interest 8 8 - 1.0%

(-) Interest income 6 3 (3) (46.6%) (+) Depreciation and amortization 3 3 - (0.2%)

EBITDA 156 162 6 3.9% EBITDA Margin 22.2% 20.7% - (1.5 pp.)

EBITDA

Operating Income

Financial Expenses

Income Tax
















Net income posted an annual increase of 8.2% this quarter, to reach MXN 116 million, from MXN 107 million in 1Q18. Net margin stood at 14.8% in 1Q19.

Net Income and EPS (MXN million)

Concept 1Q18 1Q19 ∆$ ∆% Consolidated Net Income 107 116 9 8.2% Controlling Interest 102 114 12 12.1% Earnings Per Share* (MXN) 0.30 0.33 0.03 12.1%

*Figures in Mexican pesos. Considering 342,022,974 outstanding shares in 1Q19 and 1Q18.

1Q19 Earnings Per Share (EPS), recorded an 12.1% annual increase, reaching MXN 0.33, from MXN 0.30 EPS of the same period last year.

Financial Position

Cash & cash equivalents balance, as of March 31, 2019, was MXN 766 million, comprised of MXN 679 million in available cash and MXN 87 million corresponding to the guarantee fund of our local notes “CADU15”.

CADU's cash funds are primarily invested in high-quality, short-term debt securities.

Accounts Receivable Integration (MXN million)

Concept 1Q18 1Q19 ∆$ ∆%

Homes sold receivables 187 404 217 115.8%

Other 246 144 (102) (41.5%)

Total Clients 433 548 115 26.6%

Accounts Receivable (days) 1Q18 1Q19 ∆ days ∆%

Homes sold receivables 16 33 16 98.2%

Other 183 115 (68) (37.1%)

Total Clients 34 40 6 18.1%

As of March 31, 2019, accounts receivable totaled MXN 548 million (40-day turnover), vs. MXN 433 million in 1Q18 (34-day turnover).

107 116

1Q18 1Q19

Net Income (MXN million)

8.2%

821 779 869 7661,161

783 788 672 766

Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19

Cash & Cash Equivalents (MXN million)

Net Income

Accounts Receivable (A/R)

Cash & Cash Equivalents















As of quarter-end, Working Capital Cycle (WCC) surpassed by 144 days the 628 days recorded in 1Q18, reaching 772 days this quarter, due to the increase in inventory under development & completed, as well as the development of middle-income and residential projects, which involve longer payback periods.

Inventory Integration (MXN million)

Concept 1Q18 1Q19 ∆%

Land Bank 1,865 2,099 12.5% Work in Progress 3,718 4,993 34.3%

Capitalized Interest 194 225 16.0%

Total 5,777 7,317 26.6%

Inventory balance increased MXN 1,540 million YoY (+26.6%), achieving MXN 7,317 million as of March 31, 2019.

As of quarter-end, the inventory balance was mainly comprised by land bank (recorded at acquisition cost) for MXN 2,099 million (up 12.5% vs. the MXN 1,865 million at the end of March 2018), and Work in Progress & Completed Homes value for MXN 4,993 million, increasing 34.3% when compared to the MXN 3,718 million in 1Q18.

As of March 31, 2019, Total Debt was MXN 3,656 million, up 33.6% when compared to the MXN 2,738 million recorded in the same period 2018.

Bank Loans (MXN million)

Concept 1Q18 1Q19 ∆$ ∆%

Bridge loans 1,589 2,059 470 29.6%

Land Bank - 14 14 -

Working capital 383 963 580 151.5%

Financial leases 1 1 0.3 65.5%

Total 1,972 3,036

1,064 54.0%

34

648

39 15

628

39

767

34 14

758

40

785

29 24

772

Receivables (days) Inventory (days) Suppliers (days) Clients' advancepayments (days)

WCC

Working Capital Cycle (days)

1Q18 4Q18 1Q19

Debt

Working Capital Cycle (WCC)

Inventory















The bank liabilities posted an increase of MXN 1,064 million, attaining MXN 3,036 million in 1Q19, compared to the MXN 1,972 million of 1Q18. In this sense, loans for working capital grew by 151.5% YoY, to MXN 963 million, while bridge loans for construction activities amounted to MXN 2,059 million in the 1Q19 (+29.6% YoY). The debt growth mainly derives from the higher volume of inventory under development & completed, as well as the Company’s larger operational scale.

Debt Securities – Local Notes (MXN million)

Concept 1Q18 1Q19 ∆$ ∆% CADU 15 277 120 (157) (56.6%) CADU 18 489 500 11 2.2%

Total 766 620 (146) (19.0%)

Total Debt* 2,738 3,656 919 33.6% *100% of the Company’s debt is denominated in Mexican pesos as of March 31, 2019.

At the end of 1Q19, the Company’s debt securities balance amounted to MXN 620 million, a decrease of 19.0% when compared to the MXN 766 million of the 1Q18, follow the amortization of MXN 157 million of the Local Notes "CADU 15" during the last twelve months.

On a quarter-over-quarter basis, the Company’s debt securities balance decreased 6.1%, following the MXN 40 million amortization in “CADU 15” remaining balance this quarter.

As of March 31, 2019, CADU’s credit rating granted by HR Ratings and Verum was “HR A-”and “A-/M”, respectively. Regarding the Company’s Notes, for “CADU 15”, Fitch Ratings and HR Ratings, assigned credit rates of “A (mex)” and “HR A”, respectively; while for “CADU 18”, Verum and HR Ratings assigned rates of “A-/M” and “HR A-”, respectively.

It is important to note that on April the 12th we announced the issuing of our Local Notes “CADU 19”, for MXN 500 million, whose proceeds will be deployed in working capital and short-term debt refinancing.

Leverage and Interest Coverage Ratios (times)

Concept 1Q18 1Q19

Gross Debt to EBITDA 2.6 3.0

Net Debt to EBITDA 1.5 2.4

Total Liabilities / Equity 0.9 1.0

EBITDA / Interest Paid 4.4 3.1

Gross Debt / EBITDA ratio stood at 3.0x, increasing 0.4X when compared to 1Q18. Moreover, Net Debt / EBITDA ratio increased to 2.4 times in 1Q19, from 1.5x in 1Q18.

As of March 31, 2019, interest coverage ratio (EBITDA / Interest Paid), was 3.1 times, from 4.4 times in 1Q18, down by 1.3 times.

Finally, the weighted average cost of debt was 11.65% (TIIE + 3.14 pp. / not considering commissions). It is worth noting that 100% of our debt is subscribed at a floating rate.












Regarding the Company’s debt covenants of Local Notes with ticker symbols “CADU 15” and “CADU 18”, CADU is currently in full compliance. These covenants are listed below:

That the Company’s LTM Consolidated Revenue does not show a decrease equal or greater than 30% when compared to the Consolidated Revenue recorded in the same period last year

o LTM 1Q19 Consolidated Revenue increased 7.2% when compared to the same period last year

That the Company’s Total Liabilities / Shareholders’ Equity ratio does not exceed the 3.0 times mark

o As of March 31, 2019, Total Liabilities /Shareholders’ Equity ratio stood at 1.0x

That the Company’s Net Debt / LTM EBITDA ratio will not be greater than 3.0 times o As of March 31, 2019, Net Debt / LTM EBITDA ratio was 2.4x

That the Company’s Interest Coverage ratio (LTM EBITDA divided by interest paid over the last twelve months) will not be less than 2.5 times

o As of March 31, 2019, Interest Coverage ratio stood at 3.1x

Debt Maturity Profile as of March 31, 2019 (MXN million)

Concept Up to 1 years Up to 2 years Up to 3 years Up to 4 years Up to 5 years Total

Bank Loans 436 322 1,092 1,022 14 3,036

CADU 15 120 - - - - 120

CADU 18 - - 171 171 - 500

Total 556 322 1,263 1,194 14 3,656

% Total 15.2% 8.8% 34.5% 32.6% 0.4% 100.0%

In relation to the Company’s debt maturity profile, 15.2% matures in the remainder of the year, 8.8% in 1Q20, 34.5% before 2 years, 32.6% in 3 years, 8.4% in 4 years and 0.4% in 5 years. The Company does not have any debt contracted in foreign currency.

The Stockholders’ Equity, as of March 31, 2019, totaled MXN 4,780 million. At the end of 1Q19, the Company’s capital structure was comprised of 50.5% liabilities and 49.5% equity, while at the end of 1Q18 was comprised of 48.3% liabilities and 51.7% equity. The leverage ratio (Total liabilities / Stockholders’ Equity) slightly increased to 1.0 times in 1Q19, from 0.9 times in 1Q18.

At the end of 1Q19, Stockholders’ Equity was MXN 634 million higher than that recorded in the same period of 2018. Separately, the Return on Equity (ROE) recorded an increase of 30 bps., going from 18.4% in 1Q18 to 18.7% this quarter.

4,1464,780

Stockholder´s Equity (MXN million)

Mar-18 Mar-19

15.3%

Stockholders’ Equity













158

-9

7633

-103-180

-94

Free Cash Flow (MXN million)

Cash Flow

Cash Flow Integration (MXN million)

Concept 1Q18 1Q19 ∆%

Earnings before taxes (EBT) 134 131 (2.3%) Investment activities (3) 0 (93.2%) Financing activities 18 24 33.9% Cash flow before taxes 149 155 4.0% Cash flow generated from operating activities (76) (252) >100.0% Net cash flow from operating Activities 73 (97) (>100.0%) Net cash flow from investment Activities 3 3 6.9% Net cash flow from financing Activities 319 186 (41.8%) Δ Cash and cash equivalents 395 92 (76.7%) Cash and equivalents – beginning of period 766 674 (12.0%) Cash and equivalents – end of Period 1,161 766 (34.0%)

Free Cash Flow to Firm 76 (94) (>100.0%)

1Q19 Free Cash Flow was negative for MXN 94 million, in line with the investments made in Work in Progress & Completed Homes inventory along the quarter.

************************** Contingency

The figures herein contained could be subject to change, as the opinion of the Company’s External Auditor for the year ended December 31, 2018 is not yet available, as the proper application of the International Financial Reporting Standard IFRS 15 "Revenue from Contracts with Customers" remains under analysis.

This analysis is limited to determine the recognition date of revenue generated from the new development "Allure", in Cancun, Quintana Roo.

Recent Developments

On April 12, 2019, was announced the issuance of Local Notes (CEBUREs – Certificados Bursatiles) under ticker symbol “CADU 19", for MXN 500 million, at a 5-year term, bearing an interest rate of TIIE28 + 2.9 percentage points. The raised proceeds will be mainly used for investments in project development and short-term debt refinancing.

Cash Variations

3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19

76

-94FLEF

Accumulated Free Cash Flow as of March 31, 2019 (MXN million)

Acummulated mar-18 Acummulated mar-19

















On April 12, 2019, Fith Ratings reaffirmed its long-term credit rating on local scale of BBB+(mex), with stable outlook, for Corpovael, S.A.B. de C.V. (Corpovael). Furthermore, upgraded the credit rating for the issuance of Local Notes (CEBUREs – Certificados Bursatiles) with ticker symbol “CADU 15" to A+(mex), from A(mex).

On April 12, 2019, the announcement to the celebration of the Ordinary General Shareholders Meeting of CADU was made (scheduled to be held on April the 29th, 2019).

On March 15, 2019, HR Ratings assigned the credit rating on local scale of "HR A-" with stable outlook to Local Notes (CEBUREs – Certificados Bursatiles) with ticker symbol “CADU 19". While, Verum assigned a credit rating of 'A-/M' to this issuance, with stable outlook.

Analyst Coverage

Given that Corpovael, S.A.B. de C.V. ("CADU") has issued securities under the regulations of the Mexican Exchange Internal Bylaws, it informs that the financial institutions that provide analyst coverage over CADU’s stock are: Actinver Casa de Bolsa, BBVA Bancomer and Punto CB. For more information, please visit http://ri.caduinmobiliaria.com.

About CADU Corpovael, S.A.B. de C.V. “CADU” (BMV: CADUA) is a leading homebuilder in the development of affordable entry-level, middle-income, and residential homes in Mexico. CADU has more than a decade of experience in the housing sector where it has developed a successful business model by seeking sustained, high profitability. Its competitive advantage is based on an efficient and vertically integrated structure (developing activities of land acquisition, urbanization, building, and commercialization) in markets that have been identified as having a solid demand for housing. It primarily operates in Quintana Roo, Mexico Valley, and Jalisco.

Forward-looking statements

1Q19 Conference Call

Information presented by the Company may contain forward-looking statements about future events and/or financial results. The reader should understand that the results obtained may differ from the projections contained in this document, as past results in no way offer any guarantee of future performance. For this reason, the Company assumes no responsibility for any indirect factors or elements beyond its control that might occur inside Mexico or abroad and which might affect the outcome of these projections.















Corpovael, S.A.B de C.V. and Subsidiaries Consolidated Statement of Financial Position

As of March 31, 2019 and 2018 (MXN thousands)

Mar-31 Mar-31 ∆%

2018 2019

Assets

Current Assets: Cash and cash equivalents $1,001,007 $679,361 (32.1%)

"CADU15" reserve fund 160,051 86,893 (45.7%)

Accounts receivable (Net) 433,299 548,413 26.6%

Other accounts receivable (Net) 285,567 567,531 98.7% Inventory 5,777,498 7,316,944 26.6%

Other Current Assets

Others 300,348 373,697 24.4%

Non-current Assets:

Property, plant and equipment (Net) 66,760 86,989 30.3%

Otros activos no circulantes -

- - Total Assets $8,024,630 $9,659,828 20.4%

Liabilities and Stockholders’ Equity

Current Liabilities

Bank loans 443,662 801,819 80.7%

Debt Securities 149,781 160,000 6.8%

Accounts payable 343,727 266,748 (22.4%)

Taxes payable 34,929 3,750 (89.3%)

Other current liabilities 151,209 278,349 84.1%

Non-current Liabilities

Bank loans 1,528,340 2,234,644 46.2%

Debt Securities 616,093 460,000 (25.3%)

Deferred taxes 610,694 674,114 10.4%

Total Liabilities $3,878,436

$4,879,424

25.8%

Stockholders’ Equity

Capital stock 171,011 171,011 -

Retained earnings 3,915,503 4,471,664 14.2%

Controlling interest 4,086,514 4,642,675 13.6%

Non-controlling interest 59,680 137,729 130.8%

Total Stockholders’ Equity 4,146,194

4,780,404 15.3%

Total Liabilities and Stockholders’ Equity $8,024,630 $9,659,828 20.4%

Financial Statements













Corpovael, S.A.B de C.V. and Subsidiaries

Statement of Consolidated Comprehensive Income

(MXN thousands)

1Q18 %/Rev. 1Q19 %/Rev. ∆%

Revenue:

Homes sold $644,563 91.4% $762,179 97.2% 18.2%

Land plot sales - - 1,655 0.2% -

Construction services 60,890 8.6% 20,693 2.6% (66.0%)

705,453 100.0% 784,527 100.0% 11.2%

Costs and expenses:

Cost of sales (485,808) 68.9% (537,313) 68.5% 10.6%

Gross income 219,645 31.1% 247,214 31.5% 12.6%

General expenses (84,458) 12.0% (112,103) 14.3% 32.7%

Operating income 135,187 19.2% 135,110 17.2% (0.1%)

Financial income 6,240 3,331 (46.6%)

Financial expenses (7,536) (7,608) 1.0%

(1,296) (4,277) 229.8%

Earnings before taxes 133,891 19.0% 130,834 16.7% (2.3%)

Income taxes:

Current (26,842) 3.8% (14,969) 1.9% (44.2%)

Net and Comprehensive Consolidated Income

$107,049 15.2% $115,865 14.8% 8.2%

Controlling interests 102,095 114,420 12.1%

Non-controlling interests 4,954 1,445 (70.8%)

Net and Comprehensive Consolidated Income

107,049 15.2% 115,865 14.8% 8.2%

Net Income (Loss) per Share*

0.30 0.33 12.1%

* Considering 342,022,974 outstanding shares in 1Q19 and 1Q18.












Corpovael, S.A.B de C.V. and Subsidiaries

Statement of Consolidated Cash Flow

(MXN thousands)

1Q18 1Q19

Operating Activities Earnings before taxes 133,890 130,834 Items Related to Investment Activities Depreciation and Amortization 3,123 3,118 Interest income (6,240) (3,331) Capitalized interest recognized in cost of sales 18,075 24,196

Cash Flow from Earnings Before Taxes 148,848 154,816

Cash Flows from or used in Operating Activities Decrease (increase) in accounts receivable 32,413 (5,126) Decrease (increase) in inventory (185,338) (237,231) Decrease (increase) in other accounts receivable and other current assets

155,364 (51,451)

Increase (decrease) in accounts payable (74,908)

(76,243) Increase (decrease) in other liabilities (26,467) 83,116 Income taxes paid or reimbursed 23,179

35,006

Net Cash Flows from or used in Operating Activities 73,091 (97,114)

Investment activities Adquisición de Acciones - Investment in property, plant and equipment (3,123) - Interest received 6,240 3,331

Net Cash Flows from or used in Investment Activities 3,117 3,331

Financing activities Bank loans 892,107 850,975 Debt certificates - - Amortization of bank loans (460,169) (525,318) Amortization of debt certificates - (40,000) Dividends paid - - Interest paid (67,806) (100,000) Other ítems (45,273) -

Net Cash Flows from or used in Financing Activities 318,859 185,657

Increase (decrease) in Cash and Cash Equivalents 395,067 91,874

Cash and Cash Equivalents at Beginning of the Period 766,091 674,380 Cash and Cash Equivalents at End of the Period 1,161,158 766,254

Note on Financial Statements: in addition to the contents of this report, for better analysis we recommend referring to the details noted on financial statements found at http://ri.caduinmobiliaria.com.











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