Corporación Inmobiliaria Vesta (VESTA) Q3 2023 earnings summary

Executive summary

• Q3 revenue rose 23.9% YoY to $56.4M, supported by leasing and inflation adjustments; Adjusted NOI and EBITDA margins were 92.1% and 80.3%, respectively.

• Portfolio GLA exceeded 40M sf including assets under development; stabilized occupancy reached 97.3%, up from 96.6% in Q3 2022.

Financial highlights

• Q3 rental income was $56.4M, up 23.9% YoY; nine-month revenue reached $158.52M, up 21.4%.

• Q3 Adjusted NOI rose 20.4% to $52.0M; Adjusted EBITDA increased 17.1% to $45.3M.

• Q3 net profit was $76.22M versus $61.97M; total comprehensive income reached $78.98M versus $62.26M, aided by property revaluation gains.

• Nine-month net profit was $202.81M versus $164.93M; revenue grew 20.6% to $157.56M and Adjusted EBITDA increased 17.7% to $130.10M.

• Vesta FFO increased 26.0% to $33.89M; FFO attributable to common shares fell to $2.32M from $20.36M, reflecting higher exchange-rate-related current tax.

Outlook and guidance

• FY 2023 revenue growth guidance was raised to 19–20% from 17–18%; Adjusted NOI margin guidance was lowered to 92.5% from 93.0%, and Adjusted EBITDA margin to 81.5% from 82.0%.

• Management expected a strong finish to 2023 from leasing and renewals, while selectively pursuing construction starts and potential asset sales.