Metrovacesa has posted significant figures since its IPO in terms of revenues, EBITDA and adjusted profit (excluding asset impairment). At year-end 2023, the developer's EBITDA increased 62% year-on-year to €74.2 million. The EBITDA margin reached 12.7%, an increase of 4 percentage points compared to 2022 and reported revenues of €586.5 million, representing an increase of 13% compared to 2022, when it earned €519 million. During this period, 1,675 homes were delivered with an average price of 300,000 euros. Despite the increase in construction costs, the company raised its gross developer margin from 21.2% to 22%.
In terms of land sales, Metrovacesa achieved revenues of 84.1 million euros in 2023, with a positive gross margin of 20%. This reflects higher demand for tertiary land, especially in emerging segments other than offices.
The company experienced a deterioration in its income statement of 65.1 million euros due to asset revaluation, mainly in the tertiary portfolio, which depreciated by 9.6% due to higher interest rates and lower demand for office assets. However, the residential portfolio increased in value by 3.8%. These impairments are of a non-recurring nature and do not affect cash generation, but resulted in a negative net result for the year.
Adjusted profit for 2023, excluding asset write-downs and taxes, was 48.6 million euros, an increase of 25.9% year-on-year. In addition, the NAV per share stood at €13.33, indicating that the shares are trading at a significant discount to the NAV of the assets.
In terms of cash flow generation, Metrovacesa ended the year with €131.6 million in operating cash, within its annual target. By 2024, the company expects cash generation between 100 and 125 million euros. Net debt at the end of the year was €332 million, with a leverage ratio of 13.8%, below the sector average. The cash position reached €232 million at the end of the year.
Housing demand remains strong despite higher mortgage costs
In 2023, demand for new housing remained stable throughout the year. In this period, Metrovacesa ended the year with a pre-sales portfolio of 3,332 homes, representing a future turnover of 1,084 million euros, an increase of 9% compared to the previous year. Throughout 2023, 1,836 homes were sold under reservations and contracts, marking an increase of 11% compared to 2022, excluding homes in the build to rent segment. In the last quarter of 2023, pre-sales increased by 36% compared to the same period last year.
The pre-sales pipeline provides substantial visibility for future financial results, as 82% of the deliveries scheduled for 2024 and 57% of those for 2025 have already been sold. This indicates progress towards the company's target of approximately 2,000 units sold annually in the medium term.
In terms of developments under construction, Metrovacesa commenced construction of 2,078 homes during the year and ended 2023 with a total of 4,517 units under construction or completed. In addition, the total portfolio of units currently being marketed amounts to 6,385, indicating the volume of potential deliveries for the next three years.
Increased land acquisition activity in 2023
The developer increased its investment last year, allocating 90 million euros to the purchase of land for approximately 1,900 homes. These acquisitions were made with the expectation of attractive margins and returns. The company's strategy is focused on expanding its land portfolio in selective locations with high demand for housing and a shortage of land for development.
Notable transactions include the strategic purchase in Los Cerros, where they acquired land for more than 1,000 homes, making them the largest landowner in this new development in southeast Madrid. In addition, finalist land acquisitions were made in Malaga and Granada.
Shareholder return strategy
The company's operational capacity allowed it to distribute a total of 100 million euros in dividends in the last year, including an interim dividend of 50 million euros paid in December 2023. To this amount will be added a proposed dividend to be determined, which will be presented for approval at the next general shareholders' meeting at the end of April and is expected to be paid in the second quarter of this year.
This underlines Metrovacesa's attractiveness to shareholders, highlighting its strong cash generation, dividend distribution and its policy of investing in new land that promises attractive returns in the medium term.
