Corporacion Geo, S.A. de C.V.

Corporacion Geo, S.A. de C.V. Announces Quarterly Report 3Q04

    Mexico City (ots/PRNewswire) - Corporacion Geo, S.A. de C.V. (OTC Bulletin Board: CVGFY) (BMV: GEOB; CORPGEO MX, ADR Level One CUSIP: 21986V204), the leading homebuilder in Mexico and Latin America, today reported results for the third quarter of 2004. Strong revenues, double-digit growth reported for each line of the income statement, margin expansion, combined with a new historical accounts receivable level, quarterly positive free cash flow generation, as well as net debt reduction are the key points to notice.

    Luis Orvananos, Founder and Chairman of Corporacion Geo, stated, "At Geo, we are always totally focused on our clients' satisfaction, a strategy that was recognized at the National Housing Awards where Geo received the most awards for the fourth consecutive year. This strategy has also allowed us to achieve our growth and profitability targets for the thirteenth consecutive quarter. We feel very committed to the development of the Mexican home building industry, and in that way, we will keep working, quarter-by-quarter, for the benefit of both our clients and stockholders. We are sure that 2005 will be another great year for Geo, our clients and our investors."

    For the 13th consecutive quarter in a row, 3Q2004 operating results observed solid increases in all lines of the P&L and a more solid Balance Sheet. Units sold grew 14.1%, totaling 8,600 homes sold during the quarter, while Revenues grew 20.1% year-over-year, reaching $2,063.9 million pesos. In  addition, Gross Profit increased by 20.6% with a Gross Margin of 26.89% compared to 26.78% in 3Q2003. Operating Profit presented an increase of 22.0% with an Operating Margin of 17.0% versus 16.8% in 3Q2003.

    As well, EBITDA showed an increase of 24.3% in comparison to 3Q2003 with a margin of 22.9% for this period compared to 22.1% in 3Q2003. When comparing year-over-year, Net Profit grew by 40.4% totaling $195.9 million pesos,  compared to $139.5 million pesos in 3Q2003, with a Net Margin of 9.5% in  3Q2004.

    In regards to Financial Structure, the Free Cash Flow generation presented an improvement of $14.2 million pesos over last year, having passed from $-148.0 million pesos in 2003 to $-133.8 million pesos in September of  this year. It is important to note that the quarterly free cash flow  generation in 3Q2004 totaled $180.9 million pesos, an increase of 79.3%  compared to $100.9 million pesos in the same quarter of last year. With  positive free cash flow generation one of the Company's main drivers, these  results show the clear FCF trend, targeted at meeting end-of-year goals.

    As a result of the investment principally made in work in process in order to assure not only this year's production, but also next year's, the level of Inventories of the third quarter presented an increase of $1,064.0 million pesos compared to September 2003.

    As a result of implementation of strategies to improve the Company's management of Working Capital, the Accounts Receivable to Sales ratio reached a new historical best of 41.9% compared to the 45.9% for the third quarter of 2003.

    In the same manner, total Financial Liabilities presented an increase of 23.8% compared to the 3Q2003 standing at $ 2,766.2 million pesos, and also showed a decrease of -9.3% equivalent to $283.8 million pesos compared to 2Q04. The level of Cash and Cash Equivalents showed an increase of 98.9% when compared to the third quarter of 2003, from $645.4 million pesos to $1,283.4 million pesos.

    Lastly, Net Debt presented an important decrease of 6.7% standing at $1,482.8 million pesos versus $1,589.1 million pesos in 3Q2003, and quarter-by-quarter presented an important decrease of 10.8% moving from $1,662.38 million pesos in 2Q04 to $1,482.8 million pesos this quarter, while  the Net Debt to Capitalization ratio observed a decrease over 3Q2003, moving  from 33.4% to 28.8% in 3Q2004. Finally, the debt risk profile significantly improved during the quarter, especially considering the fact that US dollar debt exposure is less than 3.3% of total financial liabilities, the composition of the debt with 70.0% short term and 30.0% long term, and the improvement in the Interest Coverage, moving from 2.73 in 3Q2003 to 2.92 in 3Q2004.

    It is important to mention the notable increase in the Return on Equity indicator, moving from 15.9% to 21.2% in 3Q2004.

    A detailed, public and complementary version of the earnings release is available for all the investments community on our web site. Visit us at HTTP://WWW.CASASGEO.COM.

    This press release contains forward-looking statements regarding the Company's results and prospects. Actual results could differ materially from these statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

      Contact and Additional Information:
      Jorge Perez
      Director of Finance and Capital Markets
      Corporacion Geo
      Ph. +(52) 55-5480-5071
      Fax +(52) 55-5554-6064
      Ricardo Maiselson / Kenia Vargas / Ma. Elena Gallina
      Investor Relations
      Corporacion Geo
      Ph. +(52) 55-5480-5078
      Fax +(52) 55-5554-6064

    Web site:

ots Originaltext: Corporacion Geo, S.A. de C.V.
Im Internet recherchierbar:

Jorge Perez, Director of Finance and Capital Markets,
+011-52-55-5480-5071, or fax, +011-52-55-5554-6064, or, or Ricardo Maiselson, or Kenia Vargas, or Ma.
Elena Gallina, Investor Relations, +011-52-55-5480-5078, or fax,
+011-52-55-5554-6064, or, all of Corporacion Geo.
FCMN Contact:

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