April 25, 2013 / 9:40 PM / in 5 years

UPDATE 1-Mexican homebuilder Homex posts sharply lower Q1 profit

* Q1 profit 95.265 mln pesos vs 729.97 mln pesos yr ago

* Revenue nearly halved to 3.3 billion pesos

MEXICO CITY, April 25 (Reuters) - Mexican homebuilder Homex’s first-quarter profit and revenue fell sharply as it struggled with slowing home sales and a rising debt load, the company said on Thursday.

Net profit tumbled to 95.265 million pesos ($7.7 million) from 729.97 million pesos in the year-earlier quarter. Revenue almost halved to 3.331 billion pesos from 6.187 billion pesos.

Home sales by Homex, along with Mexico’s two other big homebuilders Geo and Urbi, have dropped as more Mexicans are buying old homes closer to schools and offices rather than new homes in suburban developments.

Homex, Mexico’s second-biggest homebuilder by home sales, sold 5,430 homes in the first quarter, down from 8,738 in the same period a year earlier.

“We will keep working diligently with authorities, financial institutions and, more importantly, within the company, to successfully navigate the challenges in this period,” Chief Executive Gerardo de Nicolas said in a filing to Mexico’s stock exchange.

Shares in Homex received a boost last week when the Culiacan-based company said it had agreed to sell a stake in some of its prisons to a bank and a construction company owned by tycoon Carlos Slim.

Homex stock, which has lost half its value so far this year, closed down 1.23 percent at 14.42 pesos before the company reported its results.

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