GEO's 1Q97 Home Sales Rise 187 Percent; Operating Margin Reaches 16.1 Percent.

MEXICO CITY--(BUSINESS WIRE)--April 29, 1997--

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CORPORACION GEO, S.A. DE C.V.

FIRST QUARTER 1997 FINANCIAL HIGHLIGHTS

o First quarter home sales increased 186.6% to 2,786 from 972 in 1Q96.

o Revenues rose 84.8% to Ps. 322.7 million against Ps. 174.6 million in 1Q96.

o Gross profit grew 87.2% to Ps. 93.9 million.

o Operating profit increased 235.2% to Ps. 51.9 million as compared with Ps.

15.5 million in 1Q96.

o Operating margin increased from 8.9% to 16.1%

o Net profit was Ps. 5.0 million against a net loss of 22.1 million of 1Q96.

o Mortgage backlog up 22.4% to 23,007 from 18,797 in 1Q96.

Corporacion Geo is the largest builder of affordable homes in Latin America, having sold over 60,000 units with more than half a million Mexicans living in GEO homes. The Company is engaged in all aspects of design, development, construction, marketing, sales and delivery of its homes and is committed to providing superior quality of life for all its homebuyers. GEO's developments typically include educational, recreational, entertainment, healthcare and shopping facilities.

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Mexico City, April 29, 1997 -- Corporacion GEO, S.A. de C.V. (CORPGEO MM), Mexico's leading builder of affordable homes, today announced a first quarter 1997 jump of 186.6 percent in homes sold to 2,786, and an 84.8 percent increase in revenues to Ps. 322.7 million compared with first quarter 1996. GEO's net income for 1Q97 was Ps. 5.0 million compared with a loss of Ps. 22.1 million in 1Q96.

GEO Chief Executive Officer Miguel Gomez Mont said of the results: "We are pleased to report that our expansion strategy throughout Mexico and our initiatives to reduce the seasonality of our sales are proving successful."

Mr. Gomez Mont added: "This is the first time in 10 years GEO has shown a profit in the first quarter, clearly reflecting the success of our strategy."

The prices of housing units in the first quarter remained roughly constant in real terms with prices in the fourth quarter of 1996.

GEO's 1Q97 gross profit grew 87.2 percent to Ps. 93.9 million and gross margin had an incremental gain to 29.8 percent. Operating profit increased 235.2 percent to Ps. 51.9 million from Ps. 15.5 million in the year-ago first quarter. Operating margin increased from 8.9 percent to 16.1 percent.

Sales, general and administrative expenses rose 21.0 percent to Ps. 42.0 million due largely to the personnel, systems, equipment and marketing requirements of increased building activity, the Company's expansion into new states in Mexico, and its international expansion into Chile. As a percentage of sales, SG&A decreased to 13.0 percent in 1Q97 from 19.9 percent in 1Q96.

During the quarter GEO participated in two mortgage auctions conducted by FOVI, a Mexican trust fund, and was successful in both, obtaining a total of 3,580 mortgage commitments. GEO's mortgage backlog at the end of the quarter reached 23,007, a 22.4 percent gain over 18,797 commitments at March 31, 1996. On April 21 the Company won an additional 2,557 FOVI mortgages. INFONAVIT did not hold any mortgage auctions during the first quarter of 1997.

"We anticipate expanding into as many as 3 additional Mexican states this year," Mr. Gomez Mont said today, "and we have also commenced our internationally expansion strategy with our joint venture in Chile."

Earlier this month Corporacion GEO announced it has joined Chile's Constructora Salfa S.A. in a 50/50 partnership, GEOSAL S.A., to develop affordable housing in the Chilean market.

"GEOSAL combines Latin America s preeminent affordable housing developer with Chile's most experienced construction company," Mr. Gomez Mont said. "Salfa has been operating in the Chilean market for over 65 years."

At the end of the first quarter Corporacion GEO announced the first integrated employee incentive compensation program in Latin America. The program includes both an employee stock ownership plan (ESOP) for all employees and an annual incentive plan for the Company's 40 senior managers.

Looking ahead, Mr. Gomez Mont said today: "We are excited by the significant growth potential of our business. The Mexican government has reiterated its commitment to reducing our country s current 6-million-unit housing deficit, and with GEOSAL, we have opened new platforms for growth internationally."

Luis Orvaqanos, Chairman of the GEO Board of Directors, also said: "My confidence in the future of GEO, which is shared by everyone at the Company, is based on the fact that we are by far the biggest and best builder of affordable housing in all our markets. Nobody else comes close, as evidence by our results in the first quarter. We sold a record number of homes, had a net profit in the quarter for the first time, and launched our international expansion with the creation of GEOSAL. ^"We don't simply sell houses. We sell a quality of life for all the residents of our communities. We will continue to grow because people want to live in GEO communities."

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                CORPORACION GEO, S.A. DE C.V.
                Consolidated Income Statement
(in thousands of constant pesos as of March 31, 1997)

                                                      Change
                     March 31, 1997   March 31, 1996    Ps.         %
Number of housing
 units sold              2,786              972        1,814    186.63
Revenues
 As a contractor        21,659            6,512       15,147    232.60
 As a developer        301,060          168,117      132,943     79.08
  Total Revenues       322,719          174,629      148,090     84.80
Costs
 As a contractor        17,475            6,386       11,089    173.65
 As a developer        211,323          118,066       93,257     78.99
  Total Costs          228,798          124,452      104,346     83.84

Gross profit from
 contracting activities  4,184              126        4,058   3220.63
Gross profit from developing
 activities             89,737           50,051       39,686     79.29
 Total Gross Profit     93,921           50,177       43,744     87.18

Selling, general and
 adminstrative expenses 42,014           34,695        7,319     21.10
Operating Income        51,907           15,482       36,425    235.27

EBITDA                  53,025           36,709       16,316     44.45

Integral cost of financing
 Interest (income)     (4,442)         (17,498)       13,056    -74.61
 Interest expense       9,737           11,763       (2,026)    -17.22
 Foreign exchange loss    978            1,020          (42)     -4.12
 Loss/(Gain) from monetary
 position              40,810           42,609       (1,799)     -4.22
                       47,083           37,894        9,189      24.25

Other expenses/income   (233)            (616)         (383)    -62.18
Income from affiliates   590              334           256      76.65

Earnings before taxes  5,181          (22,694)       27,875    -122.83

Provisions:
 Taxes                    34              335         (301)     -89.85
 Employee compensation     0                0            0         0.0

Earnings before taxes and extraordinary
 items and minority
 interest               5,147         (23,029)      28,176     -122.35

Minority interest         111            (973)       1,084     -111.41

 Net Income            5,036          (22,056)     27,092      -122.83

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CONTACT: Hector Caballero  Jane Valdez

Investor Relations  Investor Relations Executive

Corporacion GEO The Anne McBride Company

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