Release Date: July 26, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Earnings grew by 14% in the second quarter and 20% in the first half of 2024.
- Successful delivery of 15,000 square meters of ABL in Curitiba and another 5,000 meters in Belo Horizonte.
- Digital innovation with the Multi app showing significant growth, with 12 million accesses and 2 million downloads in the last 12 months.
- Strong buyback movement, with more shares repurchased in the first half of 2024 than in the entire 2023.
- Positive outlook on rent growth post-revitalization works, with examples like New York City Center showing a 28.7% increase in rent in the quarter.
Negative Points
- Drop in rent year-on-year for important assets like BarraShopping and Morumbi due to revitalization works.
- Impact of the floods in Rio Grande do Sul, affecting operations and sales temporarily.
- Challenges with specialized workforce availability, potentially impacting CapEx and project timelines.
- Temporary discomfort and reduced space for kiosks and other operations during revitalization works.
- Concerns about the potential impact of the tax reform on the real estate sector, with uncertainties still looming.
Q & A Highlights
Highlights from Multiplan Empreendimentos Imobiliarios SA (MLTTY, Financial) Q2 2024 Earnings Call
Q: What justified the drop in rent for important assets like BarraShopping and Morumbi? When will these works stop impacting rent collection?
A: The drop in rent is due to revitalization works. Once these works are completed, rents are expected to increase. The revitalization of New York City Center, for example, led to a 28.7% rent increase in the quarter. (Eduardo Kaminitz Peres, CEO; Armando D'Almeida Neto, CFO)
Q: What is the company's strategy regarding capital allocation, especially after the Canadian investor's decision?
A: The company will continue its share buyback program if shares remain undervalued. The focus is on short-term opportunities like share repurchases and medium to long-term investments in expansions and acquisitions. (Eduardo Kaminitz Peres, CEO)
Q: Can you provide an update on the Golden Lake project and its impact on margins?
A: Despite the floods in Rio Grande do Sul, Golden Lake was not affected. Sales are strong, with 76% of Lake Victoria units sold. The project maintains a 30% gross margin expectation. (Eduardo Kaminitz Peres, CEO)
Q: How is the company handling the impact of revitalization works on rent revenue?
A: The revitalization works are causing temporary discomfort but are necessary for long-term growth. The rent revenue is expected to recover once the works are completed. (Armando D'Almeida Neto, CFO)
Q: What are the expectations for CapEx for the year, and how is the workforce situation affecting it?
A: CapEx will continue to accelerate due to ongoing projects like the expansion of Barigüi. Workforce issues have normalized, and the company is confident in its investment strategy. (Eduardo Kaminitz Peres, CEO)
Q: How does the company view the potential impact of the IGPM on rent growth?
A: The IGPM is expected to positively impact rent growth gradually from the second quarter onwards. (Armando D'Almeida Neto, CFO)
Q: What is the company's approach to asset recycling and partnerships for growth?
A: The company prefers to grow through expansions rather than selling assets. Partnerships are considered, but the focus remains on internal growth and leveraging the company's low debt levels. (Eduardo Kaminitz Peres, CEO)
Q: How is the company addressing the high stock of provisioning and its impact on future results?
A: The company expects a better environment for reducing provisioning in the future, supported by strong sales and increased foot traffic in shopping malls. (Armando D'Almeida Neto, CFO)
Q: What is the impact of the Multi app on parking revenue and customer engagement?
A: The Multi app has significantly increased customer engagement, with over 12 million accesses and 2 million downloads. The grace period for parking discounts is ending, which will positively impact revenue. (Armando D'Almeida Neto, CFO)
Q: What is the company's stance on the tax reform and its potential impact on the real estate sector?
A: The company is monitoring the tax reform closely and will evaluate its impact once the final details are clear. (Armando D'Almeida Neto, CFO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
