Release Date: November 18, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- SYN Prop E Tech SA (SYYNY, Financial) successfully prepaid 13 debentures, reducing leverage with cash from a partial sale of shopping malls.
- The company distributed BRL440 million in dividends and approved a capital reduction, returning a total of BRL1 billion to shareholders.
- Operationally, the company achieved a high occupancy rate of 93.4% in its malls, with expectations to improve further.
- The company reported a strong return on equity (ROE) of nearly 30% over the last 12 months.
- SYN Prop E Tech SA (SYYNY) has a comfortable cash situation and a well-managed debt profile, with plans to potentially distribute more dividends or reinvest cash.
Negative Points
- The company experienced a significant drop in adjusted EBITDA by 58% due to portfolio adjustments and accounting effects.
- There was a notable vacancy impact in the Grand Plaza mall, affecting overall occupancy rates.
- The financial occupancy rate was slightly lower at 95%, with expectations to improve in the next quarter.
- The company faced a higher penalty in the quarter related to PDD, which is expected to revert in the next quarter.
- Despite operational improvements, the company's net profit was affected by adjustments related to previous sales transactions.
Q & A Highlights
Q: Can you elaborate on your capital allocation strategy given the low leverage and recent asset sales?
A: Thiago Muramatsu, CEO: We aim to maintain low leverage while developing the CLD project, which will require cash over the next 1.5 years. We are also keeping room for potential investment opportunities, especially as real estate funds face higher restrictions. We plan to reassess dividend returns in 12 months based on these opportunities.
Q: What is the value generation thesis for SYN in 2025 and beyond, especially after property sales?
A: Thiago Muramatsu, CEO: Despite recent distributions, SYN offers an appealing cap rate of nearly 15% for 2025. We expect operational performance improvements and increased service provision returns, enhancing our return on invested capital.
Q: Can you clarify the accounting value of investment properties and the share of installments to be received?
A: Hector Bruno Franco de Carvalho Leitão, CFO: The accounting value is BRL800 million, as detailed in our pro forma balance. The installment values of BRL360 million and BRL550 million are entirely SYN's share, with no partner involvement.
Q: How does the high-interest rate environment affect your acquisition and asset selling strategy?
A: Thiago Muramatsu, CEO: We anticipate reduced acquisition activity due to challenging conditions for real estate funds. We remain open to opportunities that offer shareholder value, without a specific asset focus. Divestments will continue if they align with shareholder interests.
Q: Are there any M&A opportunities on your radar, and why do you outsource parking lot management?
A: Thiago Muramatsu, CEO: We continuously analyze M&A opportunities, but nothing is imminent. Our parking lots are managed by Upper Place, a wholly-owned subsidiary, ensuring strategic alignment and control.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
