Release Date: August 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- ALLOS SA (BSP:ALOS3, Financial) reported a net revenue of BRL622 million, a growth of 3.8% compared to the previous year.
- The company achieved an 8% growth in sales per square meter, surpassing BRL1,800 per square meter.
- The FFO per action showed a significant growth of 41%, driven by effective management of liabilities.
- The company maintained a strong cash position with BRL3.7 billion and a comfortable leverage ratio of 1.5 times net indebtedness over EBITDA.
- ALLOS SA (BSP:ALOS3) successfully executed a share repurchase program, reducing the capital base and enhancing shareholder value.
Negative Points
- The company faced challenges with the IGP-M tax and concentrated expenses impacting EBITDA growth, which was only 2% compared to the same quarter last year.
- There is a noted decrease in liquidity for asset sales compared to previous years, potentially affecting the disinvestment program.
- The cost of occupancy remains a concern, although it has slightly improved, it still poses a challenge for future growth.
- The company’s media business, while growing, still represents a small percentage of the overall revenue, indicating limited immediate impact.
- The integration process post-merger is ongoing and expected to take several more years to fully realize the synergies and benefits.
Q & A Highlights
Q: How do you evaluate new opportunities for purchasing and participation in assets, and what are the ways of funding these acquisitions?
A: (Rafael Sales Guimaraes, CEO) We focus on reinforcing acquisitions and investments that enhance our portfolio's relevance and consumer experience. We have the capacity for reinvestment and are negotiating debt to manage costs. While I can't provide specific details due to ongoing negotiations, we have funding options and structures to improve returns.
Q: How has the current market liquidity affected your asset recycling and negotiations?
A: (Rafael Sales Guimaraes, CEO) The market has lower transaction velocity due to available resources taking longer to capture. However, we continue to update and maintain transparency, aiming to keep our guidance on capital returns and debt investments.
Q: What is your strategy for managing the cost of occupancy and its future outlook?
A: (Rafael Sales Guimaraes, CEO) We manage expenses to avoid real price increases for tenants, ensuring healthy growth. We expect gradual rent increases and positive IGP-M effects from July onwards. Our lease spread shows a 10% growth, contributing positively to future results.
Q: Can you elaborate on the integration progress post-merger and its impact on tenant negotiations and NOI growth?
A: (Rafael Sales Guimaraes, CEO) Integration is ongoing, with significant synergies already captured. We anticipate further top-line synergies over the next few years. The merger has allowed us to optimize tenant mix and improve operational efficiency, contributing to NOI growth above inflation.
Q: How do you plan to maintain your leverage guidance, and what are your strategies for capital structure and repurchasing shares?
A: (Daniella Guanabara, CFO) We adjusted our leverage guidance to 1.9x net debt over EBITDA, considering ongoing disinvestment programs and additional resources. We evaluate market conditions and opportunities for share repurchasing, balancing investments and returns.
Q: What is the rollout schedule for your loyalty program across the portfolio, and how do you assess tenant health?
A: (Rafael Sales Guimaraes, CEO) We plan to implement loyalty programs in most shopping malls by early next year, enhancing consumer experience and marketing efficiency. Tenant health is generally good, with strong performance in segments like sports and beauty, despite some challenges in electronics.
Q: How do you see the growth potential of Helloo Media and its impact on revenue?
A: (Rafael Sales Guimaraes, CEO) Helloo Media continues to grow, contributing significantly to revenue. We expect its relevance to increase, with ongoing digitalization and expansion efforts. The media business complements our core operations, enhancing overall growth.
Q: What are your plans for future expansions and redevelopments, and how do you measure their success?
A: (Rafael Sales Guimaraes, CEO) We are finalizing studies for two significant expansions and continue to focus on projects that improve consumer experience. Success is measured by increased NOI, improved tenant mix, and enhanced consumer satisfaction.
Q: How do you manage the mix of contracts indexed to IPCA and IGP-M, and what is the impact on parking lot revenue?
A: (Daniella Guanabara, CFO) We are gradually migrating contracts to IGP-M, with current exposure to IPCA around 19-20%. Parking lot revenue has seen positive flow levels and increased ticket prices, contributing to overall growth.
Q: What are your strategies for managing third-party shopping malls and their impact on Helloo Media's growth?
A: (Rafael Sales Guimaraes, CEO) Managing third-party shopping malls complements our core operations, providing scalability and business opportunities. Helloo Media's growth is driven by its presence in both proprietary and third-party malls, enhancing our overall media strategy.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
