Release Date: August 15, 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 completed a significant asset swap, enhancing its market share in key shopping centers.
- The company announced a substantial dividend distribution of BRL440 million, reflecting strong financial performance.
- Operational performance improved with a 96% occupancy rate in their portfolio, marking the highest in recent years.
- The company has a strong cash position with net cash of BRL200 million and plans for further capital returns to shareholders.
- SYN Prop E Tech SA (SYYNY) is optimistic about future growth opportunities, including potential new acquisitions and expansions.
Negative Points
- The company's EBITDA is expected to decrease due to the sale of a significant portion of its shopping malls, impacting revenue.
- There is a potential drop in EBITDA margin due to the increased representativeness of service revenue, which typically has lower margins.
- The company faces challenges in renegotiating debt terms to facilitate further capital reduction and shareholder returns.
- Despite improvements, the company still has some vacancy issues in its corporate buildings and warehouses.
- The reduction in ABL (Area Built for Lease) could limit future growth opportunities if not offset by strategic acquisitions.
Q & A Highlights
Q: Can you provide more details on the timing and potential penalties related to the capital reduction negotiations with creditors?
A: Thiago Muramatsu, President: We are negotiating with creditors to allow more flexibility for capital reduction. There are no additional costs involved, just commercial negotiations. We aim to resolve these issues and reduce capital this year, but the exact volume is uncertain. We will announce specifics once finalized.
Q: How will the recent asset sales impact your EBITDA margins, and are there plans to reduce G&A expenses?
A: Hector Leitao, Financial Director and Investor Relations: EBITDA margins will initially worsen due to a drop in rental revenue and increased service revenue. However, we expect better margins in the long term due to higher NOI from better assets. We are also working on reducing third-party costs, which will improve margins over time.
Q: Is there a possibility of distributing dividends from 2025 receivables this year?
A: Thiago Muramatsu, President: Yes, we are considering using part of the 2025 receivables for capital reduction this year. We aim to finalize plans and receive creditor approval by early September to facilitate this.
Q: With the reduction in ABL, are there plans for new mall acquisitions or expansions?
A: Thiago Muramatsu, President: We are open to new acquisitions, including malls, logistics, and offices, as opportunities arise. We are also negotiating the expansion of Cidade São Paulo Shopping Mall, with plans to start work by the end of this year or early next year.
Q: How does the company plan to maintain operational efficiency after the asset sales?
A: Thiago Muramatsu, President: Despite the reduction in ABL, our management and operational activities remain unchanged. We are focusing on maintaining efficiency and leveraging our improved asset quality to generate good results and explore new investment opportunities.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
