Multiplan Empen Unsp/Adr

Good morning. Welcome everyone to Multiplant's second quarter earnings conference call for 2021. We have today here Mr. Armando de Almeida-Narco, CFO N-I-R-O. We have Mr. Marcelo Banas. He is Vice VP of Development, CIO. Hans Melcher, he's the Executive Officer. Today's live webcast and presentation may be accessed through Multiplan's website at ir.multiplan.com.dr. We inform you, we would like to inform you that this event is recorded and that all participants will be in listen-only mode during the company's presentation. Thereafter, we're going to start the Q&A and then we will receive more instructions. Should you need any help, please let us know by email. to reach the operator. Before proceeding, we would like to let you know that forward-looking statements that are based on beliefs and assumptions of Multiplanet's management and on information currently available to the company, they are basically based on those beliefs, and they involve risks and uncertainties. that are related to future events and therefore depend on circumstances that may or may not occur. So the investors should understand that conditions related to macroeconomic scenarios, industry, and other factors could also cause different results that will differ materially from those expressed in such forward-looking statements. This earnings call will last for 60 minutes. Thereafter, the investor relations team will be available should you have any more questions. Now, I would like to give the floor to Mr. Armando Dalmeida, CFO, and he will start the presentation. Please, the floor is yours. Thank you, Juliana. Thank you, everyone. Thank you. And now we will not have exceptionally Dr. Perez. He is returning from his vacation. We're very happy with the operational performance of our shopping malls and also our results. But I would like to start today's conversation talking about ESG, which is extremely relevant at this time of regrowth. Now, I highlight several social initiatives that we've just implemented and that we have been implementing for many, many months. In June, Multiplan actually concluded the donation of 150 tons of food, stuff, and that benefited over 40,000 people all throughout the country. Our shopping malls have taken part in that campaign and have has gathered over 13 tons of food products and also we have received clothing items and even have worked to promote blood donation campaigns. We also continue to support the vaccination against COVID-19 and that already happens and takes place in five malls of Multiplan and we have started this week with Shopping Villa Olympia in Sao Paulo. Now, our ESG strategy has Operational Efficiency and it certainly reduces a lot of the losses here in this quarter. This is a relevant contribution for the tenants and also reinforces our environmental commitment. We are also creating the charging stations for the electrical vehicles. We have four. of those parking spots that are actually exclusive for that service. And now, we're going to have 17 docking stations, and by the end of the program, we should have 79. Therefore, we are contributing with the expansion of this new transport model that helps with the carbon emissions and being more carbon efficient. Now, I highlight that We are improving our governance. Our fiscal council here at Multiplan was reelected by unanimous and the general board in April. And we concluded June the migration of the files and local servers to a platform that is completely cloud-based. We are storing all the information of the company in a safer way. It increases mobility, allowing for for safer access to the data for many diverses, and also we are doing the audit related to the Brazilian GDPR. Now, let's go back to our results. We can see that vaccination has been advancing all throughout the country. The campaigns are bringing excellent perspectives for the business environment. And this is actually a sign of relief for all Brazilians. Life is closer to getting to normal back again. And our results in this quarter already reflect that. We see a strong operational recovery. And the step-by-step normalization and the normalization of the operations in our shopping malls. In April, we had 41% of the Normal or regular average time of operation in June we got to 87 and in July we're getting back to normal hours. Now the total for the second quarter we operated in about 70% of our usual of our normal working hours. And the sales were proportionally higher. We got to almost 80% of the levels pre-pandemic. Pre-pandemic levels. In July, the first 25 days of the month, we observed the sales of tenants getting traded 93.5%. Those are the levels compared to July of 2019, regardless of still facing a lot of restrictions here at the shopping malls. Now, we confirmed that the trend to flight to quality the search for exclusive areas, we are trying to find, people are trying to find the good spots here. And there's a greater demand from our tenants for those spaces in the shopping malls. The turnover was 13,800 square meters. And out of those, 87% are destined to satellite stores. And the rate of occupancy has reached 94.9%. in the month of June. That indicates a growing trust in tenants in wholesale and selling as a whole coming back to normal. So, we just got to a revenue from the rent 2% higher than the second quarter of 2019. So, that indicates the FSR of the rent of the same stores getting to 11.9% compared to the same period And in the second quarter, we should go over the 2019 numbers. If you look at that with the same basis, so the rent of the stores has grown in the second quarter, as I mentioned, 11.9% in comparison to the same period in 2019, 2021 compared to 2019. The evolution was even stronger in June. in the same stores, we have 19.5% higher than June of 2019 in terms of SSR rent. Now, the other results also follow up with a strong operational performance of the quarter. Now, when comparing to the last year, the EBITDA grew over 20 times, excluding the linearity effect. also has, well, without taking into consideration linearity, increased 10 times, and the revenue from parking grew seven times, showing that there is a gradual recovery of the flow. I believe that it's very important to mention the advances of our digital innovation initiatives, specifically through the omni-channels. Now, before we completed two years, our super app Mopi has reached recently the, what, 1 million downloads, which is something extremely positive from, you know, the number of users and actually their feedback, showing the importance of increasing customer relations all throughout our journey. And we know more about their habits and preferences, and we can offer more convenience and Well, a more comfortable experience. Our models are getting ready for the gradual return of the events that will reinforce our digital strategy based on the data science and focus on the experience that is more complete for our models all throughout the integration between the physical and the digital scenarios. To summarize, we're still facing a lot of restrictions and we are very far away from normal. But we can see a great demand from the tenants and a growing desire from our customers to go back to our malls. This improvement of the business environment is foretelling a really positive event with the launching of Parc Jaquara Parois in November. And this is a new mall that will be in operation, as I mentioned, in November. A proof of that is the advancement in the commercialization of the stores here at the mall, which we have 85% of ABL already sub-located, sub-rented. And the tenants are excited for the preparation. And after we deliver the keys, like I said, to the stores, by the end of July, we should restart. We should be getting ready for a great operation. Now, I would like to thank all of our tenants. for sharing with Multiplan our long-term overview or vision, and they're committed to making this new mall another enterprise that will be greatly successful. Starting from scratch is a great challenge. And we are very thankful to the tenants that trust our work, and they are alongside with us in this new enterprise. to launch a new shopping mall this year. After this really test, this very trying test of the pandemic is a demonstration of the trust that Multiplan has in the country and the real estate Brazilian market highlighting our commitment here in the country in comparison to other operations abroad. We have a lot of difficulties in Brazil, but we still believe that wholesale and commerce will recover in Brazil. Well, before I would finish, I would like to thank you. Thank our investors, our shareholders, to contribute to the fact that Multipland was for the sixth time in a role the best evaluated company in the real estate sector in Latin America by the being a leader in several categories such as ESG and the best IR investor relations team and to we have a new category which is crisis management during COVID-19 and that that was given by the institution investor magazine Now I would like to thank you once again to our tenants that helped us overcome this trying time and thank you to the shareholders. And the analysts as well. Everyone that is hearing and that is following up on the trajectory of the company all throughout these 47 years and everybody, all of our employees that work diligently to make Multiplan a better company every day. Now I give the floor to the Q&A session. Thank you once again for all of you that are here. Thank you. Juliana, the floor is yours. Thank you. We're going to start with a new session for the investors, shareholders, and analysts. Should you have any questions, please type SRS9 If your answer has been answered, you can press Part 9. The questions will be answered as we receive them. Please, if you can speak clearly during your questions, that will be greatly appreciated.

So, please, just wait a second, and we are going to get to the first questions.

First question, Mr. Alex from . Hello, good morning everyone and the team. Armando, thank you for the wonderful presentation. I have two questions. The first is related to the occupancy costs. We've seen that in regards to the recovery of rent and the sales that have been performing very well. They haven't really followed in the same measure, and I can mention that there is pressure, and we haven't really seen, well, there is also the taxes that are reducing in regards to 2019. Now, I wanted to know, can you quantify how much of that reduction of the condominium cost How much do you have in regards to the reduction of the condo rate? And can you, well, looking inside to the operation and even the initiatives on the ESG, of course, they contribute. Do you have anything that is regarding to the promotional fund, if you can approach that? And the second question in regards to, well, besides the maintenance charges or service charges or condominium, and occupancy, well, there's still some tenants that have not, let's just say, withered the storm during this challenging time. So, if you can talk a little bit more about the occupancy from the continuous, I know that there's a continuous demand, and I can imagine that you will have a recovery that will be more concrete on the occupancy side now that the pandemic is decreasing. Well, thank you for the question. The first part of your question. So the condominium charges or the occupancy costs, we are reducing expenses. Let me just say it the other way. Reducing expenses, we have two categories. One are permanent reductions. And by permanent, even because we see that this is an investment, For example, the photovoltaic energy investment. So many of these are efficiencies that will last for longer. And others, they're temporary in regards to the restrictions that we're living. For example, some stores were closed for a longer period and that would actually entail in a lower cost. So, as you go back to full capacity, you can actually have more indirect costs. You need cleaning, you need security, and also the promotional funds. And this was greatly reduced due to the finance and Now, this promotion fund as, well, it means that we can promote the shopping mall as we can help the tenant. In the marketing campaign promotion, for example, events, we can generate with those events, those promotions, that marketing, we can generate higher sales. So, we are talking about sales, and we are trying to reduce that cost. The second question, we've seen a gradual improvement in a factor that will change radically from one quarter to another. I've just seen one piece of news before we started. Sorry, I've just seen the news with the job market and the generation of new jobs, over 300,000 jobs. that were generated in June alone. This contributes for the growth and the restarting of the economy of the country and also providing some stability. So, decreasing the uncertainty. This is, you know, when you have uncertainty, you cannot plan. This is bad for the tenants. So, they need to prepare. They need to prepare inventory, logistics, and you have to have The surety that things are going to be open in the future. So we're evolving. We need to brew, create, let that trust grow and to create a positive scenario for the future that will create a great demand for the shopping mall and the tenants. And as I showed you, the occupancy rate was over 94%. These numbers for sales in the first 25 days of July, close to 94%, it already is exciting. This is generating a year that is what the tenants need. Transparency, clarity, and the security, surety that the operation will continue regardless of the economic turmoil. These are some of the factors that will allow for the regrowth in the following quarters. Great. Thank you, Armando. Thank you. It was very clear. Next question. Hello. Good morning, everyone. A few questions for you. First, I would like to understand a little bit better the shopping mall. Obviously, because we can say that the worst of the storm has gone by, but I still think that, you know, there might still be a lot of turnover in the shopping malls, even though this is a quarter that is marked by recovery. Do you still see a higher mortality, let's just say, rate in some of the tenants in some of the malls? So, the turnover is still high, from what I can evaluate. Do you believe that there is still a lot of tenants that are going to leave? Second question. I wanted to understand a little bit more the difference between the portfolio of your malls. I mean, the average was very good, but there were some malls that were doing very well. Brasilia, for example, Rio de Janeiro, and others. On the other hand, Vila Olimpia, Ribeirão Preto, they didn't tend so good. So, in this, they didn't tend so well. So, with this recovery, You're going to have differentiated work for each of these models, and you have a structural plan maybe for the models that are not doing so well. Maybe their starting point is going to be different here at this rate. So these are the two questions. Gustavo, thank you. The turnover that we've had for the quarters, they were very high. I mean, historically, we have over 14 years of data. And you see clearly that there is a turnover that is higher in the last quarters. Now, in this quarter specifically, it's a little bit less than in the last two quarters. I think that the turnover decreases gradually. I mean, it's normal. Once you have more operations and the malls are open, for example, you have, you know, more turnover maybe because we have more malls open. But specifically, once we exclude these new areas, I believe that we are going to see the turnover reducing a little bit, little by little, gradually, with numbers that are lower than what we've seen in the fourth quarter, the first quarter, or even the third quarter of last year. In regards to the shopping mall, we have a few specific issues. We have to deal with the situation as is. as you said specifically, Ribeirão Preto, Angelo Olimpia, I mean, you are surrounded primarily by offices in that region, and as we always comment, we've seen a good growth for, you know, people that are living there for residency. But most of Villa Olimpia, if you look at Sao Paulo, the offices are closed, so you don't have the public. So, you know, still, life is still going back to normal and people are not really going to the office. So, this is a reflection of all this in that specific mall. But of course, we normalize a lot of strategies and we have a lot of plans implemented to plan the recovery with an expedite recovery. Ribeiro is a city that really suffered with the closing in the second quarter. So it's kind of natural that you still have those difficulties. The unpredictability is very high. Can you imagine if you're storing all throughout and you have, for example, also the restaurants there, they have their inventory and they don't have customers sometimes. So as you have less, once you have less unpredictability, more security on the operations of what is going on, and there is a lot of positive events in the country and abroad. This will allow to contribute with the stability and therefore we're going to have a recovery even, for example, in the restaurant tour side of our business. Well, in regards to the mix, I think that we can talk about the segments. The tenants are changing. We see the malls. We have companies. trying to find the omnichannel it's not just selling on or offline there is a value creation with bubbles you have the journey of the customers and then you have demands of that type of tenant that is trying to expand there is omni channels and integrating all of them and there is the issue of the mall and the working hours are still playing a great part So by changing, for example, Rio de Janeiro, we've had positive working hours, and also we have a multi-use. We have even the homes, you know, the apartments near the shopping malls, and we have all of that, that integrated operation. So you have points for selling and for rent that will stimulate the tenants to try and, you know, really look for business in our malls. And we have less space. Now, today, for example, if you get to Barra Shopping, and I can see here the occupancy, 95% to 98%, we don't have the same amount of space. So, there's a lot of tenants that want specific spaces, spots, and they cannot find it anymore. and in the last quarter we ended up sublocating, subletting big areas with a red because this is the moment that finally some tenants could find those spaces. The spaces in the multi-plan malls, the sublocation is the subletting is getting, the best spots are getting difficult to find. That's the main point. Thank you. So now the next question is from Andremazzini from Citibank.

Hello.

Armando Hines, everyone. Thank you for the opportunity. The question about Jacarepaguá. You have the distribution of the portfolio and apparel, the restaurant area, gourmet area. In Jacarepaguá, you have the company We had the pie chart. Maybe it increases a parallel apparel decreases a little bit and I mean we can imagine. That the company wants to compete on the long term and also. This is very well located, but. The scenarios so difficulty some is more difficulty. So what? What have you done for incentives for descendants that they're going to open before Christmas in November? Would there be any penalties if they don't open by November? And also, we've had a reopening in November, and it was a time that was very specific in 2017, And there were some interesting numbers. So if you could give us a little bit more context of all of this, home office, food, gourmet apparel, miscellaneous services in . Well, we are changing our portfolio. We have a slide that shows the changes of each segment after about 10 years. So I believe that this mix is adequate. And you have a few adjustments here and there that I would say, well, little because everything that was done throughout 10 years, and this is what we're trying to find. And on the part of Jacques de Pavoie, that is a reflection of that. Now that you're going to leave from a different mix and, well, it's adjusted. So I want to see a big difference. We should be, we should see the portfolio evolving. And what is different, and it counts as ABL, is services in the mall. So you have an external park, an area for children with a park that you find the mall that was planned in this way. What is curious, what is interesting is that the project of Jacarepagua was conceived a few years ago using the same project And regardless of whatever happened with COVID, because this is a modern project with, you know, and that was reflected with the gross area that was subletted. So, architecture is different. A lot of spaces that are for common use and very pleasant spaces. So, a great incentive for the tenants about what we do, we have several initiatives. The first one, which should open by November, closer to the warmer season, which is Christmas. So, just there, well, that mall is going to be has its inception right during the Christmas campaigns. So that's with the marketing campaign, with the investments, that will give us a head start in this. This will be a great incentive and we have many initiatives and things that we do all throughout the year. It's a shame that Dr. Perez is not here because he could tell us about a lot of the launches in Canoas, if you remember, as you've mentioned. But in November of 2018, did we actually open in 2003? It was a very difficult time. in Brazil and several countries. We have a lot of history of opening the malls in challenging times and all of them where we had consolidated operations and with fantastic results. This is not a short-term investment. This is a long-term investment. And the big challenge is to show we have a lot of tenants in Chacaripaguam. And we have over 90% really occupancy rate. So, and this is going to be your 20th month. It's a business plan that has been proven by your management capacity. And last but not least, you talk about, you know, issues that are very specific to some malls and is in the neighborhood with a lot of consumption patterns, consumer habits. We have projected that the shopping mall to really be a display of all of our experience that was gathered all throughout these years. All of the experience will provide us with a result. And we are working together because of the challenges, of course, of the pandemic. And everyone in the company is trying to make this a successful enterprise. I hope that I answered your questions.

Yes, that was great. Thank you. Thank you. Okay, our next question is from Pedro Raschnell from Credit Suisse. Hello, everyone. Good morning. Thank you for the opportunity to ask you a question here. The first one has to do with the following. I wanted to understand your perspective in terms of discounts, how you're going to be dealing with the company's strategy. from now on how we're going to calibrate all that with the sales recovery. Also, I wanted to understand what we might see in terms of occupancy rates and charges actually. And I have another question about new subletting contracts. We seem to be having more sublettings, so I wanted to know what is expected really for the future. Hello, Pedro. This is Hans. Well, thank you for your question. I have a few things that I wanted to highlight here. First of all, we're talking about Covert Reductions. You know that this counts. We decided to do that because of the pandemic and of course this was for this specific period of time, but obviously we're still also considering those special reductions and we're looking at this on an individual case perspective. I believe that this is going to be. Very important. for future contracts as well. We sometimes have these automatic contracts, of course, the automatic renewal, but we're still going to see this on an individual case perspective to really adapt to each and every tenant and everyone. But again, we're looking at the indicators from April still. So if we go back to the 100% levels, We expect sales, as was said, as was shown in July, we expect that to reduce the occupancy charges, and then it would be easier to talk to tenants, understand their needs, their situations, and then also add maybe a few more benefits or maintain some of the benefits that are already being offered. About the other question, we have to be careful about that because there are many contract clauses that come with a new subletting contract and right now it is something that is recovering as was said. If we consider a few examples from last month, there was an apparel store that left and we were actually able to put a new store, we have a new tenant for that and there are some additional clauses actually. We are bringing some additional things to that, to those new contracts. It is important to see that change. It was said here that in that would be one of the cases. So we have this portfolio, and it depends on the location as well. There are a few adjustments. The GDPI rate in Brazil, there are some things that will be maintained. Of course, there are places in the malls that are still disabled, but we have a very homogenous portfolio, and that also helps a lot. We also talked about turnover. It might be reduced because we're going to have more spaces, fewer spaces, and we're going to have to be more selective. for stores and everything. So maybe it comes to a point where we're actually not going to have any space and then we'll have these bar game power, I would say. So at the end of the day, what we're going to do is look at everything on a case by case perspective and then adapt to whatever is necessary. Okay, thank you for the answer. Well, this is Armando. Just wanted to say thank you for that question as well and compliment if I can add to that. You see crises, they're not something like an on and off switch where you can simply turn it on or off and then it is over. Of course, things go gradually back to normal and it all depends on the total improvements that we might be able to implement. That's what makes it all better. But of course, the whole pandemic process and everything that happened to the company helps us think about new ways of helping tenants. We try to decide, or actually we try to make decisions very quickly. We try to reduce condominium charges, you know, maintenance charges. to make it easier for tenants. And so far we've been able to deal with this complicated moment. So we're still investing as was said in Jacarecagua and in many other projects. I think it is all part of our policy or our plan in the long run. So yes, we're going to still have those discounts or those reductions. depending on the case. And Brazil we've seen difficult times before. In 2014 and 2015 we had a few examples. So now we're trying to think about the future and the economic recovery. We believe that there are good signs that we'll be able to have growth again and More jobs as well, better job offer. So thank you for the question. Oh, thank you for the answers. Have a great day. We have a question coming from Luca De Camillis. He's asking about Parque Jacarepagua, about the construction charges. So is the company going to continue with the initial budget or is there a change? Was it affected? Can we see a gap between, you know, the multiple attendance leave fees and the GDPI adjustment fees? How is the company dealing with that? Is there any projection to reduce that gap? Thank you, Lucas, for that question. About Jacare Pagua, I think there is an advantage here because this started around two years ago. So most of the construction is done already. Of course, there will be an effect because of that rate, that index rate that is going to be adjusted, but it is going to be mitigated somehow. So we haven't finished the construction, but most of it has been done. And also the GDPR, well, it went up after the pandemic started, and we're going to try and see how that could actually help us or be in our favor. We'll have to assess the situation as we get ready to launch, as we get ready to open. But yeah, the great advantage here is that we started way back when, you know, before all these adjustments. I think we are already preparing for projects. We're already hiring people and that's going to help us be in a good place. I mean, growing whenever this happens, whenever we open. And as for the previous question, we have a few contracts with the GDPR that is automatically adjusted. So we talk to tenants about the occupancy charges and we can also talk about special reductions or discounts. So yes, it is automatically adjusted, but right now we're still offering some special reductions depending on each case. for GDPI, and you will see that we still have something like the rent fees in Barra, for instance, where we're also helping tenants, but we hope that that gap is going to be reduced in the future. I hope I have answered your question. Thank you. Now a question from Pedro Fonseca from Santander. Hello, everyone. Good morning. Thank you for the presentation. I have two questions, actually. The first one would be the permanency, the tenants that stay in the mall. Yes, I am trying to ask you about the stay at the mall for the public, for customers, and also about the portfolio in Rio de Janeiro. I wanted to know a little bit more about that, where your plans are. And finally, what about failure to pay? There has been a change in that trend, it seems to me. So I wanted to know what happened to the tenants, if it would be possible to understand what the future trend will or is likely to be. Well, thank you, Pedro, for those questions. I don't really have the stay figures. I don't really know how long people stay in the mall . Maybe we can look into that and also try to understand it from the parking lot occupancy. I've got no figures. I think in this last quarter, these past few months, we've seen quite a recovery in that regard. Especially when it comes to entertainment or restaurants, we have seen more and more people using those, also theaters. Obviously, we know there are fewer spectacles, but there are a few ones that take longer. But again, we see a trend where people are spending more time at the mall, but I don't know the figures per se. I can look into that. And about the other question, what was it? It was nonpayment, isn't it? Yes, nonpayment, failure to pay. If you could maybe tell us about that dynamic, that trend, how that's changing. What do you think is going to happen in the short term and also for the future in terms of nonpayment or failure to pay? Well, I would say that I'm happy to say that Comparing to the first quarter last year, I know it's not the best reference, but comparing the first quarter this year against last year, we see a positive change in that aspect. Maybe if we compare it to the last quarter last year, it's still a good positive change. And we believe that it's going to continue improving because we'll see sales improving, A good recovery for tenants overall. So it is a good perspective. Very positive, I would say. Of course, it's far from ideal or from what we've had before. Pre-COVID, it would be probably around 2%, slightly under 2%. So our goal is going back. to 2% to the rates that we had pre-COVID. So we hope that it's going to be possible, but of course, it's hard to be 100% sure. Let's see it. Let's look at that one day at a time, basically. Okay, thank you for the answer. Our next question is from Dr. or Mr. Jonathas from JP Morgan. Hello, Armando. Hello, everyone. Thank you for the presentation. Congrats on the results. I was wondering here, we were talking about 3 to 5 million before, and now we're showing the results of 2 million. So that seems to be good. I was looking at the lines that you were mentioning. So I wanted to know your estimations for the future for the portfolio. I suppose that now, during the opening, there is going to be a good operational result in terms of opening hours. Hello, thank you for the question. This is Hans. I would say that we had a few expenses that were important for some campaigns for some brands. Now in the second quarter, that's still going to be important, but one of the most positive results I would say has to do with the lots that we have around Parque Maceió. So, I mean, we have good projects in Maceió. Parque Maceió is one of the places where we're selling those lots for different types of developments. We have residential plans and some other plans, real estate overall. And also, just wanted to highlight that it's not just about sales, where in the future we're also going to look at some other types of real estate transactions. So right now, what I wanted to mention is Masaya, really, what we have in Masaya in terms of projects. And what about Jacare Tagua? You were asking something about Jacare Tagua, weren't you? No, I was just mentioning those lines. I think that in your portfolio you're going to have 95% and... I was wondering about the opening times, the opening hours of the malls. That was it. Oh, all right. Well, now with the reopening of the malls, that would not be the most important thing. As my colleague was saying, when we deliver the key, to the tenants, we need to think about their commitment for opening time. That is the most important thing right now. Right now, after we deliver the key, after we talk to the tenants, after we understand the opening intent that they have, we have around 95% of everything felt like. So, we're discussing that right now. We're focusing on that actually. We want tenants to open their stores and then have that commitment, of course, during Christmas time and the quality of the malls and what we're going to have in social networks, what we're going to have in terms of consumption patterns, changes, and all that is going to be important. So, it is about the opening of the malls, but it's also about that process where we deliver the key, we want to open the mall in a very successful way with good opening times. That would be great for the public and for tenants right now. Well, this is Armando. Hello, Jonathan. Just wanted to add to that, if I may. It is hard to say where we're going to have 100%, where we're going to have 95%, as you mentioned. It's difficult to say. What we have learned over these almost 50 years experience is that we normally think about the ideal mix for a shopping mall and all that beforehand. It takes a lot of planning, and then after you open, you also have to see how it's going. You have to still adjust a few things. We need to think about the rent per square meter, everything that is going to have an impact on sales whenever you have a new mall in your portfolio. But the most important thing is what Hans was mentioning. You need to think about the retail services, what kind of functions are the most important, how they're going to function. But I believe right now we have a positive trend ahead of us, and that's going to be very important to be successful in these new projects, and I'm sure we'll be successful. Okay. Thank you, Hans. Thank you, Armando. Now we have a question from Jorelle from Morgan Stanley. Hello, everyone. Thank you for the opportunity. I have two questions. The first one would be, we see this recovery in the portfolio, but accounts receivable is still not looking Excellent. So I wanted to know what you're going to do in that regard and what's the likelihood of receiving all the rent that is due, et cetera. Also about organic growth. Do you, I mean, you have a good balance right now, but I wanted to know about life costs. Do you have a preference for M&A, greenfields, brownfields? I mean, that's what I wanted to know. Thank you. Thank you. This is Hans. Thank you for the question. Well, about cash flow, we need to really keep an eye on that. We need to monitor that very carefully. And accounts receivable is a great indicator of what that looks like as well. Unfortunately, this is still reflecting a little bit of the past few months. And at Multiplan, usually our receivables, they expire on the fifth of each month. There seems to be a drop. There seems to be a reduction in that because in December, we actually see what was consumed in January. And then in March, we had a lower volume because the charges, the billing process in March was affected because of what we received in April. And right now, if we're thinking about the subletting In June, it would be 111% of 2019. But anyway, as was highlighted before, we're looking at that. We're going to be looking at that in July, the end of July. So it's really more of an indicator of the past and not so much an indicator of the future right now. So in March, we noticed that that was happening. And now in June, we're charging a little bit more. There are a few questions, of course, about the subletting contracts. We're going to have a better result in the future, I'm sure, in that regard.

And specifically for July here, the tenant, when we look at the sales, and we identified that it was very positive. In regards to the other question, that was... Multiplant has really a lot of capital, but we also have a portfolio that is very big, and that is in our DNA. So, today, we still have 200 square meters of area that we have over 600 square thousand meters, and this will be our priority. Previously, that project demand a lot of time, and here, in principle, We will show that growth. Now, the inorganic is more opportunistic. And we will always verify that there is opportunities. And we have the price here that we have a synergy of the shopping mall, the portfolio. So it's part of our DNA. to verify those opportunities, but these is a risk that Multiplan has a land bank, a lot of projects, that is the biggest project of the company. Well, thank you. And I wanted to comment, compliment actually. Thank you for your question. And I would like to say that besides the points that Hans has said, we saw in Brazil, We saw a lot of the opportunities to grow. We see the opportunities of building good malls. We don't think that the country is filled up with the shopping malls, no. And because of the, it has nothing to do with the years how pre-COVID, maybe this is the third time that I've been speaking about this, the long-term overview. We see a lot of opportunities And they go through, well, a good address. And this is fundamental. It's regarding the size of the project that can be expanded, that can grow. And in regards to brownfield, it is inevitable. And you have a few, you're doing the expansion. And the shopping mall is so consolidated and there are so many possibilities here for new operations and changing the segmentation that you're doing in expansion is almost inevitable. And here we see the potential here for growth expansion here in the company. This gives a lot of value. And the third strategy that you mentioned was that we mentioned M&A. And our preference is for capital allocation and sorry for insisting about the same things. And there is the long-term focus. Besides, it is invested in quality. We want to grow and know more. And how can we add more value to our investments that really demand and deserve that level of attention? And we demand a lot of management, and this is important for the results. So the focus on quality, focus on the scalability and size of the operation. This complements the three lines of growth that you mentioned and the opportunity of M&A. I hope that I answered the questions. Thank you for all the questions. Now we will close the Q&A session and we invite the participants that still have questions to get in contact with the investor relations department. Now I would like to give the floor to Mr. Armando de Almeida for the last ideas. Thank you to everyone for your interest. for the number of investors and analysts that are hearing us here today. The call finishes today, but our investor relations area is continuing the discussion. Should you have any questions or any suggestions, we are always open. This is our work. Thank you very much. Thank you very much.