Multiplan Empen Unsp/Adr

Welcome to the earnings call of the results of the fourth quarter of 2021 of Multiplan. We have here Mr. Jose Zaccaparris. He is the President. Mr. Armando Dalmeida Neto, VP Finance and Investor Relations. Mr. Marcelo Baris, VP of Development. Hans Melscher, he's the Director of Planning. in Investor Relations, and Mr. Richard, Director of Digital Strategy. And we inform everyone that the presentation of the, well, the earnings call, you can download the presentation from the ri.multiplan.com.br. And you can know that the participants will only hear the teleconference during the presentation of the company. And thereafter, we're gonna start the Q&A session. When more, you will get more information. Should you need any help during the earnings call, please request the help of the operator and you can type asterisk zero. Before we start, we would like to say that the disclaimer, anything that might be said during the earnings call regarding the perspective of business perspective and projections and operational goals and finance are premises of the Board of Directors of Multiplan and based on the information that is available now to the company. Any future forward-looking statements do not assure performance and they involve risks and uncertainties. So these future events, they depend on circumstances that might or might not take place. Investors have to know that general economic conditions, industry conditions and other operational factors can affect the future results of the company and can lead to results that are materially different from those that have to be taken care of in the future. The teleconference will take 60 minutes. After this period, the investor relations area will be available should you have any more questions. Now I would like to give the floor Good morning, everyone, dear ladies and gentlemen. It is a great pleasure to be here with you and comment a little bit about our results. And I'm going to be maybe you're going to be a little bit tired, but I'm going to say something different for those of you that want to understand our company. I'm going to refer here to our on our analysis on the several crisis that we've gone through. I would like to say that in these 50 years of experience, we I probably went through 15 crisis economic crisis and every four and four years younger so we have a crisis so let's start usually people that are fearful of the crisis they open up a space for their competition and these crisis are always generating new demands. And then those that grow are actually the ones that can identify those new demands and even foresee them. We grew, we grew regardless of the crisis, and we knew how to adapt to every moment. As the recent case of Parc Shopping Jacques Carre Paguas delivered in November 19th, that was built Right in the middle of the COVID crisis. Now, we don't get intimidated by crisis when our results of the fourth quarter are here to prove what I've said. In the fourth quarter, it was the only period that we actually had the breath to continue with restrictions, but we could catch our breath. And maybe there is another subjective factor, which is COVID, that makes people be hostages in their own homes. If it wasn't that, the results would have been much better. And remember that Christmas was doing well when we had COVID. And then we lost a little bit. Naturally, people are concerned since the beginning. So what I would like to say to you is here in the comparison of the fourth quarter. And as you know, the numbers, the fourth quarter of 19, why am I talking about 19? It's a near of growth. It's a year that the malls grew. So we are comparing a period that temperature and pressure are basically the same. except the subjective issue that people believe that COVID and so on and so forth.

I'm not going to comment that, but this is a global issue.

Now, the fourth quarter of 21 and comparing to 19, we have the sales of growing 19%, the net revenue. of Multiplan grew 21% and the profits 50.1%, also referring to the same period of 19. So it is a good growth period for Brazil. And our estimation for results at the beginning of 22 that we have here, the numbers, We have our sales growing 4.4%, January 19. We also have 42.6 above January 21. And our growth of the net revenue is of the order of 25% if we compare to the same period 19.

Very well. 41% if we were to compare to January 2021. Well, today Multiplan Assets at its fair value account for $23 billion. However, On December 31st, 2021, we were listed in the stock exchange, evaluated at 11.2 billion. In December 2019, the very same company was worth 19.9 billion at the market value. While the income and the revenue, they were quite close to the ones that we registered in 2021, quite close figures. The fourth quarter was the only moment in which the shopping malls as I said before were able to sell more regularly well in this period and the fourth quarter the results were better than those of 2019 the profits grew at 50.1 percent as compared to 2019 and also importantly We have to take into account that we are still living with the COVID pandemic that locked people inside their homes. And this wasn't happening in 2019. So let me go back and talk about this issue about our company. So on December 31st, 2021, well, the net income of the company was 2.5 billion. These were the sales. So we made this internal exercise. If we sell 10% of our assets, we could then settle the entire debt amount. And I say that because at this point in time, the interest rates are going up. They're actually very high. And We are wondering whether we are evaluated at a very low level. So perhaps it would not be interesting to sell some of our assets to make this company more profitable and debtless. Well, that's an issue that we are now analyzing. So I'm very much attached to what I have. I'm a buyer, not a seller.

Anyhow,

We are more developers than buyers of pre-set developments. So we feel like creating and doing. This is what we do. This has been the engine of our company. So let me acknowledge something that is important. Well, Multiplan in 1984, we delivered our fifth mall in Brasilia, in the city of Brasilia in Brazil. Well, this mall was inaugurated by President Figueiredo. It was a very special event. So it was a period of major recession. So we were going through this recession period and the company was highly indebted. We were highly leveraged. We had 15% of capital and 85% was debt. It was a terrible period for our company. Well, the sales went down, the GDP was a 3% negative at the time, and we were going to go bankrupt. We could not afford to pay our debt. We could not afford to pay our debt. Well, I'm not sure, but I had that 100%, 200%, 300% in the final months of the Sarney administration in Brazil. You're very young, perhaps you don't remember that, but we had, you know, 80%. So you can see how hard it is to grow in Brazil vis-à-vis this a fearful situation that we face here. Well, let me go back now and tell you what we did to overcome the crisis and avoid going bankrupt. Well, for the first time, we started to sell shares in the shopping malls to entities whose purpose was attaining income in the long run. The entities at the time, they were You know, pension funds at the time. But in order to solve our issue, we sold 50% of all of our assets, half of our assets.

But we paid our debt.

We paid our debt in full, and then we repurchased everything that we had sold, virtually everything. The five malls amount to 100% of Multiplant's property. Ribeirão Preto, we had Barra Shopping, Morumbi Shopping Mall, FAC Shopping, and there's another one, another mall. Viej Mall. That was the first child, so to speak, and then I'll talk about this later. Very well, today our net debt over the assets of the company, this ratio, according to our assessment, our assessment is conservative and this ratio is 10%, around 10%. So what I would like to tell you now, I would like to highlight that with the coronavirus crisis that we are facing right now, well, I'm being repetitive, but we delivered four malls, Jacarepagua, with 95% of the tenants filled in. So perhaps this is the most intriguing project, one of the best projects that we've had in this company. 95% of the tenants allocated. And perhaps, well, this was developed during the COVID-19 crisis. That's it. So we have not stopped in the very worst moment when our malls were closed. Well, of course, we had losses. And we waived on the tenant fees that we were entitled to receive throughout a long period. And we charged half the fee, half the monthly fee. So we did not, you know, call this debt. We were solidary to the tenants, to our partners. We did not postpone their debts. We work with our hearts. That's our issue. Well, now we have a quite successful success case. It was actually a climax when it was inaugurated. Well, because it's adapted to the moment that we are now living. We are more focused on entertaining on green areas. We have this external park that will be delivered in March, next March, April. It is going to be the first open children's park with a very large green area. It's a very playful concept involving leisure and joyful moments. Well, this is knowing how to identify a crisis and adapt to such crises. That's why I say that crises generate opportunities. Jacarepaguá, our mall, is a result of the crisis. It couldn't be like any other mall, because early on when we began working, the malls were much more focused on retail. But then we changed, and there's much to tell you here. I'm not going to waste time on this anymore. Anyhow, what I would like to say is that Jacarepaguá is a region with 700,000 inhabitants, and trade and service is just crawling in that region. The issue that we had there is that in order to make this more feasible, we had to invest in roadways, in lighting, in signage, in the entire region, encompassing a large area of Jacarepaguá. And with that, the traffic of that region became more accessible, according to the opinion of the dwellers of the region.

So the roadways became more accessible.

I do have some other points to highlight here for you. Well, it's always nice to mention that in October the 5th, last year, 2021, we were still facing this moment of crisis and the company launched Golden Lake. And I refer to this project because I would like to say that when we talk about the actual income in large urban centers close to the malls, I mean, malls that really stand out in their cities, We are fully convinced on the synergistic effect that we see between the mall and the surrounding constructions. There is always additional return on investment for the company. It's not so expressive, but it's also important. So this has been one of the strategies. Well, the five first malls that we built, we had the cities growing around the malls and they grew exponentially. Let me give you an example. Golden Lake. So we built this 30 years ago and at the time, A flat that was sold for $500,000 today has been appraised in $2.2 million in spite of the crisis because the real estate market suffered a drop. It was appraised at a higher amount, but that's it. The good, the actual assets, they will always appreciate. And that's why Brazilians like so much to invest in actual income. That's real estate income, right? Because you get paid, you have the revenue flow, but you also have the appreciation of the asset. If we take into account our malls, the BH Mall, for example, that we built 41 years ago, that was in 1979. We took a loan of 12 million from Citibank. Citibank was the only bank that had long-term funding. So we ran this risk and buying this insurance, buying this loan in dollar. But I was bold. I was very bold at the time. And then we built that mall, the BH Mall at the BR3 Roadway. It was really a highway and everything around that highway was nothing. There was nothing around it. And we built. And the owner of the land was the president of one of the banks, BMG Bank. And then when he sold me the land and I told him that I was going to build a mall there, and then he said, why are you going to build there? He asked me, as a good citizen from the state of Minas Gerais, I thought that I had found this golden mine. And I told him I'm going to build a mall. And then he said, oh, man, but Why are you going to be a mall there? All you can find there is horses and goats. Yes, it was a steep land and there was a great deal of mules and horses and goats. And then I inaugurated and then today the city grew around the mall. It's one of the key neighborhoods in the city in terms of appraisal value. And that's around the BH Mall. So what do I mean by that? Well, it cost 12 million. That was the low end. But today, the appraisal at the fair value, at the fair market value, even taking into account the high interest rates that we see in the market, it's worth 400 million, around that. So virtually 40 times more. And we made eight expansion projects with the income that was generated by the mall itself. So we were able to use that income. So with the remainder of the income we reinvested in the mall so that we could make it an appreciating value.

Very well done. Let me carry on.

What I mean is that throughout the last 50 years, we have experienced so many crises. They will happen. The malls will keep on growing. They will expand and they will appreciate the value of the surrounding land, the surrounding area. Let me draw your attention to one thing now. Much has been said about COVID. Well, the in-person retail would not prevail. The digital retail would prevail then. And the malls would go bankrupt. Well, I admit that some of them have faced that, but in none of our malls have we seen such situation. Of course, we had, you know, cities in which we spent seven months with the doors closed down. So this is what surviving means. We were dead by seven months and then we are reborn, right? Very well, we survived. We could show to the public. We had this international company that came to do surface testing. We had 800 testing sessions and I was amazed. They could not find coronavirus, not a single strain of coronavirus, neither in the bathroom nor on the tables, chairs, handrails, staircases. They couldn't find a single strain of the coronavirus, not even in the grating of air conditioning or in the air conditioning system. So much was said that coronavirus could live on your clothing for such and such days. So people were kind of willing to wear underwear only. They didn't want to contaminate their family. So much has been said because of the lack of knowledge on the virus itself. And today, fortunately, things are under control and the virus has weakened as we had foreseen in the beginning. So the virus weakens by, you know, getting people infected. Well, this was a virus that stopped the world. Regrettably, there was a single country that did well with this virus. The rest of the countries faced a serious crisis, but Brazil resisted. I believe that this year we are going to have economic growth. We're going to have a positive GDP growth. So I think this year may be a bit more difficult, but as I say, well, if we had to close our doors for seven months and we didn't die, it's hard to kill us, right? So we are just like cats. We have seven lives. What I would like to tell you is that the shopping malls, Well, the malls are a subproduct of the urban chaos. And I say that because in 1973, myself and my partners started building the malls. The perception that we had at the time is that the urban chaos was there, was installed. Nobody could buy anything. In Rio de Janeiro, where I live, I've lived most of my life in Rio de Janeiro, and I may tell you that I remember that here He was the director of the traffic department. He would empty the tires that were stopped in the retail areas or downtown. So we saw triple lines. Triple rows of cars parked one next to the other. Traffic was chaotic. You know, coming into the city through Copacabana and Barra da Tijuca in order to get there would take you two hours. It was terrific. It was terrible, actually. So this really drew our attention. So we had developed many commercial centers. These were commercial galleries and they had no parking space. So the development process should be based then on building commercial centers with parking areas, just like we did with Ibirapuera Mall. At that point in time, we made this decision. We went to the United States. We hired a consulting company for malls. We went to Europe as well at the time. And we realized that the project that we had envisaged for Ibirapuera was wrong, actually, at the time. But then we saw different realities. We adapted the design. We launched it quite successfully. And to this day, well, the owners, I left the company then because I sold my shares for personal reasons at the time and then After a few years, after leaving the company, my partners sold shares to Comint. Comint was a bank that had granted credit for the company at the time and Comint sold each shop to each tenant. So they raised twice as much. because they would finance the tenants in 10 years. We're not talking about doing this because if we do this someday, we are not going to have control over the quality of the mall, the activities that run in the mall, things that we don't want to have in the mall. We don't want to have predatory competition in the mall. Competition is healthy, but it should not be predatory. So this is, of course, in view of the chaos, we began working. So shopping malls emerged to make cities visible. All of the malls in Brazil, virtually all of the malls in Brazil will have, you know, surrounding chaos installed because we have a high number of vehicles. It's much higher now than what we had before. Well, without further ado, I'm not going to say much more. I would like to say that today in Brazil, we have 620 malls and 1700 domicile sites and 1700 sites. Some municipalities will grow in the future, even because of the influence of the shopping malls. So I would like to say goodbye. I will not talk about Multiplan. You know a lot about this company. Thank you so much. Thank you. We'll now begin with the Q&A session for the investors and analysts. Should there be any question, please type asterisk one. If your question is answered, you may leave the queue by typing asterisk two, star two, and the questions will be answered according to their order, according to the order they arrived. So you have to open up your mic to ask your question. So we're going to be able to hear your question properly with the right audio quality. So our first question is from Gustavo Cambauva from BTG Pactwell Bank. Hello, good morning. I have two questions. Let me open the release. There is this discussion about the occupation of the malls. And my question is about this. We were talking about the many initiatives of the companies in terms of the mix, the reduction of the maintenance fee. Well, this has really strengthened your portfolio. This helped you to grow a lot in terms of the tenant fee, and this is above the sales growth. So my question is, we always talk about the average of the occupation cost, but according to the current levels, that is above the historical average that the company has always had. Do you truly believe that this is a sustainable rate, a sustainable fee? Do you believe that in the future, Multiplant will have a different occupational rate? Or should it normalize down the road with inflation going down and sales going up? So I would like to understand whether you have a figure. A magical number perhaps for the occupation cost and what does the future bring? My second question is about the vacancy rate. The vacancy rate has been going down. It's a bit higher than the historical average, but it's very much concentrated on some assets. Most of the assets have resumed the historical average. So how do you see the recovery? How do you see Santa Ursula, New York? How do you see these assets? Will it take longer to recover or is there any specific action for such assets? Good day.

So, good morning. Thank you very much for your questions. Now, in regards to the cost, the occupancy cost that we presented is the result of the sum of all of these pondered by the size, the cost of rent, our expenses. And then we have a case study, Just to clarify all the questions that we received on this issue. The urban cost can climb because of the consolidation of our assets even. You can imagine that we brought in 2011, 2012, 2013, we had five new malls that faced a challenging Gdp Decreasing 0 recently with the pandemic and they are presenting a strong growth so when you look at other assets more consolidated you will see that as they are selling more the square footage or the square meters That allows for us to charge more for that asset.

It has a greater productivity per square meter.

And then at the same time that you have the occupancy costs that will reduce when comparing to a new mall, a property that is just launched in the market. Now, I wanted to talk to the analysts, the investors that have been with us for so long. If you take a look at 10 years ago, and then you look at our occupancy cost, and at the time they asked is if we could grow more. And the answer is given, not in words, but with data, with results. What did we try to pursue? Well, not try. What we always pursue is to increase the productivity of our malls, whether if it's by the localization, by consolidation, and for the management of these enterprises, generating more productivity. Today, we have other mechanisms that are more traditional. and we have the logistics productivity and we have our multi-app so that our tenant can sell more through several channels and making this point more productive. Well, the cost can rise a little bit more throughout time, as long as they have a sales environment that is sustainable. And second, the occupancy rate. Is the glass half empty or half full? And, well, the occupancy is worse than in 2019. and even so we can surpass sales and rent even though this occupancy rate is lower. Given the quality of our assets and given the fact that we are turning the page on the pandemic, I see an upside of occupying these areas as you have the normalization of commerce and we have practically the year of 2020 How are you going to plan this, invest in this? And we have a lot of uncertainties that are going by. And I think that this will bring a lot of opportunities. Armando, I wanted to interrupt you to say maybe something philosophical. The only certainty that we have is that everything is uncertain.

And we take on the risk.

And I mean, living is a risk. I remember that my first enterprise, I launched in November of 1963 at the Lapa, a building. That is close to the military dictatorship, the revolution that culminated in 64. And everybody told me I was insane. It wasn't that I was insane. I was a student. And my friend, I was working as a real estate agent. I studied in the morning and then I earned some money. And then a friend sold his apartment. I sold his apartment for a very good price.

And then he asked me.

I was to do the incorporation, how to build buildings. And he said, well, I don't know, but we will figure it out. And then he gave me the money. We purchased it. He paid everything. He could only pay for six installments and it was 36. And then he paid one lump sum. He bought the first part, which was 40%. And I was 60% owner. And then everybody told me I was insane. But here is the great opportunity of my life. I know that I can lose everything, and I can owe money all throughout my life, but that's my option. And then I launch, and then I sold everything. So it seems that, well, I didn't have anything, and then I had more risks. I remember that in the government, Sarnes was an unlisted company. We went to Portugal, we bought, we got the first mall in Portugal, and then we did some enterprises in Miami. I want to know, I want to tell you that a company, the company is in Brazil, but it can also be in the different places. And of course, whenever there is the opportunity, in the real estate of growing and having results, we're going to risk. Today, the only risk that the company has is the net liability for 2.5 billion, but for those of us that had 85% of that and 50% of capital and we didn't go bankrupt in 84, you know, what does it mean? It means that Brazil grew Brazil is changing all the time. And it's evident that due to sanitary, political, environmental issues, they really hinder our activities. That's it. I want to add that the risk, the only uncertainty that we have is that everything is uncertain. And given this uncertainty, because we are going through this period, three assets where we have higher vacancy, they are recovering the tenants in due to the, you know, movie theaters are going back. We have new movies. There is a good occupancy that is improving a lot. And in Sao Paulo, we have the offices going back. And the last point, the turnover. The turnover, 7.9% in a year, highest in the company lives. And we are using the space correctly. We have new operations, the technology area, yes, internet, because it's incredible, of course. Everybody, nobody will purchase a fridge via the Internet or the telephone. You're not going to buy a special shirt or a suit over the Internet. But, you know, there is one thing we are not here at the beginning of the opening of the mall. And here we have. The demand that we realize is human. You know, we are gregarious people. And there is the Greek philosopher Aristotle. We are guided not only by our family, we are, we get tired of the same people. And in the mall, I am an observer. We have people. It's a place to meet as from the standpoint of healthcare. We have a great healthcare center and now we're talking about healthcare in a mall, but you know, the mall, the shopping mall is the biggest antidepressant.

And we,

Have that energy of seeing people, but being imprisoned is the worst condition for any human being. Otherwise we wouldn't have jails. The greatest punishment is the cage. But when we self cage, you know, you have that fear that paralyzes us. I did not stop during the pandemic. Not a single day I was at home. I got COVID. I got infected, but I didn't have any symptoms. I didn't have fever, no lung issues. I lost my sense of taste, but then I was working. I had a surgery recently that it was the longest period of my life that I was away from the company, that it was 30 days. And I don't remember having been away from the company more than that. In 10 years, maybe, you know, people, everybody tells me to take on vacation. But when you do what you like, you transform your work in a hobby. We human beings need that. We live off challenge. Without challenge, it's not fun. So I apologize, it has nothing to do with the call. Gustavo, we hope that we answered your question. Anything else? That's great.

Thank you. Next question comes from Alex Ferraz Itaú Bebea.

Hello, Dr. Perez, Armando. Thank you for your presentation. I have two questions. Well, the first question is in regards to the comment about selling the assets. For those of us that follow up on the company, it's not so common. And obviously, when we look at the market and even the shares in the private market, we can see that the private market, we have a cap level that is more attractive. Obviously, it's very determined, but when we talk about the possible sale and we have a nested several participations fraction in the assets, how do you actually think about that part of the agenda? Or unfortunately, there is that option for leveraging. And then the second part. Regards to January and you even mentioned the revenue 25% against January 19. And we had that growth in the fourth quarter. I mean, for the contracts that are overdue, that are going to be due, the level is very similar to what we see in the third quarter. the seasonality of Christmas, and then we have the contracts expiring at the same level and the same date. What can you tell us? Well, Alex, I'm going to answer this about the asset and then Armando can talk about the issues, financial issues that you mentioned. But yeah, when I was mentioning the 10%, of the value of the company and we pay for debt, I am not, I'm not trying to sell anything, okay? Internally, some would like, it would give us more liquidity and then, but then you kill the golden egg heron. So I am resilient, resistant. Our assets, yes, they are under-evaluated by several reasons. We're not going to sell assets, you can rest assured. Nonetheless, if tomorrow we have an asset that we bought and that is not working, certainly We hope we are not going to spend a lot of money spending something that might not work. OK, so. In that sense, yeah, we can sell it, we can sell it so we don't have issues, but our cost of labor is very high. The company is expensive, so we want to fix our synergies. Concentrated in productive activities, whether it's real estate, So that's it. My answer is that. But the financial part, Armando can answer. So Alex, I just want to talk about the innovation are magical. Unless the tenant wants to leave the contract and renewal is automatic.

When he was talking about the growth of the net income, So when you take the IGPM indicators, for example, you have a good idea on the continuity that we had in the fourth quarter. That's the kind of continuity we had in the fourth quarter. Was this your question? Well, Armando, yes. I was, you know, using the fourth quarter as a reference. It was a bit easier to have the passing over of the discount, but I think you answered my question. Okay then. Thank you so much. The next question is from Bruno Mendonca from the Bradesco Bank, BBI. Good morning. Thank you for your time. I have two questions as well. So Armando, was talking about the turnover that is above the average. But looking at the consolidated figures, we have the impression that the new tenants are entering into the contract, paying according to this new price level. Well, it's higher than what it was pre-pandemic. Can you talk a little bit more about this dynamic of turnover, the new negotiations? From the standpoint of the negotiations and how do they compare to the readjustment negotiations you've had? Well, this is the first question. The second question is about leveraging. So what can we expect down the road in terms of leveraging? There are too many things happening at the same time. You do have Golden Lake that is under development. Is there anything in terms of investing in digital platforms, in relevant companies, addressing the CAPEX and what you can do? So what can we expect from the CAPEX evolution? Is there a target figure for the year end? Do you expect to generate cash in 2022? I don't know if my perception is correct and that's it. Thank you very much. Bruno, well, let me talk to you about the turnover. It's a normal thing. Of course. We never thought. We never thought that we would experience such a crisis as we have experienced. Well, the prognostic factors against our activity were terrible. It would come to an end, everything would be digital, that's what they said. Anyhow, there are some cities that had trouble in their trading and retail areas and this also affected the shopping malls. There were cities in which the retail sectors, the retail areas were closed down seven times in a row. On the other hand, we've adapted We have fixed things. We started being very careful about the entering and leaving of people. We started using thermometers, testing people's temperature. We hired infection experts. And we invested a lot in the sanitary and hygiene area. So we rest assured based on the data that we collected. We felt reassured. And the turnover is normal. We've never had such a big gap. So what were the losses in terms of a tenant or rented area? It went from 97 to 95.3. But back way then, in the beginning of the COVID pandemic, we were running at a loss of 10%. No, no, it was just 4%. So we were quite resilient. So imagine, you know, closing down for seven months, opening up the stores after seven months, the souls of the tenants were reborn. It was their second life, right? This is fantastic. What I may tell you is increasingly so. What I see is that people feel imprisoned for one reason or another. So they feel like going out. They feel like going outdoors. Well, travel or traveling overseas. The airlines, they suffered just like us or even more. And there is no aircraft to fly. There are no flights. We do have restrictions imposed by countries. So if you want to travel, you cannot travel, right? And so I managed to go to the United States and I do have a company there because the American government understood that those who invest heavily in the United States, they would, you know, have a different treatment but it was late last year midway actually last year I was able to travel to the United States in July or September well and then I spent one and a half year without this possibility of a traveling and that's a terrible feeling you are imprisoned in your own country you are locked in your home So what the mayor decided is that nobody can go out of the house because the virus will infect you. People may be arrested. I don't know. So COVID in a certain way has shattered the economy of the world with very few exceptions. And we know who the exception is. I'm not going to name names, OK? But the world was really affected. The world was shattered. So we work with the physicians. We do have medical centers. Here in Ribeirão Preto, for example, we have large medical centers. They have been in operation for 30 years. So this wasn't available in the world, the clinics and the medical centers. We came up with this. So the physicians took three, four different kinds of vaccines. This is a lack of safety in spite of the health system and the great health professionals. They were all willing to work, but they had been vaccinated. They were ready to serve. I had two vaccines. I didn't have the booster. Well, people tell me to go and get the booster. I won't. I do a blood tests every quarter. And my immunity is good, so I rest assured. I feel safe. We also test for COVID. We test immunity for COVID. So if it's good, it's good. It's OK. Well, what I mean with all of that is that we are now, you know, reallocating. For the technological department, well, we need to have in-person entertainment, the presence-based retail. So the exchange of currency for merchandise, the retail, is a way of integrating people in society. People go to the mall because they want to talk. They want to talk to salespeople. They want to drink their coffee. They want to meet people. So we have, you know, life centers. It's reassuring to people. It's safe to people. If people feel bad, we do have, you know, nursing services. We even have ambulances available. So what I would like to say is that I see a great future for our activity. Of course, the street retail suffered a lot. I don't know how they will recover. I don't know how recovery will happen in major cities. But in our case, shopping malls most survived. We totaled 620 malls in 5,400 municipalities and there's room for growth, definitely. And the malls have been present in the world for more than 70 years. In Brazil, 50 something years.

I don't know if I answered your question.

So let me give you an answer. It's not so charming. It's not so charming of an answer. It's more of a technical answer to Bruno. Well, Bruno, I think your perception is right. And let me give you some evidence on that. If you compare, for example, Empen Unsp-Adr piggyback on your question to clarify some other questions that we have been receiving these days asking about the rent calculation. If it's net, if it has discounts or not, it's net. It's free of discount. It's the rent that is actually paid. All deductions are included. So this is what we charge. This is what we bill. This is how we calculate for the rent for that very tenant. So your question now about the rental of the new shops, it makes sense. Everything is aligned and it's possible because of the quality of the undertakings that we work with, because of the productivity of the undertakings and because of the opportunity that we offer in renting shops in unique places. Your second question about leveraging. So we have amortization that has been foreseen for this year. Our CAPEX doesn't have and has never had a target on how much we will invest. We will invest as we see good market, as we see a good market opportunity, available funding, the cost of the capital, the best use of the company's resources. So our planning is something about deleveraging over the year because the leveraging, historically speaking, it's higher still because of the discounts that were given throughout the last two years. So even with the investments that we have been planning to make, we expect to have a gradual deleveraging of our company. Okay, perfect. Thank you so much. I thank you, Bruno. The next question from Andrea Mazini from Citibank. Hello, Professor Perez. Armando, thank you for your call. The question is about the tenants replacement 7.9%. It's the highest churning, right? So let us talk about who's coming in, who's leaving, perhaps small shops that didn't do well during the pandemic. Those that cannot access credit, for example. So the tenants that really suffered and left. So who's coming in? The digital native companies, the new brands, they start in the digital platforms and then they know they need a brick and mortar shop. The second question is about taxation. You optimized quite interestingly the taxation on revenue. Revenues are growing year on year compared with the fourth quarter of the year 2020 and the taxation is going down. So there was a reduction year on year and it's lower than the historical average. So about taxation at a lower rate, I think it's 5%. Now, is this something that we can expect for the future? Or was this an isolated behavior? Well, Andrean, thank you so much for the two questions that you had. The first on page 33 of our report, I draw your attention. because we inform the ABL, we inform who are the new tenants and the tenants that left us. So there was a swap, 5,800 square meters of apparel left and 4,200 square meters of a food court and a restaurant and gourmet areas 2,454 house appliances and office products, office supplies. So these were the main additions here. So we see those who left and those who came in. And within the tenants that came, and he mentioned this already, So there was this expressive area of companies, offices. They were online companies. And as you well said, they felt the need of having the brick and mortar shops to have this physical presence in the mall because of the exposure, because of the touching experience that this enables. And about your question about the taxation. Well, we took the opportunity using credits on essential expenses. So there was this isolated effect on the PIS and COFINS taxes. These are taxes on revenues. Well, of course, there'll be a recurrence of this in the forthcoming years. It's a credit program. regarding previous fiscal years, but this will have a positive effect in the next quarters as well. Thank you, Armando. Did I answer your question, Andre? Yes, you did. Thank you so much. The next question is from Igor Alterra from XP. Hello, good morning and thank you for the opportunity and for the presentation. I have two questions. First about the dynamics of a rental for 2022. So sales are quite resilient as you showed us. data from January with growth of 4% when we compare with January 2019. So this gives us some boost for you to keep on charging more rental throughout 2022. Do you still have this dynamic going on? And the second question is about delinquency. So in spite of the more active charging, you were able to really address the issue of delinquency. So you control that well. So how do you see this rate between delinquency and billing, invoicing? So how do you see these two sides? That's my question. Well, I'm going to answer just a part of your question, perhaps the most consistent part of your question. Well, the rental is based on sales, the rental fee. When you sell more, well, the rental fee goes up. So that will depend on the throughput, on the productivity, on the efficiency of each of the malls. And this is very much important to us. Everything is based on sales. Those who do not sale do not buy. Only those who can sell can buy. And that's what retail is about. And the rental fee is related to that. Well, the examples that I may give to you is that everybody told me that I was crazy to build this Jacarepagua Mall. And then we inaugurated at a rate of 95% of closed deals in terms of rental contracts. And some had to pay the handshake fee to be able to rent because it was a high demand market. So that's the best answer that I can give to you for a newborn mall. The newborn malls, they do not start working at such high rates. That's it. So the best test was testing reality. It was a reality check. And let me add to that, the rental fees for 2022, of course, there is a positive outlook because we do see a recovery of the entire sector. We are now operating normally. We see the restrictions being lifted, and this will enable us to be more efficient in the management. So this will result in more sales for the tenants. And of course, this will create an environment in which we can charge higher fees. Of course, there is this pressure on the readjustment rates, and this is going to be favorable in terms of rental fees. and I was having this conversation this morning and many people ask about this well the GDP will not grow that much this year and then I quite quickly was taking a look at 2015 and 2016 and these were years in which the GDP went down 3.55 and 3.31 respectively and then even so we've had sales growth rental fee increases And all of that is possible when you have the combination of good properties and a good management. And this is what we have in our company, right? Regarding default and delinquency rate, I believe that when we look into our indicators, we see the strong recovery that we've had Well, delinquency is one of the indicators that is above the historical average. So we were able to surpass the figures that we had in 2019. There was a big win. Well, 2019 was a record year in terms of good performance. So exceeding such rates is special to us. It feels special, especially because of all of the restrictions that we have faced. And delinquency has been going down. It has been dwindling, but historically speaking, we've had higher figures than the ones that we had in 2019 based on the quality of our portfolio. Because of the improvement in the economic scenario, because of the improvement in sales, we hope to reduce delinquency rates over time. Of course, we wish to do that and we're going to work to do that.

Great, Dr. Perez. Thank you very much. Thank you. Next question, Funny Oren from Santander. Hello, everyone. Thank you, Armando. And my question, well, most of my questions were answered. So I just wanted to question and one point that is Kanoas. From what I observed in the sale of Kanoas, Even though it is a recent article and asset that is launched in 2017, it's getting to very close to Baja Shopping Sioux. And I understand that these are similar, but it's very impressive with how quickly it is maturing. And this is what I want you to understand, Dr. Perez. You talk about Chacaripagua. What do you think could be Chacaripagua? Since you have a lower income in Chacaripagua, but you had more people. How quickly can you mature this asset? I know that it's a million dollar question, but that's it. Well, thank you very much for having this for understanding very well our sector but I will explain to you how we work the problem is I am tired if you do not bring a different idea world if you do not bring a global world if you don't integrate more with nature if you do not think that the people that Go to the mall. Most don't buy anything, but they feel better. We invest a lot in the fun part. And Ganoas was the first mall that had the ice skating rink that was well-structured. It was working 24 hours and every day of the year. And here in Jacarepaguá, Actually, Rio de Janeiro didn't have any of this. It's a beautiful thing. I don't know if Canoas is better than Chacaripagua. Oh, you spend so much money in Chacaripagua. But we do not discriminate people. Our problem is that many times it's not the issue of who we should copy. We should fight. We are our own competition. So always we want to deliver more things, making the reality better than the dream, which is what's happening to Jacarepagua. Canoas was great because here we were discussing, oh, it's, it had another mall and I thought that it was a great possibility. I did Canoas with a different purpose and It was the agreement with the mayor's office to integrate the Cetudio Vargas Park. We had lakes. It's a beautiful place. And we integrated the mall with the park. And the park was launched before because nobody knew where the mall was in Canoas. I think that not even the people from that city knew. So we are the kings of the outskirts. But anyway, it's growing more than Barra, Chopin, Sue, because a great deal of Porto Alegre. It's 15 minutes to the north of Porto Alegre, where we have the concentration of the population. and they go to Canoas. Canoas is a trip and Yacarepagua can be a fun day trip. Yacarepagua is still smaller than Canoas. So it means that the people take the picture of the bathroom. And then I got there and I was scared and I thought, And the restrooms are very beautiful.

So Jakare.

And if you ask Jakare Pagua, if they're happy, they're absolutely happy because people that go to Jakare Pagua, they don't want to leave Jakare Pagua. It's an old neighborhood. that has 700,000 inhabitants and was forgotten because it concentrated at Barra da Tijuca, which is the main focus of investments. And we forgot Jacarepaguá, that it exists since the time of the empire. So it is a traditional neighborhood. And it's evident that we have 700,000 people. It has a poorly distributed, you know, socioeconomic strata. We have middle class, lower middle class. We have people living in mansions. What's happening? It's that a lot of people are leaving Barra to go to Jakarta, Papua. and Jacarepagua didn't have any restaurants. It didn't have anything. And then I saw an opportunity. With that, Multiplan strategically concluded the complete domain of the East Zone. We are, we have 5 malls Campo Grande as well Campo Grande we have it's a nice mall it's beautiful and it's here's the thing our objective at least my objective is to make people happier give them what they didn't have before. So let's go back to in time. When I did the first mall, I asked the Americans why they did the malls outside of the, the cinemas outside the mall. And they answered, because those that go to the cinema, they don't go to the shopping mall. And now look at what they're doing. They asked me when I built the barra shopping how did i make something why did i do something so crazy but no pain and pleasure are the two faces of the same coin so today we have barra chopping and they go because of a habit because those that go to barra shopping every day They see the physicians that are selected. There are very special solutions.

And. But I shopping receives 25 million people per year.

Maybe the city has 7 million and we receive four times. the population of Rio de Janeiro. So it's by giving the receive, as we say in Portuguese. Invest for the future. Nobody is tossing away money. So why would you have a skating rink? I heard many criticisms, but we need to realize and Get ourselves in the place of the consumer. And we need to think about what makes individuals happy. Our last initiative is with Augusto Cori. He's the author of a great bestseller. And we created this therapeutic center. And I'm going there to see, to treat the emotional issues that people have. Because me for many, many years, I looked at people and then I said, what can I do for these people so that they feel better? And we looked at the external part, but we know that inside there is a problem. So I wanted to try and help those people so that they can go to the mall and be happy. And maybe that's the time that Joy will cover some pain, but they have internal problems as everybody else has. And then I created Multi Syndrome because I got information from somebody from Sao Paulo that told me They couldn't see a therapist, but they went to that center, and with 120 real, they managed to treat themselves. And these are psychiatrists. I got into the mall. And you can buy a shirt for 120 real, but you're not going to solve your pain, your emotional pain. So you have here a backup. You have a support that I am certain as people will adopt. We have 300,000 appointments as we have in our mall in Centro Navis, and that's per month. And that's why I ask you why. Because when you go there to do your treatment, you have access, you have the feeling that you don't have anything because it's, when it's their time, they're called on the cell phone. So you don't have to look at the face of the people and then they're happy. We turned the habit of going to the physician a little bit more pleasant. And the physicians asked me for many, many years, what was happening? that his appointment in his clinic in Leblon, people would prefer to go to the mall. And then I said, because going to barra shopping is like going out and it anesthetizes the fear. Because when you go to the physician,

People that go to the physician, nobody likes to go to the physician.

And I know that a friend of mine recently went to do a procedure. And then there is some expenses and spectacularly installed. They say that I went there. And I thought, well, I had nothing else. It was so good. And I was already relaxed. That's what she told me. So to make people's lives better, making people happier, it's an objective. Maybe that's the objective of having a therapist inside of the mall. But I talked to many analysts and they think that the idea is very good. To end the stigma that you treat with a psychiatrist is because you're crazy. Conflicts, emotional conflicts, everybody has them. And it can generate a disease and a series of things. So you need to treat your soul. And this is what Multiplan tried to do in the human soul with the shopping mall. Thank you, Dr. Perez. Thank you. Congratulations for the result. Thank you, Fanny. So now we have Marcelo Mota, JP Morgan. Good morning. Well, if you can, I know that there is an impact with the result, but understanding 2022 and looking at the initiatives of growth in the company, We lost the connection of the person that is asking a question, and we continue with Luis Serafin from Bradley Corporation SA. Well, my question was exactly about Multiply and leaving the capital of BR Malls.

Well, we're waiting for Lucida Finn.

What have we seen when we invested in the delivery center way back when? Our entry into the partnership was to try and service the needs that we saw in the shopping mall as basically to the quick delivery leaving the shopping mall. getting very quickly to the house of the consumer. And the second point is to raise the logistics stocks for the internet in such a way that they can be duplicated in several apps in marketplaces, generating value. And you don't have to sell in our app. What we wanted And what we want is to generate a value for the consumer convenience. And all throughout time, we saw that that strategy of the delivery center was replicated with several other participants. So delivery that was taking too long, the concept of the quick delivery this is a trend in the world in the same way that several companies are specialized with all the different SKUs via the internet so what we saw is that our investment was we needed to adapt to a need a pain of the market that existed at the time and that's why we decided to no longer invest. I hope that I answered your question, Luis. Yes, thank you. I don't know if Marcelo Mota is back. Mota, are you there? Can you hear me? So, Mota. Okay, we managed to hear you. So the delivery center, I hope that the question for the delivery center has been answered. And in regards to Golden Lake, it's a vector of growth. Obviously, we do not do that business of the real estate development as an obligation is not the main activity of the company. It's an opportunity. It's an opportunity to generate value and earn money, and at the same time, yes, perfect.

Well, that's a concept of a new neighborhood, a new way of living. Well, there's a caveat. Our DNA is a real estate DNA. We've built more than 300 properties, at least I did in my life. The shopping mall was the trick of the trade. We went from the commercial galleries to the malls, something that was more needed. Well, we do have the priorities, commercial centers, providing services in the commercial centers, and we also prioritize development. We have one million square meters around our malls. So we have much land. It was appraised for very little. Now it's appraised at a high value. So we're going to develop properties around it. In Golden Lake, as you know, Mota, the first phase was launched. That's the Lake Victoria and the other phases that have been planned. So when we think it's timely, we're going to launch the other phases as well. Yeah, perfect. How are the sales going? Can you inform us on that for us to measure the positive impact that it could have in the 2022 results? Of course, we brought a report to you. So far, we have 42% of the private area sold. This is data from January. We have 3839 units from the 94 that were sold and this amounts to 207 million BRL. The VGV is 530 million BRL. And the construction works begin now, right? In January, in February. Just to see how much it represents. We sold 207 million BRL. We don't have many We don't have images. That's a shame. Because if we could show to you the images, it's amazing. It's really amazing. Yeah, the images are not ready. It's a very unique project in Brazil. Definitely in the south region of Brazil, it is one of the largest ones. It's similar to the Golden Green, but it's better than the Golden Green because we learned from Golden Green and we did it better. So there we're going to have pet hospital, for example, a pet hospital, a pet hotel, better saying. And people want that. So when people want to go out on the weekends, where can they leave their pets? So we built this a pet hotel. That's a very nice hotel because these pets, they're special. The dogs are like people today, for example. And I believe we learned a lot in the pandemic. And I've always liked dogs in my life. But we like them even more. So people now love their pets. Yeah. Very well. It's worth visiting this project. We had an interference in the sound. I think they're tired of us. Very well. I think we came to a closure. Are there any more questions? There are no further questions. José Isaac Pérez will do his final remarks. I would like to thank you for your patience in listening to us and asking questions that are extremely constructive questions for our company. We also learn a lot in exchanging information with you. And I would like to tell you that we are very much motivated by what we do. We believe in it. So I would like to thank you. And I would like to tell you that Multiplan is doing well. We're going to do well this year in spite of the elections, but it's a highly promising year for the retail market. Thank you so much. Thank you. The teleconference on the Q4 results on Multiplan is now closed. I wish you all a nice day.