Syn Prop E Tech Sa S/Gdr

Ladies and gentlemen, and thank you for waiting. You're welcome to CCP's conference to discuss the results for the fourth quarter of 2020. The audios and visuals are simultaneously transmitted on the www.sa.com.br. I'd like to inform that all participants will be listening to the teleconference, and then we're going to start our Q&A session. In case any of you need assistance during the conference, please dial star zero for operator. Before moving on, we'd like to clarify that This teleconference provides anticipations about future events and contain risks that may not be contemplated and results will be different. CCP does not update them in case of new information. I would now like to introduce to you Mr. Laura Macos, Financial Director. Please move on. Thank you very much. First of all, good morning. And I'd like to thank you all for your participation and for dedicating some time to listen to our earnings release. 2020 was a very challenging year. It goes without saying in different areas of the economy, And because we depend a lot on the presence of people, it was very challenging, but I believe that we were able to close the year with very positive outcomes. I also think that the performance of our investment was above the expectations we had in the beginning of the pandemic. For the beginning of our presentation, we have dedicated part of our efforts to improve the return for shareholders. We had two programs that were carried out. One of them was a shared buyback. We canceled and improved shareholder satisfaction. We also understood that there was not a lot of opportunities for investment for the company. And therefore, we decided to have a distribution of dividends in the order of 135 million equivalent to 0.88 per share. We also had the acquisition of the fourth floor of Padilla Libre Financial Center. And from an operational point of view, we have two factors.

Was a bit negative.

But it was not significant, and we were able to close the year with an increase of 20%, and that represented approximately 15% of our total. And then in January, we signed an MOU with SPX, a resource. we will focus on the capital management of third parties. So now moving on to the next slide, we will talk about the recovery of the shopping mall. When it reopened in early June until the end of December, we had an increase of about 35% per month. October, the recovery was more accelerated. Between October and December, there was a small de-acceleration, but we still recovered our flow to levels very close to the levels before the pandemic. In terms of the recovery of sales, we had an average increase of about 32%. And then moving on to slide number six where I will talk about the consolidated results and then later I will talk about each one of the different segments. We concluded the fourth quarter in the year of 2020 with a financial occupancy of 89.5% and a physical occupancy of 86%, but I would like to make a few disclaimers here and I will talk a little bit about each one of the different segments so that you can better understand what the reason was for us to have such a significant decrease. So I'm going to start with the shopping mall. We closed the year with a 93.7%. we can see that we had a decrease in the order of 1% when compared to the previous year. So we were able to recover occupancy when we compare with the previous quarter of 2020, and we were very close to the last quarter of 2019. And then you can see here 94.8, and we concluded 2020 with 93.7 and therefore there was a decrease of about 1%. And an important compliment is that in January we had rentals and increased our occupancy, allowing us to be very close to the 2019 level. We closed the year with 75.9% of financial occupancy and 83.9% physical occupancy. And there were some factors that had an impact. And when we defined our assets on Fadialina and SA, in the AAA building, we had financial occupancy and physical occupancy of 91%. And I'd like to remind you that the two main impacts we had in the vacancy in AAA buildings was because XP left Saria Lima building. They had not left the building yet. And also, we purchased the empty floor. So these were the two main impacts we had in terms of physical and financial occupancy of the AAA building. And I'd like to remind you that in the case of Act B, we're going to have the payment for the anticipation cancellation, and we will be able to rent this area again without an adverse impact. In case of the Class A buildings, I think that we had already announced that Itaú partially left IPM and they're going to remain there until May. We have 40,000 square meters that are going to be vacant. But on the other hand, we have good expectations. We have had some demands. Today we have a demand which is even higher than the vacant area we're going to have when it totally leaves the building. And then moving on to slide seven and talking about the performance of our shopping mall. We closed with a negative result of 23.3%. We have reduced the gap when compared to 2019, quarter by quarter. In October 2020, we had a very good month. It was when the malls were reopened. We believed there was going to be a positive trend for November and December. In fact, with the increase of new cases and closure of other shopping malls in Brazil, we realized there was some retraction in the number of sales of all of our store renters. But we still had better results. when compared to the third quarter of 2020. We also increased same-store rent. We were minus 2.4% negative in the fourth quarter. We reached total sales of 71 million. And our total number was 2.2 in our investment. In slide nine, talking about the financial performance regarding renters, we had an increase of 45.7% in offices for the year. Our AAA buildings had a 56.5% increase in the year and 46.8 in the quarter. On December 26, 2019, when we compared the same properties, we can see that there was a positive growth for the quarter and for the year of about 12%. In Class A buildings for the quarter, we had a positive performance of 12% of growth. When we analyzed the whole year, there was a positive growth of 5.2% in Shelby Mall. the revenues with leasing, and this is before the discount, so this is for gross leasing or performance for the quarter. When compared to 2019, it was flat. But when we compare 2020 with 2019, we had a decrease of 10% regarding payments of users' rights. significant percentage decreases, but in absolute numbers, this is minor. This is something natural as our malls are maturing and basically totally occupied and therefore the trend is for this usage right to decrease over the lifetime. In slide number 10, talking about net revenue, we had a small decrease of 4.2% in the quarter and an increment of 3.3% in the year. The reason for us not to have ground is the parking flow. We were really affected and that is a rather relevant area for us. And therefore we had a growth which was below the leasing rate. And now the NOI was basically flat when we compare the fourth quarter over a year. And it was below 2% or around 2% when we compare the whole year. However, the loss we had in the mall was compensated by the better performance in the billions when we compare the assets. We also had a portfolio increase, which helped us to significantly improve our results. In slide number 11, we can see the net profit and adjusted FFO. We had a decrease in net profit when we compared one quarter to the quarter year over year, but that's because we had sales in 2019. And then when we analyzed the adjusted FFO and we have already discounted the sales effect, we had a 32% growth when we analyzed the consolidated basis. And we had an increase of 17.7%. with an increase of 19% for the fourth quarter. And when we analyzed the whole year in the consolidated basis, we had a 40% increase reaching 175 million. And in the adjusted base, we had an increase of 64%. We left from 50 million and reached 82 million. And even though the operational results was somehow flat, this investment had to do with a better performance of our debt. We had a positive impact with the reduction in the interest rate. And also, we concluded 2019 and early 2020 by exchanging some of our debt which were increased fixed amounts for CDI plus the spread. It enabled us to be able to enjoy this decrease in the interest rate, which was very good for us, especially in such a challenging year. And in slide number 12, we're going to talk about our debt analysis. We closed the year with a net debt over the ETDA of 4.7 times when we analyzed the nominal ETDA and when we analyzed the adjusted ETDA, we had a 4.4 times. Of course, there was an increase from the fourth to the third quarter due to the use of cash, both for distribution of dividends and also for shares buyback for right now. We think this is a very comfortable situation, and we have been able to meet our covenant without any major problems. In terms of cost, we exchanged our debt to TR, and therefore 80% of our debt was linked to CDI, 17% to IPCA, and a very small part with pre-fixed values and that is linked to the TR. And now moving on to the last slide in my presentation, slide number 13 with our amortization schedule. And something we have tried to do here is to have our amortization schedule without any major variations year over year. Because our business is capital intense, this management of our debt is very important. We have tried to have flat refinancing. In 2020, we have $230 million. And most of our payments for 2027 and over. I am done with my presentation and I now return to the operator. We're going to start our Q&A session for investors and analysts. In case you wish to ask any questions, please dial star one. If your question has been answered, you can remove yourself from the line. Alex from Itaú BBA would like to ask a question. Good morning, Tiago. Thank you for the presentation. I have two questions. The first one has to do with SPX regarding the debts and the types of assets that will be focused. And in the portfolio, you're going to look for new classes for investments. And regarding vacancy, you commented and you have already mentioned the disclaimer, but I'd like to know what the expectation is, especially for AAA, for the Alima and the financial center in terms of location. What do you think the timing is going to be? And do you have any significant change in the spread for this specific moment in time? Well, thank you for your questions, Alex, first of all. Talking about the partnership with SPX, we have two or three funds that may be explored. The first one of them I have already commented. It has to do with new revenues that may be generated.