Syn Prop E Tech Sa S/Gdr

Good morning, ladies and gentlemen. Welcome to the SYNC video conference to discuss the results for the first quarter of 2022. This video conference is being recorded and the replay can be accessed on the company's website, ri.sync.com.br. The presentation will be also available for download. Please be advised that all the attendees will only be watching the video conference during the presentation. And then we will start the Q&A session when further instructions will be provided. For those who are watching this video conference in English, we advise you to download the presentation in the company website in the quarter results section, so you can see translated material. Before proceeding, I would like to emphasize that the forward-looking statements are based on the beliefs and assumptions of the SIN management. and the current information available to the company. These statements may involve risks and uncertainties as they relate to future events and therefore depend on the circumstances that may or may not occur. Investors, analysts and journalists should be aware of events related to the macroeconomic environment, the industry and the other factors could case results to differ materially to this presentation, Mr. Thiago Muramatsu and Mr. Hector Leitão. Mr. Muramatsu, the floor is yours. Good morning, and I would like to thank you so much who reserved some time to follow our conference, quarterly results, talking about the achievements during this quarter. This quarter, after the asset sales that we had in November and payment December last year. And part of this resource, we already paid dividends and partly was reserved for debt paying. So here together with Hector, we analyze what we had on debt. And then we anticipate the payment within two operations in the quarter, seventh and the ninth debenture, the seventh $36 million with different collaterals, ITM and USPS. And the ninth debenture payment, almost $100 million. and Grand Plaza Real Estate Fund. After the quarterly results, we have the results and we also have the antecipate, the 13th debenture, the value over 100 million. That was the repurchase of the first series of the 13th debenture. These three debts that we paid had the term that was closed, we could see the duration of these debts of the company in general. And we had cash flow freedom so we could work with investments, dividend payments and other prepayment of debts. The prepayment of debts that we had in this quarter, we also communicate a dividend of 80 million paid on May 30th, this month. Talking about operational performance, I believe there is a big change of the portfolio. And it's interesting to understand these changes reflected in our balance, in our TRE. Hector can talk about it. And it's interesting to see the portfolio divided into three big groups. We have shopping malls, we have AAA offices and Class A offices. The final one has been suffering more with the occupation and the main sensor in this group is ITN. 35,000 meters of ABL that we have more than 35%. In our part, everything is open, is vacant. We have 17,000 vacancy in meters and the other buildings have higher vacancy, but the area is smaller. And the rest of our Class A buildings are 100% leased. AAA, this level of vacancy that is elevated now in this quarter, is the consequence of the acquisition we had, 1,500 meters in tower D, JK complex building. We have a vacant area. This operation was interesting considering costs. We sold our portfolio 36,000 reais, the square meters, and we acquired less than 25, So this has generated value in the acquisition part of what we acquired. We have already rented and the value is above our underwrite. And that is also a part that we have been working on it. But the good news is that there is a good willing for renting and leasing that is high demand on AAA shopping malls. I believe, next slide, I can explain it better. Observing the shopping malls, and we have the number since 2019, in 2020, January and February, these months were normal. Before the first result, March, it worked half of the month without restriction. Then 2021, we had restriction in the first quarter. And then we reached the first quarter 2022 with a drop. 627 million in 19 for 565 in the first quarter 22. the main factor that we could not check near the sales in 2019 was cidade de sao paulo shopping mall that is a great dependency on offices and tourism the offices from march on especially april There was a return, more massive return of people to the offices. And then we can see the reflection of these in April and May. We had May with excellent flow in the malls, no exception. The sales perception for Mother's Day was good. So in some malls, the estimate numbers is overcoming the sales on Mother's Day 2019. So from this point on, we can reach closer and closer to the sales in 2019 and overcome it. The flow is not represented here, but basically we see the same effects on sales. In our release, you can see in the detail, but the difference is that we can differently to make profitable the real estate, the parking areas with the lower flow in although areas also had profit and in the end of the day, the revenue in the parking area is higher than in 2019. And the sales also, productivity on sales is very good. Fewer people, but spending more, the average ticket is higher. And this year, especially, with big launches in the movies everything is going to back to the same levels that we had in 19 and higher in the financial aspect you see that we are getting higher about occupation when we see the first quarter 21 and 22 91.8 compared to 1995.1 there is a piece of information that is important to understand, to understand this difference in occupation. When we observe the occupation at stores, number of stores, we are so close to 2019. The big difference there is, a little bit better, in the case of occupation, is a tower that we have a commercial building in Grand Plaza. We consider it in the ABL. When we exclude the effect of this commercial building that is not something related to retailing, it's occupied by companies, small and mid-sized, we have this occupation effect on stores, the same levels that we had in 2019, the beginning of 2020. Observing the sales at the stores when we compare the first quarter 2021, we see a big growth, 63% observing the first quarter 2022 compared to 2019. Comparing sales at the stores, we see a drop of 6.5% explained by the fact the sales of Cidade de São Paulo shopping mall. Next slide. I mentioned about corporate buildings. And the ITM is considering its occupation rate when we exclude ITM class A. It has 86.2% occupation, reflected what I commented that its area is really representative in the occupation the value of rent is not so representative as AAA and AAA, we have the occupational rate and there are two buildings AAA within our portfolio and all the rest that we are still managing. And these buildings, there was the acquisition in the beginning of this year and the occupation suffered, but this is not in our concern because we have there relevant demand to occupy this space is a matter of price and not so much demand. And talking about prices in corporate buildings, it's not here in the presentation, but when we observe in our class A, the same area per square meter, we have a small drop around 3 or 4%. But when we observe AAA in the same period, first quarter 21 and first quarter 22, that is an increase of 12%. And this is reflected on what I say about prices. The problem that we see in vacancy in AAA is not depend, but more proper prices that we understand for debt development. And from my side, I believe that's it. I pass the microphone to Hector. Thank you so much, Thiago. And thank you so much all the attendees for your presence. I will talk about P&OI. This was the highlight of our balance, what our performance, operational performance in the assets. On the left-hand side, NOI plus PDD, We have a decrease of 16% compared to the last quarter, but there was an impact of 20 millions in the portfolio that we sold in the fourth quarter. To the right-hand side of the graph, we see the same properties. There was a growth of 32.5%, concentrated in shopping malls, and I will talk more about it. Observing shopping malls, we had a growth of 38.2%, observing the same properties. Observing 2019, we see a growth of 1.4% compared to 2019. And here, it's not here, the effect of default, but adding this effect, we grew 8%, almost 9% compared to 2019. So the takeaway message, the shopping malls are returning powerfully in all the malls. in default aspect and also vacancies. We see the first quarter seasonally is bad on contract decisions. We see a good settlement of vacancy and a good pipeline of new lease for the next quarters. And I believe the takeaway message for shopping malls, we are in a point in time that we are increasing going up. Also, March and Mother's Day were excellent. The weekends on these days, we were over 2019, double-digiting sales. So we are so confident on the return of shopping malls. Talking about buildings, we also see some important events. 2021, that is a drop, but there were some events, non-recurrent ones in 2021. causing this drop of 24%, an effect of linearization. Sign we receive from contract terminations. When we remove these effects, we still have growth near 10%. So, as Thiago mentioned, there is a stabilized price for Class A and a big challenge for ITM. our asset that is almost 100% vacant. And we have a growth that is interesting in AAA rent. We can see throughout the other quarters. Next slide. We see the adjusted EBITDA compared to last year. We had a drop of 5.5% in 2019, The effect was AAA sales, a part of BH Station that we sold, 20 million. So we are leveling up and pitching up with a smaller portfolio, exactly because there was this interesting performance in operations in malls, and DNA is well controlled. Basically, there was no event. highlighted, not even positive or negative in the DNA. It's well controlled. Compared to the previous years, we keep the same level on expenses. But when we see this adjusted FFO, we add operational result, financial result. There is an expressive drop compared to 19 and 21, specifically compared to 21. there was basically 15 million more on financial expenses compared to 21. And if we exclude this effect, it would get a result 2 million under 21, but the recurrent revenue under operationally speaking, there was an interesting evolution. But the downside is that it was not the scale of CDI. that was in consideration and the surprise for this quarter nobody expected was IPCA scale. As we observe, we are a level of 12% in the last 12 months. And then we have a specific debt on IPCA with a higher impact in our financial result. Observing debt, as Thiago mentioned, We prepaid already in this quarter, and even with the dividend distribution is four quarter additional. We're going to have one more. We have a level of leverage that is under control. So we close the quarter with a gross debt of 1.5, 1.487, and the cash of 546. but we are in a capital reduction process this month, adding to our cash almost 347 million. So the net debt is almost 600 million and cognate debt is three of 0.4 times and adjusting with current revenue is three times. So we have a balance that is well acquainted here. And then Talking about the amortization schedule, 200 million in March. We are going to mark 200 million in the following months. Up to May, we fulfill 200 million and we see that the following years, two years, we have space, interesting space of services and debt to pay. And of course, we are going to analyze throughout this period If eventually we anticipate some prepayment, but the good news, the photograph is that we are well acquainted with our cash compared to what we have of investment ahead of us. And highlighting that is one fourth of our debt is connected to IPCA and the rest CDI. So in the following years, we see and amortization equated to our cash flow generation. And then we can open up the floor for Q&A now. Thank you so much. We are going to start the Q&A session for investors and analysts. If you would like to place a question, raise your hand. You can use the button. If you want to write your question, please write your questions in the Q&A box with your name and company.

Wait until we collect all the questions, please.

To ask questions, you can raise your hand and you can also write your questions on Q&A box with your name and company name. The first question is from Mr. João Bellic. Can you talk more about the vacancy in Cerrado Shopping Mall? Hi, João. Yes, we can talk about it. Cerrado Shopping Mall There was a very challenging beginning. In 2019, we increased the occupation of the mall. The pandemic hit and everybody knows what happened. I don't need to repeat. We lost some operations, but now we could relocate great part of these operations. Some were located in the first quarter, another after. the end of the quarter so our occupational level is higher than this result we have now there two areas that are higher vacant and we have been working and it's interesting because there we see two effects that is a growth of the retailer's demand for the development we have been working with a higher qualification of the stores in that mall. So throughout this year, we are going to see the effects. And the second point, surrounding the mall, what's natural to happen when the mall goes to a site away from the big centers, we see real estate development, households around the mall. That region was residential, households and storages and warehouses. So we see these warehouses giving place to buildings and houses, bringing a positive effect to the mall. And this is going to be part of a virtual cycle of renting answering to your question i believe that we have for this year a good perspective to improve and improve a lot the shopping occupation next question mr elvis credential you can open up your microphone mr credential