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to SIEM video conference to discuss the results on the first quarter 2023. This video conference is being recorded and you can watch it later at the company's website, ri.siem.com.br. This presentation will be available for download. We would like to inform that all the participants will be watching this video conference during the presentation. And after that, we open up the floor for Q&A session, giving you further instructions. Before resuming, I'd like to reinforce that the statements here declare as the beliefs of the administration of SIN and the current information for the company. And this statement may involve risk and uncertainties considering that they regard future events so unforeseeable. Investors, analysts, and journalists should consider that the events about the macroeconomic environment, the segment, and other factors may influence the results here expressed in the statements. Here we have present in this video conference Mr. Thiago Muramatsu, Director and President of SIN, and Mr. Hector Leiton, Financial Director and Investor Relations with the companies. I'd like to pass the floor to Mr. Muramatsu to start his presentation. Please, Thiago, the floor is yours. First of all, I'd like to welcome you all with a good morning. You see now our call of results. I'd like to thank for your attendance. This quarter was a quarter without relevant movements within the company. On the other hand, this quarter, especially here in the area of shopping malls, we have currently a great concentration of our revenue started turbulent because of retail market is scaring us, startling us in the first 20 days of January. Throughout the quarter, we saw these effects being worn out by the growth. of sales at the mall and our activity of leasing, bringing results. Directly to the point of these results starting operational performance is slide five, talking about occupation. Occupancy of SIN had a small reduction compared to the fourth quarter, 22, because of basically seasonality at the most and impact of corporate offices, comparing the first quarter, 22, 23, and 22, I believe the seasonality effects are similar. We grew 2% in physical occupancy and more financial occupancy ahead, we are going to deep dive the segments. First, shopping malls. We place here a disclaimer about physical vacancy because of Grand Plaza.

Grand Plaza, we have a commercial building, 4,500 meters inside this development. And throughout the last year, there was an interesting movement of renting in this building.

So when we see occupancy excluding the effect of this building, we are just talking about occupancy of retail, retailing stores, the first trimester quarter, we grew 1.3%, leaving 94.3%, reaching 95.6%, going over the 95% mark in the last two quarters. So we see this already as a healthy situation. We still have some challenges ahead of us. These two developments, they are going so well. And we have been investing a lot in events and entertainment. And we can see the results here in all the malls, especially we have interesting results in Shopping D Mall and Serrado Shopping Mall. Shopping D Mall, an area that is an expansion for entertainment, taking people to the mall. This is helping a lot. in the trading of other areas. Shopping D Mall in the end of the year, that is Poucah Temple. So all these operations on recurrency help a lot in the occupancy of the mall. And Cerrado Shopping Mall, we experienced big events bringing a positive flow. It's not reflected in this quarter's numbers, but I am sure this helps a lot growing compared to less quarter. Financial occupancy, the increase was bigger. The increase was more than 2% when we compared the first quarter, 22, and the first quarter, 23. Still about the most, we had a growth of almost 15% on sales quarter after quarter, overcoming in two times the inflation rate, growth near 7.5%, vehicles flow, there was a growth that was shy, 4.5%. And to highlight in this quarter is Cidade de São Paulo Shopping Mall. In the last quarters, it was behind the other malls in our portfolio. In the first quarter, 23, there was and increase above the other malls in sales and flow. And this, we talked to investors because of the location of the mall, focusing on leisure entertainment in the city. Paulista Avenue, that is a commercial center that is a lot of people passing through because they work. in the surroundings. The companies are back to the offices, hybrid work, so it helps the return of the flow in Cidade de São Paulo shopping mall. But this year, as the companies are back to the office and people are back to the office, well, we experience something near that what we had in 2019, and this helped Cidade de São Paulo Shopping Mall a lot. Retaining the growth was 12%, leaving the numbers that we compared in the pandemic period, we are comparing normal year. This growth is really interesting comparing to the accrual inflation, 7.5%. And the leasing and the stores growing in the same rate, 9% growing above the inflation rate.

And talking about corporate buildings, I believe there is a change in the criterion, a change in the criterion, but This is not in the analysis first. We did not own the development.

We participate through a fund, but we manage this development since 2022. So we direct manage the leasing, the renting, and today we participate as a person that has knowledge, but not under our management directly. That's why we leave IT out. And another one that virtually is empty, although we have some leasing contracts ongoing, we are studying different alternatives for this development, not necessarily as a corporate office use, So it is excluded when we use this comparison that we have operational offices. Within the offices, we finalized the quarter with AAA in physical occupancy above 80% and financial occupancy near 90%. Class A offices, 86% in physical occupation, 88% in financial occupancy in AAA, We have some transitions, natural transitions within JK Towers. We bought the penthouse in 2022. It's not over the leasing process, but it's nothing important, nothing to concern about. When we see this number, low number on occupancy, That is the CEO Pact in Rio de Janeiro. In our participation, this is a small area, but the occupancy is lower than the rest of AAA portfolio. Class A, we have basically an asset that impacts more the occupancy. Wasil Machado. Good news is that we have lots of demands in the last year. month for this development. And I believe that next quarter we are going to bring good news, positive news about corporate buildings occupancy. Moving ahead, we are going to see financial aspect and I pass the floor to Hector. Good morning, everybody. Thank you so much for your attendance. I will start with the results of the development. And it's important to explain that we adjusted the results in the last quarters, excluding the effect of linear discounts granted during the pandemic. And this is justified because last year, second quarter 22, we stopped giving discounts in a linear way. So we need to exclude them in this analysis. So we can compare it using the same elements. NY total and PDD considering loss provision, reversion of loss, depending on the performance to recover default in the last quarter's positive, we are recovering a lot. There is a growth of 6.7%, reaching 47.7 million of NOI. compared to 44.7 last year. Breaking the units, the business units malls, a growth that was robust, 13.4%, closing the quarter with 39.9 million compared to 35.2. As Tiago commented, the highlight is really the strong recovery of Cidade de São Paulo shopping mall, growing a lot in results and also sales. Double digit, above the average of 13 in sales, we observed 30% increase. Results, not so much, but it's really robust though. Offices, we presented a drop of 18% in this quarter compared to previous year, closing 7.8 million compared to 9.5 million. And here, the justification is that an impact of an accounting effect that we presented last quarter, 1.9 million, that was the grace period linearization of Berman 10. There was 50% vacancy up to 2021. And we rented the other half, extended the contract to the other half that was rented already. So we calculated this linearization. If we excluded this effect, accounting effect, there was a growth of 22.7 NOI in the office, almost 11% total NOI for the quarter. Moving ahead, for the slide of results, we presented Bichida at just 39 million, compared 44.5 million last year. representing a drop of 12%. And here also there is this effect, accounting effect of last year, a reversion of bonus in 5.8 million that we had the previous year provisioning a payment that was bigger in 21 to 22 and 22, we paid lower amount justifying this reversion, excluding this effect we would have a growth of 6% EBITDA, aligned with the growth of NOI offices and shopping malls added. In the financial result, we have an indicator that is positive, aligned with our strategy of payments, amortization, anticipated amortization that we did last year. There was a financial result of 30.7 negative. compared 35 negative the previous year. So this gain, even though the CDI in average quarter after quarter 30% above, there was a positive match here because we have a lower gross debt in our cash. Following net revenue, this we have the effects of EBITDA plus depreciation and taxes. we presented a net profit, a loss adjusted in 9 million in the quarter compared to five last year and FFO excluding this grace period of net revenue, zero compared to 3.8 positive the previous year. If we adjust the effects of Berman 10, we presented here a loss 30% lower compared to the previous year. So the assets present especially the most robust growth. We are controlling expenses under the inflation rate, and the financial result will show up with a lower debt. And up ahead, we expect to see a drop in the interest rate. So we can see financial expenses already decreasing in the following Moving to the next slide about debt. We closed the quarter with 327 million cash, generating 13 million cash. This comes from the assets, non-operational activities. There was no surprise, nothing relevant. Gross debt, 1 billion 99. Closed in the quarter, net debt in our participation, 772 million, aligned with the previous quarter. Financial confidence. That is the consolidated IFRS. We closed with net debt EBITDA in 5.4, 46 times. Underneath, our limit of covenants seven times. So we have a good period on cognates. Another cognate that is very important is the assets value that are not guaranteed to debts on the corporate debt is 2.74. That is a minimum of 1.4 times.

So

we have an interesting margin in East Scotland. In the graph underneath, we can see what's going on in the last two years with the financial expenses. And of course, there is a peak in the second quarter 22 because of SELIC raise. The first quarter 23 was higher than the last quarter 22 because of seasonality of IPCA. IPCA for the year and the quarter was 8%, above 8%. So we are going to see the impact of IPCA the next quarters positive because we expect that it slow down throughout the year, closing the year in 12 months near 6%. This is a seasonal effect. that we are going to see adjusting this impact in our financial expenses throughout the year, as we did in the third and fourth quarter last year. And finally, the final slide of the financial session, we show that we have a schedule of amortization that is long this year, and the next year there is no due in the contract, that is important. In 2025, $223 million for amortization align with our strategy of having a cash that is more restrict in this period of high interest rates that we do not see lots of opportunities for business. Short term, the calculation is not so easy. because of the interest rate, there's no need to have elevated cash. And at the same time, it's an expensive cash. We have lower debt to have better result. And even though we are comfortable to move ahead with some opportunity of investment. On the right hand side, we see Since the last quarter, the debt has not changed 35% in IPCA and 65% in CDI. Average spread that is good in our debt, the debt is cheap. In the average of the debt in CDI is 1.5 spread and IPCA 6.5% is under the CDI. So I finished my financial session.

We can open up the floor now for Q&A session. We are going to start now the Q&A session for investors and analysts.

If you wish to place a question, click on Raise Hand. If your question is answered, you can leave the queue and lower your hand. If you wish to place a question in written, you can write your question in the Q&A with your name and your company's name.

Wait until we collect all the questions. If you have a question, you can click on raise hand or write your question on the Q&A box. Wait until we collect all the questions. The Q&A session is over. We would like to pass the floor to Mr. Thiago Buramatsu for his final considerations. The takeaway of this call was a quarter that kept the pace on the malls, improving above the inflation rate.

This first month, second quarter, April was a good month to us. On the offices side, some areas to work. on vacancy in some assets that started the second quarter with good perspective. And I believe that this quarter we are going to deliver the results with the malls and improving offices. And I believe that's it. I wish you all a good day. And I reinforce that Hector and I, our team, is available for you for future comments and questions. Thank you so much. Have a great day. This video conference I've seen is closed. We thank you so much for your participation and have you all a great day.