Syn Prop E Tech Sa S/Gdr

Good morning, ladies and gentlemen. Welcome to SYN Conference to discuss the results for the third quarter of 2024. This video conference is being recorded and the replay can be accessed on the company's website, ri.syn.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 the video conference in English, we advise you to download the company's website and the information available for the company. These statements may involve risks and uncertainties as they relate to the future events and therefore depend on circumstances that may or may not occur. Investors, analysts, and journalists should be aware of events related to the macroeconomic environment, the industry, and other factors that could result to differ materially from those expressing their respective forward-looking statements. Presenting this video conference are Mr. Thiago Muramatsu, CEO of SIN, and Mr. Hector Leitão, CFO and IRO of the company. Now I'd like to give the floor to Mr. Thiago Muramazzo, who will start the presentation. Please, Thiago, you can proceed. Good morning, everybody. Thank you so much for participating of this teleconference. And to start, we would like to see the third quarter 24 achievements, less activity in the business, but some activities internally that is very important to share with you. Starting with the prepayment of 13th debenture, something that we mentioned that we would do, reduce the leverage with the cash received from the transaction of the shopping malls partial sale. We paid the second series 160.7 million and in September we distribute 440 million in dividends. considering already the profit of the operation of the partial sale of the mall. After the closing of this third quarter, we approved the capital reduction, 560 million, in a total of dividends and capital reduction, returning to the shareholders 1 billion reais. In addition to that, we announced in the end of October the signature of Brasilio Machado. We announced this in the second quarter and we conclude the signature in this transaction is 32 million. And then we are selling a building, our participation in class B that was almost 100% vacancy. And here, just showing the flow of the transaction that we conclude in June, receiving up to the close 941 million. Part of this 300 million was cash. And then the end of the closing of the payment, taxes and expenses of transaction, we spent 70 million reais. And then we have two more parts to receive 359. paid in December 24, and one more installment December 2025, 550. Both installments are CDI-oriented. And back, as I mentioned before, the distribution of values to shareholders. We distributed already 440 million dividends on September 2nd, and we have our capital reduction that we are still in the term of the creditors finalizing December. two or three weeks from today with the payment date up to the end of this year. Showing also the work, we had ROE, return on equity in the last 12 months. The return is almost 30%. And this is one of the best returns that we have in the stock market in the last 12 months with two distributions. with the yields over 50%. In the operational, starting with the malls, we finalized the quarter with occupancy of 93.4, a big impact of vacancy in Grand Plaza. Really relevant, but we are already in discussion on the minute for next quarter, probably This number is going to be closer to what it was in the third quarter 23. Financial occupancy as the area that is vacant is big and with the rental per square meter lower to a store, a satellite store, we finalize with financial occupancy of 95%. And then the expectation is signing this contract that we can over past 95% of occupancy in our malls. And talking about sales, the composition of sales, we finished the quarter with a total of 724 million sales. The growth compared to third quarter, 23.4%. And half was replacing malls. what we have been doing, working on qualifying our mix in general. And 20 million growth of same-store sales. This quarter is 3.2%. In comparison, same-store rental from zero from the second quarter, 24, going to 2.7%. Percent increase in the third quarter, 24. Buildings, this considering Brasilio Machado transaction, we finalized the semester, but now we concluded the sale. We finalized 93.2%. The vacancy was really representative, almost 100% vacant, considering this asset in our portfolio, 83%. When we remove this effect of our portfolio is 93.2% and financial occupancy a little bit higher 84%. And to finalize here operational aspect, we have our CLD warehouse partially concluded with the first phase delivered this first phase. We have the physical occupancy of 72%. As the quarter finalized, we have three negotiations ongoing enough to finalize the year with 100% occupancy in this asset. I pass the floor to Hector so he can talk about financial performance. Good morning, everybody. Thank you so much for your attendance in our call. I'd like to start talking about NOI of the same properties as we had an important divestment in last quarter. I would like to bring the performance of the same properties adjusting the share In the last quarter, we can see growth of almost 2.5% in total of NOI, reaching 22 million in the third quarter. And in the accrual of the year, the growth is 9.7%, with 65 million. Compare 59.3% on the nine months previous year. Opening up the business unit, shopping malls, the growth is 4%. and 10.6 accrual in the year. Offices, there is a penalty and why growth it was not. This is a punctual result of the quarter. We are growing almost 7% a year and in the quarter, the drop of 3%. That was some accounting effects on grace period that we accrue in this quarter. because of occupancy in our development. But the trend here, we are going to continue to grow above the inflation in offices as well. Observing the results, there is no adjust on participation, a bit that adjusted on the quarter. It's important to highlight that there was adjust because of the sale on the previous quarter. especially in two lines, financial results. We remove all the positive effect of the monetary adjustment of the installments, December 24 and 25, a penalty in the adjusted to keep our criterion of removing the sales effect. And also above the financial result in revenue and other revenues and operational expenses, we have a positive adjust now because of AVP, present value installments. So on the net value, we have an important adjustment in our net profit because of the sale. Seeing the numbers, we closed the quarter in 18 million. In EBITDA adjusted with a drop of 58%. It is expected this plunge as we commented last quarter, our EBITDA recurrence is around 20 million. And here there was a penalty, a higher penalty in this quarter on PDD, the last quarters we presented a positive number. And this PDD would revert next quarter because we receive Highest part of the PDD was a tenant and we received in October. So we are going to revert PDD next quarter. In the crew of the year, we closed 95, 96.6, 29 drop in the same reason that I explained before in the participation. Profit, the growth is 10% compared to the previous quarter, closing with 6 million and here Although they adjust, the financial result was superior than last year because of the positive net cash all over the quarter and dividend distribution. The net debt is $300 million, inferior to what we presented in the previous year. In the year accrual, we have $16 million adjusted net profit, $700 loss last year, FFO in the quarter that is a drop of 40%, 9 million FFO and the accrual of the year 35 million growing on 30. So basically the drop and the plunge that we see is portfolio adjustment. On the other hand, the financial result is better. We leverage the balance in a better net profit and underneath of the graph, We have EBITDA net profit. Without the sales, without this effect, we would like to highlight the accrual. EBITDA will reach $650 million in the accrual of the year and $486 net profit. Leveraging the quarter, we close with $880 million debt and $300 million million on net debt representing twice our EBITDA in the last 12 months. So we presented before the transaction a leverage close to five times. We have net cash in the second quarter because we received the transaction after distribution. We are back to a net debt almost two times. And observing after the transaction, after the installments and payment of capital reduction, December 25, we see a net debt close to zero. So we had already a comfortable cash situation with a debt profile that was comfortable as well. Now, even more, we have a great option either on distributing more dividends or having some reinvestment with this cash that we have in our hands. And finally, we see the amortization schedule well equated considering the towers, 120 million for next year, 134.26. and 27, and in 28, we have the amortization that is more expressive, 400 million, giving us time to re-leverage and equate this amortization. So we are comfortable here in this situation considering cash management and debt management. Index, we have half and half, IPCA, CDI. This cost is very interesting, the spread of 1.3 CDI and 6.5 in IPCA. On my side, I'd like to conclude. Let's open up the floor for Q&A. We are going to start now the Q&A sessions for investors and analysts. If you would like to ask any questions, please press the reaction button and then click on raise hand. If your question is answered, you can exit the queue by clicking on lower hand. If you would like to ask a question in writing, please enter in the Q&A field, followed by your name and your company. Our next question comes from Mr. Elvis Credente, BTG Pactual. Please, Elvis, ask your questions. Your microphone is open. Hi, everybody. I have a question. about capital allocation. That is a big movement on capital director and the leverage of the company's low even after capital distribution, selling assets. On the other hand, the news, Brookfield, Assess, Brasil Machado selling. I'd like to understand your reasoning midterm to allocate the capital of the company if we expect a leverage that is higher, investments, and more return to the shareholder. That's it. Thank you so much. Hi, how are you? We have, in fact, the level of leverage that is low. That is our objective here. We have the development of CLD. That is still on the second phase out of four. So we have a cash exposure to happen in the next year and a half. So part of the cash is going to be used for that. And we have a term, a deadline, and Hector showed us in 28. But in addition to that, we would like to leave room for opportunity investments. So when we lately we see opportunities so we observe some things and would like to make room for these things for the next 12 months up to the end of next year to understand if we can find something that is timely. The moment is also interesting next month because real estate fund will have a higher restriction for capture So we have a position of capital structure is balanced with credit. So maybe we can see opportunities in the future in the next 12 months. So the idea is that in 12 months from now, we can discuss more if there is more room for returning dividends to the shareholders. Thank you. Good morning. So if you have a question, press the raise hand button. If your question is answered, you can exit the queue by clicking on lower hand. If you'd like to ask a question in writing, please enter the Q&A field followed by your name and your company name. Please wait. We are collecting questions. Our next question is from Mr. Marcos Barroso. He says, hello, good morning. Thank you for answering my questions. One, if you invest in ceiling to current price after sales of properties in 2024, what's the thesis of value generation for 2025 and long term? There are two questions. Let me start with the first one. I think that Every investor has their thesis on investment. What can I say? On SIEM, it doesn't matter the moment that you get into after distribution in capital reduction, you still see a cap rate that is very appealing calculated. by investors and banks almost 15% expectation for 2025. We do not have any guidance on this sense. And the idea is that you have a company that is low even after the dividends and we see operational performance That is not reflected in this quarter. But the perspective of growth is very interesting next year. With this transaction, we have a higher part of our result in service provision, improving the return on invested capital. So some of these components, I believe, help. in the value generation. I believe the main is a calculation of cap rate, the way of the investor sees their strategy of investment. And next question, also Marcos Barroso, the second part. He says, about the minority share imbalance the accounting value of investment property of 1.7 billion. What is the partner shareholders compare minority and the installments to be received of the shoppings? What is the percentage of the shareholders and the minorities? Hi, Marcos, dear executor. Thank you so much for the question. About the accounting value in the release, you can see 800 million. We open the balance pro forma. And about this installment value 360 and 550, this is our share already. So do not consider partners here. So these values are totally received by SIN. OK, thank you. And if you have a question, you press the raise hand. But if your question is answered, you exit the queue by clicking lower hand. If you would like to ask a question in writing, please enter in the Q&A field, followed by your name and your company. Our next question is Ms. Sunny Miranda. She asks, With the high interest rate scenario and economic instability, how do you adjust your acquisition strategy and asset selling? Is that any profile of asset that you consider more appealing or the opposite that you are preventing? And about the period of opposition of creditors, is there a term for a deadline? Hi, Sami. Let's start with the second question that is more direct. Yes, there is a deadline. I believe it's December 2nd, finalizing it. And then we receive the cash on the second installment, XP. So it would be something that timely, as soon as the term is ending, our RE will communicate the cutoff date. and the instructions for capital reduction. And about the first question, I believe I have already answered these 12 before we see a scenario in the next 12 months with the reduction of acquisition activity on real estate development because of a more challenging capture scenario. And this is a little bit of the difference when you see a company of profits and real estate investment, they have different objectives considering dividends and growth on capital. We can position ourselves as buyers in a moment that we have a capture difficulty on real estate funds. Maybe that is opportunity. In this point, there is no specific asset that we are searching for or preventing. Maybe that's our work is to have an assessment of opportunities to understand potential upsides for each one of asset classes that we work. So we observe and search opportunities of investments where there is a possibility of gain of our shareholders. And talking about divestment, something that we did a lot in the last years, well executed, well performed, well successful, reaching a value close to what we believe. And eventually we can have another movement of divestment, nothing so relevant, but it's always searching opportunities to see something that makes sense to our shareholders, for you in general. That's it. Thank you. Our next question comes from Mr. Reinaldo Francisco. Congratulations on the results. Can you update the situation of the work in Cidade de São Paulo Shopping Mall? And this question also answered Mr. Eduardo Salma. Hello, Reynado and Eduardo. An update of this construction work we have not started yet, this construction work. is an area of the vault together with another building. So we are working the bureaucratic aspect to advance with this construction work. But for now, we do not have a term date to start this construction work, this expansion work. There is one more question about the DRI will answer you directly. Thank you. And if you have a question, you use raise hand button. If your question is answered, you can exit the queue by clicking on lower hand. If you would like to ask a question in written, please enter it in the Q&A field, followed by your name and your company. Our next question is Mr. Eduardo Granjero. Please, Eduardo, open up your mic. Good morning, everybody. Thank you so much for the opportunity. Congratulations on the result. I'd like to have a follow-up question about capital allocation, asking if you have any opportunity of M&A already in your radar. And the second topic, a little bit different, I'd like to understand better why do you outsource the management of parking spaces, parking lots? What is the strategy behind it? Good morning, Eduardo. We have a good relationship with great part of banks, real estate funds and property owners. So we have a big funnel of opportunities coming up to us. So constantly we are analyzing. This is all my investment and we have it as our daily activities. So that is always something under analysis, but I believe short term in the next two months, there is nothing that we see. already ongoing to be concluded. So we have analysis, discussions, nothing advanced, just things on daily activities. And about your second questions, the company that manages the parking lot is Upper Place and it's 100% owned by us. They do not have our name, but it's ours managing parking lots. Okay, I understand. Thank you so much. Remember, for asking questions, just click on raise hand. No more questions. The Q&A session is closed. We would like to give the floor to Mr. Thiago Muramatsu to make the company's final remarks. I believe that we talked a lot about things things on the third quarter and also mentioning things on perspective that we have on the operational point of view, capital allocation and M&A. I believe we conveyed a very good message to you all. And remember that if you have questions, further questions, our theme of our year are here for you. Thank you so much. Good day. This theme video conference is now closed. We appreciate your participation and have a good afternoon.