Syn Prop E Tech Sa S/Gdr

Good morning, ladies and gentlemen. Welcome to SYNC's video conference to the discussion of the results referring to the second quarter of 2025. This conference is being recorded and the replay can be accessed on the company's website. The presentation will also be available for download. We inform you that all participants will, in listen-only mode during the presentation, And then we will have a question and answer session when further instructions will be provided. Before proceeding, I'd like to emphasize that forward-looking statements are based on the beliefs and assumptions of SIN's administration and in the current information available to the company. These statements may involve risks and uncertainties, given that they relate to future events and therefore depend on circumstances that may or may not occur. Investors, analysts, and journalists should take into account that events related to the macroeconomical environment, the segment, and to other factors may cause the results to be materially different from those expressed in the respective forward-looking statements. With us here today, we have Mr. Thiago Muramatsu, CEO, and Mr. Hector Leitão, CFO, and IRO. Now I'd like to hand over to Mr. Thiago Muramatsu, who will begin with the presentation. Good morning. Thank you for being here with us in our earnest release. We're going to begin this presentation with the realizations of the second quarter. The first one is the anticipation of XP installment. When we concluded the transaction, the deal in June last year, an installment had been paid and accorded for the agreement until the end of 24. And there was until another installment of 550 million for December 2025. and we opted for anticipating this installment. So the value, total value was 590.5 million updated by the CDI. And the cost of this deal equivalent to the CDI plus 0.7, we had a discount of 1.32%. on this anticipated period from April until December 25. We chose to do so because we brought cash in anticipation to the company, so we could do this. Also, we had a reduction in the amount And also this resulted in gains in tax efficiency. So this offset the discount. So due to this anticipation, we were able to do the prepayment of the 12th debenture, amounting to R$377 million. It was almost at the same time because the original maturity would be in December 27, and we did this. Also, we paid 70 million reais in dividend. This is around 0.45 reais per share. And we are going to use this to do the reduction in equity. It's about 2.16 reais per action. as informed through our communication to the market and the payment date. Okay, we are still in the legal term. And we have this payment date that is not yet decided. It is open to be done until the 15th of October. But we have a next date that is 18th September, 2025. Also, we announced the intention of selling the Shopping D, we are selling it in conjunction with XP. We are selling our entire stake in a value, a total value of 8.9 million reais. There are still some conditions that are ongoing, including CADES approval. And also, regarding still the subsequent events, we are receiving the payments of the Brazilian Machado. We have received almost the totality. There were six installments. We've received them at the Act. Then we had three more, and we have still... two remaining installments that are going to be paid in September and in November. Now, regarding our operational performance, we would like to explain about our physical occupation. We had a reduction regarding the second quarter of 24 concentrated on a big store that is very representative in our portfolio. And if we took out this effect of this store, it would be another result. The problem with it is the definition of mix. We have several proposals, okay? We expect to close the deals until the end of the year. And when we compare the reduction of financial occupation and physical occupation, you can perceive that the financial occupation is much less. It's because of this story whose square meter is less representative than the area. And now talking about sales evolution, we had an increase of 6%. So we had 1B and 400, and now we have a total sales of almost 1.5B. So we had the same store's sale of 6.3%. And compared to the first quarter, we can see that there was a considerable increase. When we talk about the same store's rents, we amounted to an increase of 8.3%. And if we look at the entire half, we see this 5.5%. It's a little bit higher than the same store's sales. Now talking about corporate buildings, we have almost 100% of our class A buildings occupied. The vacancies due to the Brazilian Machado whose sales is not yet finished, but looking at the portfolio as a whole, we are flat, but when we take count the effect of Brazilian Machado, we go the occupation up to 89%. Regarding the financial occupation, the increase was even better because of the rent in some areas that were higher. So we are now amounting to a little bit more than 90% regarding the financial occupation. and regarding warehouses, our third arm of businesses. So now we have the CLD delivered, the phases one and two, and we are developing now the phase three that is already pre-rented. So although it is not concluded yet, this has a linking with the phase two. So the phase two and phase three is already 100% rented. Phase four is a little bit delayed. It's not rented yet in our total participation. EDIs entrepreneurship is 17%. So we have the direct ownership in the active and also indirect participation through FIPE together with ESPCHIS. It's more than 8.5%. Now regarding the financial performance, I would like to invite Hector. Thank you for being here with us today. So let's talk about the same properties perform our results. We grew 8% in the half, closing the first half in 49.6. It's a sound, solid growth. And now a breakdown. In moles, we had 33.6% in the first half, This is an increase of 3.8 compared to the first half last year. And then we see an effect of a vacancy that we have of a big large area. And due to this, we have a bigger expense because of this vacant area. But We understand that this is very common in the first quarters and second quarters. So it's seasonal, you know? And then also we have a very good opportunity of reinforcing our mix. Our portfolio is concentrated in consolidated assets. So when a store is not performing well, And then it leaves, you know, we have the opportunity of improving. So this first effect is not really concerning. Second, in the accounting year, we don't take into consideration some cash effects. We had the full delinquency that was very low in our portfolio in this period. If we consider the delinquency rates from one year to the other, we should say that we had a very good surprise regarding the performance of the stores. And this is a reflection of our very healthy Customer's portfolio. Well, regarding offices now, we grew 10% in the half and 90% of it, it's because of the towers, JKDA. Since last year, we have a high volume of reviews in the building and the rent is now around 35% increased. in those reviews so we had a very excellent performance of our commercial team in increasing the rents and this shows how the market for offices rent is uh doing well in sao paulo right now now regarding Warehouses, we have an evolution of the locations of the rents. Last year, we had almost 70% of the assets rented. Now we have more. So we are going to see a very sound growth in the CLD in the next quarters, naturally because of this delivery of the... houses and the rental of them. Now we have the main indicators, EBITDA, net income, FFO. We still have a distortion regarding last year because we had a bigger portfolio of malls and we had the sale done in the last year. So we closed the half with 66.1 of EBITDA. And when we take out the non-recurrent effects, even comparing with the bigger portfolio that we had, we had an EBITDA, adjusted EBITDA of 39.6 million, fall of almost 50%. Adjusted net income was growing in almost 70 percent because of our financial results with a decreased leverage and also we have a defect of the depreciation so when we exclude this effect we look at the adjusted FFO and we see that there is a decrease of 1.3 percent aligned with last year so We arrived at these results even with a smaller portfolio and with the distribution of equity last year. So we delivered a very good results for our shareholders and the cash is very aligned even with a smaller portfolio. And now regarding our debt, we paid our 12th debenture. So our gross debt decreased. Also, we closed the half with a 553 million in cash. And our EBITDA was 86. So our net cash is a little bit lower than one time EBITDA. And Here we have our amortization schedule. After our amortization of the 12th debenture, we have now a very comfortable situation for this year, 27 for the next two years, and a more important refinancing for 2028. related to the indexers, nothing has changed. We have now 85% of our debt in IPCA and only 15% in the CDI. So we have a debt profile that is very interesting. Average cost of 86% of the CDI. Okay, now we can open for the Q&A session. Now we will begin with the Q&A session for investors and analysts. In case you want to ask a question, please press the reaction button and then raise your hand. If your question is answered, then you can click the button down your head. to put down your hand. If you want to send your question in the reading form, please do it by the chat. Please hold. Our first question comes from Reinaldo Verissimo. Thank you for the results. How do you see the second half and 2026? Any updating about the expansion of the Cidade de São Paulo shopping mall? Hello, Renato. How are you? Well, we are now in this second semester and if things continue the way we have seen so far, we have a very positive prognosis regarding the malls. There was a decrease in the commercialization demand at the end of the first half, but now we are seeing a rebound. So I think we are gonna solve soon the vacancy that we have in our portfolio is still in the second half. In the case of the buildings, we have also some revisions to be done still this year. They are under negotiation, but we see it very positively. Also, we are paying attention to some opportunities, but we don't have any novelties to tell you yet. In 2026, well, We have been trying to change our mix, improving our mix. So we are doing this very interesting job of qualification to offer our clients a more interesting mix and surround the time. This has given very positive reflex. We expect to see the good results in 2026. The second half of 2026 is very positive for us. Regarding the Cidade de São Paulo shopping mall, we don't have anything concrete to share with you right now. Thank you. If you want to ask a question, please click on the raise hand button or type your question on the Q&A button. Please hold. Our next question comes from Ricardo Grossi Fernandes. Mr Fernandes, you may go on. Mr Fernandes, please activate your microphone. Our next question comes from Jose Guilherme Melo. Mr. Melo, please turn on your microphone. Hello, good morning. Can you hear me? Well, good morning, Thiago. Good morning, Hector. Well, my question is like that. Well, My intention is to be an investor of your company, but I would like to understand this equity reduction that was done. Thank you. Thank you for your questions, José Guilherme. Well, in the last few years, we have been doing a series of dividends distribution and capital reduction. We don't have any more distribution of dividends and reduction of capital forecast, and we cannot give guidance right now regarding these two topics. So what I can tell you is that, okay, we have, I really cannot give you more details into the future. And this reduction in the equity is because you have too much debt and you don't have cash or you just want to invest in new assets and to have a more sound cash. No, it's the opposite. We have a higher cash. So we are giving this money back to our shareholders so we are more balanced in our cash. as Hector showed in the presentation, we have only one need for cash, and it is in 2028. So from now until there, we have a recurrent flow that inflow of cash. So we don't have this obligation in the short term that would demand us to have this higher amount of cash. So we are returning this cash to our shareholders because of that. Okay, so you had this equity reduction, okay? The cut date is until the 15th to the 20th of September. So let me ask you, is there a chance of this not happening? Or is this already defined? No, this is already approved by the board. So we are just waiting for the declaration of our... Creditors. Yeah. Okay. Thank you. So, Tiago, Hector, thank you. Our next question comes from Guilherme Ferraz. Mr. Ferraz, please turn on your microphone. Good morning. Can you hear me? Yeah, yeah. It's very good to be here with you again. So I have two brief questions. You said yesterday that you intend to do some investments at the end of this year and at the beginning of next year, like around 70 million. Which capital are you going to use for this? Are you going to use from the cash or from where? And the second question is regarding leverage. We saw a reduction of almost half of leverage regarding last year. So while Selic is in this level, are you going to remain with this leverage or do you intend to increase leverage until the end of the year? Well, Thank you for your questions. And well, first regarding the investments, we are going to do an investment of 50 million. We are committed already with this 50 million. Part of it is the capex of the shopping malls and the rest is for finalizing the works on the COD. So for this investment, we have enough cash. We have a little bit above 500 million in cash. So we are going to do this throughout the second half and the first half of next year. So we don't need, you know, to have new debts or have any flow of cash. This is what I can answer to you right now. And regarding leverage, if you look at the historical records, we always try to be the more efficient possible. Today, we have the low level of leverage, but also our cost regarding the CDI is very low. So, our debt costs 86% of the CDI. In the past, when we had low rates of SELIC, it was only one digit, we had our debt linked to the CDI to really benefit from this low SELIC. But now, since we have a good cost, we don't need cash in the next two years. The idea really was to do this equity reduction. Of course, leverage is going to increase, but the cost is very low compared to any other type of new debt that we see in the market. And what about acquisitions? Do you plan to do some acquisitions at least this year? Well, to be sincere, we have this very active business area. So we are always looking at it, you know. We have been doing some investments last year, but we continue looking to acquisitions, new investments. Yeah, because with this high interest rate and high offer of... buildings, the idea is to use the opportunities. Yes, yes. The idea is to, you know, try to be very disciplined regarding our equity. So if we are going to do some acquisitions, it will have to make sense regarding the cost of capital of you shareholders. but the idea is, well, you have eyes for the capital of the state or what about the smaller cities? Well, we intend to remain really where we see a lower risks in Sao Paulo city, focus in here. Okay, thank you, Tiago. Have a nice weekend. Our next question comes from Eduardo Salma. Mr. Eduardo, you can open your microphone. Good morning, Tiago, Hector, how are you? Well, I have a question, but before I see José Guilherme here, I am shareholder. of this company from the times in which it was called CCP. And I am very pleased with your responsibility. You know, I see the management that you do. I have respect for you. I'm very pleased with your job. And my question is, what is your expectations regarding the performance of the shopping malls? It's fulfilling itself. You yesterday mentioned Grand Plaza, Tietê. Are you pleased with the other shopping malls, Cidade de São Paulo? What about their performance? Thank you for your kind remarks. We're very happy when the shareholders are pleased with our job. Well, regarding the shopping malls' performance, We highlight the results of Grand Plaza and Tietê. Mainly, Tietê has been growing strongly this year, last year. The region is growing in the surroundings, so it is the only retail offer in the region. Also, we have been working in the mix And this has been bringing very good results. Regarding the other two, Cidade de São Paulo, we still are very excited. The performance is great. We are diversifying our source of revenues there. So not only the rentals, but also events, media, So there is a potential to be explored in this area. And we are growing at a very nice pace, almost like a non-startup, up to 60% per year. And we believe that we can continue growing strongly even more. There we have a higher vacancy. than what we are used to because of this specific store that left the shopping mall. But we are not concerned. We understand that this is an opportunity. We want to do a transaction that would add value to the shopping mall. Regarding the other shop in Rio, I think there is a competition in the region, and even so, Shopping Day has been able to show good performance. From 2020 until today, the results are almost doubled, although the growth is in a lower pace. Vacancy there is a little bit higher, but we also understand this as an opportunity to do some mix improvement and bring things that are going to be good. Well, I think all of our shopping malls have a very positive prognosis. Thank you. Have a nice weekend. The Q&A session is finished. Now we would like to hand over to Mr. Thiago Muramatsu to his final comments. Well, I would like to thank everybody again. I think I was able to deliver in thanks to your questions Our expectations for the second half, we believe that it's going to be even a little bit better than the first half. And, well, we have our IR team here available if you have any additional questions. And thank you. This video conference is finished. Thank you for participating and have a good afternoon.