HBR Realty Empreendimentos Imobiliários (HBRE3) Q2 2024 earnings summary

Executive summary

• Gross revenue for 2Q24 ranged from BRL 41 million to R$43.9 million, with net revenue between BRL 36.6 million and R$39.8 million, and adjusted EBITDA at BRL 18.3 million to R$20.7 million, reflecting stable or modest growth year-over-year.

• Shopping centers (HBR Malls) saw a 7.5% rise in net revenue and 10% total sales growth, while ComVem sales grew 32% and hotels posted up to 15.7% revenue growth.

• Operational highlights included 20% ABL/GLA growth in ComVem, 14–30 new contracts signed, and high occupancy rates across platforms.

• Asset recycling and divestment strategies advanced, with Bradesco BBI hired to lead asset sales and several project terminations and swaps executed.

• Major lease signed with Hospital Israelita Albert Einstein for 15,400 m² in HBR Corporate Pinheiros; sustainability and ESG initiatives highlighted.

Financial highlights

• Net revenue for 2Q24 ranged from BRL 36.6 million to R$39.8 million, with gross revenue up to R$43.9 million and adjusted EBITDA between BRL 18.3 million and R$20.7 million.

• NOI margin was 79–79.5% in 2Q24, and adjusted EBITDA margin reached up to 52.1%.

• Net loss for 2Q24 ranged from BRL 15.4 million to R$19.5 million, mainly due to higher financial expenses.

• SG&A expenses decreased by 4.2%, supporting EBITDA.

• Adjusted FFO was negative, ranging from R$-13.4 million to R$-15.7 million.

Outlook and guidance

• Multiple project deliveries scheduled through 2030, with significant CapEx concentrated in 2025–2026 and a total plan of up to R$1.2 billion.

• Asset sales and recycling to fund investments and reduce leverage, with focus on core platforms.

• Expectation of improved hotel performance and robust pipeline in São Paulo and high-growth urban areas.