HBR Realty Empreendimentos Imobiliários (HBRE3) Q3 2024 earnings summary

Executive summary

• 3Q24 saw strong operational improvement, with net revenue up 8.3%, NOI up 11.2%, and adjusted EBITDA up 20.8% year-over-year, driven by cost control, reduced discounts, and contributions from all platforms.

• The company operates across four platforms—convenience centers, corporate buildings, shopping malls, and diversified assets—with 46 operational assets totaling 230,709 m² and 39 projects in development.

• Strategic milestones included the delivery of ComVem Moema, start of 3A Paulista construction, and the W Hotel winning the Master Real Estate Award for best mixed-use project.

• ESG initiatives advanced, including energy efficiency, zero-landfill projects, and social programs in shopping centers.

Financial highlights

• Net revenue (IFRS) reached R$41.5 million, up 8.3% year-over-year; NOI was R$33.4 million, up 11.2%; adjusted EBITDA was R$23.1 million, up 20.8% with a 55.5% margin.

• Net loss for 3Q24 was R$13.9 million (IFRS), compared to a loss of R$4.3 million in 3Q23, mainly due to higher financial expenses.

• Adjusted FFO (IFRS) was negative R$13.2 million, versus negative R$3.7 million in 3Q23.

• Gross profit increased 6.4% to R$30.5 million; financial expenses rose 36.2% year-over-year.

Outlook and guidance

• Multiple new projects are scheduled for delivery from 4Q24 through 2030, including Hotel W São Paulo, ComVem Patteo Klabin, 3A Pinheiros, and additional self-storage units.

• Capex to be incurred totals R$1.2 billion, with R$887 million attributable to the company; allocation is under constant reassessment.