Iguatemi (IGTI3) Q2 2024 earnings summary

Executive summary

• Total sales reached R$4.95 billion in 2Q24, up 7.0% year-over-year, with growth of 9.8% excluding Rio Grande do Sul malls impacted by flooding.

• Adjusted EBITDA rose 11.5% to R$233 million, with margin improving to 73.1%; adjusted net income increased 24.6% to R$107 million.

• Asset recycling and acquisitions included the sale of stakes in São Carlos and Alphaville, and the purchase of a 16.6% stake in Rio Sul and an increased stake in Iguatemi São Paulo.

• New CRI funding of R$700 million extended average debt maturity to 4.7 years and improved cash coverage.

• Released a comprehensive sustainability report outlining ESG commitments and waste reuse milestones.

Financial highlights

• Net revenue for 2Q24 was R$301 million, down 0.4% year-over-year; adjusted net revenue (excluding non-recurring effects) grew 3.4%.

• Adjusted FFO rose 19.3% to R$154 million, with margin up 6.4 p.p. to 48.3%.

• NOI margin reached 93.2% in 2Q24, up 0.8 p.p. year-over-year.

• Rental revenue grew 3.3% to R$251 million, driven by 17.8% growth in overage rental and 15.3% in temporary rent.

• Parking revenue increased 7.1% to R$54.4 million, reflecting higher vehicle flow and price adjustments.

Outlook and guidance

• 2024 guidance for net revenue growth in malls is 4–8%, with 6.1% achieved in 1H24.

• EBITDA margin guidance for malls is 82–85% (actual 1H24: 79.7%); total EBITDA margin guidance is 75–79% (actual 1H24: 73.6%).

• July sales grew 11% year-over-year, and occupancy rate and tenant health remain strong entering 2H24.

• Investment guidance for the year is R$190–230 million, with R$104.3 million invested in 1H24.

• Expects continued positive lease spreads and strong sales momentum into 2025.