Multiplan Empreendimentos Imobiliários (MULT3) Q3 2024 earnings summary

Executive summary

• Achieved record operational and financial results in 3Q24, with net income up 6.1% in 3Q24 and 15.4% year-over-year, driven by efficiency gains, higher margins, and strong leasing and real estate sales.

• Completed a landmark R$2.0 billion share repurchase at a 16.2% discount, boosting shareholder value and EPS, and approved major repurchase of Ontario participation with 99.9% shareholder approval.

• Maintained a robust capital structure with significant liquidity, low leverage, and shareholders' equity at R$7,340.8 million.

• Multiple mall expansions and refurbishments underway, including DiamondMall, ParkShoppingBarigüi, Maceió, MorumbiShopping, and ParkShopping Brasília, with high pre-leasing rates and strong tenant demand.

• Digital strategy advances with the Multi app, achieving over 26 million uses in 12 months and more than 1 million unique users for Free Flow parking.

Financial highlights

• Net operating revenue reached R$1,608.5 million for the nine months ended September 30, 2024, up 10.2% year-over-year; net income rose to R$828.5 million, a 15.4% increase from the same period in 2023.

• 3Q24 net revenue: R$545.2M (+6.5% vs. 3Q23); EBITDA: R$401.1M (-2.8%); Net income: R$93.2M (+6.1%).

• NOI margin reached 93.2%, company expenses at 8.5% of net expenses, and property expenses at 6.8%.

• Same Store Sales (SSS) grew 10.3% in 3Q24 vs. 3Q23; occupancy rate at 96.4% in Sep-24; net delinquency rate at -0.1%.

• Net financial expenses decreased to R$117.5 million from R$178.3 million year-over-year.

Outlook and guidance

• Seven mall expansions totaling 67,288 sq.m of GLA are planned through 2027, with approximately 200,000 sq.m in potential expansions.

• Ongoing expansion projects and renovations expected to drive future growth, with new GLA launches and mall upgrades.

• CapEx for reworks and expansions to remain elevated for another year to year and a half, normalizing to pre-pandemic levels thereafter.

• Management expects positive net working capital at the parent level after debenture settlement, with consolidated net working capital already positive at R$818.6 million.

• Deleveraging expected to continue naturally through cash flow and selective asset sales, maintaining a comfortable leverage threshold.