Multiplan Empreendimentos Imobiliários announced yesterday its earnings performance for the second quarter of 2019. The Company continues to deliver strong results with strong operating performance – indicators such as rental revenue, occupancy rate and mall sales, which accelerated compared to the first quarter – while optimizing its store mix.
In the second quarter, sales of shopping center tenants grew 6.6% over the same quarter of the previous year, to R$ 3.8 billion. Growth was driven by higher sales in 18 of the 19 malls in Multiplan's portfolio. Sales were mainly driven by the results of the Company's newer malls, which opened in 2012, which posted aggregate growth of 13.9% – an indication that they are on the path to consolidation. ParkShopping Canoas, which completed one year of operation last November and posted sales growth of 28.3% this quarter; VillageMall, which benefited from the mix change during 2018, with growth of 13.5%; and JundiaíShopping, also benefiting from recent mix changes and successful openings, with sales growing 13.4%. Among the malls already consolidated, it is worth highlighting the results of RibeirãoShopping, BH Shopping and BarraShopping with sales growth of 8.0%, 7.7% and 5.8% in the second quarter, respectively.
Same-store sales (SSS) expanded 6.7% in the second quarter, driven by the Services segment, which once again posted the largest increase in SSS (+22.2%).
Rental revenue reached R$ 265.7 million in the period, a growth of 6.2% over the same quarter of the previous year, mainly due to the recent acquisition of 20% of BH Shopping, which led to double-digit growth (+38.0%) in its rent in the quarter; IGP-DI adjustment effect of 7.2%; and the addition of R$ 1.9 million in merchandising revenue, mainly at BH Shopping and MorumbiShopping. Same store rent (SSR) rose 9.6%, the highest growth in five years, since the second quarter of 2014. Shopping malls continue to be very busy, ending the period at 97.6%, a 26 b.p. increase over the same period last year. Compared to the first quarter of 2019, occupancy increased 45 b.p.
Net Operating Income (NOI), an important real estate sector indicator, which represents the sum of property revenues minus the expenses needed to operate them, totaled R$ 293.2 million in the second quarter, growing 7.3% over the same period the previous year, benefiting from the increase in rental and parking revenues.
In the second quarter of this year, EBITDA totaled R$ 214.1 million, a decrease of 16.8% over the same period last year, mainly due to the accounting impact on the stock-based compensation account, which increases the expenses when the stock appreciates. Excluding this effect in both periods, EBITDA would have grown by 3.0% to R$ 235.8 million.
Net income decreased by 20.9% in the second quarter and totaled R$ 115.2 million, mainly due to the same effect mentioned above. Excluding this line, net income would have grown 16.8% to R$ 136.9 million, driven by the 6.0% growth in net revenue.
In the first six months of 2019, Multiplan has already invested 57% more than during the entire year of 2018. In addition to investments already announced in the first quarter, such as the construction of ParkJacarepaguá, the acquisition of 20% of BH Shopping, and the investment agreement in Delivery Center, the Company continues to invest in innovation, sustainability and renovations and the creation of new areas for the malls.
One of the highlights is the inauguration of a photovoltaic complex to fully supply VillageMall's energy requirements. The plant was developed in northern Minas Gerais with the objective of generating 100% of the energy consumed by the project, with savings of R$ 5.5 million in the first year of operation. The project goes far beyond savings on the light bill: the construction of the plant will prevent the emission of 227,655 tons of carbon dioxide over 25 years of operation, equivalent to planting 418,000 trees.
Multiplan also introduces Multi, a cellphone super-application that will put the malls right into the palms of its users, enhancing the customer experience and strengthening their ties to clients. The app, which is now available for iOS and Android devices, offers easy access to mall features and services, bringing digital convenience and enriching the physical experience of Multiplan's mall visitors. Among its features, the application will enable purchases of virtually all items available at the mall with the guarantee of a fast delivery, through a partnership with Delivery Center. The initial version of the app is being tested at BarraShopping in Rio de Janeiro. Also in 2019, Multiplan will launch new features in the application and incorporate new ventures in the coverage area.
Click and download the Multi app.