Multiplan

On April 29th, Multiplan announced its earnings results for the first quarter 2015. In spite of the challenging economic environment in Brazil, Multiplan had strong operational performance coming from its properties in 1Q15.

Average shopping center occupancy rate was 98.6% during the quarter, reflecting the high demand for space in the company’s malls. Occupancy costs dropped 20 b.p. to an average of 13.5% and rent delays (delinquency) remained at 1.8% during the quarter.

Shopping center sales increased 7.1% in 1Q15, showing resiliency in mature operating assets as well as a robust growth coming from malls under consolidation. The portfolio recorded average monthly sales per square meter of R$1,376, attributable to the company’s homogeneous high quality shopping centers. Same Area Sales increased 5.7%, on top of an already strong growth of 9.3% in 1Q14.

Gross Revenues were R$293.0 million in 1Q15, led by a 15.7% growth in rental revenue’s. Morumbi Corporate continues to increase its revenue contribution, recording R$14.5 million in 1Q15. The shopping center portfolio ended the quarter with a monthly rent of R$108/m². Same Store Rent grew 9.5%, implying a real increase of 4.1%, above the simple average of 3.7% calculated since the IPO, or 3.3% in the last five year.

Following the low mall vacancy rate and efforts by the company to reduce condominium costs, shopping center expenses dropped 10.1% in 1Q15, and reached the lowest percentage of mall net revenues ever recorded, of 9.3%.

The rent increase and a reduction in expenses led to Net Operating Income (NOI) + Key Money growth of 15.9% in the quarter, with a margin of 89.7%. NOI in the twelve months ending in March 2015 was R$914.1 million, or R$4.85 per share, equivalent to a five-year CAGR of 15.7%.

G&A expenses totaled R$25.7 million in 1Q15, representing a small 4.8% increase compared to 1Q14, being entirely offset by services revenue of R$27.6 million in the quarter.

The consolidated EBITDA recorded R$193.7 million, with a 73.2% margin. Excluding non-recurring results reported in 1Q14, EBITDA grew 10.6% in the quarter. The Shopping Center EBTIDA margin was 76.7% during the quarter.

On the debt side, the company ended the quarter with a net debt-to-EBTIDA ratio of 2.23x, and an average cost of gross debt of 11.53% p.a., 122 b.p. below the SELIC basic interest rate in March 2015, of 12.75%.

Net Income was R$69.6 million in 1Q15. If “non-recurring events” is excluded from 1Q14, growth would have been 14.2% in the quarter. In the twelve months ending in March 2015, FFO was R$539.0 million, corresponding to a FFO per share of R$2.86, equivalent to a five-year CAGR of 10.6%.