Multiplan announces third quarter earnings results for 2018. Store sales accelerate 7% compared to the previous quarter, reflecting the strong operating indicators of the company's assets. EBITDA and Net Income continue to show double-digit increases, 25.5% and 54.1%, respectively.
Even in a difficult scenario, considering a strong comparison base - sales grew 8.1% in the third quarter of 2017 compared to the same period in 2016 - and the impact on the flow of visitors due to the World Cup in July, stores in Multiplan’s shopping centers registered a 7.0% increase in sales in the third quarter of 2018. This is the highest quarterly growth this year, reaching total sales of R$ 3.6 million or R$ 1,593/m² per month.
The average occupancy rate presented strong growth, reaching 97.7% in the third quarter of this year, which shows evolution in tenant demand. Since the first quarter of 2016, it was the first time that seven shopping malls had an occupancy rate above 99%, led by ParkShoppingBarigüi (100%), BarraShopping (99.8%) and MorumbiShopping (99.4%).
EBITDA totaled R$ 227.2 million in the quarter, evolution of 25.5% over the previous period, mainly due to a 4.4% increase in net revenue, driven by an increase of R$ 11.5 million in rental revenue, lower share-based compensation expenses, an 18.7% decrease in shopping center expenses and a 51.9% reduction in projects for lease expenses. The EBITDA margin increased 1.255 b.p. when compared to the third quarter of 2017, reaching 74.7%.
Net income increased by 54.1% in the third quarter of 2018 over the same period of 2017, reaching R$ 116.4 million, mainly due to the 25.5% growth in EBITDA and the 20.3% decrease in net financial expenses, as well as a greater distribution of interest on shareholders' equity (R$ 80.0 million in the last quarter compared to R$ 65.0 million in the same period of 2017).
The net debt/EBITDA ratio decreased from 2.27x in June 2018 to 2.19x in September 2018, the lowest leverage ratio since December 2012 and lowest net debt-to-EBITDA covenant (4.00x). Due to the current stability of Brazil's basic interest rate (Selic) and the high exposure of the Company's debt to CDI, Multiplan's debt cost remained practically stable, varying from 7.66% pa. to 7.65% p.a. in September 2018.
Multiplan’s 20th shopping center is in the construction stage in Rio de Janeiro. ParkJacarepaguá will have 39,000 sq.m. of GLA and feature an innovative architectural project, unique landscaping and large open spaces, boasting the most modern sustainable technologies available. Besides retail stores, the project will offer a supermarket, a multiuse events center, a permanent ice-skating rink, seven stadium movie theaters, an amusement park, restaurants, a large food court and more than 2,000 parking spaces.
