Multiplan announces its results for the fourth quarter of 2017. The company's net income reached R$ 135.0 million, growth of 58.6% over the same period of the previous year, mainly due to the 41.8% decrease in net financial expenses and benefited by the provision of R$ 65.0 million in Interest on Own Capital. Net margin was 41.7%, 1,436 b.p. higher than 4Q16. In the quarter, FFO increased by 38.5% to R$ 184.5 million, also benefiting from strong margin growth.
Year-to-date, net income rose 18.4% to R$ 369.4 million. The net margin was 31.4%, 377 b.p. above 2016. The Company announced R$ 240.0 million in Interest on Capital for the year, a new record, leading to a payout of 68.3%, the highest nominal and percentage distribution since the IPO. In 2017, the FFO reached R$ 558.5 million, an increase of 15.3% over 2016.
In 2017, Multiplan presented growth in all key operating metrics, while at the same time posting significant financial results.
EBITDA totaled R$ 244.9 million in 4Q17, an increase of 2.1% over the same period last year, mainly due to a 4.0% increase in net revenue and a 9.3% decrease in headquarters expenses. The result was partially offset by a 104.2% increase in projects for lease expenses, due to the inauguration of ParkShopping Canoas.
EBITDA for the year totaled R$ 244.9 million, up 2.1% over the same period of the previous year, mainly due to a 4.0% increase in net revenue and a decrease of 9.3% % in headquarters expenses. The result was partially offset by a 104.2% increase in projects for lease expenses, due to the inauguration of ParkShopping Canoas.
Tenants’ sales growth
In 4Q17, tenants in Multiplan's malls once again rang up strong sales, reaching R$ 4.6 billion and growing 4.9% over 4Q16. With this result, the company has now reported growth in store sales during all 43 quarters since it went public in 2007.
Same Area Sales (SAS) increased by 3.6% when compared to 4Q16, while Same Store Sales (SSS) rose 2.7%.
Accumulated for the year of 2017, tenant sales totaled R$ 14.7 billion, a growth of 6.8% over 2016. Satellite stores reported sales of R$ 27,440/m² in 2017, the highest amount ever recorded.
SAS grew by 6.6% in 2017, accruing growth of 12.3% in two years, while SSS increased 5.2% in the year, with all segments expanding.
For the first time, a total of six shopping malls surpassed the R$ 1.0 billion mark in annual sales. These assets recorded R$ 8.6 billion accrued sales, 7.6% higher than in 2016.
CAPEX
Multiplan invested R$ 99.1 million over the course of 4Q17. The largest amount, R$ 70.9 million, was for new shopping center development, while another R$ 15.9 million was invested in expansion projects
The investments in the development of shopping centers were mostly earmarked for ParkShopping Canoas, in Rio Grande do Sul and the startup of the construction work at ParkShopping Jacarepaguá, in Rio de Janeiro. Investments in expansions totaled R$ 15.9 million and included the completion of the second phase of Expansion II of Pátio Savassi and an expansion of VillageMall. With these investments, total GLA delivered by Multiplan in 2017 was 57,600 m² through four projects, representing 7% growth in this metric.
Construction of ParkShopping Jacarepaguá, Multiplan's 20th shopping center, began in Rio de Janeiro in December 2017. The asset will contain approximately 40,000 m² of GLA and is scheduled to open in November 2019.
Located in a region lacking in retail, services and leisure options, the project is designed to serve 600,000 inhabitants¹ The shopping center willstretch over approximately 95,000 sq.m. of land and, following the steps adopted in ParkShopping Canoas, will bring an innovative architecturalproject, unique landscaping and large open spaces, boasting the most modern sustainable technologies available, seeking high condominiumefficiencies and as a consequence, reducing operating costs.
The Company will have a 91.0% ownership interest in the shopping center’s revenues and bear 100% of the project’s development costs. The investment is estimated at R$ 500.0 million. The shopping center will have 232 stores, including 15 anchor and mega stores, a supermarket, a multiuse events center, a permanent ice-skatingrink, seven stadium movie theaters, an amusement park for kids, 10 restaurants, a large food court with 34 operations and 2,100 parking spaces, ofwhich 700 will be covered. The expectation is the shopping center will create approximately 3,000 jobs
