Multiplan's results for the 4th quarter of 2019, released yesterday (Feb. 17), show an increase in sales and a higher occupancy rate of the group's shopping centers, in addition to an increase in rental revenue and a decrease in occupancy costs. Tenant sales grew 6.8% compared to 2018, reaching R$5.2 billion, a new record since the Company's IPO in 2007. For the year, sales totaled R$16.3 billion, up 5.4% over 2018.
Black Friday sales rose 23% compared to the same date in the previous year, showing greater importance and popularization of the event. The Christmas season still predominates as the main retail event, with December accounting for almost half (45%) of total fourth quarter sales - against 30% in November and 25% in October.
"With the increase in proportionality of the services, entertainment and food segments, we see a greater distribution of sales throughout the year. We also observed an increase in the relevance of Black Friday," says Armando d'Almeida Neto, Multiplan's Vice President of Finance and Investor Relations Officer. "The company recorded, in the period, strong operational growth and continues to generate growth opportunities, with good investments. We entered 2020 with good prospects for the year," he adds.
The occupancy rate in Multiplan's shopping centers in the fourth quarter reached 98%, the highest since the first quarter of 2016 and well above the Brazilian average in 2019, estimated at 95.2% by the Brazilian Association of Shopping Centers (Abrasce).
Net income grows 26.3%
The net operating result (NOI), an indicator that represents the sum of the revenues from the properties minus the expenses necessary to operate them, reached R$333.1 million in the fourth quarter, growing 4.7% in relation to the same period in 2018. In 2019, NOI totaled R$1.2 billion, an increase of 5.5% in the annual comparison.
EBITDA grew 9.9% over the fourth quarter of 2018, reaching R$253 million, and closed the year at R$932 million. Net income grew 26.3% to R$ 142 million in the fourth quarter, hitting R$471 million in 2019. Operating Cash Flow (FFO) totaled R$196.7 million in the fourth quarter, an increase of 18.8% compared to the same period in 2018, and reached R$700.2 million in the year.
Multiplan recorded the lowest average cost of gross debt in the Company's history (5.35% per year), resulting from a reduction in the Selic rate, renegotiation of contracts and debt management.
Investments of R$787 million in 2019
The company invested R$787 million in 2019 in the development of new projects, revitalizations and acquisitions of minority interests. Among the main projects for 2020 are ParkJacarepaguá, Multiplan's 20th mall in Rio de Janeiro, and the expansions of ParkShoppingBarigüi, in Curitiba, and DiamondMall, in Belo Horizonte, announced this Monday.
In January this year, the Company also announced a new investment in Delivery Center, a pioneer in the integration of online retail and physical retail, with which Multiplan entered into an association in 2019. The Delivery Center's expansion and consolidation plan will allow it to expand its sales and delivery service to more retailers in the Company's portfolio, thereby boosting the importance of Multiplan's superapp, Multi, in consumers' daily lives. The superapp was launched in August, with the objective of offering more convenience to customers and to be a virtual showcase for storeowners. It already has reported 160,000 downloads, in addition to being used in 18 Multiplan shopping malls.
