Allos S.A. (ALOS3) Earnings Call Transcript & Summary

Good afternoon. Thank you for waiting, and welcome to the earnings call of Aliansce Sonae Shopping Centers to discuss the results of the third quarter of 2022. We have here present, Mr. Rafael Sales, the CEO; Leandro Lopes, he is the Director of Operations; Jose Baeta Tomas, Finance Director; and Daniella Guanabara, IRO. This event is being recorded. [Operator Instructions] This event is also being translated simultaneously via the Internet and webcast and can be accessed on the www.ri.alianscesonae.com.br, where you have the presentation available. We will have the recording available for 1 week. [Operator Instructions] Should you be connected via the webcast, your questions should be submitted directly to the RI team via e-mail, [email protected]. Before we proceed, we would like to clarify that any forward-looking statements made during this earnings call regarding the business perspectives, projections of the company are based on the beliefs and premises of the Board of Directors and it's based on information that is currently available. Any forward-looking statement is not a guarantee of performance. They involve risks, uncertainties and premises. They are based on -- they're referring to future events, therefore, depend on circumstances that may or may not occur. Investors have to understand that general and -- conditions of the industry, operational, macroeconomic things might affect the results of the company and might lead to different results from those on the forward-looking statements. Now I would like to give the floor to Mr. Rafael Sales. He will start the presentation. Mr. Rafael Sales, the floor is yours.

Good afternoon. Thank you for the interest in the results of Aliansce Sonae. We closed another quarter with great results. We can see that our sales have accelerated BRL 2.8 billion in total, a growth of 17%. If you compare to the same exercise in '19 performance that is consistent that allowed us to provide more discounts. And we reached the discounts over rent very close to what we observed in the third quarter of '19. We are reducing, therefore, the discounts. And therefore, our rent revenue has grown 24% in comparison to the revenue of '19. And our same-store rent has gotten to growth without the discounts. We have the reduction of the problems. And we had, had -- we had a decrease of delinquency and we have a decrease of 60% in the provisions. This last quarter, we -- our delinquency net was negative in 0.09%. Now with the top line growth and the provision movement, our investment is BRL 238 million, 23% above -- 22.7% above what we had in '19. In regards to the EBITDA and the AFFO, the indicators totaled BRL 197 million and BRL 127 million, growing 20% and 22.3%, respectively, over the same period of '19. And the NOI was BRL 237.8 million. Still, the evolution of margins. We have the EBITDA margin of 74% and we have an AFFO margin of -- that you can see on the slides. And these are very important numbers. And they show the synergies that we captured with the function -- the fusion of Aliansce Sonae. Therefore, we consolidated another quarter of expansion of margins that are above those that we had in '19 regardless of the inflationary pressure that is very strong on our costs. Now let's talk about our relationship with tenants. Once again, our team has delivered a great result. When we look at the negotiations that were done for the -- complete our administered shopping malls and the ones that we manage, we have 234 new contracts. This is 36,000 square footage that is rented, so 36,000 square meters that were signed GLA. That's where we got to 97% occupancy rate. This is the highest occupancy rate since we created the fusion in 2019. Another point which is very important, it's the performance of one of our malls, which is Passeio das Águas in Goiânia. Passeio das Águas had an increase of occupancy of 8 percentage points, 8% if you compare it to the third quarter of '21. This shopping mall really exemplifies the synergies of top line of the combination of business of Aliansce Sonae. Passeio is in Goiânia, as I've mentioned, it was built to be a very relevant shopping mall with a great potential for growth. However, if you consider its size and the crisis that we used to live when the shopping mall was launched, the ramp-up was much slower than what we predicted before. This year, therefore, we should have BRL 30 million in NOI and -- if you compare it to the BRL 17 million of NOI of 2019. Therefore, there is a growth of almost 70%. Besides that, we hope to close this year with total sales of this shopping mall of over BRL 600 million. Now let's go to the same -- to the next slide and I would like to update you on the M&A activities. In October, we had the conclusion of the sales of 2 shopping malls that were a part of the disinvestment pipeline, Vila Velha and Londrina. The transaction amount was BRL 176.7 million and an estimated cap rate NOI '22E 8.1%. This is a good NOI for the market conditions if you compare it to the other transactions. This reinforces our capacity to execute M&As which are aligned with our strategic pillars. And I would also like to update you in regards to the shop -- the time line with the brMalls business combination. And we hope to conclude this transaction at the beginning of next year. We are working for 5 months for the preparation of the integration. And we are very excited with the perspective of starting the year -- next year already with the measures of value generation that this union should bring to all the stakeholders. Now before I give the floor to Danny, I would like to comment about the next slide, where we share with you that we're giving the administration of Parque Maceió to our partner Multiplan as it was predicted in our alternatives of management between the partners. We are very happy to give a shopping mall that has performed so well over the last few years even though we faced an economic recession and the crisis of the pandemic. The shopping mall, which was launched in November 2013, there was accumulated sales of over -- well, growth of 40% in total sales if compared to 9 months in '19 and we hope BRL 156 million growth, a growth of 35% over 2019. So now I give the floor to Daniella and she can continue the presentation. And I'll come back during the Q&A session. Thank you very much.

Thank you, Rafael. Good afternoon to everyone. As Rafael mentioned at the beginning of the call. In the third quarter of 2022, the performance of sales is positive and we accelerated all throughout the months. And once again, we overcome the threshold in the same period of 2019. Shopping in different regions continue to present expansions of 2 digits, reinforcing the force of our portfolio in several markets. The highlights for the third quarter of '22 with the growth of -- in comparison to the third quarter '19 were Parque Shopping Belém 49.7%, Shopping -- Parque Shopping Maceió 46.7%, Shopping Leblon 40.5%, Boulevard Shopping Belém 29.7%, and Boulevard Shopping Belo Horizonte 26.7%. Now on the next slide, we should have the cash flow of the company. In the year, the operational generation already reached BRL 519 million. This corresponds to conversion of 91.5% of EBITDA in the cash. We can see that in the cash, 83.4% of the debt is connected to the CDI, 5.5% to the inflation and 11.1% is prefixed. Remember that this profile of debt already contemplates the last issuance of the company. In September, we concluded another capture of the ventures with success with a total of BRL 1 billion with a rate of CDI plus 1.35%. This cost besides being compatible with the capture of other AAA companies will allow us to prolong our indebtedness profile. The leverage of the company is still at a lower threshold, 0.6x the net debt over the EBITDA. On the next slide, we bring you an update on our projects of expansion, redevelopment in the short term that were announced by the company in the third quarter of 2021. Over the last year, we've evolved in several fronts and we concluded already the expansion of Carioca, the revitalization of Franca. And we already started the expansion works of Franca as well. We launched the first phase of the revitalization of Parque Dom Pedro. Another news is the launch of the multiuse complex that are never seen before in the Shopping da Bahia. We're talking about a total area that is billed 153,000 square footage -- square meters distributed in 4 complexes. Amongst those, 3 residential and 1 entrepreneurial condominium of a single tower. These enterprises that follow the main architectural design sustainability technology trends should add a monthly flow of over 58,000 visitors to the shopping mall. Besides the multiuse complex, Shopping da Bahia will have an expansion of 10,000 square meters, combined with the retrofit that will promote a hub of convenience inspired in the lifestyle of the main planned cities in the world. In the next slide, in regards to our sustainable agenda. I am very happy to share with you that at this moment, 3 of our directors are [indiscernible] representing Aliansce Sonae at COP-27. That COP-27 is one of the most important events on climate change. And we took part in 2 panels debating about the work of the private sector for a more sustainable world. Besides that, we officially established the ESG goals on the long term for the company, where the objective of development -- specific objective of development. We are taking on a series of commitments that should be implemented until 2030 and getting to carbon neutral by 2040. This is another step of Aliansce Sonae in the direction of being a reference in sustainability. And before we give you the time for the Q&A, I would like to just highlight that we published yesterday a review of the guidance of the company. The estimation of reaching EBITDA for 2022 was updated for the -- between BRL 780 million and BRL 800 million. The CapEx estimation for 2022 was updated for the threshold between BRL 300 million and BRL 350 million. The other projections that were published in relevant fact of March 29, 2022, are still the same. Thank you very much, and I would like to open for a Q&A session.

[Operator Instructions] The first question, Gustavo Cambauva, BTG Pactual.

I wanted to ask you 2 questions, more about the synergies with the fusion of Aliansce Sonae. When we look at that margin of EBITDA that you just reported in the third quarter, which is already a high threshold of margins, I wanted to understand how do you see what was already captured, in fact, in terms of synergies. So when you look at the estimation that you did back then during the M&A time, now you had the pandemic in the middle. Of course, that hindered things. But now today, in your opinion, can we capture everything? Do you still have anything additional in expenses, on revenues that you think that there is still an upside that is maybe larger than even the EBITDA margin that you reported might change? And the second question is still on those -- on that theme is more related to the process of integration that you had a few surprises. And maybe a learning -- a lesson learned that can be used for the fusion as well with brMalls. Was there on the side of staff or even what you could save, the entire process of consulting, what is surprising in this process for the integration of both companies? And what do you think would be eventually -- what could accelerate this process with the fusion of brMalls?

Thank you for the question. Thank you for both questions. Second is a bit more complex and maybe will require an additional time for discussion and maybe with more time. But certainly, we will try and answer. First is relating the M&A. Well, the main thing here, we have to remember, if we didn't imagine having an inflationary pressure that was so heavy, that was so -- that would affect the shopping malls so much after 2019 and that was [indiscernible] the pandemic. So 2 factors combined that required more time for analysis were the numbers in a very granular way for synergies. If you look at that margin, we can say Aliansce for some time, I would like to say from 2017 until 2019, we've done a great work for gaining margins, which as compared to the margins the company that has the best margin in the industry, we are compared to what was reported. We had -- when we joined with Sonae, even though the company -- we're talking about a company that obviously has shopping malls that -- we have the 5, 6 main ones that have SLAs that are completely different from the market. So to be able to get with the shopping malls that are still maturing with Aliansce Sonae and we're getting margins, it is our greatest reference. So we have the biggest margins in the industry when you look at the EBITDA. So this is a good indication that we -- that the margins of Sonae that were smaller, the management is reporting numbers that are as good as the flow from the synergy from our business combination. Well, in terms -- nominal terms, numbers, the synergy for costs and synergy for occupancy of condominium were captured that was around BRL 40 million. Now the synergies of G&A were captured as well. And for many years, we had a drop in G&A. And in this quarter, we start to have an effect of inflation, our inflation in salaries and several other fronts. And also airfare, we've had a lot of pressure there. Having said that, given all of this pressure, regardless of that, we could expand our margin. We still are very optimistic with our capacity to manage the company in a very efficient way after 3 years and after 3 years of nominal drop of costs regardless of the inflation. So in that front, everything is very well captured. Media, since the second quarter, we are starting to see synergies as well and we will be able to open. It would be the idea of just disclosing at the end of the year, the total capture of top line synergies for media. Parking also, when you look at the results of parking, it's growing much more than the cost, the flow. And that is another collaboration of the synergies. In the top line, we can see clearly, which is the case of Passeio das Águas, which very quickly, [indiscernible] over the presentation and they're going to have a release that we're going to get more details, which is a mall that besides growing sales in 40%, it grow NOI 70%, NOI growth. So it shows that we have synergies as Manauara that had BRL 700 million in sales per year in the past and now it's BRL 1 billion and has an NOI that is close to BRL 100 million. So also top line synergies that are confirmed with our transaction. And once again, the top line synergy that are not just top line for tenant but also from higher sales using the same areas, the same equipment. Therefore, showing more value, more efficiency per square footage, which is what we wanted to do. Both the management of Aliansce and management of Sonae were sure that we could pull this together. So looking at brMalls, we've had several limitations to be able to connect synergies and numbers because we have to do a review -- efficient review of the synergies that were announced. What we just mentioned now is that those synergies started. They were confirmed by both consulting, the one that we subcontracted before and being a company that is working with us and brMalls now with them as well. So in that sense, I can assure that the numbers -- that we are working with our numbers that are completely reachable and completely reasonable. So we can work with those members very easily. And we hope to review them after the publication. And we can -- in a more detailed way, we can get into this curve of capture that you requested that we unfortunately cannot detail. But certainly -- and it's a great provocation and it will be done next year.

Our next question is from Pedro Lobato, Bradesco BBI.

I wanted to ask you a little bit more on -- I mean I've seen the positive evolution of the quarter. But I wanted to know more about October. How do you see the evolution in October? And also about the occupancy, we see the indicator very well aligned with what we had in 2019. So what I wanted to know is do you think there's still space for more efficiency in the condominium, I mean maybe reducing or changing the occupancy mix. Or do you think this is the same level that we're going to see in the next few quarters?

Thank you for that question. Well, about sales in October, for instance, I can say that we see the same pace in growth around 17% approximately. In this period of time, there are a few regions that were a highlight. But overall, we see the retail as a sector is very optimistic. There is a little bit of political uncertainty as usual with the elections in Brazil. But I mean this could maybe change a little bit of the speed. But we are close to Christmas now and very good occupancy overall. So this gives us a very good expectation of having good Christmas sales and also a period of time in which the shopping malls are going to be full or going to be very -- we're very positive basically about the scenario for Christmas. Now about the synergies and the condominium or the condominium fees, maintenance taxes, I think we know that -- we have usually an average charge, condominium charge. But we don't usually just look at that average number. We're looking at prices, we're looking at the mix and we're looking at each and every category that we have. We need to understand what kind of capacity or power they have. Many times, tenants -- new tenants have better margins even though they might be looking at a lower level of sales. I mean if you're looking at a business that is related to medical things instead of appliances, it is a different number. So if we have a better mix, we're going to also have good results in terms of rent. So if it is good for us, if it is sustainable for tenants, that is the ideal scenario. So because of that, we are now very comfortable, I would say, with the occupancy and with our ability to expand that a little bit further and have higher rent. We have a very favorable moment right now because what we have in terms of rent is above the rent revenue. I mean the same-store rent, the SSR, is very good right now. I mean we're looking at most tenants having good participation in SSR, in same-store rent. Also if we look at the turnover in the past few years, it wasn't great because of COVID-19. But now that is also looking at a much more positive trend, an interesting spread, I would say. It is a positive spread that has accumulated against the rent in contract because actually, the rent in contract is going to consider the whole accrual of inflation in the rent contracts. So that's what allows us to have this very positive outlook right now. We are looking at revenue growth, very positive. And this gives us that comfort that we did a good job replacing or changing the mix in our malls. So I would say that is something that we're certain of. I don't think there's a space right now for a reduction in the condominium charges because of this scenario where we have inflation and also because of our charges being average, being okay. I mean it is a very efficient condominium charge if we compare it to other competitors. So again, I think we're looking at a very good experience for customers with reasonable cost for tenants. So this all allows us to capture better rent next year.

Our next question is from André Mazini, Citibank.

I have 2 questions. On failure to pay, if we look at the results of the banks in this quarter, what we see is that they're very concerned about failure to pay. There are a few reports from FGV, for instance, talking about that. So it is good to see that in shopping malls, that has been a negative thing. I mean you're not concerned about that. So I wanted to know how do you reconcile that for the future? Do you think there is going to be a higher level of failure to pay? I mean I don't think it is the case. I think at the end of the day, what is important for you is the situation of the tenants. So I don't think it's an issue for you. But I just wanted to know what your view is on this, on what banks are concerned about right now and those reports from FGV, for instance, have published lately. So what is your perspective on that? And also another question on something that you mentioned before. Passeio das Águas has had a better occupancy, around 8 points more. So on revenue synergy on this larger portfolio, I wanted to know the following: if Passeio das Águas was a stand-alone mall or a different scenario if it wasn't for the M&A. How do you think they can expand a little bit further being in a larger company? So I mean if you're in Leblon, maybe you have to be in Passeio das Águas. Is there a negotiation like that or anything else that you could tell us?

Thank you for the question. I can answer about Passeio das Águas. And then I'm going to turn it over to -- now I am going to talk about this a little bit and Leandro and then turn it over to Leandro as well. So Passeio das Águas has a more robust portfolio. It is not just about the portfolio, of course. What we have learned a long time ago with the industry in the past 20 years is that a large portfolio doesn't really mean anything if you don't have the quality, if you don't have the potential in retail, if you don't have demand that is qualified from different classes or levels of purchase power basically. I mean Passeio das Águas had very good brands but maybe they were not fit for the audience that was there. And also, the speed for reaction is important or the knowledge that you have. I mean a company with 7,000 stores like us with all that mapped out, with good data to back it up, with technology, prediction technology, artificial intelligence, where we know what the best mix is for each region, I mean we know about the demand if it is not fit for a certain region. With all that, we're able to create a pipeline, a good pipeline for our commercial trends. And our team, we're also able to have great experts, maintain great talent. And as a consequence, we're going to have people creating that mall experience that is very fit, very adequate for each place. I mean these are people who make things happen. And this is what a mall is about. When we're talking about cutting on costs in condominium charges, it's not that we want the mall to look cheap, no, or that we want to save on, I don't know, the bathroom or toilet paper. That's not what we're saying. What we wanted -- what we want is that the mall has so many events and initiatives, that the mall is going to really connect with the community that is around. That is the main audience there. So we called Marco, for instance, to be there at the mall and he left the mall. And in the end, it was good. We created a vacancy. And after that, even though they had a high vacancy, we replaced that with many other operations that are much more interesting. And right now, we have very good restaurant activity that only a group like ours is really able to do because we are able to create this food court, this food plaza that is going to be adapted to that place. We have this whole lifestyle thing considered. We have a green space as well that attracts a lot of people. So it is an even more interesting experience for all of the audience. We have Decathlon, Centauro. We have many large stores. We're going to have a Nike store as well, one of these new Nike stores. So it all means that we're going to have a completely different approach. It is not a traditional thing. It is -- we're trying to show tenants that this mall has much more potential and we want people to be connected with them all in a more frequent way. Well, besides everything that I've mentioned, we also have real estate in that region. We have some of our own lots being developed with Cirella -- alongside with Cirella, in Goiânia, in some lots where we have this agreement. So all of that is going to help a mall unleash its potential really. I'm just giving you example from Passeio das Águas but it's valid for many other malls. I mean the Campus Party Brasil, for instance, in the Midwest of Brazil happens exactly in Passeio das Águas. So that's another way to connect with the community, with society, with people. I mean there are many concerts as well, country music concerts. We are really using that space many hours a day. So it's not just about retail, it's also entertainment. And we also have the real estate. We have many things going on. So this magic requires many spices, I would say, many seasonings for this all to happen. It is not simply a renegotiation. We're looking at data. We're looking at technology. We're looking at the ability of the team to make a mall much more interesting. Same thing happened at Manauara and many other malls that are here at Aliansce Sonae. And they are benefiting now from these businesses, from everything that Sonae team can offer. So that's the reason for our conviction in the top line in the transactions. Now let me turn it over to Leandro to talk about the tenants.

I think failure to pay is a good trend in the financial health of tenants. So here, we're talking about ability to pay. And if we look at the sales of tenants in satellite, for instance, it was more than 20%. We had cosmetics, for instance, growing 56% versus last year and more than 20% versus 2019. So for instance, in clothing, we had a growth of 23%, a very good positive trend. All of these indicators, especially the health of the satellites, shows that we are able to capture good value here with very, very low failure to pay. I think this year, it's not going to be different. It seems like the satellites are stronger now and we're not going to have any issues in that regard, whether it's occupancy, whether it's failure to pay.

Our next question is from Pedro Hajnal, Crédit Suisse.

First of all, I wanted to know more about the following. It's not the first quarter that we see a change here in transaction costs versus P&L so profit distribution. We know that there's probably not going to be a huge variation, as you said. But now that we're getting closer to the approval, now you probably have a more clear agenda. So I wanted to know are there any costs, any expenses that should be considered that you weren't expecting? And also another question here is you were talking about occupancy before. And I do believe that it is very impressive numbers in the past quarters. I wanted to know if you've seen any -- if you've had any kind of incentives for new tenants. I mean you mentioned the spread but maybe, I don't know, if something such as grace period or something.

I am Daniella Guanabara. About the expenses, the transaction expenses, we have something already on profit distribution about the difference that we had with Aliansce Sonae. I mean the card transaction was very quick. We were able to recognize all of the expenses referring to transactions in the opening quarter. This is a longer deal. We know that the transition is not simple. So as time goes by, we're looking at all those expenses until day 1, but yes, we're starting to recognize all that. Now you also asked about the new tenants, right, Pedro? I would say the incentives are the same as usual. We might have some grace period for some projects or ramp-up for rent. I mean this is all considered in the revenue. That's why we have a positive spread, actually, around 3%. That's the real spread versus the accumulated plus growth in revenue that we have noticed. And the same-store rent as well, lagging a little bit. So it's important to see the same-store rent playing a role here. I think everything that happened in terms of changing stores and all that, that is captured in revenue. So yes, we don't have any kind of effect that has a delayed action or anything like that because as soon as tenants start, they start to pay. So there might be a grace period for those that are preparing to open. But yes, that's why we have this good speed in this period of time because of Black Friday and Christmas.

Next question is from Goldman Sachs.

Very quick question. So I want to -- well, we are hearing, we realize that there are several shopping malls that had sales that grew 40%, 50% in regards to, for example, Parque Shopping Belém and Maceió. But there is also some shopping malls that you have a growth that is stable or single digit. What I wanted to know from you is given the fact that you are talking about the M&As and the sales, when you look at the portfolio and you see more candidates for disbursement or sales or for those that had a lower performance or are they going to increase sales through more investments or change in mix? What can you tell us about that?

I'm going to give the floor to Leandro and he will talk about the details to us. Shopping malls that are in the pipeline that you mentioned, they're growing less but many of them because they're going through interferences to grow more or to -- for example, Shopping da Bahia, we launched an enormous enterprise. We're doing a renewal. We have new access that's being created, new parking spots that are -- parking garage that has been created. The square meters is much larger than the average of the company. So it is the second shopping mall that has the best sales for satellite, sales square meters. So there is a moment that eventually, we're going to have some breathing space so that the shopping malls will start growing again. There are no shopping malls that are to be built or to be purchased. Maybe we're going to grow less this year but this is more due to the interferences. Leandro is going to get into the details about the shopping malls. The satellite ones is very good in [indiscernible] the total because it is a big shopping mall and they have a lot of electronic stores. And this is just an example. If you look at the basis of the fragile shopping malls that were sold, if you look at de Natalia or the ones that are leaving the portfolio, these shopping malls are having good growth. But they're not going to have, unfortunately, the potential to become very relevant shopping malls. So that's more of a temporary issue. Maybe there is one or another one that might be eligible for the ones that had lower growth that might come into the pipeline of disbursement, but nothing that is -- none of the big ones we're frightened. Carioca, we did a revamping that was very nice and we've shown the pictures. And this is going to generate -- we're going to have that acceleration from now on. Since we didn't stop the improvement works because -- regardless of the expansion, well, many of the work started now and we were not frightened. And this is great because the occupancy of 97% already takes into consideration all the new areas. So it's good because we rented well. And with that, we're going to have a space for growth next year in some markets such as this, specifically some markets that you think it's curious. When we have places that are performing very well, such as Maceió and then in the north Parque Belém, both shopping malls for high-income, Boulevard and the lower-income -- lower middle class, Parque Belém, they are in extremes, if you would like to say of income rates, income thresholds. They're still growing, both. So this is a regional issue, cultural issue and less structural issue at least this year. Next year, of course, we have to measure how things are going. Well, I'm going to let Lea talk about this because this is very interesting on a case-by-case scenario.

As Rafael has mentioned, we have several issues. And the main thing is not only looking at sales. We have, for example, at Carioca and Grande Rio, a change in the shopping -- supermarkets, Rio de Janeiro renewed. In Bangu, we had, in general, a big impact of the electronics and also cinema. But when we look at the indicators that, in fact, showed the health with 98% -- 97% occupancy, Caxias 98.6%. And we are here with the revenues Bangu, Bahia above 27%. They're all great growth. When we look at isolatedly the sales, there might be the issue of leaving a cinema -- leaving the cinema, which is the case of Plaza Sul and Metrópole. We got the movies Plaza Sul, we're launching today the supermarket that, in fact, takes total sales to have an indicator not so strong. But when we look at all the other indicators, we are convinced of the health of these other malls as well.

Our next question is Daniel Gasparete, Itaú BBA.

It's just a quick question. If you can tell us about the opportunity that the fusion is advancing. Of course, we are depending on the approval, of course. But I wanted to understand what is your -- what are your thoughts in terms of priority? So we had the approvals. And how does that fit with the approvals of the portfolio, please?

Thank you for the question. Thank you for the interest as well. Well, okay, the priorities. From the financial standpoint, as I mentioned, we have to publish them after the approval that has been concerned -- that has been approved -- after confirmation has been approved, I apologize. And then we will have the approval next year with time to do the closing at the beginning of next year in January. That's why we will give you the details. In terms of general priorities, I think the most important thing is 2 companies here that we know that we're getting the results that are accelerating in terms of recovery, in terms of occupancy, in terms of capacity to bring the tenant, bring the customer inside of the shopping mall. The consumer is more frequent. When we look at regionally, if we compare case by case with our competition, we are much better. This is very important to take into consideration. The regional market is neighborhood by neighborhood. The neighborhood itself -- some neighborhoods have 2 shopping malls. And they have the capacity sometimes to accommodate that. But the important thing here is not to lose this trend, this good trend for the recovery of results of revenues, of capture of rents that are better and the implementation of new stores, which is why the companies are doing in a very successful way. Because of this, whenever we launch the synergies of Sonae and the synergies of Aliansce and Sonae, when we announce that [indiscernible] a capture deadline because of what we captured at the beginning based simply on the decision-making process for cost and expenses that are the most obvious ones. We have what is in the first year, which is usually from the standpoint of gains of synergies, we have the condominium charges. We have the block charges. We have the renegotiations for services. We have the restaging of workforce and subcontracted parties in -- once we have a more efficient running shopping mall. There are several, therefore, measures that generate small gains that are added to the condominium charges, the condominium costs that are strong in this first wave of synergies with Aliansce Sonae. So in parallel, we are very focused and we still have the shopping malls that are very strong, very robust. And the experience of the customer that is not hindered by our corporate moment. In parallel that renegotiation mainly of condominium and for more immediate synergies, I'm going to let Lea comment on this. He is taking part and he also knows of the studies of the business combination itself.

As Rafael has said, so we're going to detail this up ahead. But one of the most important things is not to lose the focus, not to lose the experience of the client and the tenant and the sales. In practice, every fusion has a complexity of range. We're going to get the teams together for processes. And I believe that the priority in general is not to let our tenant, not to lent our client and sales consequently and all the works that we do in occupancy and delinquency -- well, all of that has to be maintained regardless of the period that we're still going to be adjusting the processes. This is the main priority since the beginning.

Well, if you allow me, just one follow-up in regards to M&A. Do you see the need of having other assets in the portfolio, for example, the combined company, whether if it is to improve or to reduce leverage? Well, we have Campinas shopping that can be a hub for sales. Do you have any other assets that you think that would be making sense to add to your portfolio? That's the question.

Well, it's a bit early on to do this evaluation. I think that in practice, all the assets that were sold, they were in the pipeline of disbursement of the companies. And there was an issue that was in the contract for the approval process. So I think that when we see the companies together, we will get more visibility. We will get a better vision to be able to plan this up ahead.

Your next question is Fanny Oreng, Santander.

Well, I just have 1 question about -- in theory, Aliansce performs on the shopping malls of brMalls even, they performed very well in periods that you see the mass of salary people that are growing. And we're getting to the salary levels of 2019. We have a population that is more leveraged. But let's just imagine that in 2023, the leveraging of the population goes back to dropping because of continuous improvement in income. What do you see a potential of same-store rent? When you see the growth of your malls, you have a growth that is inferior to what we see -- for example, the GCM that is accumulated, the index rates that are accumulated. So this is -- there is still a potential for capturing same-store rent for 2023 until 2024. And I'm talking about Aliansce itself. So I wanted to understand if -- what can we have in terms of same-store rent for next year? Is there any space for increasing? That's my question.

Thank you for the question. In fact, as I told you before, there is an issue of competition, local competition and characteristics of the market itself, area sequences. The shopping malls that were reported before, we have some specific characteristics. And usually, 8, 9 malls are very relevant in the portfolio that has a larger number of shopping malls. So it makes you have a concentration effect when it happens, when you have a specific movement that is very strong for shopping malls that have this higher potential for growth. In our case, we can see that this is very spread out. We have Leblon that has shopping that was -- that is performing much higher than average. And we are going to get more market share in Belo Horizonte in the most noble region of Belo Horizonte because of a better standard. And this is a shopping mall that is the most sophisticated one in the city, better structured, with better offices, with the better shopping malls here. So this led us to take several brands that were not existing in the region before. So many things are very specific. So it's very difficult to explain this individually. So Belo Horizonte, Belém, Manauara, Leblon, so markets and placements that are completely different. So having said that, this potential increase in rent for next year given the same-store rent that is stronger than the revenue is a reality, of course. I don't -- it's difficult to measure how much the other components of revenue and rent will grow. And certainly, with a higher occupancy, the trend for volatility and occupancy in the first quarter, which is natural, start to affect less from the standpoint that you get more robust rent. And the fact that we recently have had the stores and we are monitoring this carefully. The tenants are getting great results for our sales. So we have a lag that is positive for our side. And it's difficult to maintain to see if we're going to get the catch up in sales or rent in terms of average of the portfolio. Since this is a portfolio that is combined. And of our combined, the 10 biggest malls of Aliansce and brMalls, 5 Aliansce and 5 brMalls. These are shopping malls that have the characteristics that we are just mentioning. They are super -- they're much demanded by the tenants and they have a frequency that is much higher of the consumers. So with these 10 malls, we have a more robust and stronger from the tenant standpoint to bring news, we are very optimistic. In terms of salary base, well, there is that issue about the discussion of where the available money is going to go to. Clearly, there is a revolution in the base of growth and even some markets that are in drop. In real estate, for example, new real estate in general and cars -- well, these expensive assets naturally, once the consumer has an income, our products are the ones that do not require a lot of credit except the electronics and the kitchenware, which we are suffering since the beginning of the year. So that effect of the credit and the combination of the consumer less -- that wants to spend less money and they don't want to do an expensive purchase is affecting wholesale. But we understand that this is a good year. This is going to be a good year unless there's going to be an effect that is nonpredictable, economical -- economic effect because we believe that we have a scenario that is very good for income, for growth of salaries, formal and informal, from what we've been monitoring. And all of that gives a good sustainability. Well, it's very difficult to add -- well, our -- the spend -- we are not concentrated in what the products and products that are depending on credit. No, the consumer that comes to a shopping mall, they spend with most of the -- most of the things that they spend are not so expensive. Basically, that's it. Yes, that's it.

Next question, Jonathan Koutras from JPMorgan.

Rafael, well, the first question is about what we've seen a catch-up that is very relevant. It's below the levels of 2019. And is there any specific reason? And the other question, well, there was an increase in real estate building. Is there anything that you can highlight?

Jonathan, could you repeat the second question, please? It was very difficult to understand. The part -- the first part, we kind of got the idea.

My question is review of CapEx, understanding what led this to drop.

Okay, CapEx. CapEx is a combination of factors that in the end, we managed to accelerate some works and we were able to do gradual expansions. And the other fact was the approvals that are slower in some places, specifically in shopping malls that have a more relevant impact. For example, Shopping da Bahia, we started to work more in the second semester. We expect a better in the -- more in the first -- in Taboão, we still have the expansion that is pending approval. So this is something that we are -- well, for next year, we are going to review this number. And thinking about everything that is necessary for brMalls, we are going to have to reevaluate this at the beginning of the year on what will be the priority from the standpoint of expansion and improvements. The first question, I'm going to give the floor to Leandro.

Jonathan, okay, so we see parking lot an improvement. Since the first quarter, we've had an improvement. We closed the quarter with less parking but doing a proxy in the portfolio after the sales, we have a number of minus 10% if you compare to 2019. Regardless, we have shopping malls that are positive even considering 2019. The shopping malls, they have a flow that is much higher. So we have a gradual improvement. There is a cost work that we're doing. And naturally, we have had a result with a parking lot that is positive if we compare to last year and 2019.

Well, if we have no further questions, I'm going to turn it over to Rafael Sales for some final remarks.

Well, I would like to thank you all for your questions, your comments, for participating in our call. And we are at your disposal should you have any further questions. Thank you.

Thank you. This is the end of the conference for the results of the third quarter of 2022 Aliansce Sonae. You may now disconnect. Have a great rest of the day.