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

Good afternoon, and thank you for standing by. Welcome to the First Quarter of 2025 Earnings Conference Call of Allos. Today with us are Mr. Rafael Sales, CEO; Mr. Vicente Avellar, COO; and Ms. Daniella Guanabara, CFO and IRO. This conference is being recorded. [Operator Instructions]. This conference is being broadcast simultaneously on the company's website. ri.allos.co, where you can also find the slide deck. The replay will be available right after the conference for a period of 1 week. Questions can only be submitted through the Zoom app. In case you are watching on the website, please e-mail your question directly to the Investor Relations team at [email protected]. We would like to inform you that any statements that may be made during the call related to the company's business perspectives, operating and financial targets are based on the company's management's beliefs and assumptions as well as on currently available information. Forward-looking statements do not guarantee performance. They involve risks, uncertainties and assumptions as they refer to future events and therefore, depend on circumstances that may or may not occur. Investors should understand that general economic conditions, industry conditions and other operating factors may affect the future performance of the company and lead to results that differ materially from those expressed in such forward-looking statements. Now I'd like to turn the conference over to Mr. Rafael Sales. The floor is yours.

Good afternoon, everybody. Thank you very much for your interest in Allos' results. As we step in 2025, we believe that Brazil will be in a very challenging business environment. However, the country's top shopping malls will have the opportunity to showcase their strength and resilience in our current portfolio, which was modeled and has been developed over the past years should deliver consistent results despite the more adverse economic scenarios. From a financial standpoint, we have been generating operating results and allocating capital in a responsible way. We structured our balance sheet with long-term and balanced rates so that we are able to weather any turmoil. And the performance that we had this quarter bears witness to that to the trend that we have seen since the last quarter. Now I'd like to go to Slide 2 to show you some operating results. In the first quarter of 2025, our sales increased by 5% rather, although there was a mismatch in time in Easter, which took place in March last year and April this year. The highlights are the Southeast, the South and the North of Brazil and also the Midwest, especially in those regions where we have agri business. And in these markets, we are very well located, and our average performance has been better than the average of the company, which has been driving our growth. And also in April, there was a 16.4% increase in our total sales. And in same-store sales, we grew by 2.4%, which showed that there was a seasonal effect but we are going to have positive indicators. And sales per square meter, which has been posting good performance over the years show on this chart our track record in sales per square meter since 2019, and we delivered a CAGR of 7% throughout this period and a total increase of 52% since 2019. I would also like to highlight our commercial relationship with the tenants, although the interest rates have been higher than last year. The tenants, entrepreneurs, business owners continue to show a good demand for area. And in 1Q, we signed 137 contracts including 2 Sephora stores, 1 in Campo Grande Shopping Mall and the other in Mooca Plaza, 1 drug -- 1 farm in Maringa and a Tommy Hilfiger as well, which are brands that are growing in Brazil. Our occupancy rate was 96.8%, 50 bps better than the first quarter 2024. And later in the presentation, you are going to see other operating indicators. Now let me give you an overview of the financial results on Slide 3. We can see that the strong operating performance translated into consistent results. Our net revenue was BRL 618 million, 5% more year-on-year. As I said, that happened despite the seasonality effect because of Easter. We had strong sales related to Easter in April in the second quarter. And we can see that there has been a resumption in the growth in leases driven by the contractual renewals. Our EBITDA grew although it was below the growth in our guidance, but that happens because of the seasonal effects. It grew by 5%, reaching BRL 443 million in 1Q '25. And these results happened basically because of the net revenue increase and our costs grew below the inflation. And we are very confident about delivering our guidance between BRL 2.070 million and BRL 2.150 million. And we are still committed to that guidance. And we have been delivering on our guidance over the past years. FFO came to BRL 275 million despite the increase in the Selic rate, which went from 10.75% to 14.70%, and still we were able to grow by 4% in nominal terms this quarter. If we look at our FFO per share, which should be the main indicator here for profitability for shareholders, we had a 13% increase year-on-year, which basically reflects not only the growth in our total FFO, but also the buyback that happened in the last 12 months in the amount of BRL 230 million, which is another way of delivering value to shareholders, rewarding those who stay with us for a long time and also creating opportunities for growth despite the year with such high interest rates, as was the case in the last 12 months. Before I turn it over to Dani, I'd like to mention that in April, we had our shareholders meeting, electing 3 independent members of the Board. We now have 4 in total. We had an increase in the number of women in our Board. We have 2 women in our Board of Directors, which confirms our trajectory of advancing to the highest levels of corporate governance, not only according to official indices but also in the market's perception. Now I'd like to turn it over to Dani, and I'll be back to take your questions after the presentation. Thank you.

Thank you, Rafael, and good afternoon. Now on the last slide, we can see that in 1Q '25, Allos continued to have a high demand for new areas and finished the quarter with 96.8% in occupancy rate, 50 bps more year-on-year and the same rate that we had in 4Q '24 despite the seasonal effect. In 1Q '25, we signed 137 contracts across our shopping malls. I'd like to highlight here 2 Sephora stores, 1 in the Campo Grande Shopping Mall and another 1 in the Mooca Plaza Shopping, a farm store at Catuai Maringa and a Tommy Hilfiger at the Goiania Shopping. We also had Fogo de Chao store being opened in Tambore and Adidas in the Boulevard Shopping Bauru. Now on Slide 5, our occupancy cost came to 11.2%, a little bit more than 1Q '24 due to the resumption in leases. Net delinquency in the period was 2.5%, a 110 bps drop year-on-year, also because of the strong sales performance, which has an impact on the tenant's financial health. Now on the next slide, we can see that in 1Q '25, our net debt over EBITDA ratio was 1.8x. And the rates that we had in the debt breakdown, thanks to the financial discipline, 97.9% of our debts are related to the CDI and 2% are fixed rate and 0.1% to inflation. We are pursuing costs below our average rate. And also, we want to extend the term of our debt. In January, we finished the issuance of another CRI, which reached BRL 625 million with a cost of 99.5% of the CDI, increasing the maturity of our debt. Now let's talk about our Media business. Media delivered BRL 35.8 million in revenue 9.5% higher year-on-year, which accounts for 5.6% of Allos' revenue in the quarter, 70 bps more than 1Q '24. helloo now has almost 2,000 screens, a significant number. And also, it has additional potential, especially if you incorporate the data from the app to create direct targeted campaigns. Now on the next slide, let's take a look at the Benefits program. In the beginning of the year, we celebrated the second phase of the rollout. In April, we launched 34 malls in total until April, and tenants recognize the program as a powerful tool to increase traffic and to boost sales. We had 25% of tenants engaged making over 1,000 benefits available. The program is also driving our media business, which is a highlight in terms of performance in the company quarter over quarter. Now I'd like to show you some recent highlights in our sustainability journey. In April, we published the second sustainability report, reaffirming our strategy and commitment to responsible actions and positive impact. The document reviews the sustainable life centers commitment, which provides guidance on actions related to sustainability and governance. These spaces inspire people and it drives more engagement in the communities. And you can see the document in full by accessing our Investor Relations website. And Allos is now 1 of the 82 companies included in the Sustainability Index of B3, the Brazilian Stock Exchange. We believe that innovation and sustainability walk hand in hand. Also for the second consecutive year, Allos was the sponsor of Rio Open, the biggest South American tennis tournament, and also the wheelchair tennis elite, providing support to extraordinary athletes. This partnership strengthens our commitment to sustainability, to accessibility and inclusivity. And with that, I would like to thank you for your interest in Allos, and we are now going to open the Q&A session. Thank you.

[Operator Instructions] The first question comes from Bruno Mendonca with Bradesco BBI.

I have a question about your EBITDA guidance. In the presentation, you mentioned that you continue to be confident about your EBITDA guidance. The first quarter seasonally is usually lower in terms of EBITDA. But I understand that this is a seasonal effect. But my question is, what is your confidence about your EBITDA guidance? And how does that relate to the top line and costs and expenses? And also about your guidance, the consensus right now points towards strong slowdown in activity in the second half of the year and also GDP. So what is the scenario that you are considering in your guidance? And how much does your guidance rely on strong sales performance in the second half of the year?

Thank you for the question. This is Rafael. Well, about seasonality, we should take into account that in the first quarter of the year, we had lower seasonality. Last year, it accounted for 22% of the revenue, 22% of the revenue of the company came in the first quarter. Without Easter, that number was even lower. And historically, the fourth quarter accounts for 32% to 34% of the revenue. So at least in our case, there was indeed a concentration in a few malls. For example, there are 10 malls that are important. Actually, I should give you more color on this because many people ask questions about April. We had negative same-store sales in 10 malls between 6% and 16% in the month of March. Those malls, the same 10 malls in April grew by 14% to 17% in same-store sales. And the same-store rent in April was 9%. And in the quarter, it was 5%. So that part of the portfolio had strong recovery in April, driving our total revenue from rents to grow 9%. I believe that those numbers point to the trend that I'm mentioning because the rent revenue is increasing. And that shows that the first quarter was really an outlier out of the ordinary. If it is a weaker quarter, any impact will hurt us a little bit more in percentage terms. And of course, we had a decrease in costs and expenses. But we have strong conviction in our guidance because we already had accounted for that slowdown in our budget. But now we have lower delinquency than we expected. And the demand for stores is a little bit better than we had projected. So the slowdown was a scenario that we factored in so much so that we had adjustment in percentage terms that was a little bit more modest than we expected. The growth in lease was lower than expected, but things are very healthy right now. Although the same-store sales was lower, the same-store rate was higher. Now when it comes to costs and expenses, this is a great question. Some people left and that drove expenses in SG&A. And also in the second quarter, we have the effect of not having that many people in the company in the second quarter. And in the second half of the year, we believe that we are going to have more opportunities of that sort of gaining efficiency in SG&A expenses. So overall, demand for area is strong. Occupancy is strong. We had 10 malls impacting same-store sales, but they all grew in percentage terms in April in the second quarter. And it is not common, of course, for us to give you color on April. But in this case, I think it was important to do so. And if we thought that we were at risk of not meeting the guidance, we would let you know as soon as possible because it wouldn't make sense to not do it. We have been giving guidance for 4 years. We have been meeting our guidance every year since. And if we have any perspectives of not meeting it, we would let you know as soon as possible. But we are actually very comfortable about it. And the new stores, the new contracts and delinquency and occupancy make us believe so much in our guidance. And we have some decreases in expenses after the merger -- 2 years after the merger. ERP is running well. We have some redundancy expenses until the end of the year, but all of that tends to drive costs down.

Expense dilution that you mentioned. Is it related to any initiative? Is it related to helloo or media contracts or any other point that you deem relevant?

No, I mentioned the decrease in expenses because of the decrease in headcount. Helloo is actually growing, but if you look at any negative variation in lease has the opposite effect. So helloo is not big enough yet to cause such a decrease in expenses this year. Maybe after next year, that would be possible. Maybe we are going to have sufficient topline for that. But just referring to expenses of Allos, especially SG&A expenses, now that we have more efficient structure, especially 2 years after the merger and after the implementation of the ERP system.

The next question comes from Ana Zerkowski with UBS.

I'd like to ask a question about helloo. It has been growing, becoming more and more relevant, as you mentioned. And you announced also a partnership with [ NOW. ] If you can share with us a little bit more about your expectations about the growth of helloo, and how this partnership should boost your brand, and also the share of revenue that we should expect coming from helloo this year.

Well, the growth opportunities with helloo are very synergistic with the mall business. We are still confirming the conditions with [indiscernible]. So we can only give you the same information that we disclosed in the material fact. So we can't really announce anything new about this. But strategically speaking, malls and airports have a lot of synergy with this business because we have a number of malls in cities where there are major airports. And helloo already has a track record that shows strong execution. And media is a completely different business model. You need to gain scale and you need to have more footprint than malls. But there is a synergy. And also we have 5,000 residential buildings in regions close to airports. So we have indoor out-of-home media and we are growing in that space. We are focusing on that and growing more in the environment that we know how to operate. The Allos business is B2B2C naturally. And our relationship with tenants can be used to boost national, international brands across all segments in our malls. They are all levers for helloo to grow, just like airports will continue to be because this dynamic makes a lot of strategic sense because this market is also B2B2C, and that's where we decided to focus our efforts. In terms of financial projections, well, we are working on it. We just received news that we were chosen and we are going to sign the contracts. There's a number of important steps. But as I said, helloo is synergistic with our malls and is going to help us leverage the helloo brand and get more partners to be present in our ecosystem.

The next question comes from Ygor Altero with XP.

I have 2 questions. First, I'd like to know more about your growth avenues in an interest where we have higher interest rates. If you can break it down in expansion and M&A, that would be great. And the second question is about the capital market. It is now improving. So if we continue like that, do you think you could resume recycling in the second half of the year?

Thank you for your question, Ygor. Well, as I said in the first question, the lease increase should play an important role this year. And we continue to be very comfortable about it for this year, and it is going to be the main driver for sure because it is the main pillar for return in the company. And in the release, I don't know if you had time to take a look at it, our CapEx includes a few projects with significant returns and it will allow the company to grow. And if you haven't had time to take a look, please do it because we're going to provide -- we actually provided guidance in that chapter in our release. And we gave you important information on how to assess maintenance CapEx and also growth CapEx. And of course, Media is very important. The loyalty program grew a great deal as well. It is present in most of our malls, 40 malls virtually, and it's running very well. And today, we have over 400 brands providing rewards to the customers under the loyalty program and a number of benefits as well. And that shows the potential for growth coming from this segment. Now divestment, which reduces revenue naturally. Well, obviously, we can go back to the market to sell minority stake or malls that don't make sense for us anymore. But our portfolio right now is already in an appropriate size in our opinion. We have 30 malls fewer if we put together brMalls and Aliansce 10 years ago when we had the 3 companies, and the 3 companies started to resize their portfolio, we have 44 malls. If we had 30 malls fewer, that would be a significant decrease, right? Considering that we decreased the number of malls in the past. And we used those funds to buy shares back. So we already ensured to shareholders a growth in the line that is the most sensible to shareholders, which is the increase of FFO per share and also dividends per share. If we look at those 2 indicators, we continue to grow despite the interest rate, which is so high. There was an increase of 400 bps. So imagine to do business in Brazil with so much leverage. So you should consider that our net income increased a lot this quarter. And those increases are not top line increases, but they are value that is returned to shareholders. So we are returning that value to shareholders in the way we can with such a higher capital cost. And if we have better opportunities in the second half, we can take a look at the options to reduce the average cost of debt or resize the portfolio and maybe resume growth with a different perspective. We should remember that next year is an election year. So we need to be careful in our assessments. We are not going to have significant debt maturing in 2026 and '27 because we don't want to refinance our debt in the 2 years that will probably be more volatile. Thank you.

Next question with André Mazini with Citi.

Rafa and Dani, I have 2 questions as well. The first one is about the chart that you included in Page 21 in the release. I was curious about the grade dispersion in Recife and Amazonas. They have 3x as many vehicles as the average in your portfolio and malls that sell so much like Leblon, they are not even in the top 8. Is that related to how the cities are planned? Is it harder for pedestrians to walk in the shopping mall in Recife, for example? And if you consider that, can you increase the ticket in those 2 malls? Is there any upside in terms of ticket in those 2 malls? And the second question, you mentioned your contracts with airports in the amount of BRL 1.4 billion in the next years. And if you can give us more color on the economics. There is a BRL 15 million payment upfront. Are you going to invest CapEx? And what about the margins in this business? It seems to me that the margins are high. I'd like to know your take on that, please.

Mazini, thank you for your questions. I'm going to address your question about media first and then I'll turn it over to Vicente to talk about the parking lots, which is a curious topic. About media, we are in the process of negotiating the contracts. So we can't really give you details about the contract and also the profitability model. But this business, it provides a high return on invested capital, but the margins are lower because it requires more people, the operating cost is different. So everything is different from operating a shopping mall. But CapEx is better because you just need to install those screens, the displays and we buy the displays with a large scale so that reduces CapEx. And we can only give you more information about that after we finish the negotiation of the contract. And now over to Vicente to talk about the parking lot business.

Well, this business is more related to the profile of the shopping mall really, depending on the physical structure, the location and the access to the shopping mall, all of that interferes in the shopping mall's ability to absorb more or less traffic. It also depends on the number of activities around the shopping mall. In the case of Amazonas and Recife, those are 2 shopping malls where we have large parking lots and also the malls are extremely important in their region. So in regions where you have a lot of activity and that can attract the population around that area where you can capture the population that lives in the neighboring areas. And you also capture traffic, Uber traffic, taxi traffic, and they need to go into the parking lot due to the design of the area to drop off passengers or pick them up. So all of that interferes with the absolute number that you see on the release. But for sure, those are 2 shopping malls that are very dominant in their area and there's plenty of opportunities in them, and they have been performing well. Now when it comes to increasing the cost, the price or not, that analysis is different because it all depends on the availability of parking spots in the surrounding areas, the level of the competition, the prices in the region. We usually make a deeper analysis asset by asset to determine our ability to increase prices and bring in more revenue. But the absolute volume is more related to the design of the shopping mall itself.

The next question comes from Jorel Guilloty with Goldman Sachs.

The first question is about the spread trend. You talked about the new tenants, Fogo de Chao and others. So I'd like to know more about the leasing spread for new tenants and also the leasing spreads in renewables. The second question is about liability management. You worked very hard on the maturity and you have a leverage of 1.8x. And over the next 2 years, you might have some different situations. And when you look at your capital structure, the 1.8x ratio, is it the ideal level? Or should it be more? Should it be less? I just wanted to know more about your thoughts on capital structure.

Jorel, this is Dani. About the leasing spread, when you look at the occupancy, it is very high already and there is a positive trend. And as the IGP-M inflation rate recovers, last year, it was negative for most of the year. It is now stronger and it should become stronger and stronger. And the environment has been great for leasing spreads. When it comes to renewals, the rate should be 10%. And for new contracts, it's 10% and renewals 6% of adjustment. And liability management, well, the capital structure today with 1.8x in leverage is a structure that we believe to be comfortable. It is a structure that allows us to keep the portfolio up to date and to have a deleveraged balance sheet so that we are better protected in volatility times and still provide good return to shareholders. Our policy, our practice, actually, in terms of dividends is a monthly one and we keep the guidance of paying 50% of the FFO in buyback or dividends. So with such low leverage, we can do all of that, give back to shareholders, keep malls growing and modern and to have a more defensive balance sheet at this time. And the liability management that was done this year and last year with debt, with -- that have a cost below the CDI. And we can strengthen our FFO per share, which was 13% and our increase in the FFO was 3.8%.

I'd like to add some thoughts about the leasing spread. To increase the lease requires that business is doing well. If we exclude same-store sales that was affected by Easter. If we look back, same-store sales has been a very healthy indicator over the years. And the first 4 months of the year were very strong as well. In parallel, when you look at the retail publicly listed companies, they are all reporting better numbers in terms of sales and margins, which means that retail, the omnichannel retail is resuming growth with good margins. And consequently, the ecosystem will have room for better leases because the tenants are being successful right now and they are good partners. If our partners do well, we also have the opportunity of increasing lease. And since the environment for retail is better, that helps us do better as well.

The next question comes from Antonio Castrucci with Santander.

I'd like to ask a follow-up question about helloo. The partnership with [indiscernible], was it already included in your guidance? And do you have projects of signing contracts with other airport operators? About same-store sales, the negative performance in the food and beverage segment was expected. But also, it has been lower in convenience and home goods. Do you have any color to give us on sales in the months of April and May?

Well, starting with your second question, that's exactly why we gave you color on the sales in April because food and beverage and convenience sectors are very much linked. So when you have a lot of traffic because people are coming to the malls to buy presents for Easter or Mother's Day, you have an additional demand for services and entertainment. So when you have a holiday or celebration date, you bring more traffic into movies, parking lots, and restaurants. That's why April makes a lot of sense complementing will happened in March. So we saw that recovery in our portfolio, but we still don't have the numbers for May. What we are publishing here are the numbers until April. And about helloo, as Rafael said, we can only disclose information that you saw in the material factor. We are, right now, waiting for the authorization from the antitrust authority and the Board of [indiscernible] to move ahead.

The next question comes from Mariangela De Castro with Itau BBA.

I have just one question. What's your perspective about the market's willingness to receive more divestment? I believe that, that appetite has decreased, but I'd like to know if you are still receiving proposals to acquire your assets or is there any room for funds to absorb any potential divestment actions?

Mariangela, thank you for your question. About divestment, as we said earlier, 2 years ago, we had almost BRL 3 billion in divestment. So if we think there is a good opportunity, we are going to seize it. If there was a company that knew how to make the most of the good windows with the CRI bonds and CDI rates, that's our expertise. Of course, we're not going to give you the recipe of the secret sauce here. But if we have the opportunities to do it, and Brazil fluctuates so much and we can't really foresee it, we are getting ready for different scenarios. Our balance sheet is prepared to weather any storm that comes already in Brazil. And if we have the opportunity, we'll do it. If not, we won't. We don't need to do it. The mall that gives us the lowest results will give us BRL 30 million to BRL 40 million per year, and we have already sold 30 shopping malls. And now our thesis is to grow again in leases, generating return for shareholders, investing in the assets in the amount of BRL 200 million or BRL 300 million in CapEx for new projects and grow in Media, additional revenues as well, which affected positively the results. So everything is going well. We don't need to sell anything. But if there's anyone that can seize any opportunity that arises, that's us.

The next question comes from Elvis Credendio with BTG.

Rafa and Dani, about the multiuse contracts. I'd like to know more about the BRL 54 million in the contracts. And also, do you think you can expand your contracts of this category? And also about consolidation. It's been 2 years since the merger. I'd like to know if you can envision more consolidation in the industry? Are you analyzing the big movements that happened since 2019? Is there any operation that would make sense for you? Or even outside Brazil in Latin America, have you considered anything of the sort? Would it make sense for you?

Elvis, this is Dani. About multiuse contracts. It's part of our strategy to strengthen the leadership position of our malls in the primary areas. We have 6.8 million square meters in constructive potential. And we have buildings being built at this moment and we have been receiving cash from these projects. We provide you with guidance about how we are going to receive in cash from these projects in the medium and long term. In each of our malls where we have potential for construction, we are going to explore the potential. And the master plan is considered in the medium and long terms. Over the next 30 to 40 years, we can calculate a number of expansions possible in the shopping malls. And we also complement the numbers with real estate exploration, strengthening the shopping mall and also the number of people living in the surrounding areas, you can increase the frequency of visits, driving up sales. And in the medium and long term, the return will also go up. So it is part of our strategy to focus on multiuse contracts and we have been accelerating that vertical in our strategic plans.

About consolidation, Elvis. This is Rafa. Well, we had 2 significant mergers and we are still in the process of building Allos as a company that provides good results as we expect over the years, creating a culture, which is so important for the development of a company in the long run and also creating a method that is an evolution of what the other companies do separately, creating team spirit so that we can evolve more and more in our execution capacity, extract more value and deliver more value to the shareholders and to our team because they are our shareholders as well. But our biggest focus right now is to operate a company better, make progress in our management, capturing operating efficiency as I mentioned -- as I was answering the question about EBITDA, and that's the main focus of the company. The company is already generating BRL 2 million in operating cash per year or more than that. We have 54 million people visiting us every month. So that's a size that makes us -- that puts us in a good position to help tenants and to expand. If the capital cost was not so high, we would have even more expansions. We have a major expansion potential in our malls, as Dani said. And again, the BRL 200 million to BRL 300 million per year to be invested in expansion in growth, that's the appropriate number in the current scenario here in Brazil with interest rates so high as they are right now. And if we have the opportunity to grow even more, the trend is for us to focus on expansion, develop our portfolio, improve customer experience, becoming more and more relevant. And you can see the growth in this quarter in the Leblon shopping mall. We invested not in expansion, but area allocation and reallocation of anchors and transforming customer experiences, and the mall grew by 15% in the quarter. And mind you, it's a very consolidated mall. So we want to invest in the portfolio to get returns and make consumers -- customers more loyal and to increase their visits, and the consolidation was very successful. And now the opportunities should be assessed on a case-by-case basis.

The next question comes from Marcelo Motta with JPMorgan.

About the ERP integration, if I'm not mistaken, you had a phase to roll out in April with SAP and Oracle, I'd like to know if that has already started and if that caused any impact in your operations in April and May?

Motta, thank you for your question. I believe our coordination is very thorough in terms of the ERP integration. We had seasoned teams who had worked in previous integrations, and we didn't have any hiccups in the rollout. We went through the most sensitive phases we built in all of our shopping malls. It's business as usual now. We got ready for that experience and everything is now going according to plan without any hiccups since day one.

The next question comes from Rafael Rehder with Safra.

I also wanted to talk about M&A. In terms of acquiring assets, you have a very strong cash position. And now with higher interest rates, are you talking to the minority shareholders that may want to sell their stake? Would that make sense in terms of capital allocation?

Rafael, thank you for your question. Indeed, some malls in our portfolio are owned by minority shareholders. They have some stake in those malls. And although they have operating numbers that are very strong and they are dominant in their markets. And because of that, we want to continue investing in them. And it would make sense for us to increase our stake in those malls that have such great potential for growth because they are leaders in their markets, right? Making our operating numbers stronger and improving our strategic footprint in specific markets that have that characteristic. We want to be the main destination for consumers and the place where tenants can do good business. So investing in those malls make sense in a country with interest rates in the level as they are right now makes things harder because the company needs to have higher return than the cost of capital. And in order for us to acquire stake, we would need to have a very clear growth perspective. Let me give you an example that happened in the past. In 2021 -- December 2020, January 2021, we acquired a significant stake in Leblon from Brookfield. It was in the middle of the pandemic, and our cap rate was low considering the level that the company had. But the mall almost doubled their NOI in 2 years. In 2022, we already had more than twice as much the level of NOI that we had when we acquired it. So if we have opportunities like that, we're going to consider it with malls with that characteristic, with such great growth potential. If you look at the occupancy rate per mall, you're going to see that there is a number of malls that are still ramping up. We still have a potential to capture more same-store rent increases. So that dynamic is very important and it's going to decide whether or not to acquire more stake in the existing malls. And yes, that's a great question. But the scenario right now makes it harder for us to make those deals, but we are ready to consider those possibilities if necessary. Thank you for your question, Rafael.

Ladies and gentlemen, that concludes the Q&A session. I'd like to turn the conference over to Mr. Rafael Sales for his closing remarks.

Again, thank you very much for your attention, your questions. The discussion about the company was very good, very positive. And we're here to take any more questions you might have if you need to schedule a meeting or if you want to discuss any point further. Thank you.

That concludes the 1Q '25 Allos conference call. Thank you for your participation. Have a good day. [Statements in English on this transcript were spoken by an interpreter present on the live call.]