Fibra Shop (FSHOP13) Earnings Call Transcript & Summary

Good morning. My name is Patricia Area, Financial Analyst at Fibra Shop. I would like to welcome everyone to Fibra Shop's Second Quarter 2026 Earnings Conference Call. We are happy to announce that Fibra Shop is celebrating its 13-year anniversary. Please note that this call will be recorded for documentation purposes. By remaining on the call, you consent to the recording. As in previous quarters, this conference call is being conducted via Zoom, allowing us to present the results on the screen. Fibra Shop issued its earnings report yesterday. If you did not receive a copy via e-mail, please not hesitate to contact us at investor@fibrashop.mx. I would like to remind you that forward-looking statements made during this conference call do not account for future economic circumstances, industry conditions, company performance or financial results. These statements are subject to several risks and uncertainties. All figures presented have been prepared in accordance with International Financial Reporting Standards and are stated in nominal Mexican pesos, unless otherwise noted. Joining us today from Fibra Shop in Mexico City are Gabriel Ramirez, Chief Financial Officer; Irving Garcia, Controller; Marie Carmen Hernandez, ESG and Investor Relations; and myself. Now I will turn the call over to Mary Carmen. Please begin.

Thank you, Patricia. Good morning, everyone, and thank you for joining us today. On behalf of our CEO, Salvador Cayon, I would like to share the following message. During the second quarter, we reaffirmed the strength and consistency of our strategic execution. Today, we are seeing tangible process, a stronger portfolio, a more robust capital structure and continued improvement in the market perception of our certificate flights. One of the key pillars of this strategy has been the evolution of our properties into Central Davina that enhance the visitor experience and reinforce a more resilient model aligned with evolving consumer trends. Let's begin with our ESG strategy. In June 2026, La Cara obtained the World Health Safety rating awarded by the International -- well Building Institute, becoming the first Mexican shopping center and the first asset owned by the Mexican FIBRA to receive this international recognition. This definition validates the implementation of policies, protocols and best practices aligned with international standards for health, safety and well-being and reinforces our commitment to developing spaces that integrate wellbeing, safety and quality of life as fundamental drivers of long-term value creation. Santos. During the quarter, we continued executing Phase 1 of Puerto Paraisto transformation project, which includes the redevelopment of 5 key areas. Oasis, Walkaway, Sports area, Tonio and lobby. Every element of this development has been conceived to support the activities and experiences that define our Central de Vida concept. Operational and financial results. During the second quarter 2026, EroShaft's operational metrics remained resilient. Total occupancy 94.88% stabilized occupancy, 96.92%. As of June 30, 2026, the company had a total of 2,131 executed lease agreements. These indicators confirm the resilience of our portfolio and the continued strength of tenant demand across our properties. Now turning to the financial results. Starting with revenues, second quarter consolidated revenues reached MXN 684 million, representing a 5% increase compared with the 2 quarter 2025. Moving to NOI. Second quarter NOI totaled MXN 508 million, increasing 3% compared with the same quarter last year with a 74% NOI margin. Regarding EBITDA, second quarter EBITDA reached MXN 489 million, up 3% versus the same quarter of last year with a MXN 71.43% margin. In terms of adjusted net income during the quarter, we recorded MXN 198 million, equivalent to MXN 0.107 per certificate, up by 16% versus the same quarter 2025. Finally, FFO for the second quarter 2026 reached MXN 204 million. Overall, these results reflect consistent sequential momentum throughout the year of a meaningful year-over-year expansion in profitability and recurring cash flow generation. Regarding the quarterly distribution on July 20, the technical committee approved a distribution of MXN 130 million, equivalent to MXN 0.24 per certificate, up 24% compared to the second quarter of 2025. The full amount represents a return of capital payable no later than August 6. Now let me walk you through the Fibra Shop value creation strategy has translated into performance for our investors. As a follow-up to the analysis we presented during the first quarter regarding the results of our growth and value creation strategy implemented since 2023, this quarter, we conducted a comparative exercise against MXN 6 using a simple average to evaluate our positioning relative to the industry. Because the absolute price of each certificate is not directly comparable across Fibra, given differences in the number of certificates outstanding and portfolio composition, we use the percentage change in certificate price over comparable periods as a relevant benchmark. Over the past 24 months, Fibra Shop certificate has appreciated more than 1000% compared to the peer average of 26% meaning our certificate has outperformed the average of our peer group. Over the past 12 months, our certificate increased 35% compared to the peer average of 7%, confirming that this is not a onetime effect, but a sustained trend of value appreciation of our investors. Incorporating the trailing 12-month dividend yield of 6% into the price appreciation, Fibra Shop's approximate total return over the last 12 months reached 40% versus a peer average of 11%. I want to note this is a simple approximation. Beyond stock performance, we also see a meaningful and still unrealized opportunity in how the market values our underlying assets. Since 2023, Fibra Shop's market capitalization is about 170%, while our shareholders' equity has increased by a more modest 31%. As a result, the implied discount between our market capitalization and our shareholders' equity has narrowed from 80% in 2023 to 58% as of this quarter. This tells us the market has begun to recognize the underlying value of our assets, but it also tells us that a meaningful revaluation opportunity still exists. Even after this improvement, the market is still valuing us below our book equity. What is driving the appreciation in our underlying property values? 2 factors. First, operating performance. Our annualized NOI has grown, up 14% since 2023, reflecting a more efficient and profitable operations. Second, a compression in the implied capitalization rate applied to our properties, which has declined from 12% at the end of 2023 to 10% as of this quarter, reflecting a reduced perception of risk among both the market and our independent appraisers regarding the quality and stability of our portfolio. Together, these 2 factors, stronger cash flow generation and lower discount rate explained the 28% increase in our property values over this period. If this trend continues, we expect property values and in turn, the intrinsic value available to our investors. At this time, we will open the floor for questions. [Operator Instructions] . [Foreign Language].