Grupo Gicsa S.A.B. de C.V. (GICSAB) Earnings Call Transcript & Summary

Good day, everyone, and thank you for standing by. Welcome to GICSA's Second Quarter 2023 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. It is now my pleasure to turn the call over to Natalia Nirenberg of InspIR Group. Now you may begin.

Hello, everyone. I'm very pleased to welcome you to GICSA's Second Quarter 2023 Earnings Conference Call. Joining us today from GICSA is Mr. Diodoro Batalla Palacios, Chief Financial Officer. Mr. Batalla will discuss GICSA's second quarter 2023 consolidated results per the press release distributed by the company yesterday, July 27. If you wish to be included in future distributions of press releases, please contact us at InspIR Group in New York at (212) 710-9686 to be added immediately. A special note to any members of the media who are joining us today. We would like to remind you that today's call is for investors and analysts only. Therefore, questions from the media will not be taken. If you are a member of the media and wish to direct any questions to the company, please contact the company directly after today's call. Also, please note that during this call, comments made by management may include forward-looking statements, which are subject to various conditions and uncertainties based on a variety of factors. These forward-looking statements may differ materially from actual results. Thus, we ask you -- we ask that you refer to the disclaimer located in the earnings release prior to making any investment decision. It is now my pleasure to turn the call over to Mr. Batalla, Chief Financial Officer of GICSA, who will lead today's presentation. Diodoro, please go ahead.

Okay. Thank you and good morning, everyone, and thank you for joining our second quarter 2023 earnings call. During the quarter, we made additional progress in our strategy to improve the company's long-term financial position. Part of the strategy, on June 30, we received the final payment of -- for the transaction of the sale of Explanada Aguascalientes property. And with that, the transaction was complete. As agreed, the proceeds from this transaction were allocated to the partial prepayment of the local bonds, GICSA 15, 17 and 19. With respect to the remaining assets under the Cebures agreement, we continue working forward, completing the construction and commercialization of Paseo Metepec and on selling the other remaining assets. Regarding to our pipeline properties, we are pleased to announce that the construction of the Grand Outlet Riviera Maya is in the final stage of completion, and we expect to begin operations during the next quarter this year. Regarding our Cero5Cien residential project, the construction is 80% complete. And at the end of the quarter and 65 units have been sold, representing 64% of the total inventory. Moving to our operations. During the quarter, visitors to our properties increased 16% year-over-year and 12% compared to pre-pandemic levels. This was translated into better sales in our tenants, which increased 9% year-over-year and 29% compared to the pre-pandemic level. In addition, total occupancy at our property was 85%. Consistent with our plan to maximize operating cash flow, we continue focusing in our CORR strategy, which is collect, operate, renew and rent. This past quarter, we signed 83 new leases equivalent to 21,000 square meters while 12,000 square meters started operation, and we collected 94% of our total invoicing. Turning to our financial results. In the second quarter, both consolidated and proportional NOI increased 5% year-over-year to MXN 840 million and MXN 695 million, respectively. Consolidated and proportional EBITDA for the quarter were MXN 786 million and MXN 642 million, an increase of 3% and 2%, respectively, when compared to previous year. Looking ahead, we are convinced that delivering our pipeline properties, increasing our occupancy levels, deleveraging our balance sheet together with more favorable economic environment will continue to significantly improve our profitability, cash flow and financial strength. We remain committed to our business shareholders, clients and employees of our company. With this, I conclude my comments for the quarter, and I open the call for questions. Operator, please go ahead.

[Operator Instructions] And it does appear that we have no questions in queue at this time. I'd like to turn the program back to our speakers for any additional or closing remarks.

Thank you very much, everyone, again, for joining us today for our results conference call. As a reminder, we are always available to answer any or all -- and all of your questions. So please do not hesitate to contact us if you have any after today's call. On behalf of everyone at GICSA, we wish you a great day. Thank you very much.

This does conclude today's program. Thank you for your participation. You may disconnect at any time. Have a wonderful day.