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 2024 Earnings Conference Call. Joining us today from GICSA is Mr. Diodoro Batalla, Chief Financial Officer, who is here this morning to discuss the company's performance and answer any questions that you may have. [Operator Instructions] Please be advised that today's conference is being recorded and will be available on the company's Investor Relations website. 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 meant 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. Before we get started, let me remind you that information discussed on today's call may include forward-looking statements regarding the company's future financial performance and prospects, which are subject to risks and uncertainties. Actual results may differ materially, and the company cautions not to place undue reliance on these forward-looking statements. GICSA undertakes no obligation to publicly update or revise any forward-looking statements, whether because of new information, future events or otherwise. 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.

Thank you, operator and good morning to everyone. Thank you for joining us at our second quarter earnings conference call 2024. I hope everybody is doing well. During the quarter, we maintained stable our operation and financial indicators. In this regard, our visitor traffic same properties and tenant sales increased about 2% and 3% in 9-month basis. On the leasing side, this quarter, 21,686 (sic) [ 21,786 ] square meters were signed in a total of 63 leasing agreements, and we started the operations in 14,952 square meters on 55 leasing spaces. Our occupancy rate reached 86%, with rents per square meter standing at an average price of MXN 374. Turning to our financial indicators, consolidated and proportional NOI went from MXN 840 million and MXN 696 million in the second quarter 2023, to MXN 894 million and MXN 741 million this period, growing both indicators at a 6% rate. Consolidated and proportional EBITDA totaled MXN 829 million and MXN 676 million, up to 5% versus the second quarter of 2023. In the side of our development's progress, we remain going forward in the stabilization phase of our Grand Outlet Riviera Maya after the success of its soft opening at the year-end 2023, and Paseo Metepec counted at 89% advancing construction and 75% in commercialization. And in the residential project Cero5Cien, we are about to finalizing, with a 92% rate of construction advanced. Now after discussing the operations and financial metrics, I would like to thank our investors for their unwavering confidence and support and highlight that our CORR, C-O-R-R, strategy, consisting of collect, operate, renovate and rent, remains as the main catalyzer to improve our occupancy levels and commercial offering. In this sense, we were confident into the second quarter of this year. Now I will turn the call over to the operator for questions. Operator, please go ahead.

[Operator Instructions] Our first question comes from Carlos Alcaraz, Apalache Análisis.

Congratulations for the results. I have 2 questions. The first one is regarding stabilizated properties. Will you be see -- looking to sell any property in the short term? And the second one is about the loan-to-value ratio. What is your expectation for 2025?

Carlos, regarding your questions, at the moment, we are not considering in selling any of our operating properties. As you know, we reached an agreement in 2022 with the bondholders of the CEBURES GICSA 17, 15 and 19, and we were in the process of looking to sell Acapulco mall after the Otis event. We are in the reconstruction phase, so now is on the side to sell that property until it's reconstructed and operating again. And in our loan-to-value ratio, today, we are at 36%, and we are working hard in order -- for next year, our goal is to reduce significantly our leverage levels in the CEBURES side, both the 5 [ divisions ] that we have, GICSA 15, 16, 17, 18 and 19, that had about -- around number MXN 10 billion. We are doing next year, our goal is to reduce it at least at half.

With no questions in queue, the question and answer session conclude. Thank you, everyone, again, for joining us today at our earnings conference call. As a reminder, GICSA Investor Relations team are always available to punctually address any and all of your questions, so please do not hesitate to contact us if you have any further inquiry after today's call. On behalf of GICSA, we wish you a great day. Thank you all for being in today's conference call. Now you may disconnect.