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 2025 Earnings Conference Call. Joining us today from GICSA is Mr. Diodoro Batalla, Chief Financial Officer, whom is here this morning to discuss the company's performance and answer any questions 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 that today's call is met 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 in today's call may include forward-looking statements regarding the company's future financial performance and prospects, which are subject to risks and uncertainty. 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. Mr. Batalla, please proceed.

Thank you, operator, and good morning, everyone. I hope all of you are doing well. Thank you for joining us today at our 2025 second quarter earnings conference call, a period marked by the stable and resilient trends across our key operational and financial indicators as we move forward in the execution of our strategies. In this context, on the operational side, visitor traffic in the second quarter of this year increased by 2% year-over-year, while tenant sales were up 6%, thus maintaining the resilient base of last quarter. Following the operational traction during the quarter, 80 new lease agreements were signed, totaling 21,000 square meters, while 69 new leasing spaces were opened, thus adding 18,000 square meters of occupied GLA. And as of this quarter, the occupancy rate stood at 89%, up 3 percentage points, while the average rent per square meter reached MXN 395, recording a 6% annual increase. In the stabilization portfolio, the Grand Outlet Riviera Maya closed the quarter with an occupancy rate of 55%. Likewise, a Galerías Metepec II occupancy of the second quarter closed at 79% as most tenants are currently filling out their spaces ahead of their openings. On the financial side, our total revenues for the quarter amounted MXN 1.2 billion, a 10% annual increase, boosted by both a higher occupancy rate and average rent. Consolidated NOI stood at MXN 983 million and proportional NOI at MXN 816 million during this quarter, both increasing by 10% year-over-year, while consolidated and proportional EBITDA reached MXN 904 million and MXN 757 million, representing an annual growth rate of 9%. Similarly, consolidated and proportional NOI margins stood stable at 81%. As our financial position, total consolidated debt closed the quarter at MXN 23.8 billion, representing a 15% decrease year-over-year basis. So our ratio loan-to-value stood at 31%, reflecting our unwavering efforts to enhance the capital structure. Before concluding, I would like to mention that in the coming periods, we will continue consolidating our position as a space that encourages family connection and enjoyment, kicking off preparation for the 2026 Soccer World Cup through the recently launched Chute Mexa campaign. A series of [ theme ] activations in our shopping malls. These initiatives are aligned with the growing excitement around Soccer and are designed to offer safe, engaging experiences to our visitors. Finally, it is important to point out laser focus on the execution of our CORR strategy as our quarterly results still reflects its effectiveness even in the challenging macroeconomic environment. This concludes my participation. And now we will turn the call over to the operator to open the floor for Q&A. Operator, please.

[Operator Instructions] Our first question comes from [ Alejandro Rodriguez ].

Can you hear me now?

Yes.

A couple of questions. The first one is how much of the actual revenue is converted? How much of that is invoiced versus converted? During the pandemic, you used to disclose that sort of ratio. And the second question is if you can comment on the recent Standard & Poor's rating action.

Of course, invoiced versus collections, now we are -- after -- the pandemic is now very far away. Now our collection rates came back to the same levels that we had before pandemic, at least around 95% of invoiced revenue collected each period. And that is what we normally have, and we are back into normal rates. Regarding the Standard & Poor's notification, we recently announced that we are in the process of doing a restructure in our Cebures [ additions ] with GICSA 17, GICSA 15 and GICSA 19. We are currently in conversations with the lenders. And we will have an assembly on August 6 in where we will announce the agreement that we reached with them. So that is why Standard & Poor's put our rating in observation.

With no further questions in the queue, I would like to turn the call to the management for the close of this conference.

Thank you for joining us at today's earnings conference call. As a reminder, GICSA Investor Relations team are available to address further inquiries. So please do not hesitate to reach out after today's call. We wish you a good day.

Thank you. You may disconnect.