Multiplan Empreendimentos Imobiliários S.A. (MULT3) Earnings Call Transcript & Summary

Good morning, everyone. Welcome to the earnings call of the results of the fourth quarter of 2021 of Multiplan. We have here Mr. Jose Isaac Peres. He is the President. Mr. Armando d’Almeida Neto, VP, Finance and Investor Relations; Mr. Marcello Barnes, VP Development; Hans Melchers, he's the Director of Planning and Investor Relations; and Mr. Richard, Director of Digital Strategy. And we inform everyone that the presentation of the -- well, the earnings call, you can download the presentation from the ri.multiplan.com.br. And you can know that the participants will only hear the teleconference during the presentation of the company. And thereafter, we're going to start the Q&A session when more -- you will get more information. [Operator Instructions] Before we start, we would like to say that the disclaimer anything that might be said during the earnings call regarding the perspective of -- business perspective and projections and operational goals and financed -- our promises of the Board of Directors of Multiplan and based on the information that is available now to the company, any future forward-looking statements do not ensure performance and they involve risks and uncertainties. So these future events, they depend on circumstances and/or might not take place. Investors have to note that general economic conditions, industry conditions, and other operational factors can affect the future results of the company and can lead to results that are materially different from those that have to be taken care in the future. The teleconference will take 60 minutes. After this period, the Investor Relations area will be available, should you have any more questions. Now I would like to give the floor to Mr. Jose Isaac Peres. He's the President and he will start the presentation. Please, the floor is yours.

Good morning, everyone. Dear ladies and gentlemen, it is a great pleasure to be here with you and comment a little bit about our results. And I'm going to be -- maybe you're going to be a little bit tired, but I'm going to say something different for those of you that want to understand our company. I'm going to refer here to our -- on our analysis on the several crises that we've gone through. I would like to say that in these 50 years of experience, we -- I probably went through 15 crises -- economic crisis. And every 4 and 4 years numbers, we have a crisis. So let's start. Usually, people that are fearful of the crisis. They open up a space for their competition. And these crises are always generating new demands. And then those that grow are actually the ones that can identify those new demands and even foresee them. We grew regardless of the crises, and we knew how to adapt to every moment. As the recent case of ParkShoppingJacarepaguá delivered in '19 -- November 19, it was built right in the middle of the COVID crisis. No, we don't get intimidated by crisis. When our results of the fourth quarter are here to prove what I've said. In the fourth quarter, it was the only period that we actually had the breadth to continue with restrictions, but we could catch our breath. And maybe there is another subject factor, which is COVID that makes people be hostages in their own homes. If it wasn't that, the results would have been much better. Remember that Christmas was doing well when we had COVID, and then we lost a little bit. Naturally, people are concerned since the beginning. So what I would like to say to you is here in the comparison of the fourth quarter, and as you know, the numbers, the fourth quarter of '19 -- why am I talking about '19? It's a year of growth. It's a year that the malls grew. So we are comparing a period that temperature and pressure are basically the same, except the subjective issue that people believe that COVID and so on and so forth. I'm not going to comment that. But this is a global issue. Now the fourth quarter of '21 and comparing to '19 -- the -- we have the sales of growing 19%. The net revenue of Multiplan grew 21% and profit 50.1%, also referring to the same period of '19. So it is a good growth period for Brazil. And our estimation for results at the beginning of '22, that we have here the numbers. We have our sales growing 4.4% January '19. We also have 42.6% above January '21. And our growth of the net revenue is of the order of 25% if we compare to the same period '19. Very well. 41% if we were to compare to January 2021. Well, today, Multiplan assets at its fair value account for BRL 23 billion. However, on December 31, 2021, we were listed in the stock exchange valuated at BRL 11.2 billion. In December 2019, the very same company was worth BRL 19.9 billion at the market value. While the income and the revenue, they were quite close to the ones that we registered in 2021, quite close figures. The fourth quarter was the only moment in which the shopping malls, as I said before, were able to sell more regularly. Well, in this period, in the fourth quarter, the results were better than those of 2019. The profit grew at 50.1% as compared to 2019. And also importantly, we have to take into account that we are still living with the COVID pandemic that locked people inside their homes. And this wasn't happening in 2019. So let me go back and talk about this issue about our company. So on December 31, 2021, while the net income of the company was BRL 2.5 billion. These were the sales. So we made this internal exercise. If we sell 10% of our assets, we could then settle the entire debt amount. And I say that, because at this point in time, the interest rates are going up. They're actually very high. And we are wondering whether we are valuated at a very low level. So perhaps it would not be interesting to sell some of our assets to make this company more profitable and debtless. Well, that's an issue that we are now analyzing. So I'm very much attached to what I have. I'm a buyer. I'm not a seller. Anyhow, we are more developers, the buyers of preset developments. So we feel like creating and doing. This is what we do. This has been the engine of our company. So let me acknowledge something that is important. Well, Multiplan in 1984, we delivered our fifth mall in Brasilia in the city of Brasilia in Brazil. Well, this mall was inaugurated by President Figueredo. It was a very special event. So it was a period of major recession. So we were going through this recession period. And the company was highly indebted. We were highly leveraged. We had 15% of capital, 85% was debt. It was a terrible period for our company. While the sales went down, the GDP was a 3% negative at the time. And we were going to go bankrupt. We could not afford to pay our debt. We could not afford to pay our debt. Well, I'm not sure, but I had debt up 100%, 200% to 300%. In the final months of the Sarney administration in Brazil, perhaps you don't remember that, but we had 80%. So you can see how hard it is to grow in Brazil vis-a-vis this fearful situation that we face here. Well, let me go back now and tell you what we did to overcome the crisis and avoid going bankrupt. Well, for the first time, we started to sell shares in the shopping malls to entities, whose purpose was attaining income in the long run. The entities at the time, they were pension funds at the time. But in order to solve our issue, we sold 50% of all of our assets, half of our assets. Well, we paid our debt. We paid our debt in full. And then we repurchased everything that we had sold, virtually everything. The 5 malls amount to 100% of Multiplan's property. Ribeirão Preto, we had BarrShopping, Morumbi Shopping Mall, Shopping, and there's another one, another mall, VillageMall. That was the first child, so to speak. And then I'll talk about this later. Very well. Today, our net debt over the assets of the company, this ratio according to our assessment, our assessment is conservative and this ratio is 10% -- around 10%. So what I would like to tell you now, I would like to highlight that with the coronavirus crisis that we are facing right now, well, I'm being repetitive, but we delivered 4 malls Jacarepaguá, with 95% of the tenants filled in. So perhaps this is the most intriguing project, one of the best projects that we've had in this company. 95% of the tenants allocated. And perhaps, well, this was developed during the COVID-19 crisis, that's it. So we have not stopped in the very worst moment, when our malls were closed. Well, of course, we had losses and we waived on the tenant fees that we were entitled to receive throughout a long period and we charged half the fee -- half the monthly fee. So we did not call this debt. We were solidary to the tenants, to our partners. We did not postpone their debt. We work with our hearts. That's our issue. Well, now we have a quite successful success case. It was actually a climax when it was inaugurated. Well, because it's adapted to the moment that we are now living. We are more focused on entertaining, on green areas. We have this external mark that will be delivered in March, next March, April. It is going to be the first open children's park with a very large green area. It's a very playful concept involving leisure and joyful moments. Well, this is knowing how to identify a crisis and adapt to such crisis. That's why I say that crisis generate opportunities. Jacarepaguá, our mall, is a result of the crisis. It couldn't be like any other mall, because early on, when we began working, the malls were much more focused on retail. But then we changed and there's much to tell you here. I'm not going to waste time on this anymore. Anyhow, what I would like to say is that Jacarepaguá is a region with 700,000 inhabitants. And trade and service is just crawling in that region. The issue that we had there is that in order to make this more feasible, we had to invest in roadways, in lighting, in signage, in the entire region, encompassing a large area of Jacarepaguá. And with that, the traffic of that region became more accessible according to the opinion of the dwellers of the region. So the roadways became more accessible. I do have some other points to highlight here for you. Well, it's always nice to mention that in October 5, last year, 2021, we were still facing this moment of crisis, and the company launched Golden Lake. And I refer to this project, because I would like to say that when we talk about the actual income in large urban centers close to the malls, I mean, malls that really stand out in their cities. We are fully convinced on the synergistic effect that we see between the mall and the surrounding construction. There is always additional return on investment for the company. It's not so expressive, but it's also important. So this has been one of the strategies. Well, the 5 first malls that we built, we had the cities growing around the malls, and they grew exponentially. Let me give you an example. Golden Lake, so we built this 30 years ago and at the time, a flat that we sold for $500,000, today has been appraised in $2.2 million, in spite of the crisis, because the real estate market suffered a drop. It was appraised at a higher amount. But that's it. The good, the actual assets they will always appreciate. And that's why Brazilians like so much to invest in actual income, that's real estate income, right? Because you get paid, you have the revenue flow, but you also have the appreciation of the asset. If we take into account our malls, the BH Mall, for example, that we built 41 years ago, that was in 1979, yes, 1999 -- 1979. We took a loan of BRL 12 million from Citibank. Citibank was the only E&O bank that had long-term funding. So we ran this risk in buying this insurance, buying this loan in dollar. But I was bold. I was very bold at the time. And then we built that mall, the BH mall at the BI3 roadway. It was really a highway. And everything around that highway was nothing. There was nothing around it. And we built -- and the owner of the land was the President of one of the banks, BMG Bank. And then when he sold me the land, and I told him that I was going to build a mall there. And then he said, why are you going to build there? He asked me. As a good citizen from the state of Mina Gerais. I thought that I had found this golden mine. And I told him, I'm going to build a mall. And then he said, "Oh, man. But why are you going to build a mall there? All you can find there is horses and goats. Yes, it was a steep land, and there was a great deal of mules and horses and goats. And then I inaugurated and then today, the city grew around the mall. It's one of the key neighborhoods in the city in terms of appraisal value, and that's around the BH Mall. So what do I mean by that? Well, it cost BRL 12 million. That was the loan. But today, the appraisal at the fair value, at the fair market value, even taking into account the high interest rates that we see in the market, it's worth BRL 400 million, around that. So virtually 40x more. And we made 8 expansion projects with the income that was generated by the mall itself. So we were able to use that income. So with the remainder of the income, we reinvested in the mall, so that we could make it appreciating value. Very well then let me carry on. What I mean is that throughout the last 50 years, we have experienced so many crises. They will happen. The malls will keep on growing. They will expand, and they will appreciate the value of the surrounding land, the surrounding area. Let me draw your attention to one thing now. Much has been said about COVID. Well, the in-person retail would not prevail. The digital retail would prevail then. And the malls would go bankrupt. Well, I admit that some of them have faced that. But in none of our malls, have we seen such situation. Of course, we had cities in which we spent 7 months with the doors closed down. So this is what surviving means. We were dead by 7 months, and then we are reborn, right? Very well. We survived. We could show to the public. We had this international company that came to the surface testing. We had 800 testing sessions, and I was amazed. They could not find coronavirus, not a single strain of coronavirus. Neither in the bathroom nor on the tables, chairs, handrails, staircases. They couldn't find a single strain of the coronavirus, not even in the grating of air conditioning or in the air conditioning system. So much was said that coronavirus could live on your clothing for such and such days. So people were kind of willing to wear underwear only. They didn't want to contaminate the family. So much has been said because of the lack of knowledge on the virus itself. And today, fortunately things are under control and the virus has weekend as we had foreseen at the beginning so the virus weekend by getting people infected. Well, this was virus that stopped regrettably. There was a single country that did well with the virus, the rest of the countries faced a serious crisis. But Brazil resisted. I believe that this year, we are going to have economic growth. We're going to have a positive GDP growth. So I think this year may be a bit more difficult. But as I say, well, if we had to close our doors for 7 months, and we didn't die, it's hard to kill us, right? So we are just like cats. We have 7 lives. What I would like to tell you is that shopping malls -- well, the malls are a subproduct of the urban chaos. And I say that because in 1973, myself and my partners started building the malls. The perception that we had at the time is that the urban chaos was there, was installed. Nobody could buy anything in Rio de Janeiro, where I lived. I've lived most of my life in Rio de Janeiro. And I may tell you that I remember that here, [ Colonel Fontenelle ], he was the Director of the Traffic Department. He would empty the tires that were stopped in the retail areas or downtown. So we saw triple lines. Triple rolls of cars parked, one next to the other. Traffic was chaotic. Coming into the city through Copacabana and Barra da Tijuca in order to get there would take you 2 hours. It was terrible actually. So this really drew our attention. So we have developed many commercial centers. These were commercial galleries and they had no parking space. So the development process should be based then on building commercial centers with parking areas. Just like we did with Ibirapuera Mall. At that point in time, we made this decision. We went to the United States. We hired a consulting company for malls. We went to Europe as well at the time. And we realized that the project that we had envisaged for Ibirapuera was wrong actually at the time. But then we saw different realities. We adapted the design. We launched it quite successfully. And to this day, well, the owners -- I left the company then because I sold my shares for personal reasons at the time. And then after a few years after leaving the company, my partners sold shares to [indiscernible] was a bank that had granted credit for the company at the time and [indiscernible] sold each shop to each tenant. So they raised twice as much, because they would finance the tenants in 10 years. We're not talking about doing this. Because if we do this someday, we are not going to have control over the quality of the mall. The activities that run in the mall, things that we don't want to have in the mall. We don't want to have predatory competition in the mall. Competition is healthy, but it should not be predatory. So this is, of course, in view of the chaos, we began working. So shopping malls emerged to make cities visible. All of the malls in Brazil. Virtually, all of the malls in Brazil will have surrounding chaos installed, because we have a high number of vehicles. It's much higher now than what we had before. Well, without further ado, I'm not going to say much more. I would like to say that today in Brazil, we have 620 malls and 1,700 domicile sites -- and 1,700 sites. Some municipalities will grow in the future, even because of the influence of the shopping malls. So I would like to say goodbye. I will not talk about Multiplan. You know a lot about this company. Thank you so much.

[Operator Instructions] So our first question is from Gustavo Cambauva from BTG Pactual.

I have 2 questions. Let me open the release, there is this discussion about the occupation of the malls. And my question is about this. We were talking about the many initiatives of the companies in terms of the mix, the reduction of the maintenance fee, well, this has really strengthened your portfolio. This helped you to grow a lot in terms of the tenant fee, and this is about the sales growth. So my question is, we always talk about the average of the occupation cost, but according to the current levels, that is above the historical average that the company has always had. Do you truly believe that this is a sustainable rate, a sustainable fee? Do you believe that in the future, Multiplan will have a different occupational rate? Or should it normalize down the road with inflation going down and sales going up? So I would like to understand whether you have a figure -- magical number perhaps for the occupation cost? And what does the future bring? My second question is about the vacancy rate. The vacancy rate has been going down. It's a bit higher than the historical average, but it's very much concentrated on some assets. Most of the assets have resumed the historical average. So how do you see the recovery? How do you see Santa Úrsula, New York, how do you see these assets? Will it take longer to recover? Or is there any specific action for such assets?

So thank you very much for your questions. Now in regards to the cost. The occupancy cost that we presented is the result of the sum of all of these, pondered by the size, the cost of rent, our expenses. And then we have a case study. Just to clarify all the questions that we received on this issue. The occupancy cost can combine, because of the consolidation of our assets even. You can imagine that we brought in 2011, 2012, 2013, we had 5 new malls that faced the challenging moment. GDP decreasing, 0 recently with the pandemic and they are representing a strong growth. So when you look at other assets, more consolidated, you will see that as they are selling more the square footage or the square meters, that allows for us to charge more for that asset. It has a greater productivity per square meter. And then at the same time, you have the occupancy costs that will reduce when comparing to a new mall, a property that is just launched in the market. Now I wanted to talk to the analysts, the investors, that have been with us for so long. If you take a look at 10 years ago, and then you look at our occupancy cost. And at the time they asked us if we could grow more. And the answer is given -- not in words, but with data, with results. What did we try to pursue -- well, not try, what we always pursue is to increase the productivity of our malls, whether if it's by the localization, by consolidation, and for the management of these enterprises, generating more productivity. Today, we have other mechanisms that are more traditional. And we have the logistics productivity, and we have our Multi app. So our tenants can sell more through several channels, and making this point more productive. Well, the cost can rise a little bit more all throughout time. As long as they have a sales environment. Sales environment that is sustainable. And second, the occupancy rate. It -- the glass is half empty or half full. And while the occupancy is worse than in 2019. And even so we can surpass sales and rent, even though this occupancy rate is lower. Given the quality of our assets and given the fact that we are turning the page on the pandemic, I see an upside of occupying these areas as you have the normalization of commerce, and we have practically the year of 2020, 2021 in uncertainties, how are you going to plan this, invest in this. And we have a lot of uncertainties that are going by. And I think that this will bring a lot of opportunities.

Armando, I wanted to interrupt you. To say maybe something philosophical, the only certainty that we have is that everything is uncertain. And we take on the risk. And I mean living is a risk. I remember that my first enterprise, I launched in November of 1963 at Lapa, a building that is close to the military dictatorship, the revolution that accommodated in '64. And everybody told me I was insane. It wasn't that I was insane, I was a student. And my friend, I was working as a real estate agent. I studied in the morning, and then I earned some money. And then the friend sold his apartment. I sold his apartment for a very good price. And he asked me. I was to do the incorporation, how to build buildings. And he said, "Well, I don't know, but we will figure it out." And then he gave me the money. We purchased it. He paid everything -- he could only pay for 6 installments and it was 36. And then he paid 1 lump sum. He bought the first part, which was 40%. And I was 60% owner. And everybody told me I was insane, but here is the great opportunity of my life. I know that I can lose everything. And I can owe money all throughout my life, but that's my option. And then I launched and I sold everything. So it's seems that -- well, I didn't have anything. And then I had more risks. I remember that in the government [indiscernible] company. We went to Portugal, we got the first mall in Portugal, and then we did some enterprises in Miami. I want to tell you that a company -- the company is in Brazil, but it can also be in the different places. And of course, whenever there is the opportunity in the real estate of growing and having results, we're going to risk. Today, the only risk that the company has is the net liability for BRL 2.5 billion, but for those of us that had 85% of that and 50% of capital, and we didn't go bankrupt in '84. What does it mean? It means that Brazil grew. Brazil is changing all the time. And it's evident that due to sanitary, political, environmental issues, they really hinder our activities. That's I wanted to add that the risk, the only uncertainty that we have is that everything is uncertain. And given this uncertainty, because we are going through this period, 3 assets where we have higher vacancy, they are recovering the tenants and due to the -- movie theaters are going back. We have new movies. There is a good occupancy that is improving a lot. And in Sao Paulo, we have the offices going back. And the last point, the turnover. The turnover 7.9% in a year, highest in the company lives. And we are using the space correctly. We have new operations. The technology area, yes, Internet. Because it's incredible. Of course, everybody. Nobody will purchase a fridge via the Internet or the telephone. You're not going to buy a special shirt or a suit over the Internet. But there is one thing. We are not here at the beginning of the opening of the mall and here, we have the demand that we realize it's human -- we are gregarious people. And there is the Greek philosopher, Aristotle. We are guided not only by our family. We are -- we get tired of the same people. And in the mall, I am an observer. We have people. It's a place to meet. As from the standpoint of healthcare, we have a great healthcare center. And now we are talking about healthcare in the mall. But the mall -- the shopping mall is the biggest antidepressant. And we have that energy of seeing people. But being in prison is the worst condition for any human being. Otherwise, we wouldn't have jails. The greatest punishment is the cage. But when we self-cage, you have that fear that paralyzes us. I did not stop during the pandemic, not a single day I was at home. I got COVID. I got infected, but I didn't have any symptoms. I didn't have fever, no lung issues. I lost my sense of taste, but then it was working. I had a surgery recently that -- it was the longest period in my life that I was away from the company, that it was 30 days. I don't remember having been away from the company more than that. So in 10 years, maybe people, everybody tells me to take on vacation. But when you do what you like, you transform your work in a hobby. We human beings need that. We live off challenge. Without challenge, it's not fun. So I apologize, it has nothing to do with the call. Gustavo, we hope that we answered your question. Anything else? That's great.

Next question comes from Alex Ferraz, Itaú BBA.

I have 2 questions. One, the first question is in regards to the comment about selling the assets. For those of us that follow up on the company, it's not so common. And obviously, when we look at the market and even the shares in the private market, we can see that the private market, we have a cap level that is more attractive. Obviously, it's very determined. But when we talk about the possible sale, we have a method several reservations fraction in the assets. How do you actually think about that part of the agenda? Or unfortunately, there is that option for leveraging? And then the second part. With regards to January, and you even mentioned the revenue, 25% against January '19, and we had growth in the fourth quarter. I mean, for the contracts that are overdue or that are going to be due, the level is very similar to what we see in the third quarter. The seasonality of Christmas, and then we have the contracts expiring at the same level in the same date. What can you tell us?

Alex to answer this about the asset and then Armando can talk about the issues, financial issues, that you mentioned. But yes, when I was mentioning the 10% of the value of the company, and we pay for debt. I am not -- I'm not trying to sell anything, okay? Internally, some would like. It would give us more liquidity and then -- but then you kill the golden egg heron. I am resilient, resistant. Our assets, yes, they are underevaluated by several reasons. We're not going to sell assets. You can rest assured. Nonetheless, if tomorrow, we have an asset that we bought. And that is not working. Certainly, we hope -- we are not going to spend a lot of money, spending something that might not work, okay? So in that sense, yes, we can sell it. We can sell it. So we don't have issues. But our cost of labor is very high. The company is expensive. So we want to fix our synergies, concentrate it in productive activities, whether it's real estate. So that's it. My answer is that. But the financial part, Armando can answer.

So Alex, I just want to talk about the innovation or manager call. The -- unless the tenant wants to leave the contract and renewal is automatic. When he was talking about the growth of the net income, so when you take the IGPM indicators, for example, you have a good idea on the continuity that we had in the fourth quarter. That's the kind of continuity we had in the fourth quarter. Was this your question?

Well, Armando, yes, I was using the fourth quarter as a reference. Well, it was a bit easier to have the passing over of the discount. But I think you answered my question.

The next question is from Bruno Mendonca from the Bradesco Bank BBI.

I have 2 questions as well. So Armando was talking about the turnover that is above the average. But looking at the consolidated figures, we have the impression that the new tenants are entering into the contract paying according to this new price level. Well, it's higher than what it was pre-pandemic. Can you talk a little bit more about this dynamic of turnover, the new negotiations, from the standpoint of the negotiations and how do they compare to the readjustment negotiations you've had? Well, this is the first question. The second question is about leveraging. So what can we expect down the road in terms of leveraging? There are too many things happening at the same time. You do have Golden Lake that is under development. Is there anything in terms of investing in digital platforms, in relevant companies, addressing the CapEx and what you can do? So what can we expect from the CapEx evolution? Is there a target figure for the year-end? Do you expect to generate cash in 2022? I don't know if my perception is correct. And that's it.

Bruno, well, let me talk to you about the turnover. It's a normal thing. Of course, we never thought -- we never thought that we would experience such a crisis as we have experienced. Well, the prognostic factors against our activity were terrible. It would come to an end, everything would be digital. That's what they said. Anyhow, there are some cities that had trouble in their trading and retail areas, and this also affected the shopping malls. There were cities in which the retail sectors -- the retail areas were closed down 7x in a row. On the other hand, we've adapted. We have fixed things. We started being very careful about the entering and leaving of people. We started using thermometers, testing people's temperature. We hired infection experts. And we invested a lot in the sanitary and hygiene area. So we rest assured based on the data that we collected. We felt reassured. And the turnover is normal. We've never had such a big gap. So what were the losses in terms of tenants or rented area? It went from 97% to 95.3%.

But back way then in the beginning of the COVID pandemic, we were running at a loss of 10%.

No, no, it was just 4%. So we were quite resilient. So imagine closing down for 7 months, opening up the stores after 7 months. The souls of the tenants were reborn. It was their second life, right? This is fantastic. What I may tell you is increasingly so, what I see is that people feel in prison for 1 reason or another. So they feel like going out. They feel like going outdoors. Well, travel or traveling overseas, the DIA Airlines, they suffered just like us or even more. And there is no aircraft to fly. There are no flights. We do have restrictions imposed by countries. So if you want to travel, you cannot travel, right? And so I managed to go to the United States. And I do have a company there, because the American government understood that those who invest heavily in the United States, they would have a different treatment. But it was late last year, midway actually, last year, I was able to travel to the United States in July or September. Well, and then I spent 1.5 years without this possibility of traveling, and that's a terrible feeling. You are imprisoned in your own country. You are locked in your home. So what the Mayor decided is that nobody can go out of the house, because the virus will infect you. People may be arrested. I don't know. So COVID, in a certain way, has shattered the economy of the world with very few exceptions, and we know who the exception is. I'm not going to name names, okay? But the world was really affected. The world was shattered. So we work with the physicians. We do have medical centers. Here in Ribeirão Preto, for example, we have large medical centers. They have been in operation for 30 years. So this wasn't available in the world, the clinics and the medical centers. We came up with this. So the physicians took 3, 4 different kinds of vaccines. So this is lack of safety. In spite of the health system and the great health professionals, they were all willing to work that they had been vaccinated. They were ready to serve. I had 2 vaccines. I didn't have the booster. Well, people tell me to go and get the booster, I won't. I do a blood test every quarter. And my immunity is good. So I rest assured. I feel safe. We also test for COVID. We're testing immunity for COVID. So if it's good, it's okay. Well, what I mean with all of that is that we are now reallocating for the technological department. Well, we need to have in-person entertainment, the presence-based retail. So the exchange of currency for merchandize, the retail is a way of integrating people in society. People go to the mall, because they want to talk. They want to talk to salespeople. They want to drink their coffee. They want to meet people. So we have live centers. It's reassuring to people. It's safe to people. If people feel bad, we do have nursing services. We even have ambulances available. So what I would like to say is that I see a great future for our activity. Of course, the street retail suffered a lot. I don't know how they will recover. I don't know how recovery will happen in major cities. But in our case, shopping malls most survived. We totaled 620 malls in 5,400 municipalities and there's room for growth, definitely. And the malls have been present in the world for more than 70 years, in Brazil 50-something years. I don't know if I answered your question.

So let me give you an answer. It's not charming -- it's not so charming of an answer. It's more of a technical answer to Bruno. Well, Bruno, I think your perception is right. And let me give you some evidence on that. If you compare, for example, the rental and from 41.4% with the rent growth in malls, that was 35.4%. And if you add to that, the vacancy rate you can see how consistent things are. So I will piggyback on your question to clarify some other questions that we have been receiving these days, asking about the rent calculation. If it's net, it has discounts or not, it's net, it's free of discount. It's the rent that is actually paid. All deductions are included. So this is what we charge. This is what we build. This is how we calculate for the rent for that very tenant. So a question now -- your question now about the rental of the new shops. It makes sense, everything is aligned, and it's possible because of the quality of the undertakings that we work with, because of the productivity of the undertakings and because of the opportunity that we offer in renting shops in unique places. Your second question about leveraging. So we have amortization that has been foreseen for this year. Our CapEx doesn't have and has never had a target on how much we will invest. We will invest as we see good market. As we see a good market opportunity, available funding, the cost of the capital, the best use of the company's resources. So our planning is something about deleveraging over the year, because the leveraging, historically speaking, it's higher still because of the discounts that were given throughout the last 2 years, okay? So even with the investments that we have been planning to make, we expect to have a gradual deleveraging of our company, okay?

The next question from André Mazini from Citibank.

The question is about the tenants replacement, 7.9%. It's the highest churning, right? So let us talk about who's coming in, who's leaving. Perhaps small shops that didn't do well during the pandemic. Those that cannot access credit, for example. So the tenants that really suffered and left. So who's coming in, the digital native companies, the new brands? They start in the digital platforms, and then they know they need a brick-and-mortar shop. The large networks as well, they have accessed the capital market. So I would like to know who comes in, who leaves in this 7.9% churn market. So the second question is about taxation. You optimized quite interestingly, the taxation on revenue. Revenues are growing year-on-year compared with the fourth quarter of the 2020 and the taxation is going down. So there was a reduction year-on-year, and it's lower than the historical average. So about taxation, at a lower rate, I think it's 5% now. Is this something that we can expect for the future? Or was this an isolated behavior?

Well, André, thank you so much for the 2 questions that you had. The first on Page 33 of our report, I draw your attention because we informed the ABL, we informed who are the new tenants and the tenants that left us. So there was a swap. 5,800 square meters of apparel left; and 4,200 square meters of food court and restaurants, and gourmet areas; 2,454 square meters (sic) [ 2,445 square meters ] house appliances and office product -- office supplies. So these were the main additions here. So we see those who left and those who came in. And within the tenants that came and you mentioned this already, so there was this expressive area of companies' offices. They were online companies. And as you well said, they felt the need of having the brick-and-mortar shops to have the physical presence in the mall, because of the exposure, because of the touching experience that this enables. And about your question about the taxation. Well, we took the opportunity using credits, credits on essential expenses. So there was this isolated effect on the PIS and COFINS taxes. These are taxes on revenues. Well, of course, there'll be a recurrence of this in the forthcoming years. It's a credit program regarding previous years -- previous fiscal years, but this will have a positive effect in the next quarters as well. Did I answer your question, André?

The next question is from Igor Altera from XP.

Thank you for the presentation. I have 2 questions. First, about the dynamics of rental for 2022. So sales are quite resilient, as you showed us data from January with growth of 4% when we compare with January 2019. So this gives us some boost for you to keep on charging more rental throughout 2022. Do you still have this dynamic going on? And the second question is about delinquency. So in spite of the more active charging, you were able to really address the issue of delinquency. So you controlled that well. So how do you see this rate between delinquency and billing invoicing? So how do you see these 2 sites? That's my question.

Well, I'm going to answer just a part of your question, perhaps the most consistent part of your question. While the rental is based on sales -- the rental fee. When you sell more, well, the rental fee goes up. So that will depend on the throughput on the productivity and the efficiency of each of the malls. And this is very much important to us. Everything is based on sales. Those who do not sell, do not buy, okay? Only those who can sell, can buy, and that's what retail is about. And the rental fees related to that. Well, the examples that I may give to you is that everybody told me that I was crazy to build this Jacarepaguá mall, and then we inaugurated at a rate of 95% of closed deals in terms of rental contracts. And some had to pay the handshake fee to be able to rent, because it was a high demand market. So that's the best answer that I can give to you for a newborn mall. The newborn malls, they do not start working at such high rates. That's it. So the best test was testing reality. It was a reality check. And let me add to that. the rental fees for 2022, of course, there is a positive outlook, because we do see a recovery of the entire sector. We are now operating normally. We see the restrictions being lifted and this will enable us to be more efficient in the management. So this will result in more sales for the tenants. And of course, this will create an environment in which we can charge higher fees. Of course, there is this pressure on the readjustment rates, and this is going to be favorable in terms of rental fees. And I was having this conversation this morning, and many people ask about this. Well, the GDP will not grow that much this year. And then I quite quickly was taking a look at 2015 and 2016, and these were years in which the GDP went down 3.55 and 3.31, respectively. And then even so, we've had sales growth, rental fee increases, and all of that is possible when you have the combination of good properties and a good management. And this is what we have in our company, right? Regarding default and delinquency rate. I believe that when we look into our indicators, we see the strong recovery that we've had. Well, delinquency is 1 of the indicators that is above the historical average. So we were able to surpass the figures that we had in 2019. There was a big win. Well, 2019 was a record year in terms of good performance. So exceeding such rate is special to us. It feels special, especially because of all of the restrictions that we have faced and delinquency has been going down. It has been dwindling. But historically speaking, we've had higher figures than the ones that we had in 2019. Based on the quality of our portfolio, because of the improvement in the economic scenario, because of the improvement in sales, we hope to reduce delinquency rates over time. Of course, we wish to do that, and we're going to work to do that.

Next question, Fanny Oreng from Santander Bank.

And my question. Most of my questions were answered. So I just wanted to question -- and 1 point that is the Canoas. From what I observed in the sale of Canoas, even though it is a recent article and asset that is launched in 2017. It's getting to very close to BarraShoppingSul. And I understand that these are similar, but it's very impressive with how quickly it is maturing. And this is what I wanted to understand. Dr. Peres, you talked about Jacarepaguá. What do you think could be Jacarepaguá since you have a lower income in Jacarepaguá, but you had more people. How quickly can you mature this asset? I know that it's million-dollar question, but that's it.

Well, thank you very much for having -- for understanding very well our sector. But I will explain to you how we work. The problem is, I am tired if you do not bring a different idea world; if you do not bring a global world; if you don't integrate more with nature; if you do not think that the people that go to the mall, most don't buy anything, but they feel better. We invest a lot in the fun part. And Canoas was the first mall that had the ice-skating rink that was well structured. It was working 24 hours, and every day of the year. And here in Jacarepaguá, actually, Rio de Janeiro didn't have any of this. It's a beautiful thing. I don't know if Canoas is better than Jacarepaguá. You spend so much money in Jacarepaguá, but we do not discriminate people. Our problem is that many times, it's not the issue of who we should copy. We should fight -- we are our own competition. So always, we want to deliver more things, making the reality better than the dream, which is what's happening to Jacarepaguá. Canoas was great because here we were discussing how it had another mall and I thought that it was a great possibility. I did Canoas with a different purpose. And it was the agreement with the Mayor's office to integrate the Getúlio Vargas Park. We had lakes. It's a beautiful place, and we integrated the mall with the park. And the park was launched before, because nobody knew where the mall was in Canoas. I think they're not even the people from that city knew. So we are the kings of the outskirts. But anyway, it's evolving more than BarraShoppingSul, because a great deal of Porto Alegre, it's 15 minutes to the north of Porto Alegre where we have the concentration of the population and we got to Canoas. Canoas is a trip. And Jacarepaguá can be a fun day trip. Jacarepaguá is still less than Canoas -- its smaller than Canoas. So it means that the bathroom of -- that people take the picture of the bathroom. And then I got there, and I was scared, and I thought, the restrooms are very beautiful. And so Jacarepaguá -- if you ask, Jacarepaguá, if they're happy, they're absolutely happy, because people that go to Jacarepaguá, they don't want to leave Jacarepaguá. It's an old neighborhood that has 100,000 inhabitants and was forgotten, because it concentrated at Barra da Tijuca, which is the main focus of investments. And we forgot Jacarepaguá. That it exists since the time of the Empire. So it is a traditional neighborhood, and it's evident that we have 700,000 people. It has poorly distributed socioeconomic strata. We have middle class, lower middle class. We have people living in mansions. What's happening is that a lot of people are leaving Barra to go to Jacarepaguá. And Jacarepaguá didn't have any restaurants. It didn't have anything. And then I saw an opportunity. With that, Multiplan strategically concluded the complete domain of the East zone. We are -- we have 5 malls, CampoGrande as well. CampoGrande, we have -- it's a nice mall. It's beautiful. And it's -- here's the thing. Our objective, at least my objective is to make people happier. Give them what they didn't have before. So let's go back to in time. When I did the first mall, I asked the Americans why they did the malls outside of -- the cinemas outside the mall, and they answered, because those that go to the cinema, they don't go to the shopping mall. And now look at what they're doing. They asked me when I built the BarraShopping. How did I make something -- why do I do something so crazy? But no. Pain and pleasure are the 2 phases of the same coin. So today, we have BarraShopping, and they go because of a habit. Because those that go to BarraShopping every day, they see the physicians. They are selective, there are very special physicians. And BarraShopping receives 25 million people per year. Maybe the city has 7 million, and we receive 4x the population of Rio de Janeiro. So it's by giving we receive, as we say in Portuguese. We invest for the future, nobody is stuffing away money. So why would you have a skating rink? I heard many criticisms. But we need to realize and get ourselves in the place of the consumer. And we need to think about what makes individuals happy. Our last initiative is with Augusto Cury. He is the author of a great best seller. And we created this therapeutic center, and I'm going there to see to treat the emotional issues that people have. Because -- me for many, many years, I've looked at people and then I said, what can I do for these people, so that they feel better. And we looked at the external part, but we know that inside, there is a problem. So I wanted to try and help those people. So that they can go to the mall and be happy. And maybe that's the time that joy will cover some pain, but they have internal problems as everybody else has. And then I created a multi center, because I got the information from somebody from Sao Paulo that told me, they couldn't do -- they couldn't see a therapist, but they went to that center. And with BRL 120, they managed to treat themselves. And these are psychiatrists, I got into the mall. And you can buy a shirt for BRL 120, but you're not going to solve your pain -- your emotional pain. So you have here a backup. You have a support that I am certain as people will adopt. We have 300,000 appointments as we have in our mall in Centauro now. That's per month. And that's why -- I ask you why. Because when you go there to your treatment, you have access, you have the feeling that you don't have anything, because it's -- when it's the -- their time, they're called on the cell phone. So you don't have to look at the face of the people. And then they are happy. We turned the habit of going to the physician a little bit more pleasant. And the physicians asked me for many, many years, what was happening that his appointment in his clinic in Lebanon, people would prefer to go to the mall. And then I said because going to BarraShopping is like going out and it anesthetizes the fear, because when you go to the physician -- people that go to the physician, nobody likes to go to the physician. And I know that a friend of mine recently went to do a procedure. And then there are some expenses and spectacularly installed, may say that I went there and I thought, well, I had nothing else. It was so good. And I was already relaxed. That's what she told me. So to make people's lives better, making people happier, it's an objective. Maybe that's the objective of having a therapist inside of the mall, but I talked to many analysts and they think that the idea is very good to end the stigma that you treat with psychiatrists, because you're crazy. Conflicts -- emotional conflicts, everybody has them and it can generate a disease and a series of things. So you need to treat your soul. And this is what Multiplan tries to do in the human soul and with the shopping mall.

So now we have Marcelo Motta, JPMorgan.

Well, if you can -- I know that there is an impact with the result, but understanding 2022, and looking at the initiatives of growth in the company...

We lost the connection of the person that is asking the question. And we continue with Luiz Serafim from Bradley Corporation S.A.

Well, my question was exactly about Multiplan leaving the capital BR malls.

Well, we're waiting for is the thing where have we seen when we invested in the delivery center, way back when. Our entry into the partnership was to try and service the needs that we saw in the shopping mall basically to the quick delivery leaving the shopping mall, getting very quickly to the house of the consumer. And the second point is to raise the logistics stocks for the Internet in such a way that they can be duplicated in several apps in marketplaces, generating value. And you don't have to sell in our app. What we wanted and what we want is to generate a value for the consumer and convenience. And all throughout time, we saw that, that strategy of the delivery center was replicated with several other participants. So delivery that was taking too long. The concept of the quick delivery, this is a trend in the world in the same way that several companies are specialized with all the different SKUs via the Internet. So what we saw is that our investment was we needed to adapt to need a pain of the market that existed at the time, and that's why we decided to no longer invest. I hope that answered your question, Luiz.

I don't know if Marcelo Motta is back. Motta, are you there? Can you hear me?

So the delivery center, I hope that the question for the delivery center has been answered. And in regards to Golden Lake, it's a vector of growth. Obviously, we do not do that business of the real estate development as an obligation. It is not the main activity of the company. It's an opportunity. It's an opportunity to generate value and earn money, at the same time.

Well, that's a concept of a new neighborhood, a new way of living. Well, there's a caveat. Our DNA is a real estate DNA. We've built more than 300 properties, at least I did, in my life. The shopping mall was the trick of the trade. We went from the commercial galleries to the malls. Something that was more needed. Well, we do have the priorities, commercial centers, providing services in the commercial centers. And we also prioritize development. We have 1 million square meters around our malls. So we have much land. It was appraised for very little. Now it's appraised at a high value. So we are going to develop properties around it. In Golden Lake, as you know, Motta, the first phase was launched. That's the Lake Victoria and the other phases that have been planned. So when we think it's timely, we're going to launch the other phases as well.

Yes. Perfect. How are the sales going? Can you inform us on that for us to measure the positive impact that it could have in the 2022 results?

Of course, we brought a report to you. So far, we have 42% of the private area sold. This is data from January. We have 38, 39 units from the 94 that were sold and this amounts to BRL 207 million, the [ PSV ] is BRL 530 million. And the construction works begin now, right, in January and February. Just to see how much it represents. So we sold BRL 207 million. We don't have any -- we don't have images. That's a shame. Because if we could show to you the images, it's amazing. It's really amazing. Yes, the images are not ready. It's a very unique project in Brazil. Definitely, in the South region of Brazil, it is 1 of the largest ones. It's similar to the Golden Green, but it's better than the Golden Green, because we learned from Golden Green and, we did it better. So there we're going to have Pet Hospital -- for example, a pet hotel better saying. And people want that. So when people want to go out on the weekends, where can they leave their pets. So we built this pet hotel. That's a very nice hotel, because these pets, they're special. The dogs are like people today, for example. And I believe we learned a lot in the pandemic, and I've always liked dogs in my life, but we like them even more. So people now love their pets very well. It's worth visiting this project. So we had an interference in the sound. I think they're tired of us. Very well. I think we came to a closure. Are there any more questions?

There are no further questions. Jose Isaac Peres will do his final remarks.

I would like to thank you for your patience in listening to us and asking questions that are extremely constructive question for our company. We also learned a lot in exchanging information with you. And I would like to tell you that we are very much motivated by what we do. We believe in it. So I would like to thank you and I would like to tell you that Multiplan is doing well. We're going to do well this year in spite of the elections. But it's a highly promising year for the retail market. Thank you so much.

Thank you. The teleconference on the Q4 results on Multiplan is now closed. I wish you all a nice day. [Statements in English on this transcript were spoken by an interpreter present on the live call.]