Syn Prop & Tech S.A. ($SYNE3)

Good morning, ladies and gentlemen. Welcome to the Syn video conference for the discussion of the results related to the first quarter of 2026. This video conference is being recorded, and the replay will be available in the company's website, ri.syn.com.br. The presentation will also be made available for download. We will inform you that all participants will only watch the video conference during the presentation and afterwards we will start a Q&A session when you will have more information provided. Before we continue, I will stress that all the perspective, declarations, uses, beliefs, and assumptions from Syn administration and current information available to the company. These declarations can involve risks and uncertainties considering that they are talking about future events and therefore, depend on circumstances that may or may not occur. Investors, analysts, and journalists should consider that events related to the macroeconomic environment, the segment and other factors may make it so results are materially different than the ones that were shown in the prospective declarations. In this video conference, we have Mr. Thiago Muramatsu, President and Director of Syn and Mr. Hector Leitao, Financial Director and Investor Relations for the company. Now I would like to go over to Mr. Thiago Muramatsu, who will start the presentation. Please, Thiago, go ahead.

Good morning, everyone. I would like to thank everyone for your time to hear about our results. To get started, let's talk about the accomplishments of the first quarter of this year. We had already had this in the last quarter. So I just want to restate that today, we are a part of the B3 Index Great Place to Work. I believe that this is not only an acknowledgment of the great work that has been done over the last couple of years, but also shows that we have a true concern towards people and everything that involves the development, both professional and the company's development overall. Also, in this quarter, we finished the construction of CLD totaled 129,000 square feet, and we delivered in phases starting in October 2023, December 2024, December 2025 and the last phase in March, the last month of the first quarter of this year. And we're very happy because we were able to deliver a project of this size 100% located with amazing tenants. And we believe that we have great potential to be able to improve and really potentialize rent in this enterprise. Now operational development of the quarter. We started up on malls. We had an interesting growth in terms of physical and financial occupation. So physical occupation, we already had a high standard around 95%, 96%. And in this first quarter, we were able to reach 97.3% occupation, which in our point of view, is an excellent occupation. When we think about financial occupation, we have a bit of a lower number, 96.7%, reflecting that because we have big stores that are all rented out and you have some smaller store vacancies, and they would have a bit of a higher rent sometimes. So -- we will continue selling and the beginning of the year was a great beginning of the year. And even though there have been several things happening with retailers that haven't been working and having great sales all the same. Talking about sales, we grew compared to the first quarter of the last year, almost 7% and half of this growth came basically from selling new stores or selling same stores and the other half came from new operations within our malls, whether those are new stores, kiosks or events that end up generating some kind of sale as well. And when we look at the inflation for the period, GPM in this period, so if you look at the last 12 months of IGPM in 2026 from the last quarter of 2025 to the first of 2026, we were down 1.83% and most of our contracts are indexed to IGPM. And even so, we were able to get the rent of same stores around 5.6% for 2026. So when we compare the real growth that those stores have had, that was above 7%. And the interesting part is that this growth was very well balanced. When we look at the occupation cost for all the stores in the mall, even though we had a growth of almost 7% in rent, we were able to maintain a very good occupation. So this shows that we are gaining productivity, and we're allowing for rent to grow with a good occupation. When we look at corporate offices, we had a great quarter as well. Here, we had Brasilio Machado in the first quarter of last year that was totally empty. So we sold Brasilio Machado and it kind of lowered it a bit. But when we compare the same things, we went from 93.5% to 94.6% in the first quarter of 2026. And I believe that the biggest factor here was an improvement in occupation, especially for the CEO. We went from a vacancy of almost 60%. We rented out most of the area, and we have a perspective that is quite positive related to the occupation of this building. Here, the Sao Paulo Class A buildings are 100% rented out, and they have been for a while. And Triple A, we have some specific vacancies, but these are vacancies that we have been working on to be able to capture the best rent for those. So a little bit of what we were talking about in the beginning for CLD, this is almost 129 square meter area with almost all phases rented out. And we have a twofold participation. We have direct participation in the area, which is almost 22,000 square feet, and we have indirect participation as well via XPX. And that's almost 20% of the environment, and we have basically over 1/4. So when we consolidate, we have a participation that is close to 33,000, 34,000 square feet in this area. Now I'm going to go over to Hector, so he can talk about financial performance.

Good morning, everyone. Thank you so much for being here today. So let's go to the next slide. And now we have the performance of our portfolio. Here, I'm going to compare the same areas. We've had interesting growth in the quarter of 10.6% on NOI, getting to BRL 24.7 million and breaking it down into segments. Shopping malls, we grew 7.3% with BRL 17.8 million in the first quarter. And this is very aligned with the past quarters and having this revenue growth for rent or mall media revenue. This is an accelerated growth for rent as well. And in offices, a robust growth that we have seen in the last quarters as well. It comes from the same thing. So the revisions that we did throughout the last 8 months, especially in Triple A buildings and a little bit of the CO occupation that we've been doing, but mainly this market has increased a lot over the last 1.5 years, and we have been really using this opportunity to increase rent. Talking about EBITDA and FFO on the left, adjusted EBITDA, we had a growth of 28.7%, getting to BRL 25.8 million compared to BRL 20 million in the first quarter of last year. And you can see the gap here. The absolute gap increases for 2 main reasons. First, the main one is that even on the properties, we removed CLD because we had a relevant delivery throughout the past year. So this does show an impact, which is close to BRL 1 million. And we also had a smaller scale impact on Shopping D and Brasilio Machado that we sold last year, more so Brasilio Machado because we started selling it in the first quarter, and it had a negative result. So we can also see an improvement in the portfolio mix. And for adjusted FFO, there's also a very robust growth of almost 15%. And the gap compared to EBITDA in terms of absolute growth is because of the financial expenses that were higher than the previous year, and I'm going to give you more detail on the next slide. So talking about leveraging, we finished the first quarter with BRL 493 million in gross debt, BRL 192 million in cash flow. So a net debt, which is close to BRL 302 million. This represents 3.37x our adjusted EBITDA of the last 12 months. When we look at the quarter, the same quarter last year, we had a liquid cash flow situation. And throughout the last year, we distributed via capital reduction and dividends, BRL 464 million, and that's why our leveraging went up. We ended up having a net debt, which is close to 3.8x in the last quarter, and we've already improved almost 50 points -- 50 basis points in this quarter. And it's natural. This is what we expect because we have a cash flow generation business. So as I have been constantly stating, it's a natural trend for us to always improve this leveraging, except if we have any kind of important investment being done. Then thinking about the debt profile and payment schedule, we have the next 2 years, part of this year and the next year. We have a very comfortable situation to be able to make these payments of amortization. In 2028, we have repayment tower that is more important, mostly in the last quarter of 2028. So we have a lot of time, almost 30 months for us to be able to pay off this debt to understand what is the best moment to either refinance or try to have a new debt or do the repayment. So the team has been discussing this constantly together with the market to understand. And I think that the positive message here is that banks and investors have a lot of appetite to have debt with us. So we have a lot of liquidity and the cost that we have as well. What we understand is the cost that is interesting and risk profile for the company has been interesting. So this is not concerning for us to have this refinance in 2028. But of course, we're going to pay attention to every opportunity to do this throughout 2027, beginning of 2028. And this debt profile is quite interesting. We have 90% of the debt connected to IPCA rate, which is very aligned with our assets. Our rents are all related to inflation. So I think it's a debt profile that is very adequate when we think about our structure and our asset revenue structure and 10% in CDI. When we have the average of the cost, looking back the picture of the last 12 months, we have a cost close to 80% of the CDI, which is excellent. And looking at the curve, we have a cost close to 9% of the CDI. So this is a very healthy debt that obviously shows a lot of results for us. With that, we can move on to questions. Now we will start the Q&A session to be able to open for investors and analysts.

[Operator Instructions] Our first question comes from [ Mr. Guilherme Ferraz ].

A question about passive management and expirations in 2028. Looking at the debt payment schedule, we noticed that the profile of expirations between 2026 and 2027 is very comfortable and long. However, there is a relevant concentration of commitments for 2028, which is around BRL 400 million. Considering we are going into a horizon of midterm for this expiration, is the company studying a strategy of prepayment with cash flow resources rollout with new emissions of CRI or debentures? Or is the plan to use the generation of operational cash flow to pay out this amount?

Guilherme, I think I ended up responding to your question, but just to highlight, we have a good optionality. We have an interesting deadline for this payment. This is a debt that has some assurances, and in eventual payment, I'm going to have these assurances. We have Cidade Sao Paulo, just to guarantee this debt. So it's an asset that has a more -- a higher value. We don't see any issues with that payment process. We have been doing this, looking at the market, looking at the cycle, looking at the debt for the company, what cost they have, what's the appetite of these companies for our role. So having -- after having this analysis, we're comfortable and we have a great window. If we see that there is a great window. If we see that we can do that in an anticipated way, we can do it. And we can propagate that this debt, we can make the best decision possible. And that's going to be for the question. So we are very okay with that.

The next questions will be answered together. The first one for [ Mr. Guilherme Ferraz ]. Considering the company's recent divestment cycle and its strong cash position, what is the strategic priority for portfolio expansion in the short and medium term? Does management intend to focus on consolidating and expanding the logistics warehouse segment. Given the sector's resilient outlook or is there also an appetite for new acquisitions, retrofits, and high-end shopping malls and office properties where Syn already has proven expertise. In summary, what will be the main growth driver over the next 24 months? And the second question from Mr. Reynaldo [indiscernible]. Congratulations on the results. Does Syn intend to expand its logistics warehouse portfolio depending on how CLD performs?

Guilherme and Reynaldo, Thiago here. I think that today, we are in a macroeconomic moment that is very difficult for us to see what we intend to do over the next 24 months. We have been actively looking at basically all asset classes that we invest in, offices, logistics, warehouses, shopping malls, and today, the only challenge is to be able to make it work in the bottom line. We have some disparities between asking price and the price that we are actually able to have that positive bottom line. So with that, we see a lot of opportunity in the logistics sector, yes. However more than the other 2 asset classes in general. But we still look very carefully towards all possible future investments in shopping malls, office properties and logistics warehouses. But in 24 months, I hope we can have these investments. But today, it's a little bit hard because of capital costs.

Our next question comes from [ Mr. Eduardo Salvo from Conseco Construtora ].

So 2 quick questions here. The first one, there was a time that I talked to Philippe, and there was a high volume in the company and everything dropped. So what do you link this to? Is there anything specific? And secondly, is there any percentage chance for expansion of the Sao Paulo?

Well, for the second question, yes. But it's going to be a bit of a smaller expansion than what we considered initially. So we are around 1,500 or 1,000 square meters, but it's going to be much more productive to have this 1,000 square meter expansion and a rent price that actually has a great bottom line. About the first question that you asked about volume. Here, we weren't able to identify any specific reason for why there was a high volume. There hasn't been any specific facts for the company or concentrated movements for any shareholders in this period. So we really don't know what happened that day.

Yes, Eduardo, just to give you a little bit more information. We have followed that there was a lot of general volatility in the market in this period, and also a lot of correlation with interest, approval, expectations, some conflicts that we've seen in terms of impact and inflation and the profile of the investors that were in these situations that you mentioned these are funds that kind of come in, they get out of the portfolio. So they have a bit of an erratic investment profile. So I don't see it as something micro or very closely related to the company, but maybe more of a macro strategy of the funds, some foreign funds that had some movement in these days of risk allocation in their portfolio. So that's what we understood. Yes, even open is an opportunity actually to have a little bit more exposure.

The Q&A session is now over. We would like to go over to Mr. Thiago Muramatsu, for to have his final thoughts for the company.

Once again, I would like to thank everyone for your time to be here today. As I've stated in the beginning, we have had a great operational performance in our assets. Hector has been saying here as we've been doing a lot of capital structure with a lot of discipline and the new investments are currently depending on an improvement and finding the most favorable situation. And we're maintaining our position as a productive company, and we'll be able to have good investments as we've done last year, both investment and this investment trying to get into this cycle. Thank you once again.

The Syn video conference is now over. Thank you so much for your participation, and have a great afternoon. [Statements in English on this transcript were spoken by an interpreter present on the live call.]