Syn Prop & Tech S.A. (SYNE3) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. Welcome to the video conference from Syn for the discussion about the results related to the second quarter for 2026. This video conference is going to be recorded, and the replay can be accessed on the company website at ri.syn.br. The presentation also be shared and available for download which mentioned as all the participants only is going to watch the conference before the presentation. [Operator Instructions] We reinforce to use that dispensation going different [indiscernible] and for information that is going to be shared. Those declarations can raise risks [indiscernible] related to the future moment still depend for different advantage that can [indiscernible] investor and analyst is going to take that teams related to the macroeconomical for the segment and other factors can make that the results can be materially different from those that is going to be expressed on the declaration and the prospection. It's going to be available in the video conference, Thiago Muramatsu Director and President of Syn and Hector Leitao, Financial Director and Relations with Investor for the company. We would like to take the order for Mr. Thiago Muramatsu, that's going to be and start the presentation. Please move on to Mr. Thiago.

Good morning. I would like the opportunity and the ability to get the results meeting that we have here, and we we're going to start here our presentation, talking about what is going to happen in the second quarter [indiscernible] for the mall. So, we have an increase later for the second quarter for 2025, then we have 94% occupation to 96.2%. The financial occupation increased it for 0.5 percentage point here. And just remind to you all that we have a decrease related in the first quarter. In the first quarter here from 2026 because we have an area that have a few accidents on 2028 for this area, for the city of Sao Paulo already been said, it's going to be from July. Now we are running again in the 97% of the physical occupation of this mall. Moving forward for the sales, we have an increase in this evolution above the inflation of this period that we mentioned from 5.1% that even with something the occupation a little more lower than we have in relation to the first quarter. We're going to have a good increase, and this reflects what the good work that we are doing related to improve the mix to give new stores in our malls that have sales where that is even bigger than we have and the competition that we have for this increase during this quarter. Less than half was for the same-store sales, but the new stores have a good quantity increase almost than 2% for the sales and size that we are doing on our work for a few years that improved for the cost mix and events and activation that have inside the mall, and this represents an increase for almost BRL 7 million on the quarter 2. So our brand here, we have the same stores, even the same stores that we have a few reduction here in this quarter. But looking for the previous 4 ones, we are always running above the inflation that we have. In this quarter, we are a little more for the inflation, but it's still above. Moving for the corporate buildings, we have a decrease on this quarter, especially when you talk or and when you look out for the Class 8, and these reductions on the level of occupation was related also for this occupation that we have in Nova Sao Paulo. We have a lot of companies partially give the area back to us. So incorporation that we have for the buildings that we have [indiscernible] Rio de Janeiro is a building that we have a lot of challenges in there, but we are in the last year increasing the occupation. So from the previous year to year, we have an occupation from 40%, and now we are more than 60% that and we are continuing to work a lot on this building. And talk a little bit about for the logistics warehouse. So we are talking that the last phase is going to be delivered. And fortunately, this warehouse is 100% rented all the phases that we delivered with the exception for the second phase. All of them was 100% occupied. And now we have a price of rental here for the last phase, very aligned what we have in the market and we have a good perspective when we talk about the vision that is going to happen on the next years. We have a few contracts that now in time to get a revision. So we have an increase and we have the value of the rental for this warehouse even on this year of 2026. I'm now going to move to Hector for the financial performance to you all.

Good morning all. Well, according to the performance that we have for performance of the same properties results here in corporation that they have the same portfolio that they have excluding the activities that have the change of the participation. On the case of CLD, they have an expansion, operational expansion, delivery for the last phases here. The portfolio had an increase of 10.5% in relation throughout the previous year. Now we had BRL 48 million here on the malls here, splitting [indiscernible] malls, we have BRL 35.3 million against BRL 32.2 million in the previous year, we have 9.6% increase. In office, we have 13% of increase adding the result of BRL 12.9 million also include they have come from the recipe that they have here, organically increase of this and remind that we don't have some amazing incorporation to have a like-for-like, but we take in consideration the Rio de Janeiro from CLD. We're going to -- we had an 18% increase here related to the previous year. Here, moving towards the indicators, the financial indicators, EBITDA, we have 27.9% [indiscernible] for that I showed to you. And also we have a license here I want to mention, what we have different states here. We have the sales. We have a decrease in the FFO adjustment in relation to the previous year. We have from 25.6% now we have 22.1%. And here, the main offender here is not the financial results. We have cash flow here that was free. And now in the second semester here, we have 2 different terms here. So to have the investors here, we have BRL 350 million in the end of the year more BRL 64 million. So obviously, this cash flow here on the first semester is going to be lower that you have in the previous year, even better financial results to have BRL 19 million here less than you have in the previous year. Moving forward, we have here. We closed the second semester with the March that we have here about BRL 505 million. We have invested [indiscernible] so we have total debt BRL 48 million. So very well aligned with the previous quarter and different that we have for the second quarter of the previous year is that we have this cash flow more than BRL 550 million here in the company. So taking in consideration the adjusted EBITDA that we have for the previous 12 months for BRL 94.7 million, we closed with of that 3.18x related to EBITDA, an improvement related for the first quarter here will be well explained for the increase of this EBITDA. And moving forward what we have is pro forma amortization schedule that we have here. We have what we have scheduled in our cash and the cash generation here, cash flow generation until the end of the year, we have more BRL 7 million for amortization for, for corporate debt, and 2026 more BRL 26 million, half that corporate debt and have loans and financing direct for the units that we have. And then in 2028, we're going to have the highest tower that we have for amortization. Great parts is going to be related to [indiscernible]. We have rescheduled to financing of this debt. And during this period, we can organically minimize that, generate the cash flow for the units that we have in a way that we don't have this financing reconsideration for the 2020. Talking about the indexes here, we have 90% of a little more than [indiscernible] that is connected to [indiscernible] IPCA with 9.6% and CDI, we have 1.2%, but to here so, CDI, when we look for that for the CDI spot and IPCA for the previous 12 years, we have a debt below from CDI. So 84% of CDI that's very, very good for us. And we have to maintain this debt profile, taking advantage here for something that is going to be positive. And this way, I'm going to close this financial meeting here.

I would like to take word for Thiago Muramatsu to take the final considerations related to the company.

Well, just to close that, I would like to reinforce the second quarter. We have to confirm that the fact that we are adopted to increase the operation even for the malls and the commercial part and the substitution and requalification of the stores. And a few seconds later, we're going to move forward on the occupation that we have more challenging here. And here on CLD, if we go to the cycle of important investments, we see that we have just collecting the results to see the collection. So look for a good [indiscernible] to have a good equilibrium and good construction. I would like to thank you very much once again to all the team for your presence, and please have a nice day.

The video conference for Syn is now closed. Thank you very much for the participation for all of you, and have a nice afternoon. [Statements in English on this transcript were spoken by an interpreter present on the live call.]