2Q12 Results 2Q12. Executive Summary: Strong consumer confidence in the region leads to 9.7%

Transcription

1 2Q12 2Q12 Results Parque Arauco S.A. Executive Summary: Strong consumer confidence in the region leads to 9.7% growth in tenant sales for the first half of 2012; 6% in Chile, 20% in Perú, and 22% in Colombia Revenue growth of 19.8% to Ch$ 24,232 million as compared to 2Q2011 EBITDA increased 20.5% year over year to Ch$ 17,254 million, delivering an EBITDA margin of 71.2% Net Income totaled Ch$ 7,838 million, a 42.5% improvement over Q Two new properties opened; Plaza El Chimbote and Villa El Salvador adding 37,000 m 2 of additional GLA Strong cash position of Ch$ 124,213 million New expansion projects underway at Parque Arauco Contacts: Juan Pablo Spoerer H. CFO Kennedy and Plaza El Roble totaling an investment of US$ 45 million José Luis Fernández A. Head of Investor Relations Tel: (56 2) Fax: (56 2) ir@parauco.com Second Quarter 2012 Parque Arauco S.A.

2 1. INDEX 1. Index Financial and Operating Highlights Financial Indicators Summary of Financial Results Portfolio Analysis of Consolidated Results New Operations in 2Q 2012 and Outlook Property Highlights by Mall Parque Arauco Kennedy Mall Arauco Maipú Plaza El Roble Paseo Arauco Estación Arauco San Antonio Mall Marina Arauco Boulevard Marina Arauco Mall Center Curico Megaplaza Norte Mega Express Villa Larcomar Fashion Center Parque Lambramani Parque Arboleda Second Quarter 2012 Highlights Consolidated Financial Statements Page 2

3 2. FINANCIAL AND OPERATING HIGHLIGHTS Financial and Operating Highlights 2Q12 2Q11 Chg. % Chg. % Revenues (Ch$ Millions) 24,232 20,223 20% 47,195 39,930 18% EBITDA (Ch$ Millions) 17,254 14,315 21% 33,502 28,680 17% EBITDA Margin % 71.2% 70.8% 0 pp 71.0% 71.8% 1 pp Net Income (Ch$ Millions) 7,838 5,499 43% 15,461 12,609 23% Net Income Margin % 32.3% 27.2% 5 pp 32.8% 31.6% 1 pp FFO (Ch$ Millions) 2 9,511 10,227 7% 19,871 19,575 2% FFO Margin % 39.3% 50.6% 11 pp 42.1% 49.0% 7 pp Weighted Avg. Shares (million) % % EPS ($) % % Stock Price (Ch$) , % , % Daily Traded Volume (Ch$ million) % % Total Tenant Sales (Ch$ Millions) 1 301, ,434 12% 571, ,016 10% Total GLA (m2) 652, ,000 11% 652, ,000 11% Own GLA (m2) 437, ,182 10% 437, ,182 10% 1: Total Tenant Sales = Sales of Consolidated Assets 2: FFO = Net Profit Depreciation & Amortization Income (loss) for indexed assets and liabilities Negative Goodwill Gains (losses) from the difference between the previous book value and the fair value of financial assets Parque Arauco continues to generate competitive returns for its shareholders driven by strong revenue, operating and bottom line growth. During the second quarter we added two more Peruvian properties to our portfolio, MegaPlaza Chimbote and Villa El Salvador, increasing our total GLA by 37,000 m 2 and our operating portfolio of properties in Chile, Peru and Colombia to seventeen with total GLA of 652,700 m 2. Strategically, will continue to diversify our operations geographically and across product lines to include shopping centers, strip malls, and outlet malls. We are also allocating significant resources to reinforce each property s competitive advantages and renovate properties to provide the best customer experience and maximize rent/m 2. We recently announced an estimated investment of US$ 45 million to expand two of our Chilean properties to reinforce our positioning in our home market, Parque Arauco Kennedy and Plaza El Roble. said Chief Executive Juan Antonio Álvarez. Page 3

4 3. FINANCIAL INDICATORS Financial Indicators June 30 December 31 Covenant Units Limit Gross Financial Debt Ch$ million 369, ,053 Gross Financial Debt US$ million Net Financial Debt Ch$ million 245, ,623 Net Financial Debt US$ million Net Financial Debt / Equity times EBITDA / Financial Expenses (12 months) times > 2.5 Liabilities / Equity times < 1.4 Net Financial Debt / EBITDA times Current Liabilities % 12% 14% Non Current Liabilities % 88% 86% 4. SUMMARY OF FINANCIAL RESULTS Income Statement Consolidated Ch$ Thousands 2Q12 2Q11 Chg. % Chg. % Revenues 24,231,639 20,222,656 20% 47,195,331 39,930,244 18% Cost of Sales (4,920,812) (4,066,371) 21% (10,048,108) (7,528,572) 33% Gross Profit 19,310,827 16,156,286 20% 37,147,222 32,401,672 15% Administration Expenses (2,514,737) (2,445,685) 3% (4,568,557) (4,884,038) 6% OPERATING INCOME 16,796,090 13,710,601 23% 32,578,666 27,517,634 18% Depreciation & Amortization 457, ,684 24% 923,332 1,162,124 21% EBITDA 17,253,722 14,315,285 21% 33,501,997 28,679,759 17% Other Income / Expenses (782,371) (1,478,448) 47% (1,482,542) (1,810,756) 18% Financial Income 2,082, , % 3,740,095 1,600, % Financial Expenses (4,892,374) (3,572,587) 37% (10,002,799) (7,205,469) 39% Foreign Exchange Differences (28,667) 86,282 (546,872) (72,716) 652% Income (Loss) for indexed assets and liabilities (1,250,724) (4,123,072) 70% (3,526,172) (5,803,302) 39% NON OPERATING INCOME (4,871,686) (8,146,099) 40% (11,818,289) (13,291,879) 11% Profit before Income Tax 11,924,404 5,564, % 20,760,377 14,225,755 46% Income Tax (4,086,413) (65,183) 6169% (5,299,587) (1,616,336) 228% NET PROFIT (LOSS) 7,837,991 5,499,319 43% 15,460,790 12,609,419 23% Attributable to: Equity holders of the company 6,997,289 4,773,298 47% 14,183,474 11,091,353 28% Minority interests 840, ,021 16% 1,277,316 1,518,065 16% NET PROFIT (LOSS) 7,837,991 5,499,319 43% 15,460,790 12,609,419 23% Page 4

5 Balance Sheet June 30 December 31 June 30 December 31 Ch$ Millions Assets Liabilities Current Liabilities Current Assets Other Current Financial Liabilities 35,024 24,339 Comm. Cred. and Other Acc. Payable 6,328 17,737 Cash and Cash Equivalents 124, ,430 Current Acc. Payable to Rel. Parties 1, Other Current Financial Assets Current Provisions 6,426 5,514 Other Current Non Financial Assets 3,621 14,349 Tax Liabilities 3,962 8,003 Trade Accounts Rec. and Other Rec. 14,970 14,933 Other Current Liabilities 3,716 4,474 Accounts Receivable from Rel. Comp. 4, Total Current Liabilities 56,954 60,183 Current Tax Receivable 10,304 8,154 Total Current Assets 157, ,256 Non Current Liabilities Other Non Current Fin. Liabilities 334, ,713 Non Current Assets Deferred Tax Liabilities 55,777 52,173 Other Non Current Liabilities 8,979 8,589 Other Non Current Non Fin. Assets 15,075 36,167 Total Non Current Liabilities 399, ,475 Non Current Accounts Receivable Non Current Acc. Rec. with Rel. Part. 1,745 1,681 Total Liabilities 456, ,659 Intangible Assets exc. Surplus Value 10,041 10,702 Surplus Value 2,974 3,030 Equity Property, Plant and Equipment 4,977 2,899 Issued Share Capital 229, ,907 Investment Properties 805, ,810 Accumulated Earnings (Losses) 242, ,807 Deferred Tax Assets 12,302 10,620 Other Reserves (6,071) (9,948) Total Non Current Assets 852, ,983 Attrib. to Shareholders of the Company 465, ,766 Minority Interest 87,466 48,815 Total Equity 553, ,581 TOTAL ASSETS 1,009, ,239 TOTAL LIABILITIES AND EQUITY 1,009, ,239 Page 5

6 5. PORTFOLIO 2012 MALL Total GLA % Stake Own GLA Chg.% Parque Arauco Kennedy 108, % 108,000 Arauco Maipu 64, % 64, % Plaza El Roble 25, % 25,000 Paseo Arauco Estación 68, % 56,440 Arauco San Antonio 29, % 14,790 Arauco Quilicura (Sodimac) 9, % 9,700 Arauco Express Consolidado 12, % 6, % Marina Arauco 60, % 20,000 Boulevard Marina Arauco 12, % 4,000 Mall Center Curicó 50, % 16,667 TOTAL CHILE 437, % 324, % Megaplaza Norte 83, % 41, % Mega Express Villa Chorrillos 7, % 3, % Larcomar Fashion Center 26, % 26,000 Parque Lambramani 28, % 16,800 Megaplaza Chimbote 28, % 9,380 Mega Express Villa El Salvador 9, % 4,500 TOTAL PERU 181, % 101, % Parque Arboleda* 34, % 10,285 TOTAL COLOMBIA 34, % 10,285 TOTAL 652, % 436, % Page 6

7 6. ANALYSIS OF CONSOLIDATED RESULTS Revenues (Ch$ Million) Revenues for 2Q2012 were Ch$ 24,232 47,195 39,930 million, a 19.8% increase as compared to 2Q2011. Revenue growth was the result of 20,223 2Q11 24,232 2Q GLA expansion of 10.6% and organic rental revenue increases of 6.9%. Total GLA in Chile grew 5.7% to 437,700 m 2, with the additions coming from the expansion of Arauco Maipú, the addition of 6 strip malls from the consolidation of Arauco Express, and the partial opening of Arauco Quilicura. In Peru, total GLA increased 32.1% to 181,000 m 2, driven by expansions from Mega Plaza Norte and Mega Express Villa Chorillos and the additions of MegaPlaza Chimbote and Villa El Salvador. In Peru, rental revenue grew 8.9%. Total revenue for the first half of 2012 was Ch$ 47,195 million, an increase of 18.2% as compared to the first half of Additional GLA and higher rental revenue contributed to the growth. Gross profit for the first half improved 14.6% to Ch$ 37,147 million. Gross profit for the quarter was Ch$ 19,311 million, a year over year increase of 19.5%. The cost of sales grew 21.0% to Ch$ 4,921 primarily due to to revenue growth and additional costs related to new properties and renovations. The Company achieved SG&A leverage during the quarter, growing only 2.8% to Ch$ 2,515 million as a result of a mixture of savings and expense recovery from maturing new properties. Administrative expenses include costs related to the Company s growth plans and cost restructuring initiatives, advertising and marketing expenses as well as facilities costs which tend to be greater in the first year of operation of new properties. Operational costs (SG&A plus Cost of Sales) increased 17.8% to Ch$ 14,617 million in line with revenue growth during first half of Operational cost, adjusted for the increase in GLA, grew 6.4%, including inflation. Depreciation and amortization expenses decreased 24.3% to Ch$ 458 million as compared to Ch$ 605 million in 2Q ,315 EBITDA (Ch$ Million) 17,254 28,680 33,502 The Company recorded EBITDA of Ch$ 17,254 million, a 20.5% improvement compared to the Ch$ 14,315 million recorded in 2Q The EBITDA margin of 71.2% reflected additional revenue from added GLA, rental revenue growth, and increased common expense recovery at established properties. First half Q11 2Q Page 7

8 EBITDA increased 16.8% to Ch$ 33,502 million with an EBITDA margin of 71.0%. Non operating expenses totaled Ch$ 4,872 million in 2Q 2012 compared to non operating expenses of Ch$ 8,146 million in 2Q Financial income contributed Ch$ 2,082 million, a 121.1% increase compared to 2Q 2011, as the Company earned interest on its larger cash position relative to the same period last year, as a result of the equity issuance completed in October of Financial expenses totaled Ch$ 4,892 million primarily driven by additional interest payments on the debt offering issued in January Other expenses decreased to Ch$ 782 million, compared to other expenses in 2Q 2011 of Ch$ 1,478 million. Foreign exchange differences contributed an expense of Ch$ 29 million as compared to an Ch$ 86 million gain the previous year. The lower inflationary environment that prevailed in 2Q 2012 resulted in a loss on indexed assets and liabilities of Ch$ 1,251 million, a 69.6% decrease compared to a loss of Ch$ 4,123 million in 2Q The income tax provision totaled Ch$ 4,086 million, significantly higher than the 2Q 2011 charge of Ch$ 65 million. The increase is attributable to an expected increase in the Chilean tax rate from 17% to 20%. As a result of the tax rate increase, the Company allocated additional funds to the deferred tax account to account for the increase in potential tax provisions on the future sale of assets. Net income was Ch$ 7,838 million, or Ch$ per share, as compared with net income of Ch$ 5,499 million, or Ch$ 8.97 per share, in 2Q The weighted average number of shares outstanding during the quarter was million as compared to million in 2Q Net income grew 22.6% to Ch$ 15,461 million in first half FFO ( Funds from Operations ), defined as net income plus depreciation and amortization minus a gain (loss) on indexed assets and liabilities minus any gains (losses) on other non cash items, totaled Ch$ 9,511 million. The 7% decrease relative to 2Q 2011 is a consequence of the non cash tax effect of allocating funds to the deferred tax account in anticipation of the expected income tax rate increase in Chile. Without this non cash effect in taxes, the growth in FFO for 2Q 2012 would be 14%. Cash and cash equivalents totaled Ch$ 124,213 million at the end of the 2Q 2012 as the Company continued to invest funds to develop and renovate properties. Net financial debt at the end of 2Q 2012 was Ch$ 245,354 million. The Company remains comfortably within its financial covenants with Liabilities/ (Equity+ Minority Interest) of 0.82 as compared to a limit of 1.4 and EBITDA/Financial Expenses of 3.6, substantially above the requisite of 2.5. Total Tenant Sales (Ch$ Millions) 521, ,432 Occupancy increased 0.7 pp to 97.4% in 2Q 2012 as compared to the prior year. 270, ,542 First quarter total tenant sales increased by 10% to Ch$562,742 million. 2Q11 2Q Page 8

9 7. NEW OPERATIONS IN 2Q 2012 AND OUTLOOK I) Arauco Express (Stripcenters Chile) In April 2012, the Parque Arauco subsidiary, Arauco Express, incorporated 7 operating stripcenters including five properties in Santiago and the remaining two in Calama and Reñaca. The new operation is in line with the Company s strategy to diversify its portfolio of products. For the partial 2Q 2012, the properties earned EBITDA of approximately Ch$ 210 million, including M&A expenses. The average monthly rent per/m 2 Ch$ 13,000 for the stripcenter operations. II) MegaPlaza Chimbote This operation, located 400 Km from Lima, Peru, opened on April 24th, In the first two months of operation, the property earned EBITDA of Sol$ 585,000. Monthly sales per m 2 were more than Sol$ 600 in the first two months of operation. III) Mega Express Villa el Salvador This operation, located in El Salvador, Peru, opened on April 12th, For the first 2 and a half months of operation, the property earned EBITDA of Sol$ 370,000. Monthly sales per m 2 reached Sol$ 430. OUTLOOK As a result of strong growth across the Parque Arauco portfolio and the impressive increase in tenant sales, the Company has adjusted its EBITDA projections for In 2012, EBITDA is expected to grow 11 14% to Ch$ 68,000 70,000, compared to Ch$ 61,227 million in Page 9

10 8. PROPERTY HIGHLIGHTS BY MALL 8.1. PARQUE ARAUCO KENNEDY Ch$ mill 13,933 Ch$ mill 14,796 Ch$ mill 14,199 Ch$ mill 14,462 Ch$ mill 1,939 Ch$ mill 1,853 Ch$ mill 327 Ch$ mill 471 Ch$ mill 1,346 Ch$ mill 1,716 Rental Revenues Other Revenues Cost of Sales SG&A (ex. Depr.) EBITDA PAK generated total income of Ch$ 8,448 million in 2Q 2012, a 3.4% increase compared to 2Q EBITDA from the shopping center increased 0.5% to Ch$ 7,405 million from the year ago quarter. The Company continues to make investments to reinforce the property s focus on entertainment, services, and restaurants which contributed to an EBITDA margin decrease of 2.5 pp and higher cost of sales and SG&A of Ch$ 233 million and Ch$ 810 million, respectively. The property continues to benefit from a strong brand name and location and its sales totals were fairly balanced between anchor tenants (42%) and small stores (49%). Operating and Commercial Indicators Chg. % Tenant Sales (Ch$ millions) 177, ,336 3% Total GLA (m2) 108, ,000 0% Monthly Sales per m2 (Ch$) 278, ,987 3% Monthly Rent per m2 (Ch$) 23,131 21,782 6% % Occupancy 99.6% 99.6% 0.0 bp EBITDA Margin (%) 86.9% 89.5% 2.6 bp Page 10

11 8.2. MALL ARAUCO MAIPÚ Ch$ mill 3,340 Ch$ mill 4,081 Ch$ mill 484 Ch$ mill 542 Ch$ mill 520 Ch$ mill 366 Rental Revenues Other Revenues Cost of Sales (ex. Depr.) Ch$ mill SG&A Ch$ mill 821 Ch$ mill 2,662 EBITDA Ch$ mill 3,436 This shopping center, located in a fast growing, emerging middle class neighborhood in Santiago, Chile, continues to perform extremely well generating income of Ch$ 2,267 million in 2Q 2012, an increase of 17.4% compared to 2Q EBITDA improved to Ch$1,717 million, an increase of 26.7%, as compared to the same period of The property was able to achieve a 96.6% occupancy rate, an improvement of 2.3 pp compared to the same period of The growth over the last year has been driven by the success of the 9,000 m 2 expansion that opened in 2Q Operating and Commercial Indicators Chg. % Tenant Sales (Ch$ millions) 49,115 43,654 13% Total GLA (m2) 64,000 62,000 3% Monthly Sales per m2 (Ch$) 124, ,170 7% Monthly Rent per m2 (Ch$) 10,332 8,888 16% % Occupancy 96.6% 94.3% 2.3 bp EBITDA Margin (%) 74.3% 69.6% 4.7 bp Page 11

12 8.3. PLAZA EL ROBLE Ch$ mill 1,689 Ch$ mill 1,759 Ch$ mill 217 Ch$ mill 255 Ch$ mill 153 Ch$ mill 168 Ch$ mill 313 Ch$ mill 332 Ch$ mill 1,440 Ch$ mill 1,514 El Roble contributed income of Ch$ 997 million during 2Q 2012, an increase of 4.3% from the same period in EBITDA improved 10.1% to Ch$ 780 million aided by the 4.1 pp increase in EBITDA margin over 2Q The cost of sales was Ch$ 75 million while the SG&A expense was US$ 142 million. The property s entire GLA of 25,000 m 2 is now operating at an occupancy level of 98.2%. Rental Revenues Other Revenues Cost of Sales (ex. Depr.) SG&A EBITDA Operating and Commercial Indicators Chg. % Tenant Sales (Ch$ millions) 28,883 28,072 3% Total GLA (m2) 25,000 25,000 0% Monthly Sales per m2 (Ch$) 195, ,280 3% Monthly Rent per m2 (Ch$) 11,923 11,450 4% % Occupancy 98.2% 97.7% 0.5 bp EBITDA Margin (%) 75.1% 75.6% 0.4 bp Page 12

13 8.4. PASEO ARAUCO ESTACIÓN Ch$ mill 5,273 Ch$ mill 5,748 Ch$ mill 702 Ch$ mill 845 Ch$ mill 318 Ch$ mill 390 Ch$ mill 1,072 Ch$ mill 1,125 Ch$ mill 4,584 Ch$ mill 5,078 Paseo Arauco Estación achieved total income of Ch$ 3,239 million in 2Q 2012, a 10.1% improvement from the same period last year. The mall s EBITDA grew 12.7% to Ch$ 2,500 million. Cost of sales and SG&A totaled Ch$ 185 million and Ch$ 554 million, respectively. This is a property in the process of changing the tenant mix and redesigning the GLA to attract and accommodate more international brands and achieve a higher rent/m 2. Rental Revenues Other Revenues Cost of Sales (ex. Depr.) SG&A EBITDA Operating and Commercial Indicators Chg. % Tenant Sales (Ch$ millions) 40,983 37,904 8% Total GLA (m2) 68,000 68,000 0% Monthly Sales per m2 (Ch$) 101,497 93,872 8% Monthly Rent per m2 (Ch$) 14,236 13,060 9% % Occupancy 98.8% 96.7% 2.1 bp EBITDA Margin (%) 77.0% 76.7% 0.3 bp Page 13

14 8.5. ARAUCO SAN ANTONIO Ch$ mill 1,445 Ch$ mill 1,468 Ch$ mill 479 Ch$ mill 498 Ch$ mill 237 Ch$ mill 252 Ch$ mill 345 Ch$ mill 241 Ch$ mill 1,341 Ch$ mill 1,473 San Antonio contributed income of Ch$ 834 and EBITDA of Ch$ 582 million in 2Q The anchor stores comprised 74% of the quarter s tenant sales, while small stores and the food court generated 18% and 6% of sales, respectively. Rental Revenues Other Revenues Cost of Sales (ex. Depr.) SG&A EBITDA Operating and Commercial Indicators Chg. % Tenant Sales (Ch$ millions) % Total GLA (m2) % Monthly Sales per m2 (Ch$) % Monthly Rent per m2 (Ch$) % % Occupancy 98,3% 98,6% 0,3 bp EBITDA Margin (%) 74,9% 69,7% 5,2 bp Page 14

15 8.6. MALL MARINA ARAUCO Ch$ mill 5,287 Ch$ mill 5,602 Ch$ mill 582 Ch$ mill 655 Ch$ mill 154 Ch$ mill 199 Ch$ mill 65 Ch$ mill 54 Ch$ mill 5,649 Ch$ mill 6,004 This extremely profitable property, situated in Viña del Mar, Chile, generated income of Ch$ 3,047 million during 2Q 2012, a year over year increase of 6.0%. The property s EBITDA of Ch$ 2,915 million grew by 5.5% aided by an EBITDA margin of 95.7%. Forty eight percent of Marina Arauco s tenant sales were generated by anchor stores, while occupancy was 97.0% at the end of 2Q Rental Revenues Other Revenues Cost of Sales (ex. Depr.) SG&A EBITDA Operating and Commercial Indicators Chg. % Tenant Sales (Ch$ millions) 68,461 66,656 3% Total GLA (m2) 60,000 60,000 0% Monthly Sales per m2 (Ch$) 220, ,618 3% Monthly Rent per m2 (Ch$) 15,622 14,744 6% % Occupancy 97.0% 97.8% 0.8 bp EBITDA Margin (%) 96.0% 96.3% 0.3 bp Page 15

16 8.7. BOULEVARD MARINA ARAUCO Ch$ mill 630 Ch$ mill 882 Ch$ mill 59 Ch$ mill 86 Ch$ mill 52 Ch$ mill 33 Ch$ mill 8 Ch$ mill 21 Ch$ mill 630 Ch$ mill 914 Another exceptionally profitable property is this innovative commercial center located in front of Mall Marina Arauco opened in February Total income grew 34.0% to Ch$ 474 million in 2Q 2012, with EBITDA of Ch$ 442 million and an EBITDA margin of 93.4%. The property s GLA totals 12,000 m 2. The renewals of tenant contracts at higher rental rates and increased variable rental revenues were the primary drivers of revenue growth. Rental Revenues Other Revenues Cost of Sales (ex. Depr.) SG&A EBITDA Operating and Commercial Indicators Chg. % Tenant Sales (Ch$ millions) 6,031 3,783 59% Total GLA (m2) 12,000 12,000 0% Monthly Sales per m2 (Ch$) 93,743 58,803 59% Monthly Rent per m2 (Ch$) 13,715 9,791 40% % Occupancy 93.0% 95.0% 2.0 bp EBITDA Margin (%) 94.4% 91.4% 3.0 bp Page 16

17 8.8. MALL CENTER CURICÓ Ch$ mill 1,801 This shopping center, located south of Santiago, Chile, contributed income of Ch$ 1,024 million, an increase of 5.2% as compared to 2Q 2011, while EBITDA increased 6.9% to Ch$ 984 million. Anchor stores operate 76% of the property s GLA of 50,000 m 2. Ch$ mill 124 Ch$ mill 1,919 Ch$ mill 128 Ch$ mill 50 Ch$ mill 83 Ch$ mill 1,792 Ch$ mill 1,973 Ch$ mill 19 Ch$ mill 56 Rental Revenues Other Revenues Cost of Sales (ex. Depr.) SG&A EBITDA Operating and Commercial Indicators Chg. % Tenant Sales (Ch$ millions) 31,506 29,634 6% Total GLA (m2) 50,000 50,000 0% Monthly Sales per m2 (Ch$) 108, ,184 6% Monthly Rent per m2 (Ch$) 6,618 6,210 7% % Occupancy 99.1% 98.9% 0.2 bp EBITDA Margin (%) 96.3% 93.1% 3.3 bp Page 17

18 8.9. MEGAPLAZA NORTE Sol$ thds 21,302 Sol$ thds 25,003 Sol$ thds 3,861 Sol$ thds 4,362 Sol$ thds 3,709 Sol$ thds 4,363 Rental Revenues Other Revenues Cost of Sales (ex. Depr.) Sol$ thds 1,113 SG&A Sol$ thds 1,179 Sol$ thds 20,341 EBITDA Sol$ thds 23,822 This shopping center, located in the Peruvian capital of Lima, reflects the Company s strategy in Peru to target low to middle income areas, a market that the Company believes to be underserved in the country. The property added income of Sol$ 15,342 thousand, a 19.2% increase as compared to the same period of the prior year, on the strength of higher tenant sales, rental revenues and GLA. The property posted EBITDA of Sol$ 11,595 thousand, a 9.25% improvement from the previous year. Cost of sales and SG&A totaled Sol$ 2,885 thousand and Sol$ 861 thousand, respectively. Occupancy remained strong at the shopping center, exceeding 99.0% and GLA increased by 8% to 83,000 m Operating and Commercial Indicators Chg. % Tenant Sales (Sol$ thousands) 480, ,314 15% Total GLA (m2) 83,000 76,000 9% Monthly Sales per m2 (Sol$) % Monthly Rent per m2 (Sol$) % % Occupancy 99.9% 99.5% 0.4 bp EBITDA Margin (%) 81.1% 80.8% 0.3 bp Page 18

19 8.10. MEGA EXPRESS VILLA Sol$ thds 1,049 Sol$ thds 1,155 Sol$ thds 342 Sol$ thds 449 Sol$ thds 431 Sol$ thds 530 Sol$ thds 88 Sol$ thds 35 Sol$ thds 872 Sol$ thds 1,038 This strip mall property, located in Chorrillos, Peru, contributed income of Sol$ 929 thousand in 2Q 2012, an increase of 5.8% year over year. The shopping center s EBITDA increased by 18.8% to Sol$ 518 thousand compared to 2Q Cost of sales totaled Sol$ 442 thousand. The property s growth was driven by higher rent/m 2 and a GLA increase of 1,000 m 2 Rental Revenues Other Revenues Cost of Sales (ex. Depr.) SG&A EBITDA Operating and Commercial Indicators Chg. % Tenant Sales (Sol$ thousands) 22,939 20,023 15% Total GLA (m2) 7,000 6,000 17% Monthly Sales per m2 (Sol$) % Monthly Rent per m2 (Sol$) % % Occupancy 97.0% 92.5% 4.5 bp EBITDA Margin (%) 64.8% 62.7% 2.1 bp Page 19

20 8.11. LARCOMAR FASHION CENTER Sol$ thds 9,001 Sol$ thds 8,755 Sol$ thds 5,232 Sol$ thds 4,860 Sol$ thds 3,524 Sol$ thds 3,224 Sol$ thds 1,730 Sol$ thds 2,399 Sol$ thds 8,979 Sol$ thds 7,992 Located in Lima, the mall contributed income of Sol$ 6,978 thousand in 2Q The center s EBITDA decreased by 10.6% to Sol$ 4,065 thousand compared to 2Q Cost of sales decreased 1.2% to Sol$ 1,682 and SG&A increased 26.2% to Sol$ 1,232. The decreasing occupancy rate is a temporary consequence to the property s effort to upgrade its facilities and shift the tenant mix to achieve a higher rent/m 2. Rental Revenues Other Revenues Cost of Sales (ex. Depr.) SG&A EBITDA Operating and Commercial Indicators Chg. % Tenant Sales (Sol$ thousands) 90,004 85,450 5% Total GLA (m2) 26,000 26,000 0% Monthly Sales per m2 (Sol$) % Monthly Rent per m2 (Sol$) % % Occupancy 88.9% 98.1% 9.2 bp EBITDA Margin (%) 58.7% 63.1% 4.4 bp Page 20

21 8.12. PARQUE LAMBRAMANI Sol$ thds 4,497 Sol$ thds 3,950 Sol$ thds 574 Sol$ thds 747 Sol$ thds 2,022 Sol$ thds 1,428 Rental Revenues Other Revenues Cost of Sales (ex. Depr.) Sol$ thds 2, SG&A Sol$ thds 2,017 Sol$ thds 918 EBITDA Sol$ thds 1,251 Located in Peru, this mall generated income of Sol$ 2,302 thousand, a decrease of 6.5% compared to 2Q The lower revenue was a result of decreased rent/m 2 as the property is committed to offering clients competitive rates and achieving maximum occupancy levels. However, EBITDA of Sol$ 625 thousand improved 122.7% as the property successfully decreased its cost of sales and SG&A by 34.1% and 12.1%, respectively. Total GLA is at 28,000 m 2, and the occupancy rate remained unchanged at 92.0% compared 2Q The Company is focused on differentiating the property from peers by specializing in entertainment and food, enhancing the customers experience with the property s unique and award winning architecture, and attracting additional top line anchor stores. Operating and Commercial Indicators Chg. % Tenant Sales (Sol$ thousands) 60,866 60,554 1% Total GLA (m2) 28,000 28,000 0% Monthly Sales per m2 (Sol$) % Monthly Rent per m2 (Sol$) % % Occupancy 91.9% 91.8% 0.1 bp EBITDA Margin (%) 26.6% 18.1% 8.5 bp Page 21

22 8.13. PARQUE ARBOLEDA Ch$ mill 4,652 Col$ mill 5,266 18% Ch$ mill 1,023 Col$ mill 1,210 Ch$ mill 1,129 Col$ mill 397 Ch$ mill 1,121 Col$ mill 425 Ch$ mill 3,425 Rental Revenues Other Revenues Cost of Sales SG&A (ex. Depr.) EBITDA Col$ mill 5,654 This shopping center opened during the fourth quarter of 2010 in Pereira, Colombia. The property utilizes a unique rental structure that is atypical among the primarily condominium type mall structures in Colombia and has proven a success to date. For 2Q 2012, Parque Arboleda contributed income of Col$ 3,242 million. EBITDA improved 54.1% to Col$ 2,747 million compared to 2Q The property has total GLA of 34,000 m 2. The success of the Company s first property in Colombia is reflective of the expectations for Bucaramanga and future developments in Colombia from the US$ 1 billion investment plan with Bancolombia. Operating and Commercial Indicators Chg. % Tenant Sales (Col$ millions) 60,823 49,788 22% Total GLA (m2) 34,000 34,000 0% Monthly Sales per m2 (Col$) 305, ,938 0% Monthly Rent per m2 (Col$) 26,439 28,586 8% % Occupancy 93.1% 80.9% 12.2 bp EBITDA Margin (%) 87.3% 60.4% 27.0 bp Page 22

23 9. FIRST QUARTER 2012 HIGHLIGHTS PROJECTS UNDER CONSTRUCTION AND DEVELOPMENT STRIPCENTERS CHILE The Company has completed due diligence on its partnership with AURUS, a Chilean asset manager with a strong real estate division, with whom the Company plans to develop strip malls throughout Chile. Parque Arauco has a 51% stake and AURUS will co invest 49% in the projects. The initial aggregate GLA is 12,000 m 2 with AURUS contributing 7 operating assets to the format. The Company plans to open 3 to 5 strip malls annually in 2013, 2014, and The properties will operate under the subsidiary, Arauco Express. ARAUCO QUILICURA CHILE Progress remains on track for the mall which will contribute 33,000 m 2 of GLA, upon completion in The estimated investment is 50 million with an ongoing contribution of approximately US$ 5 million in EBITDA per year. The property will be home to two anchor stores, HITES and Paris. An initial 9,700 m 2 of GLA opened with the inauguration of a home improvement retailer in Q Expected opening date is first half of EXPANSION MALL ARAUCO MAIPÚ CHILE The completion of the fourth stage of expansion has been rescheduled from early 2013 to Q The pre holiday opening is centered around the opening of a 14,000 m 2 Falabella store. The estimated investment is US$ 15 million. The completion of the third stage of expansion in Q contributed an additional 9,000 m 2 to the growing property. As of June 2012, construction of the fourth stage of expansion is 50% complete. Page 23

24 BUENAVENTURA OUTLET MALL CHILE Buenaventura in Santiago, Chile: During 1Q 2012, the Company entered into an agreement to acquire the outlet mall property, Buenaventura, located outside of Santiago, Chile. The transaction is representative of the Company s strategy to diversify its properties among shopping centers, strip malls, and outlet stores. The investment in Buenaventura is expected to be US$ 32 million and the property will contribute approximately 20,000 m 2 GLA. The Company will commence its operation of the property by the end of August EXPANSION PLAZA EL ROBLE CHILE Plaza El Roble plans to add 12,500 m 2 of GLA. The additional GLA will be allocated among new department stores, the expansion of current anchor stores, and fashion retail. The investment of US$ 20 million is expected to produce EBITDA of US$ 2 million per year. LUXURY DISTRICT PARQUE ARAUCO KENNEDY CHILE A US$ 25 million expansion plan will contribute GLA of 7,000 m 2. The new area will consist of a Luxury District, entertainment, restaurants, and high end retail. The first stage of the expansion is expected to open in November of 2012 and the second stage is expected for March of The pictures are only for reference, final design could be different Page 24

25 EXPANSION OF MARINA ARAUCO CHILE The Marina Arauco property, located in the Fifth Region of Chile, continues to build on its success. The Company plans to add 30,000 m 2 of commercial space including a supermarket and home improvement retailer. Total investment is expected at US$ 64 million.. BUCARAMANGA COLOMBIA Parque Arauco s second property to open in Colombia, this development will have 30,000 m 2 GLA and will require an investment of US$ 100 million. Bucaramanga is expected to contribute US$ 10 million in EBITDA on an ongoing basis. Already under construction, the opening is planned for the 2H As of June 2012, construction is 51% complete. The pictures are only for reference, final design could be different Page 25

26 10. CONSOLIDATED FINANCIAL STATEMENTS Balance Sheet Assets June 30 December 31 Ch$ Millions Assets Current Assets Cash and Cash Equivalents 124, ,430 Other Current Financial Assets Other Current Non Financial Assets 3,621 14,349 Trade Accounts Rec. and Other Rec. 14,970 14,933 Accounts Receivable from Rel. Comp. 4, Current Tax Receivable 10,304 8,154 Total Current Assets 157, ,256 Non Current Assets Other Non Current Non Fin. Assets 15,075 36,167 Non Current Accounts Receivable Non Current Acc. Rec. with Rel. Part. 1,745 1,681 Intangible Assets exc. Surplus Value 10,041 10,702 Surplus Value 2,974 3,030 Property, Plant and Equipment 4,977 2,899 Investment Properties 805, ,810 Deferred Tax Assets 12,302 10,620 Total Non Current Assets 852, ,983 TOTAL ASSETS 1,009, ,239 Page 26

27 Balance Sheet Liabilities June 30 December 31 Ch$ Millions Liabilities Current Liabilities Other Current Financial Liabilities 35,024 24,339 Comm. Cred. and Other Acc. Payable 6,328 17,737 Current Acc. Payable to Rel. Parties 1, Current Provisions 6,426 5,514 Tax Liabilities 3,962 8,003 Other Current Liabilities 3,716 4,474 Total Current Liabilities 56,954 60,183 Non Current Liabilities Other Non Current Fin. Liabilities 334, ,713 Deferred Tax Liabilities 55,777 52,173 Other Non Current Liabilities 8,979 8,589 Total Non Current Liabilities 399, ,475 Total Liabilities 456, ,659 Equity Issued Share Capital 229, ,907 Accumulated Earnings (Losses) 242, ,807 Other Reserves (6,071) (9,948) Attrib. to Shareholders of the Company 465, ,766 Minority Interest 87,466 48,815 Total Equity 553, ,581 TOTAL LIABILITIES AND EQUITY 1,009, ,239 Page 27

28 Income Statement Consolidated Ch$ Thousands Chg. % Revenues 47,195,331 39,930,244 18% Cost of Sales (10,048,108) (7,528,572) 33% Gross Profit 37,147,222 32,401,672 15% Administration Expenses (4,568,557) (4,884,038) 6% OPERATING INCOME 32,578,666 27,517,634 18% Depreciation & Amortization 923,332 1,162,124 21% EBITDA 33,501,997 28,679,759 17% Other Income / Expenses (1,482,542) (1,810,756) 18% Financial Income 3,740,095 1,600, % Financial Expenses (10,002,799) (7,205,469) 39% Foreign Exchange Differences (546,872) (72,716) 652% Income (Loss) for indexed assets and liabilities (3,526,172) (5,803,302) 39% NON OPERATING INCOME (11,818,289) (13,291,879) 11% Profit before Income Tax 20,760,377 14,225,755 46% Income Tax (5,299,587) (1,616,336) 228% NET PROFIT (LOSS) 15,460,790 12,609,419 23% Attributable to: Equity holders of the company 14,183,474 11,091,353 28% Minority interests 1,277,316 1,518,065 16% NET PROFIT (LOSS) 15,460,790 12,609,419 23% Page 28

29 Cash Flow Statement Ch$ Thousands Chg. % Net cash flow from operating activities Receipts from sales of goods and services 69,639,427 61,415, % Other receipts from operating activities 0 0 Payments to suppliers for goods and services (30,011,727) (26,145,608) 14.8% Payments on behalf of employees (5,441,139) (4,098,866) 32.7% Other payments for operating activities 0 0 Dividends received 0 0 Interest paid 0 0 Interest received 3,343,845 1,501, % Income taxes refunded (5,741,844) (1,798,938) 219.2% Other inputs (outputs) in cash (9,390,174) (6,929,677) 35.5% Net cash flow from operating activities 22,398,387 23,943, % Net Cash flow from investment activities Loans to related entities (5,182,351) 0 Proceeds from sale of property, plant and equipment 0 0 Purchases of property, plant and equipment (2,910,526) (2,034,369) 43.1% Purchases of other long term assets (35,730,729) (29,845,314) 19.7% Cash advances and loans to third 0 (2,846,761) 100.0% Charges from repayment of advances and loans to third 3,909,514 0 Interest received 54,123 0 Other inputs (outputs) in cash 2,250,395 2,392, % Net Cash flow from investment activities (37,609,574) (32,334,064) 16.3% Net cash flow from financing activities Share Issuance 5,231,739 0 Payments for other shares in the equity (5,231,739) 0 Payments for others debt issues 27,581, % Total figures from loans 16,316,899 9,562, % Loans from related entities (0) 2,998, % Loan Payments (11,725,278) (15,703,800) 25.3% Other Payments 0 0 Dividends paid (18,696,266) (23,803,820) 21.5% Interest received (9,694,578) (6,617,644) 46.5% Other inputs (outputs) in cash (761,934) 830, % Net cash flow from financing activities 3,020,617 (32,734,219) 109.2% Net increase (decrease) in cash and cash equivalents, before the effect of changes in the exchange rate (12,190,571) (41,125,150) 70.4% Effects of variation in the exchange rate on cash and cash equivalents (26,159) 492, % Increase (decrease) in net cash and cash equivalent (12,216,730) (40,632,234) 69.9% Cash and cash equivalents at beginning of period 136,429,522 85,296, % Cash and cash equivalents at end of period 124,212,792 44,664, % Page 29