2Q17 Conference Call

Transcription

1 2Q17 Conference Call

2 1 Highlights & Portfolio

3 2Q17 Highlights BR Properties registered Adjusted Net Income (FFO) of R$20.9 million, with 20% margin BR Properties registered in 2Q17 net revenues of R$104.7 million, which represents a decrease of 6% when compared to 2Q16, considering the same properties' revenues. This reduction is explained by an increase in vacancy rates during 2016 and by a reduction in rent prices in specific contracts. 2Q17 adjusted EBITDA was R$83.0 million, with a margin of 79%, one of the highest in the sector. BR Properties registered adjusted financial results (expense) of R$65.4 million in 2Q17, a reduction of 18% compared to previous quarter. The reduction reflects, partially, the benefits related to the recent cuts in the basic interest rate (SELIC). BR Properties registered a net loss of R$8,8 million in 2Q17. This result was impacted by a R$26.0 million non-cash effect of the FX variation on the principal of our dollar-denominated perpetual debt. 2Q17 Adjusted Net Income (FFO) totaled R$20.9 million, with a margin of 20%, 200 basis points higher than the margin registered last quarter. BR Properties' cash position at the end of the quarter was R$998.9 million. The company registered a net debt of R$2,732.2 million and a 10.5% p.a., or 103% of CDI average cost of debt by the end of 2Q17. The Company s portfolio ended the quarter with consolidated financial and physical vacancy rates of 22.9% and 32.6%, respectively, representing a reduction of 60 basis points in the financial vacancy, compared to 1Q17. Considering new leases completed in July, totaling 10,056m² of GLA, current financial and physical vacancy rates are reduced to 22.1% and 30.7%, respectively. 3

4 2Q17 Highlights Subsequent Events On July 5th, the Company concluded the public offering of primary distribution with restricted placement efforts, pursuant to CVM Instruction 476. Through the issuance of 108,906,849 new common shares with the price per share of R$8.75, BR Properties raised R$952.9 million. On July 10th, BR Properties raised R$275.0 million through its 7th Debentures Issue. The issuance has three series with the following characteristics: The Debentures of the 1st series have a maturity of 12 years and cost of CDI % per year. The Debentures of the 2nd and 3rd series have a maturity of 15 years and cost of IPCA % per year. On July 14th, the Company concluded the acquisition of Condomínio Centenário Plaza, located in the city of São Paulo. The Complex was acquired for R$439.6 million, has a leasable area of 53,892 m² and it is composed by two properties. On July 17th, BR Properties concluded the acquisition of Galpão Imbuia, located in the city of Jarinu, with leasable area of 22,986 m² and for a total amount of R$49.4 million. Between the signing of the Deed of Purchase and Sale of Real Estate (CCV) and the conclusion of the acquisition, 50% of the property was leased. During the month of July, BR Properties leased 10,056 m², being 9,836 m² in Panamérica Park and 221 m² in Ed TNU. 4

5 Portfolio Portfolio Value Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 2Q17 Pro Forma Portfolio Breakdown (Value) 1% Portfolio Breakdown (GLA) 8% 1% 33% 49% 67% 42% Office AAA Office Industrial Office AAA Office Industrial Retail 5

6 Recent Acquisitions Passeio Corporate Galpão Imbuia Centenário Plaza Flight-to-quality movement Strong demand region with high barriers to entry Development of a strong footprint in the sector State-of-the-Art installed infrastructure Consolidated region with limited greenfield opportunities Retrofit strategy to capture value Type Office AAA Type Warehouse Type Office AAA Location Downtown - Rio de Janeiro/RJ Location Cond. Gaia Terra - Jarinu/SP Location Marginal São Paulo/SP Acquisition Date December, 2016 Acquisition Date July, 2017 Acquisition Date July, 2017 Acquisition Value R$ mm Acquisition Value R$ 49.4 mm Acquisition Value R$ 433.4mm Total GLA (sqm) 81,423 Acquisiton Price per sqm R$ 8,781 Total GLA (sqm) 22,986 Acquisiton Price per sqm R$ 2,150 Total GLA (sqm) 53,892 Acquisiton Price per sqm R$ 8,042 6

7 2 Financial Highlights

8 Net Revenues Net Revenues (R$ k) 2Q17 Revenues Breakdown (13%) 4% (6%) % 2Q16 2Q16 - Same Properties 2Q17 Office Rent Services 8

9 General and Administrative Expenses SG&A (R$ k) 10% 12% 12% (4%) (9%) Q16 1Q17 2Q17 % Net Revenues Account General and Administrative Expenses 2Q17 2Q16 var % 6M17 6M16 var % (13) SG&A (29.524) (24.563) 20% (88.611) (52.739) 68% (14) Operating Expenses (11.216) (6.220) 80% (20.544) (13.983) 47% (15) Taxes 997 (2.664) -137% (30.098) (8.155) 269% (16) Personnel Expenses (4.548) (4.047) 12% (10.985) (9.049) 21% (17) Management Fees (1.739) (2.418) -28% (2.861) (5.176) -45% (18) Stock Options / LTIP (2.283) (472) 384% (4.566) (835) 447% (19) Vacancy Expenses (10.735) (8.743) 23% (19.556) (15.541) 26% Adjusted SG&A (12.120) (12.685) -4% (27.715) (28.208) -2% (19) (+) Vacancy Expenses % % (18) (+) Stock Options / LTIP % % (15) (+) Taxes (997) % % (14) (+) Arbitration Fees - - n/a n/a (14) (+) Attorney's Fees (Non-Recurring) n/a n/a Percentage: G&A / Net Revenues 12% 10% 2 p.p. 13% 11% 2 p.p. 9

10 EBITDA Adjusted EBITDA (R$ k) 80% 78% 79% (15%) (7%) Q16 1Q17 2Q17 Adjusted EBITDA Margin Account Adjusted EBITDA Composition 2Q17 2Q16 var % 6M17 6M16 var % (29) Net Income (loss) before Minority Interest (8.790) (26.286) -67% % (30) (-) Minority Interest - (711) n/a - (1.733) n/a (28) (+) Deferred Taxes (1.400) % (64.942) % (27) (+) Income and Social Contribution Taxes (3.262) (412) 692% % (25) (-) Gain (Loss) on Appraisal of Investment Properties n/a n/a (24) (-) Gain (Loss) on Sale of Investment Properties - - n/a (65.423) (5.348) 1123% (23) (+) Other Operating Income (28) (16.510) -100% (18.269) (15.542) 18% (20) (+) Financial Result % % (18) (+) Stock Options / LTIP % % (16) (+) Bonus Provision * n/a n/a (15) (+) PIS/Cofins (Revenue Taxes) on Property Sales (Galpão SBC ) - - n/a n/a (15) (+) Taxes on One Properties Incorporation (ITBI) - - n/a n/a (15) (+) PIS/Cofins (Revenue Taxes) on Non-cash Gains on the Perpetual s Buyback - - n/a n/a (14) (+) Depreciation % % (14) (+) Attorney's Fees (Non-Recurring) n/a n/a (34) Adjusted EBITDA % % (35) Adjusted EBITDA Margin 79% 80% -1 p.p. 79% 80% -1 p.p. * From 2017 onwards, the adjustment of the "Bonus Provision" will not be considered in the Adjusted EBITDA calculation 10

11 Financial Results Adjusted Financial Results (R$ k) (6%) (18%) Q16 1Q17 2Q17 Financial Results 2Q17 2Q16 var % 6M17 6M16 var % Financial Income % % Return on Cash Reserves % % Non-cash Variations (MTM - Perpetual Bond Swap and Interest) n/a % Exchange Rate Variation (16.906) % n/a Other % % Gains on the Perpetual s Buyback - - n/a n/a Monetary Adjustment on "Galpão SBC " Sale - - n/a n/a Monetary Adjustment of Tax Credits n/a n/a Financial Expenses ( ) ( ) -36% ( ) ( ) -22% Interest Expense on Company Debt (98.259) ( ) -6% ( ) ( ) -3% Non-cash Variations (MTM - Perpetual Bond Swap and Interest) n/a (688) (3.588) -81% Exchange Rate Variation (9.070) - n/a (9.070) - n/a Other (11) (34) -67% (119) (48) 149% Expenses on the Perpetual s Buyback - - n/a - (1.806) n/a Debt Renegotiation Results (Waiver) - (62.982) n/a - (62.982) n/a Financial Results (88.633) (67.106) 32% (96.938) (25.346) 282% (-) Non-cash Gains on Exchange Rate Variation (65.390) -126% - ( ) n/a (+) Non-cash Losses on Exchange Rate Variation n/a n/a (-) Non-cash Gains (MTM - Perpetual Bond Swap and Interest) (2.510) - n/a (8.670) (4.783) 81% (+) Non-cash Losses (MTM - Perpetual Bond Swap and Interest) (247) - n/a % (-) Monetary adjustment on "Galpão SBC" Sale - - n/a (49.503) - n/a (-) Non-cash Gains on the Perpetual s Buyback - - n/a - (55.726) n/a (+) Debt Renegotiation Results (Waiver) n/a n/a Adjusted Financial Results (65.413) (69.513) -6% ( ) ( ) -3% 11

12 Adjusted Net Income (FFO) Net Income (R$ k) Adjusted Net Income (R$ k) 29% 18% 20% 118% (41%) 67% % (26.997) (8.790) 2Q16 2Q17 6M16 6M17 2Q16 1Q17 2Q17 Adjusted Net Income Margin Account Adjusted Net Income Composition (FFO) 2Q17 2Q16 var % 6M17 6M16 var % (31) Net Income (loss) (8.790) (26.997) -67% % (28) (+) Deferred Taxes (1.400) % (64.942) % (27) (+) Income Taxes on Property Sales - - n/a % (25) (-) Gain (Loss) on Appraisal of Investment Properties n/a n/a (24) (-) Gain (Loss) on Sale of Investment Properties - - n/a (65.423) (5.348) 1123% (23) (+) Other Operating Income/Expense (Non-Recurring) (28) (8.276) -100% (18.269) (6.184) 195% (20) (+) Non-cash Losses on Exchange Rate Variation n/a n/a (20) (-) Non-cash Gains on Exchange Rate Variation (65.390) -126% - ( ) n/a (20) (+) Non-cash Variations (MTM - Perpetual Bond Swap and Interest) (2.757) - n/a (7.982) (1.194) 568% (20) (-) Monetary Adjustment on "Galpão SBC " Sale - - n/a (49.503) - n/a (20) (-) Non-cash Gains on the Perpetual s Buyback - - n/a - (55.726) n/a (20) (+) Debt Renegotiation Results (Waiver) n/a n/a (18) (+) Stock Options / LTIP % % (15) (+) PIS/Cofins (Revenue Taxes) on Property Sales (Galpão SBC ) - - n/a n/a (15) (+) Taxes on One Properties Incorporation (ITBI) - - n/a n/a (15) (+) PIS/Cofins (Revenue Taxes) on Non-cash Gains on the Perpetual s Buyback - - n/a n/a (14) (+) Attorney's Fees (Non-Recurring) n/a n/a (14) (+) Depreciation n/a n/a (36) Adjusted Net Income (FFO) % % (37) Adjusted Net Income Margin (FFO Margin) 20% 29% -9 p.p. 19% 18% 1 p.p. 12

13 Indebtedness Indebtedness Proforma Capital Increase (Follow-on) Centenário Plaza Complex Acquisition Galpão Imbuia Acquisition* Debentures - 7th issuance Gross Debt Net Debt Portfolio Value Gross Loan to Value 53% Net Loan to Value 30% Gross Loan to Value - Ex Perpetual Bond 45% Net Loan to Value - Ex Perpetual Bond 21% Adjusted EBITDA (LTM) ** Net Debt/EBITDA 6,3x Net Debt/EBITDA - Ex Perpetual Bond 4,6x Adjusted EBITDA / Net Financial Expenses ** 1,4x * R$ already paid in 2Q17 ** Considering EBITDA of Centenário Plaza and Galpão Imbuia (Vacancy of 50%) 2Q17 Debt Breakdown 10% 17% 14% 17% 41% TR CDI USD Perpetual Bond IGPM IPCA 13

14 Indebtedness Amortization Schedule (R$ million) Net Debt / Adjusted EBITDA (x) vs Net Debt * 5,1x 5,2x 5,4x 6,1x 6,2x 6,3x 4,4x 4,8x 5,0x 5,6x 6,5x 7,3x 8,1x 6,3x S * Perpetual Bond 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 2Q17 Pro * 2Q17 Net Debt/EBITDA - Proforma and Ex Perpetual Bond = 4,6x forma Interest Rate Coverage (x) LTV: Gross and Net (%) 1,6x 1,6x 1,5x 1,4x 1,3x 1,4x 1,2x 1,3x 1,4x 1,3x 1,4x 1,4x 1,3x 1,4x 45% 39% 40% 41% 40% 44% 52% 46% 44% 45% 46% 54% 53% 53% 38% 34% 34% 36% 37% 41% 34% 29% 29% 29% 33% 37% 39% 30% 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 2Q17 Pro forma 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 2Q17 Pro LTV Gross Debt LTV Net Debt forma 14

15 3 Operational Highlights

16 Lease Contracts Rent / Sqm / Month Same Properties Rent / Sqm / Month - Same Properties * 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 2Q17 x 1Q17 Office 5,6% 6,1% 4,1% 3,8% 3,2% 3,5% 2,0% 0,1% 1,8% 3,6% -0,3% -4,4% -5,5% -5,1% 0,8% Industrial 3,8% 6,6% 6,7% 4,7% 4,7% 4,1% 4,6% 0,2% 0,2% 10,8% 10,6% 10,6% n/a n/a n/a Retail 5,9% 6,2% 2,4% 6,0% 7,8% 5,3% 8,6% n/a n/a n/a n/a n/a n/a n/a n/a Total 5,1% 6,2% 4,3% 3,9% 3,4% 3,6% 2,4% 0,1% 1,7% 3,9% 0,0% -4,0% -5,5% -5,1% 0,8% IPCA (Inflation Indicator) 6,2% 6,5% 6,7% 6,4% 8,1% 8,9% 9,5% 10,7% 9,4% 8,8% 8,5% 6,3% 4,6% 3,0% 0,2% IGP-M (Inflation Indicator) 7,3% 6,2% 3,5% 3,7% 3,2% 5,6% 8,4% 10,5% 11,6% 12,2% 10,7% 7,2% 4,9% -0,8% -2,7% Weighted Average: IPCA¹ x IGP-M (~ 4% x 96%) 7,0% 6,3% 4,3% 4,4% 4,4% 6,4% 8,7% 10,6% 11,4% 11,9% 10,6% 7,1% 4,8% -0,6% -2,6% * Comparison between: the average same property rent in the current period vs the average same property rent in equal period of last year * Considering only rent prices of leased areas * In nominal terms ¹ IPCA and Other Lease Contracts Average Duration Existing Lease Contracts All Contracts Built-to-Suit Contracts Current Average Duration 5.0 Years 3.5 Years Expiration Schedule (% Revenues) 3rd Year Alignment Schedule (% Revenues) 66% 37% 17% 5% 1% 28% 9% 22% > >

17 Portfolio Vacancy Vacancy 32,5% 32,6% 30,7% 19,2% 22,6% 19,8% 23,5% 22,9% 22,1% 9,0% 4,1% 10,4% 9,8% 10,0% 9,7% 10,4% 14,3% 11,2% 16,0% 13,0% 14,5% 11,8% 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 with Financial Physical Passeio 2Q17 with Passeio July with Passeio 17

18 4 Capital Markets

19 Capital Markets Performance BRPR3 7M17 70% 60% 50% 40% 30% 20% 10% 0% -10% ADTV BR Properties Ibovespa -20% - Dec-15 Feb-16 Apr-16 Jun-16 Aug-16 Oct-16 Dec-16 Feb-17 Apr-17 Jun-17 Aug Stock Performance (BRPR3) 2Q17 2Q16 var % 6M17 6M16 var % Total Number of Shares % % Free Float (%) 30% 30% 0% 30% 30% 0% Stock Price (average for the period) 9,18 8,70 6% 9,02 8,49 6% Stock Price (end of period) 10,60 7,50 41% 10,60 7,50 41% Market Cap end of period (R$ million) % % Average Daily Trading Volume (R$ million) 5,15 11,39-55% 7,59 9,13-17% Average Daily Traded Shares % % Average Daily negotiations % % 19

20 Investor Relations IR Team André Bergstein CFO and IRO Gabriel Barcelos IR Manager Nelson Brazan IR Analyst Phone: (55 11) Ticker: BRPR3 20