Cyrela Commercial Properties S.A. Empreendimentos e Participações

Transcription

1 Cyrela Commercial Properties S.A. Empreendimentos e Participações (A free translation of the original reporting Portuguese as published in Brazil containing Financial Statement prepared in accordance with accounting practices adopted in Brazil and IFRS) Report on the review of quarterly information for the quarter ended June 30, 2018 KPDS

2 Complete Financial Statements (DFP) June 30, CYRELA COMMERCIAL PROPERTIES SA Version: 1 Contents Company Information Shareholding Structure 1 Individual Financial Statements Balance Sheet - Assets 2 Balance Sheet - Liabilities 3 Income Statement 4 Statement of Comprehensive Income 5 Statement of Cash Flows 6 Statement of Changes in Equity Statement of Changes in Equity - 01/01/2018 to 06/30/ Statement of Changes in Equity - 01/01/2017 to 06/30/ Statement of Value Added 9 Consolidated Financial Statements Balance Sheet - Assets 10 Balance Sheet - Liabilities 11 Income Statement 12 Statement of Comprehensive Income 13 Statement of Cash Flows 14 Statement of Changes in Equity Statement of Changes in Equity - 01/01/2018 to 06/30/ Statement of Changes in Equity - 01/01/2017 to 06/30/ Statement of Value Added 17 Comments on Performance 18 Notes to the Financial Statements 34 Opinions and Declarations Unqualified Special Review Report 67 Opinion of the Supervisory Board or Similar Body 69 Management s Statement on the Financial Statements 70 Management s Statement on the Independent Auditor s Report 71

3 Number of shares (thousand) Current quarter 06/30/2018 Common Of paid in capital 119,664 Preferred Paid up capital Total Capital paid up 119,664 Common held in treasury 248 Preferred held in treasury Total held in treasury 248 1

4 Individual Financial Statements / Balance Sheets Assets (In thousand of reais) Code of account Account description Current quarter 06/30/2018 Prior year 12/31/ Total assets 2,577,496 2,401, Current assets 405, , Cash and cash equivalents 184,810 56, Cash and banks Interest earning bank deposits 184,694 56, Interest earning bank deposits 209, , Interest earning bank deposits measured at fair value through profit or loss 209, , Trading securities 209, , Accounts receivable Trade accounts receivable Recoverable taxes 4,939 4, Current taxes recoverable 4,939 4, Taxes recoverable 4,939 4, Other current assets 5,941 6, Other 5,941 6, Dividends receivable 5,835 6, Other accounts receivable Non current assets 2,171,844 2,185, Long term assets 25,864 23, Related party credits Advance for future capital increase Other non current assets 25,818 23, Taxes recoverable 25,511 22, Other accounts receivable Investments 2,145,897 2,161, Equity interest 2,145,897 2,161, Interest in subsidiaries 2,145,897 2,161, Property, plant and equipment Fixed assets in operation Intangible assets Intangible assets Software

5 Individual Financial Statements / Balance Sheets Liabilities (In thousand of reais) Code of account Account description Current quarter 06/30/2018 Prior year 12/31/ Total liabilities 2,577,496 2,401, Current liabilities 234, , Suppliers Domestic suppliers Tax liabilities Federal tax liabilities Taxes withheld at source Taxes on income Municipal tax liabilities Loans and financing 225, , Loans and financing 36,556 81, In domestic currency 36,556 81, Debentures 189, , Other liabilities 7,400 6, Other 7,400 6, Minimum compulsory dividend payable Other accounts payable 3,888 6, Advance from clients 3, Non current liabilities 1,148, , Loans and financing 1,148, , Loans and financing 479, , In domestic currency 479, , Debentures 669, , Provisions Tax, social security, labor and civil provisions Provisions for labor, tax, civil risks Shareholders' equity 1,194,580 1,161, Realized capital 799, , Capital reserves 3,326 3, Treasury shares 3,326 3, Profit reserves 366, , Legal reserve 46,227 46, Profit retention reserve 319, , Retained Earnings/Losses 31,993 3

6 Individual Financial Statements / Income Statement (In thousand of reais) Code of account Account description Current quarter 04/01/ /30/2018 Accumulated of the current year 01/01/ /30/2018 Same quarter of the prior year 04/01/ /30/2017 Accumulated of the prior year 01/01/ /30/ Income from sales of goods and/or services ,222 2, Cost of goods and/or services sold Gross income ,217 2, Operating expenses/income 53,649 88,075 29,703 51, Sales expenses General and administrative expenses 4,713 9,858 7,169 15, General and administrative 2,937 6,782 4,435 10, Management remuneration 909 1,843 1,561 2, Employee profit sharing and Directors fees 867 1,233 1,173 2, Other operating income 9,407 19, Other operating income (expenses), net 9,407 19, Equity in net income of subsidiaries 49,190 78,940 37,989 66, Income (loss) before financial income and taxes 54,075 88,958 30,920 53, Financial income (loss) 31,074 56,965 47,967 90, Financial income 5,918 10,281 4,348 13, Financial expenses 36,992 67,246 52, , Income (loss) before income tax 23,001 31,993 17,047 36, Net income (loss) of continued operations 23,001 31,993 17,047 36, Income/loss for the period 23,001 31,993 17,047 36, Earnings per share (reais / Shares) Basic earnings per share Common shares Diluted earning per share Common shares

7 Individual Financial Statements / Income of Comprehensive Income (In thousand of reais) Code of account Account description Current quarter 04/01/ /30/2018 Accumulated of the current year 01/01/ /30/2018 Same quarter of the prior year 04/01/ /30/2017 Accumulated of the prior year 01/01/ /30/ Net income for the period 23,001 31,993 17,047 36, Other comprehensive income 3,023 3, Adjustments for translation of investments and valuation of financial assets 3,023 3, Comprehensive income for the period 26,024 35,116 16,193 36,434 5

8 Individual Financial Statements / Statement of Cash Flows (In thousand of reais) Code of account Account description Accumulated of the current year 01/01/ /30/2018 Accumulated of the prior year 01/01/ /30/ Net cash from operating activities 68,277 13, Cash generated in operations 20,612 3, Net income (loss) before income tax and social contribution 31,993 36, Depreciation of fixed asset items Depreciation of investment property Equity in net income of subsidiaries 78,940 66, Interest, inflation adjustments on loans and debentures 56, , Amortization of commission on debentures 1,322 1, Amortizations 1, Provisions for labor, tax and civil risks Capitalized interest 8,356 3, Income (loss) from sale of interest Changes in assets and liabilities 1,230 13, Accounts receivable Taxes recoverable 2,816 10, Dividends receivable 190 1, Other assets Suppliers Taxes and contributions payable Other accounts payable 2, Advance for future capital increase Advance from clients 3, Other 48,895 24, Interest paid 37,082 89, Dividends received 85, , Net cash used in investment activities 63,253 61, (Increase) in securities 61,223 27, (Increase) in property, plant and equipment (Increase) decrease in investments 1,986 33, Net cash from financing activities 122,793 51, Funding of loans and debentures 450, , Commission for acquisition of loans and debentures Payment of loans and debentures (principal) 329, , Effect of changes in exchange rate on cash and cash equivalents 3, Increase (decrease) in cash and cash equivalents 127,817 99, Opening balance of cash and cash equivalents 56, , Closing balance of cash and cash equivalents 184, ,962 6

9 Individual Financial Statements / Statement of Changes in Equity 01/01/2018 to 06/30/2018 (In thousand of reais) Code of account Account description Paid up capital Capital reserves, Options granted and Treasury shares Profit reserves Retained earnings (loss) Other comprehensive income Shareholders' equity 5.01 Opening balances 799,763 3,326 46, ,648 5,696 1,161, Prior year adjustments , , Adjusted opening balances 799,763 3,326 46, ,104 5,696 1,159, Total comprehensive income ,993 3,123 35, Net income for the period , , Other comprehensive income ,123 3, Translation adjustments in the period ,123 3, Closing balances 799,763 3,326 46, ,097 8,819 1,194,580 7

10 Individual Financial Statements / Statement of Changes in Equity 01/01/2017 to 06/30/2017 (In thousand of reais) Code of account Account description Paid up capital Capital reserves, Options granted and Treasury shares Profit reserves Retained earnings (loss) Other comprehensive income Shareholders' equity 5.01 Opening balances 799,763 3,326 37, ,329 5,397 1,175, Adjusted opening balances 799,763 3,326 37, ,329 5,397 1,175, Total comprehensive income , , Net income for the period , , Other comprehensive income Translation adjustments in the period Closing balances 799,763 3,326 37, ,595 5,697 1,139,246 8

11 Individual Financial Statements / Statement of Value Added (In thousand of reais) Code of account Account description Accumulated of the current year 01/01/ /30/2018 Accumulated of the prior year 01/01/ /30/ Income 10,933 2, Sale of goods, products and services 962 2, Other income 9, Inputs acquired from third parties 3,768 7, Materials, Energy, Third party services and other 2,887 7, Other Gross added value 7,165 4, Retentions 1, Depreciation, amortization and depletion 1, Net added value produced 6,100 5, Added value received as transfer 99,787 81, Equity in net income of subsidiaries 78,940 66, Financial income 10,281 13, Other 10, Total added value payable 105,887 76, Distribution of added value 105,887 76, Personnel 6,520 8, Direct remuneration 4,974 5, Benefits 1,546 3, Taxes, duties and contributions Federal Municipal Third party capital remuneration 67, , Interest 65, , Other 1,496 1, Remuneration of own capital 31,993 36, Retained earnings / Loss for the period 31,993 36,734 9

12 Consolidated Financial Statements / Balance Sheets Assets (In thousand of reais) Code of account Account description Current quarter 06/30/2018 Prior year 12/31/ Total assets 3,780,396 3,639, Current assets 671, , Cash and cash equivalents 293, , Cash and banks 25,260 20, Interest earning bank deposits 268, , Interest earning bank deposits 248, , Interest earning bank deposits measured at fair value through profit or loss 248, , Trading securities 248, , Accounts receivable 109, , Trade accounts receivable 109, , Inventories 4,428 4, Recoverable taxes 4,939 4, Current taxes recoverable 4,939 4, Taxes recoverable 4,939 4, Other current assets 9,916 10, Other 9,916 10, Dividends receivable Other accounts receivable 7,850 8, Advances to suppliers 2,064 2, Non current assets 3,109,046 3,177, Long term assets 120, , Accounts receivable 4,603 4, Trade accounts receivable 4,603 4, Inventories 42,197 41, Related party credits 46 38, Advance for future capital increase 46 38, Other non current assets 73,611 66, Taxes recoverable 33,694 34, Other accounts receivable 39,917 32, Investments 2,987,743 3,024, Equity interest 161, , Interest in associated companies 161, , Investment property 2,826,364 2,849, Property, plant and equipment Fixed assets in operation Intangible assets Intangible assets Software

13 Consolidated Financial Statements / Balance Sheets Liabilities (In thousand of reais) Code of account Account description Current quarter 06/30/2018 Prior year 12/31/ Total liabilities 3,780,396 3,639, Current liabilities 306, , Suppliers 7,843 12, Domestic suppliers 7,843 12, Tax liabilities 13,820 11, Federal tax liabilities 13,669 11, Income tax and social contribution payable 10,597 7, Other taxes payable Other income taxes 1,614 1, Taxes withheld at source 284 1, Deferred taxes and contributions Municipal tax liabilities Loans and financing 261, , Loans and financing 72, , In domestic currency 72, , Debentures 189, , Other liabilities 22,879 39, Other 22,879 39, Minimum compulsory dividend payable Advance from clients 3, Other accounts payable 13,650 31, Unrecorded res sperata (key money) 5,717 7, Non current liabilities 1,559,967 1,429, Loans and financing 1,531,533 1,392, Loans and financing 862,182 1,015, In domestic currency 862,182 1,015, Debentures 669, , Other liabilities 22,867 29, Other 22,867 29, Unrecorded res sperata (key money) 22,867 29, Deferred taxes 4,859 6, Deferred income tax and social contribution 4,859 6, Deferred taxes and contributions 4,859 6, Provisions 708 1, Tax, social security, labor and civil provisions 708 1, Provisions for labor, tax, civil risks 708 1, Consolidated shareholders' equity 1,914,391 1,878, Realized capital 799, , Capital reserves 3,326 3, Treasury shares 3,326 3, Profit reserves 340, , Legal reserve 46,227 46, Profit retention reserve 294, , Retained Earnings/Losses 57, Interest of non controlling shareholders 719, ,455 11

14 Consolidated Financial Statements / Income Statement (In thousand of reais) Code of account Account description Current quarter 04/01/ /30/2018 Accumulated of the current year 01/01/ /30/2018 Same quarter of the prior year 04/01/ /30/2017 Accumulated of the prior year 01/01/ /30/ Income from sales of goods and/or services 165, , , , Cost of goods and/or services sold 80, ,558 38,777 77, Gross income 85, ,908 68, , Operating expenses/income 258 3,260 9,239 19, Sales expenses 2,419 7,303 2,569 9, General and administrative expenses 10,054 17,356 12,308 22, General and administrative 6,691 11,764 8,926 16, Management remuneration 1,318 2,640 1,898 3, Employee profit sharing and Directors fees 2,045 2,952 1,484 3, Other operating income 11,231 21,842 1, Other operating income (expenses), net 11,231 21,842 1, Equity in net income of subsidiaries ,137 12, Income (loss) before financial income and taxes 85, ,648 58, , Financial income (loss) 39,152 72,678 57, , Financial income 8,811 16,062 8,232 22, Financial expenses 47,963 88,740 66, , Income (loss) before income tax 46,305 75,970 1,046 2, Income tax and social contribution 10,094 18,462 7,457 15, Current 10,112 18,358 7,584 15, Deferred Net income (loss) of continued operations 36,211 57,508 6,411 18, Income/loss for the period 36,211 57,508 6,411 18, Attributed to the Parent company's partners 23,001 31,993 17,047 36, Attributed to non controlling partners 13,210 25,515 10,636 18, Earnings per share (reais / Shares) Basic earnings per share Common shares Diluted earning per share Common shares

15 Consolidated Financial Statements / Income of Comprehensive Income (In thousand of reais) Code of account Account description Current quarter 04/01/ /30/2018 Accumulated of the current year 01/01/ /30/2018 Same quarter of the prior year 04/01/ /30/2017 Accumulated of the prior year 01/01/ /30/ Consolidated net income for the period 36,211 57,508 6,411 18, Other comprehensive income 3,023 3, Adjustments for translation of investments and valuation of financial assets 3,023 3, Consolidated comprehensive income for the period 39,234 60,631 5,557 18, Attributed to the Parent company's partners 26,024 35,116 16,193 36, Attributed to non controlling partners 13,210 25,515 10,636 18,358 13

16 Consolidated Financial Statements / Statement of Cash Flows (In thousand of reais) Code of account Account description Accumulated of the current year 01/01/ /30/2018 Accumulated of the prior year 01/01/ /30/ Net cash from operating activities 107,259 37, Cash generated in operations 180, , Net income before income tax and social contribution 75,970 2, Depreciation of fixed asset items Depreciation of investment property 18,228 20, Amortization of commission on debentures 1,588 1, Interest and inflation adjustments on loans and debentures 76, , Provision for loss on accounts receivable , Amortizations Provisions for labor, tax and civil risks Equity in net income of subsidiaries , Capitalized interest 8,356 1, Changes in assets and liabilities 5,033 23, Accounts receivable 8,414 3, Taxes and contributions recoverable , Inventories 41,009 20, Dividends receivable Judicial deposits Advances to suppliers 19 3, Other assets 6,762 4, Suppliers 4,542 14, Taxes and contributions payable 2,093 7, Advance from clients 3,500 2, Unrecorded res sperata (key money) 8,262 9, Other accounts payable 18,326 3, Advance for future capital increase 1,531 1, Accounts payable to related parties Other 68,592 92, Interest paid 53, , IRPJ and CSLL paid 15,801 7, Dividends received , Net cash used in investment activities 94,795 96, (Increase) in securities 77,705 21, (Increase) in fixed assets 300 4, (Increase) in investment properties 3,542 43, (Increase) decrease in investments 13,848 27, Net cash from financing activities 111,182 45, Funding of loans and debentures 450, , Commission for acquisition of loans and debentures Payment of loans and debentures 341, , Effect of changes in exchange rate on cash and cash equivalents 3, Increase (decrease) in cash and cash equivalents 123, , Opening balance of cash and cash equivalents 170, , Closing balance of cash and cash equivalents 293, ,658 14

17 Consolidated Financial Statements / Statement of Changes in Equity 01/01/2018 to 06/30/2018 (In thousand of reais) Code of account Account description Paid up capital Capital reserves, Options granted and Treasury shares Profit reserves Retained earnings (loss) Other comprehensive income Shareholders' equity Interest of non controlling shareholders Consolidated shareholders' equity 5.01 Opening balances 799,763 3,326 46, ,648 5,696 1,161, ,455 1,878, Prior year adjustments , , , Adjusted opening balances 799,763 3,326 46, ,104 5,696 1,159, ,455 1,876, Capital transactions with partners ,159 23, Effect of contributions made by non controlling shareholders in subsidiaries ,159 23, Total comprehensive income ,993 3,123 35,116 25,515 60, Net income for the period , ,993 25,515 57, Other comprehensive income ,123 3, , Translation adjustments in the period ,123 3, , Closing balances 799,763 3,326 46, ,097 8,819 1,194, ,811 1,914,391 15

18 Consolidated Financial Statements / Statement of Changes in Equity 01/01/2017 to 06/30/2017 (In thousand of reais) Code of account Account description Paid up capital Capital reserves, Options granted and Treasury shares Profit reserves Retained earnings (loss) Other comprehensive income Shareholders' equity Interest of non controlling shareholders Consolidated shareholders' equity 5.01 Opening balances 799,763 3,326 37, ,329 5,397 1,175, ,630 2,112, Adjusted opening balances 799,763 3,326 37, ,329 5,397 1,175, ,630 2,112, Capital transactions with partners ,038 13, Effect of contributions made by non controlling shareholders in subsidiaries ,038 13, Total comprehensive income , ,434 18,358 18, Net income for the period , ,734 18,358 18, Other comprehensive income Translation adjustments in the period Closing balances 799,763 3,326 37, ,595 5,697 1,139, ,950 2,081,196 16

19 Consolidated Financial Statements / Statement of Value Added (In thousand of reais) Code of account Account description Accumulated of the current year 01/01/ /30/2018 Accumulated of the prior year 01/01/ /30/ Income 292, , Sale of goods, products and services 282, , Other income 9, Inputs acquired from third parties 102,887 72, Cost of products, goods and services sold 91,192 52, Materials, Energy, Third party services and other 5,198 11, Other 6,497 7, Gross added value 189, , Retentions 24,615 20, Depreciation, amortization and depletion 24,615 20, Net added value produced 165, , Added value received as transfer 27,299 35, Equity in net income of subsidiaries , Financial income 16,062 22, Other 11, Total added value payable 192, , Distribution of added value 192, , Personnel 15,423 16, Direct remuneration 9,694 10, Benefits 3,458 4, Other 2,271 2, Taxes, duties and contributions 30,844 27, Federal 28,725 25, Municipal 2,119 2, Third party capital remuneration 88, , Interest 86, , Other 1,962 3, Remuneration of own capital 57,508 18, Retained earnings / Loss for the period 31,993 36, Interest of non controlling shareholders in retained earn 25,515 18,358 17

20 São Paulo, July 31, 2018 Cyrela Commercial Properties S.A. Empreendimentos e Participações (BM&FBOVESPA: CCPR3) ( CCP or Company ), one of the leading commercial property investment, leasing and sale companies in Brazil, announces its results for the second quarter of The figures presented herein should be read together with the Financial Statements of the Company and their accompanying Notes published today. Net Revenue grows 55.2% in 2Q18, to R$165.9 million Net Income up by R$40 million in 2Q18 Key Performance Indicators 2Q18 and 1H18 (R$ million) +55.2% 2Q % 1H Q H % % Net Revenue EBITDA FFO Net Income Net Revenue EBITDA FFO Net Income Summary of Indicators (IFRS) Financial Indicators IFRS (R$ million) 2Q17 2Q18 2Q18 X 2Q17 1H17 1H18 1H18 X 1H17 Net Revenue % % EBITDA % % EBITDA Margin 55.7% 50.9% 4.8 pp. 54.0% 54.4% 0.4 pp. NOI Net Operating Income % % NOI Margin 86.1% 86.9% 0.8 pp. 84.0% 86.6% 2.6 pp. FFO Funds from Operations NA NA FFO Margin 5.4% 21.2% 26.6 pp. 7.7% 20.7% 28.4 pp. Net Income NA NA Net Margin 15.9% 13.9% 29.8 pp. 17.9% 11.8% 29.7 pp. Operational Indicators 2Q17 2Q18 2Q18 X 2Q17 Physical Vacancy 80.1% 90.9% 10.8 pp. Financial Vacancy 84.5% 91.7% 7.2 pp. Own Portfolio (sqm x 1,000) % Portfolio under management (sqm x 1,000) % 18

21 2Q18 Earnings Release 1. Most Relevant Achievements in 2Q18 Conclusion of the sale of Parque Shopping Belém In May 2018, CCP concluded the transaction to sell 100% of its interest in Parque Shopping Belém to XP Malls Fundo de Investimento Imobiliário FII. Liability Management CCP continues focusing on reducing debt and the average cost of debt, as shown in the two transactions carried out in June 2018: Prepayment of the real state loan taken from CCPS/A, totaling R$10.1 million, at TR + 10% p.a. Renegotiation of the interest rate of the Tietê Plaza Shopping real estate loan, from TR % p.a. to TR % p.a. Sale of Parque Industrial Tamboré In May 2018, CCP entered into an agreement to sell 100% of its interest in SPV Hatiha, owner of Parque Industrial Tamboré, for R$28 million. The transaction is subject to compliance with conditions precedent. 19

22 2Q18 Earnings Release 2. Operating Performance Analysis The analyses in this section refer exclusively to managerial data and do not consider the effects of accounting consolidation, when applicable. 2.1 Occupancy Rates CCP Portfolio The physical occupancy of CCP s portfolio, calculated as the total occupied area over the total leasable area, was 90.9% in 2Q18, while CCP s financial occupancy, calculated as potential revenues from occupied areas over potential revenues of the total portfolio, stood at 91.7% in 2Q18. In 2Q17, these figures came to 80.1% and 84.5%, respectively. The increase of CCP s physical and financial occupancy rates in 2Q18 was chiefly due to the sale of Parque Industrial Tamboré, which was vacant and accounted for 37% of CCP s physical vacancy in 1Q18. This transaction reflects CCP s efforts to recycle its assets by focusing on office buildings and shopping malls. Physical Occupancy Rate Variation CCP Portfolio (%) (sq.m.) 88.7% 91.7% 87.4% 87.2% 85.9% 90.9% 231,384 21,092 Shopping Center: 9,118 sqm Offices: 11,975 sqm 210,291 Vacancy Occupation Q18 2Q18 2Q18 Financial Occupancy Rate Variation CCP Portfolio (%) 85.6% 89.3% 90.2% 90.2% 90.5% 91.7% Offices 88.5% Shopping Centers 94.6% 91.7% Q18 2Q18 20

23 2Q18 Earnings Release 2.2 Office Buildings The reduction in the physical occupancy rate in the office building segment in 2Q18, of 0.5 p.p., was due to the recent agreement terminations in the Brasílio Machado. On the other hand, the financial occupancy rate increased by 1.9 p.p. in 2Q18 compared with 2Q17, as a result of the leases of the Miss Silvia Morizono building, a triple A project whose revenue per square meter is higher than that of the properties whose agreements terminated in The occupancy rate of the buildings tends to increase because the net absorption of the São Paulo and Rio de Janeiro markets has improved and the projects have a low vacancy risk, as no lease agreements will mature before the end of 2018 and only 8.4% of revenues from the lease agreements will mature in Physical Occupancy Track Record 0.5 p.p. 92.0% 82.2% 91.4% 87.2% 86.7% 81.5% 79.6% 80.1% 86.6% 88.5% 89.8% 91.1% 89.9% 92.5% 86.3% 88.7% 87.3% 2Q14 Thera 2Q15 2Q16 Thera Sale 2Q17 Morizono 2Q18 Financial Occupancy Track Record +1.9 p.p. 91.4% 87.9% 91.1% 86.6% 88.5% 82.3% 80.9% 81.0% 86.1% 87.9% 89.6% 90.2% 92.2% 92.3% 87.7% 90.7% 89.5% 2Q14 Thera 2Q15 2Q16 Thera Sale 2Q17 Morizono 2Q18 Lease Contracts Expiration Schedule (%) 44.4% 0.0% 8.4% 15.4% 17.9% 13.9% onward 21

24 2Q18 Earnings Release 2.3 Shopping Malls The occupancy rate of CCP s shopping malls has significantly improved in 2Q18. Physical occupancy increased by 4.6 p.p., while financial occupancy improved by 1.7 p.p. The increase in the shopping malls physical and financial occupancy rates was essentially due to the improvement in the performance of Shopping D and the maturation of Shopping Metropolitano and Shopping Cerrado, which have considerably reduced vacant areas in the last twelve months. Accordingly, it is worth noting that Shopping Cerrado s financial vacancy fell by 16% in 2017, while its physical vacancy declined by 6%, reflecting the efforts to lease properties with a higher lease price per square meter. Physical Occupancy Track Record +1.7 p.p. 95.5% 95.8% 90.2% 91.9% 93.6% 94.9% 95.7% 95.9% 95.3% 95.7% 94.2% 90.6% 92.7% 92.0% 93.3% 93.8% 92.9% 2Q14 2Q15 Cidade São Paulo 2Q16 Cerrado 2Q17 2Q18 Financial Occupancy Track Record +4.6 p.p. 95.5% 92.2% 89.1% 90.0% 94.6% 92.8% 94.3% 92.2% 91.9% 92.7% 92.7% 89.6% 90.5% 89.6% 91.6% 92.1% 93.5% 2Q14 2Q15 Cidade São Paulo 2Q16 Cerrado 2Q17 2Q18 Changes in Same Store Sales (SSS) and Same Store Rents (SSR) (%) Same Store Sales IPCA Same Store Rent IPCA 8.8% 5.4% 8.5% 6.4% 6.3% 3.0% 5.6% 4.6% 7.7% 3.0% 6.0% 2.5% 4.7% 3.0% 4.4% 2.7% 4.4% 8.8% 6.1% 12.8% 8.5% 9.7% 6.3% 9.2% 4.6% 10.8% 3.0% 5.2% 2.5% 4.8% 3.0% 4.9% 2.7% 4.4% 1.9% 0.4% 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 22

25 2Q18 Earnings Release Sales (R$ million) Sales in the shopping malls in which CCP holds an interest totaled R$732 million in 2Q18, 4% down on 2Q17, due to the truckers strike in May, which lasted 10 days, and the World Cup in June, which reduced the flow of customers in shopping malls. Moreover, sales in 2Q17 were positively impacted by the release of the government severance funds and the Easter, which was celebrated in the first quarter this year. Sales in CCP s shopping malls had a CAGR of 9.5%, calculated since 1Q14, representing actual growth of 3.2% p.a. CAGR +9.5% 4.0% Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 Parking Flows at the Shopping Malls (million vehicles) In 2Q18, CCP s shopping malls received approximately 2.6 million vehicles in their parking lots, a decrease of 10.4% over 2Q17, due to the truckers strike in May and the World Cup in June. CAGR +3.4% 10.4% Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 23

26 2Q18 Earnings Release 3. Financial Performance The analysis in this section refers exclusively to accounting data consolidated in accordance with IFRS criteria unless otherwise stated. 3.1 Gross Revenue CCP s gross revenues amounted to R$174.3 million in 2Q18, 52.6% up on 2Q17, due to the sale of 8% of its interest in Shopping Cidade São Paulo. The increase recorded in 1H18 was 30.6% higher than in 1H17. Gross Revenues per Segments (R$ '000) IFRS 2Q17 2Q18 2Q18 X 2Q17 1H17 1H18 1H18 X 1H17 Corporate Buildings 35,771 34, % 66,305 67, % Shopping Center 56,217 54, % 108, , % DistribuTion Centers 783 NA 1,538 NA Subtotal Leasing Revenues 92,771 89, % 176, , % Services 21,405 22, % 41,712 45, % Subtotal Recurrent Revenues 114, , % 218, , % Real Estate Sales and Development 74 62, % 86 62, % Total 114, , % 218, , % Recurring Leasing Revenues (R$ million) Recurring leasing revenues totaled R$89.4 million in 2Q18, 3.7% lower than the R$92.8 million recorded in 2Q17, due to the Flight to Quality initiative implemented to Class A offices, which reduced the segment s revenue by 17.5%. 92, % 89,366 26,534 26,939 9,237 7, % 30.1% 56,217 54, % Q17 2Q18 Triple A Offices Class A Offices Shopping Centers Distribution Centers 24

27 2Q18 Earnings Release 3.2 Cost Leasing, sales and service costs totaled R$80.2 million in 2Q18, 106.9% up on 2Q17, due to the recognition of costs related to the sale of 8% of its interest in Shopping Cidade São Paulo and the depreciation of the Miss Silvia Morizono building, which began to be accounted for in 4Q17. Year over year, leasing costs alone increased by 2.1% in 2Q18 over 2Q17. However, leasing costs fell by 3.1% in 1H18 over 1H17. Costs per Segment (R$ '000) IFRS 2Q17 2Q18 2Q18 X 2Q17 1H17 1H18 1H18 X 1H17 Corporate Buildings 3,948 3, % 8,312 8, % Shopping Centers 19,916 20, % 40,244 38, % Distribution Centers % % Subtotal Leasing Revenues 24,057 24, % 48,924 47, % Services 13,894 14, % 27,374 30, % Real Estate Sales and Development , % 1,184 41, % Total 38,776 80, % 77, , % 3.3 NOI Net Operating Income CCP s NOI came to R$77.6 million in 2Q18 (2.8% down on 2Q17), while in 1H18 the upturn was 3.6% over 1H17. The NOI margin increased 0.8 p.p. in 2Q18 over 2Q17, reaching 86.9%, while in 1H18 the increase was 2.6 p.p. NOI (R$ '000) IFRS 2Q17 2Q18 2Q18 X 2Q17 1H17 1H18 1H18 X 1H17 Revenues from Rent 92,771 89, % 176, , % ( ) Direct Expenses of Development (12,913) (11,723) 9.2% (28,177) (23,659) 16.0% NOI 79,858 77, % 148, , % NOI Margin 86.1% 86.9% 0.8 pp. 84.0% 86.6% 2.6 pp. 25

28 2Q18 Earnings Release 3.4 Financial Result Financial Results (R$ '000) IFRS 2Q17 2Q18 2Q18 X 2Q17 1H17 1H18 1H18 X 1H17 Financial Expenses (66,080) (47,963) 27.4% (133,329) (88,740) 33.4% Financial Revenues 8,232 8, % 22,522 16, % Total (57,848) (39,152) 32.3% (110,807) (72,678) 34.4% Financial Expenses (R$ million) Financial expenses came to R$48.0 million in 2Q18, 27.4% down on 2Q17, essentially due to the prepayment of R$740 million in debt in 2017, resulting in lower financing expenses, lower interest rates and liability management Q Q Q Q Q Q Q Q % * * 2Q17 3Q17 4Q17 1Q18 2Q * Recognition of capitalized interest 3.5 Net Income CCP posted net income of R$23.0 million in 2Q18, R$40.0 million up on 2Q17, while in 1H18, net income increased by R$68.7 million. The upturn in net income in 2Q18 was chiefly due to the decline in financial expenses in 2017 and the sale of Parque Shopping Belém and the interest held in Shopping Cidade São Paulo. Net Income (R$ '000) 2Q17 2Q18 2Q18 X 2Q17 1H17 1H18 1H18 X 1H17 Net Income (Loss) (17,048) 23,000 NA (36,734) 31,993 NA Net Revenues 106, , % 204, , % Net Margin 15.9% 13.9% 29.8 pp. 17.9% 11.8% 29.7 pp. Net Income per Share (R$) (0.142) NA (0.307) NA 26

29 2Q18 Earnings Release 3.6 FFO Funds from Operations CCP s FFO increased by R$40.9 million in 2Q18 over 2Q17 and by R$71.7 million in 1H18 over 1H17. Adjusted FFO came to R$25.2 million in 2Q18, R$18.9 million up on 2Q17. The adjusted FFO margin reached 13.5% in 2Q18, 17.8 p.p. higher than in 2Q17. Adjusted FFO (R$ '000) IFRS 2Q17 2Q18 2Q18 X 2Q17 1H17 1H18 1H18 X 1H17 Net Income (Loss) (17,048) 23,000 NA (36,734) 31,993 NA (+) Depreciation and Amortization 11,263 12, % 20,934 23, % FFO (5,785) 35,151 NA (15,800) 55,883 NA (+) Extraordinary Gains (Losses) (1,501) (11,231) NA (903) (21,842) NA Sale Result 756 (17,188) NA 1,104 (17,188) NA Capitalized Interest 2,006 7,605 NA (3,419) 8,355 NA AFFO (4,524) 14,336 NA (19,018) 25,208 NA Adjusted Net Revenues 106, , % 204, , % Adjusted FFO Margin 4.2% 13.5% 17.8 pp. 9.3% 12.0% 21.3 pp. FFO per Share (R$) (0.038) NA (0.159) NA 3.7 EBITDA In 2Q18, EBITDA totaled R$84.4 million, an increase of 55.2% over 2Q17. In 1H18, EBITDA edged up by 31.9% over 1H17. Second quarter EBITDA margin was 50.9%, while in 1H18 it came to 54.4%. EBITDA (R$ '000) IFRS 2Q17 2Q18 2Q18 X 2Q17 1H17 1H18 1H18 X 1H17 Net Income (17,048) 23,000 NA (36,734) 31, % (+/ ) Income Tax and Social Contribution 7,457 10, % 15,691 18, % (+/ ) Financial Results 57,848 39, % 110,807 72, % (+) Depreciation and Amortization 11,263 12, % 20,934 23, % Total EBITDA 59,520 84, % 110, , % Net Revenues 106, , % 204, , % EBITDA Margin 55.7% 50.9% 4.8 pp. 54.0% 54.4% 0.4 pp. Sale Result (747) (30,341) NA 1,190 (40,952) NA Total Adjusted EBITDA 58,773 54, % 111, , % Adjusted Net Revenues 106, , % 204, , % Adjusted EBITDA Margin 55.0% 51.1% 3.9 pp. 54.6% 50.4% 4.2 pp. Margem EBITDA ex Park Place 61.7% 58.1% 3.6 pp. 61.5% 57.1% 4.3 pp. Excluding the results from Park Place, the company that manages the parking lots in office buildings and shopping malls, the EBITDA margin was 58.1% in 2Q18, 7.2 p.p. higher than the unadjusted EBITDA. This effect was a result of the transfer of revenue from the parking lots to CCP s developments. 27

30 4. Liquidity and Debt (IFRS) Cash and Cash Equivalents and Financial Investments CCP closed 2Q18 with cash, cash equivalents and financial investments of R$542.5 million, equivalent to 14.4% of total assets. Indebtedness (IFRS) CCP s net debt totaled R$1,250.4 million at the close of 2Q18, 40% down from 2Q17, chiefly due to the prepayment of R$740 million in debt in As a result, CCP s leverage dropped significantly, with the Net Debt/EBITDA ratio reducing from 8.45x to 2.44x, improving the Company s capital structure. Net Debt (R$ '000) IFRS 6/30/2017 3/31/2018 6/30/2018 Debt 2,401,630 1,779,332 1,792,983 Loans and Financing 1,454, , ,623 Debentures 985, , ,406 Advance for future capital increase (38,527) (39,786) (46) Cash and Equivalents 329, , ,583 Cash and Equivalents 329, , ,583 Net Debt 2,072,096 1,270,785 1,250,400 Net Debt (R$ '000) IFRS 6/30/2017 3/31/2018 6/30/2018 Total Net Debt 2,072,096 1,270,785 1,250,400 Total Net Debt/EBITDA 8.45x 2.60x 2.44x Corporate Net Debt 617, , ,777 Corporate Net Debt/EBITDA 2.52x 0.63x 0.62x Net Construction Financing* 1,454, , ,623 Net Construction Financing*/EBITDA 5.93x 1.98x 1.82x * The cash effect is being considered only for Corporate Net Debt Changes in Net Debt 2, x 1, x 1, x 1, x 1, x 1, x 2, x 2, x 2, x 1,284 1,280 1,271 1, x 2.60x 2.44x 2.56x 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 Total Net Debt (000 ) Total Net Debt / EBITDA

31 2Q18 Earnings Release Verification of Financial Covenants 3.50 x 3.50 x 3.50 x 3.50 x 3.50 x 3.50 x 3.50 x 3.50 x 3.50 x 3.50 x 3.50 x 3.50 x 3.50 x 2.78 x 0.91 x 1.10 x 0.69 x 1.42 x 1.70 x 1.77 x 2.20 x 2.52 x 0.60x 0.66x 0.63x 0.62x 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 Corporate Net Debt/EBITDA LTM Covenant At the close of 2Q18, CCP had four corporate loans and six financing lines. The Company does not have dollardenominated debt. The financing lines are broken down as follows: Corporate Debt (R$ '000) IFRS Type Amount (R$ '000) Outstanding Balance (R$ '000) Cost Instalments Maturity Debentures 200, , % CDI Quarterly / Semiannual ago 19 Debentures 92,000 83,490 CDI + 1,20% per year Monthly out 26 Debentures 200, ,384 CDI + 2,32% per year Semiannual nov 20 Debêntures 450, ,489 CDI + 1,40% per year Semiannual jan 23 Total 942, ,406 Production Financing (R$ '000) IFRS Type Amount (R$ '000) Outstanding Balance (R$ '000) Cost Instalments Maturity Real Estate Credit 122, ,571 TR + 9,30% per year Monthly ago 24 Real Estate Credit 184, ,507 TR + 9,00% per year Monthly ago 28 Real Estate Credit 90,000 76,090 TR + 9,20% per year Monthly ago 24 Real Estate Credit 125, ,756 TR + 9,52% per year Monthly jan 30 Real Estate Credit 104, ,289 TR + 9,85% per year Monthly mar 30 Bank Credit Bills 350, ,410 TR + 9,60% per year Semiannual dez , ,623 Approximately 52.1% of CCP's debt instruments are indexed to the reference rate (TR), which allows the Company to have longer repayment terms. Although it is a floating index, the TR is closely administered by the government, making its variations less volatile, thus increasing its predictability. Average cost of debt 2Q17 2Q p.p % 7.98% 1.2 p.p % 9.57% Corporate Production Cost with corporate and production loan averaged 7.98% and 9.57% in 2Q18, respectively, versus 11.59% (corporate) and 10.77% (production) in 2Q17. 29

32 2Q18 Earnings Release The Company s debt profile is long, with larger amounts being due no sooner than Indebtedness by Index Amortization schedule (R$ million) CDI; 47.9% TR; 52.1% Production Financing Corporate Amortization 2024 onward Capital Stock and Shareholders Equity On June 30, 2018, the Company s capital stock totaled R$799.8 million, represented by 119,663,612 registered common shares (119,415,674 ex treasury) distributed among the block of controlling shareholders, the Company s treasury and investors (free float). Shareholders equity closed 2Q18 at R$1,194.6 million. Capital Markets Ownership Breakdown CCPR3 R$/Share (6/30/2018 closing) R$ Number of Stocks (millions) Market Cap (R$ millions) Free Float 21.97% 2Q18 Variation Verde (2); 11.7% Others; 11.0% Control; 49.2% CCPR3 44.1% IBOVESPA 12.0% IMOB 6.9% Leo K. (1); 28.0% (1) Leo Krakowiak (2) Verde Asset Management/ Verde Serviços Internacionais 30

33 2Q18 Earnings Release Sustainability In 2007, CCP became a founding member of the Green Building Council Brasil (GBC Brasil), an institution that promotes sustainable construction in the country and supports the transformation of the sector s entire production chain. All projects managed by CCP follow strict social environmental responsibility criteria, several of which being committed to obtaining and maintaining the LEED (Leadership in Energy and Environmental Design) certification, granted by the U.S. Green Building Council (USGBC), globally recognized as a benchmark in the evaluation of constructions with low environmental impact and that ensure healthy occupation conditions. About CCP CCP is one of Brazil s leading companies in the development, acquisition, leasing, sale and management of commercial real estate. It focuses on triple A office buildings, shopping malls and distribution centers, with investments in the states of São Paulo, Rio de Janeiro, Minas Gerais, Goiás and Bahia. Currently, it has thousand sq.m. of leasable area in operation. With over 17 years of experience in the sector, the Company is the result of the spin off of Cyrela Brazil Realty s commercial property activities in The Company is listed in the Novo Mercado Special Corporate Governance Segment of the São Paulo Securities, Commodities and Futures Exchange (BM&FBovespa), trading under the ticker CCPR3. Commitment to Arbitration The Company is subject to arbitration through the Market Arbitration Chamber, pursuant to the Arbitration Clause provided for in the Company s Bylaws (Chapter X, Article 58). Investor Relations Contact Information Thiago Muramatsu Chief Financial and Investor Relations Office Phone: (11) ri@ccpsa.com.br George Coura Financial and IR Manager Phone: (11) george.coura@ccpsa.com.br Fernanda Graça Couto IR Analyst Phone: (11) fernanda.couto@ccpsa.com.br The figures presented herein should be read together with the Financial Statements of the Company and their accompanying Notes. The amounts are expressed in Brazilian reais, except when indicated otherwise, and were prepared in accordance with Brazilian Generally Accepted Accounting Practices (BR GAAP) and the International Financial Reporting Standards (IFRS), issued by the International Accounting Standards Board (IASB). Operational data, including EBITDA and Adjusted EBITDA, have not been subject to independent audit. This Report includes or may include forward looking considerations and statements based on historical facts and reflects the expectations and objectives of CCP s management. These considerations involve risks and uncertainties and therefore do not constitute guarantees of future performance. CCP's future results may differ materially from those presented due to several important factors, including the economic, political and business scenario in Brazil (especially in the regions where CCP s projects are located); the successful implementation of CCP s business strategy and investment plan; the ability to purchase equipment/hire third parties without interruptions and at reasonable prices; competition; risks associated with property development, construction, leasing and property sales; the risk of not receiving results from the subsidiaries (as a holding company); regulatory risks; the risk of not developing an active and liquid market for CCP s shares; and other existing or imminent risks, whether known or unknown by CCP. CCP does not take responsibility for investment decisions based on information provided herein. Under no circumstances should this Report be considered as a recommendation for the acquisition of shares issued by CCP. When deciding to acquire shares issued by CCP, potential investors should make their own analysis and evaluation of CCP's financial condition and activities, as well as of the risks involved in said investment. 31

34 2Q18 Earnings Release Exhibit 1 Operational Analysis Occupancy Analysis Office Location Total Private Area (sqm) CCP Private Area (sqm) Physical Vacancy (1) Financial Vacancy (1) Conclusion/ Aquisition Triple A Offices 128,704 48, % 10.8% JK Financial Center SP Juscelino Kubitschek 13,144 2, % 0.0% 1998 Corporate Park SP Itaim Bibi 17,219 1, % 0.0% 1999 Faria Lima Financial Center SP Faria Lima 26,693 12, % 0.0% 2004 Faria Lima Square SP Faria Lima 18,244 8, % 0.0% 2005 JK 1455 SP Juscelino Kubitschek 22,148 6, % 15.2% 2008 CEO North Tower RJ Barra da Tijuca 14,968 2, % 37.5% 2013 Miss Silvia Morizono SP Faria Lima 16,289 13, % 32.3% 2017 Class A Offices 115,997 41, % 13.7% Nova São Paulo SP Chác. Sto. Antonio 11,987 7, % 0.0% 1994 Verbo Divino SP Chác. Sto. Antonio 8,386 5, % 0.0% 1994 ITM SP Vila Leopoldina 45,872 17, % 7.8% 1996 Centro Empresarial Faria Lima SP Faria Lima 14,483 1, % 0.0% 1998 Brasílio Machado SP Vila Olímpia 11,544 5, % 63.6% 1998 Leblon Corporate RJ Leblon 4, % 0.0% 2002 Suarez Trade BA Salvador 19,524 2, % 30.0% 2008 Total 244,700 89, % 11.5% Shopping Center Location Total Private Area (sqm) CCP Private Area (sqm) Physical Vacancy (2) Financial Vacancy (2) Conclusion/ Aquisition Shopping D SP São Paulo 29,044 9, % 11.8% 1994 Grand Plaza Shopping SP Santo André 69,503 42, % 2.3% 1997 Shopping Estação BH MG Belo Horizonte 36,652 14, % 1.8% 2012 Shopping Metropolitano Barra RJ Rio de Janeiro 44,122 35, % 10.3% 2013 Tietê Plaza Shopping SP São Paulo 37,360 9, % 4.4% 2013 Shopping Cidade São Paulo SP São Paulo 16,637 15, % 0.4% 2015 Shopping Cerrado GO Goiânia 28,369 15, % 42.8% 2016 Total 261, , % 5.4% TOTAL CONSOLIDATED 231, % 8.30% (1) Referring to CCP s area (2) Referring to 100% of the property 32