Iguatemi (IGTI3) Q2 2024 earnings summary

Executive summary

• Achieved strong operational and financial performance in Q2 2024, with total sales reaching R$4.95 billion, up 7% year-over-year, and resilient portfolio management despite severe flooding in Rio Grande do Sul.

• Adjusted EBITDA rose 11.5% to R$233 million, with margin improving to 73.1%; adjusted net income increased 24.6% to R$107 million.

• Completed significant M&A activity, including the sale of stakes in São Carlos and Alphaville, and the acquisition of a 16.6% stake in RioSul, marking a return to the Rio de Janeiro market.

• Issued R$700 million in CRI, extending average debt maturity to 4.7 years and improving liquidity.

• Released a comprehensive sustainability report outlining ESG commitments and achieving a 93.7% waste reuse milestone.

Financial highlights

• Net revenue for 2Q24 was R$301 million, with adjusted net revenue up 3.4% to R$318.5 million; adjusted FFO rose 19.3% to R$154 million.

• NOI margin reached 93.2%, and gross revenue from malls increased 3.7% to R$325 million.

• Rental revenue grew 3.3%, driven by 17.8% growth in overage rental and 15.3% in temporary rent.

• Sales per sqm in malls increased 8% to R$7,929; rental per sqm rose 3.7% to R$593.

• Financial expenses fell 20.6% to R$93 million, with cost of debt at 11.1% p.a.

Outlook and guidance

• 2024 guidance targets 4–8% net revenue growth and 82–85% EBITDA margin for malls, with 6.1% net revenue growth and 79.7% EBITDA margin achieved in 1H24.

• Investment guidance for the year is R$190–230 million, with R$104.3 million invested in 1H24.

• Margin improvement is expected in the second half due to seasonality, reduced discounts, and additional revenue from lot sales.

• July sales grew 11% year-over-year, and occupancy rate and tenant health remain strong entering 2H24.

• Expects continued positive lease spreads and strong sales momentum into 2025.