Multiplan Empreendimentos Imobiliários (MULT3) Q3 2024 earnings summary

Executive summary

• Net income increased 15.4% year-over-year to R$828.5 million for the nine months ended September 30, 2024, with efficiency gains, higher margins, and strong leasing and real estate sales driving growth.

• Net operating revenue reached R$1,608.5 million, up 10.2% year-over-year, and gross profit margin was 84.6%, reflecting robust performance in the core leasing segment.

• Major events included the sale and acquisition of land and stakes in shopping malls, share buybacks, and the launch of new residential projects.

• Digital strategy advances with the Multi app, achieving over 7 million downloads and a 55% increase in unique users.

• Operational and financial results are growing quarter on quarter, with expectations for a strong fourth quarter driven by Black Friday and Christmas events.

Financial highlights

• Net income for the nine months was R$828.5 million, up from R$717.9 million year-over-year; basic EPS was R$1.43.

• Net operating revenue increased 10.2% year-over-year to R$1,608.5 million; gross profit margin remained above 84%.

• 3Q24 net revenue: R$545.2M (+6.5% vs. 3Q23); EBITDA: R$401.1M (-2.8%); Net income: R$93.2M (+6.1%).

• Same Store Sales (SSS) grew 10.3% in 3Q24 vs. 3Q23, with all segments showing positive growth.

• NOI margin reached 93.2%, and company expenses are at 8.5% of net expenses, setting new records.

Outlook and guidance

• Seven mall expansions totaling 67,288 sq.m of GLA are planned through 2027, with approximately 200,000 sq.m in potential expansions.

• Management expects positive net working capital at the parent level after debenture settlement, with consolidated net working capital already positive at R$818.6 million.

• CapEx for reworks and expansions to remain elevated for another year to year and a half, normalizing to pre-pandemic levels thereafter.

• Deleveraging expected to continue naturally through cash flow and selective asset sales, maintaining a comfortable leverage threshold.

• Positive environment expected to support further margin and profitability improvements.