Allos SA

BOVESPA:ALOS3

Earnings Call Analysis

Company Reports Strong Q2 Performance with 41% FFO Growth Amid Continued Expansion

The company reported a robust second quarter, with investments in various shopping malls driving organic growth. Notably, there was an 8% increase in sales per square meter, and tenant sales grew by 5.8%. Net revenue rose by 3.8% to BRL 622 million, while EBITDA improved by 2%. A significant highlight was the 41% growth in FFO, attributed to effective liability management and operational performance, leading to a 50% margin. The completion of a BRL 1.8 billion disinvestment program and a share repurchase led to a solid cash position of BRL 3.7 billion, maintaining a comfortable leverage of 1.5x net debt over EBITDA.

Strong Performance Indicators

In the second quarter of 2024, Allos demonstrated robust operational performance with a net revenue of BRL 622 million, reflecting a year-over-year growth of 3.8%. This growth was significantly bolstered by a remarkable 25% increase in media revenue and a 40% surge in parking revenues. Tenant sales also showcased positive momentum, reaching BRL 9.4 billion, which translates to a 5.8% increase compared to Q2 2023.

Strategic Investments and Renovations

Allos is actively investing in revitalizing its shopping centers. Significant projects include the ongoing improvements at Parque Dom Pedro, set to be completed by Christmas 2024, and advancements in Villa Lobos and Shopping da Bahia, expected to debut next year. This strategy aims to enhance customer experience and drive organic growth.

Improvement in Margins

The company's operational efficiency is evident as the FFO (Funds From Operations) per share surged by 41%. The operational margins have climbed to 50%, marking an 11 percentage point increase compared to last year, highlighting effective management of liabilities and operational costs.

Shareholder Returns and Repurchases

In addition to strong performance, Allos is committed to returning value to its shareholders. In 2024, the company has earmarked BRL 956 million for its share repurchase program and paid out BRL 602 million in dividends, totaling BRL 1.1 billion in returns—equivalent to a 10% cash return for shareholders.

Occupancy and Leasing Trends

The occupancy rate remains stable at 96.3%. In Q2, the cost of occupancy decreased to 10.5%, benefiting from strong sales performance. Furthermore, the company is witnessing a favorable lease spread growth of about 10%, signaling a positive rent adjustment environment that outpaces inflation.

Financial Health and Leverage

As of June 2024, Allos maintains a comfortable cash position of BRL 3.7 billion with a leverage ratio of 1.5, calculated as net debt to EBITDA. This positions the company favorably amid a less liquid M&A landscape, allowing for careful capital deployment.

Sustainable Growth and Future Guidance

Looking ahead, Allos remains optimistic about future growth. The guidance projects a revenue increase, with a focus on maintaining a dividend payout of 50%. The management intends to navigate potential market conditions carefully and enhance shareholder value through strategic investments and capital allocation.

Emerging Media Business

Allos's media business is emerging as a critical growth driver, achieving a revenue of BRL 35 million—an increase of 25% year-over-year. This segment's contribution to total revenue is rising, reflecting the company's efforts in digital transformation and brand partnerships.

Earnings Call Transcript 2024-Q2

[Operator]

[Interpreted] Thank you for waiting, and welcome to the earnings call of Allos for the discussions of the results regarding the second quarter of 2024.

We have here with us today, Mr. Rafael Sales, President; Leandro Lopes, VP of Business; Vicente Avellar, Director of Operations; and Ms. Daniella Guanabara, Directors of Investor Relations.

And this event is being recorded. [Operator Instructions] This event will be transmitted simultaneously via webcast, and you can access it at the ri.allos.co address, where you have this presentation available. A replay of this event will be available after the closing for a period of 1 week.

We would like to inform that questions can only be asked through the Zoom app. Should you be connected via the webcast, your question has to be submitted directly to the IR team through the e-mail, [e-mail].

Before continuing, we would like to clarify that any statements that might be done by the -- during the earnings call regarding the business perspectives of the company, projections and operational goals and financial goals are based on the beliefs of the company as well as based on information that is readily available.

Forward-looking statements are not guarantees of our performance. They involve risks and uncertainties and premises and they're regarding forward-looking statements. And therefore, they depend on circumstances that may or may not occur. Investors should understand that economic general conditions, industry conditions and other factors, operational factors, might affect the forward performance of the company and might lead to results that are materially different from those expressed in the forward-looking statements.

Now I'd like to give the floor to Mr. Gonzales (sic) [ Guimarães ], and he will start the presentation. The floor is yours.

[Rafael Guimarães, executive]

[Interpreted] Good afternoon, everyone. Thank you for your interest in taking part.

Now I would like to start today's call with an update on the investments that we've been doing in our shopping malls. We started with another important stage at the revitalization of Parque Dom Pedro in the area of the shopping mall and the other parts of the mall. This project will be connected -- completed by Christmas this year. Continuing other works that will transform the former restaurant place, we're going to offer a better gastronomic experience. The project should be done by this year.

Besides that, we advanced in the development of Villa Lobos and Shopping da Bahia. They're going to have a differentiated look and updated for our clients. These projects have the projection of being delivered by next year.

June, we have the Northern zone of Rio, the expansion of Tijuca Shopping, another 2,100 of [ GLB ], 22 new operations, bars and restaurants, and we are going to have the restaurants that are carefully selected and with different options of food. And the child area, that's going to bring a lot of comfort for the shopping mall. We're going to have the new areas for shows.

Projects such as this allow the organic growth of our shopping malls in the company. The return rate, very good once our shopping malls are used -- are ready to pass on through the transformation.

So let's talk about our results in the second quarter. Second quarter continues to deliver strong results of the company. And the redirection of the portfolio and organic growth, we can see the operational indicators that are improving. We have an 8% growth in the square meters in sales, going over BRL 1,800 per square meter.

The indicator since 2019, you can see on the graph, and we delivered the average growth of 8.6% per year, much above the inflation of that period. That demonstrates the success of our portfolio management and the mix.

The sales of our tenants, they got to BRL 9.4 billion in the quarter, which is a growth of 5.8% versus the second quarter of '23. In the cumulative of the year, we have the performance of the Southeast region, a growth of 9.2%. Southern region, 9%. And we had the performance of shopping that way.

In July, we have the same rhythm in terms of growth in sales. Up ahead in the presentation, I'm going to bring you some more numbers of the operational indicators of the quarter.

Slide 3. Regarding to the results of the company. And here, we had a net revenue of BRL 622 million, a growth of 3.8% in regards to the previous year, impacted by -- positively by the increase of 25% in media and 40% in parking.

Today, all the shopping malls of the company has the media business that is operated by helloo. We see the media revenue, and we are very trustworthy in the high potential of this business.

And in the quarter, the rent reached BRL 468 million, which is a growth of 1.3%, a positive number regardless of the effect that GMV in the revenue of this period.

The same-store rent also grew in a consistent way, if you consider inflation, 2.3% above EBITDA, had a growth of 2% in regards to the same quarter of the last year, affected by the IGP-M tax and by the expenses that impacted very concentrated in the second quarter of this year.

From the third quarter onwards, we're going to have an operational result with a regrowth of growth and seeing a trend that is closer to what we had in the first quarter of the year.

The FFO per action has a resolution that is very expressive of growth, a growth of 41%. That performance was done because of the management of these liabilities that reduce the cost of the indebtedness that aligned to the performance -- operational performance allowed us to get to the 50% margin in this year, 11 percentage points higher than the previous year, than the second strong quarter of last year. And we had the execution of the repurchasing of sales -- shares that reduced the capital base of the company.

Before giving the floor to Dani, I would like to pinpoint that in the second quarter, it marked the conclusion of the disinvestments that we had announced since the third quarter of last year, with the entry of BRL 1.8 billion in resources for the company and with the concentration of the shopping malls that are aligned to our long-term strategy.

Regardless of the current scenario of less liquidity in the M&A scenario, in comparison to the past, we are executing the disinvestment program that we announced in March of this year, always focused in sustainable growth for the company and value generation for our shareholders.

In regards to the repurchasing program, it's important to update you on the repurchasing of sales program. We have allocated BRL 956 million in the projection of the shares of this year of 2024. If we add that to the BRL 602 million of dividends paid in this year, we have BRL 1.1 billion in returns for the shareholders, 10% cash for our shareholders.

Still, we closed the quarter with a cash of BRL 3.7 billion and a leverage of 1.5 of the net indebtedness over EBITDA. That's a comfortable cash position also.

And we should highlight that in July of this year, we grew in a great deal in the shares that were acquired until the month, with 31 million shares canceled, and that's equivalent to over the 5% of the capital of the company. In the last program of repurchasing approved 21 million shares, we still have BRL 7 million that we have to acquire in this business.

We continue to want to deliver consistent results, seizing the opportunities for cash for value generation for the tenants, shareholders and consumers and for society.

Now I give the floor to Dani, and then I'll return for the Q&A session. Thank you. Have a nice day.

[Daniella Guanabara, executive]

[Interpreted] Thank you, Rafael. Now going to Slide 4. We continue to seize the opportunity of the seizing of the big areas with privileged localization and the potential for redevelopment and satellitization. The volume of signed contracts, 191 in the quarter, kept the occupancy rate stable at 96.3%, besides reinforcing the participation in the mix in the shopping malls as the wholesale offer that is more align-able for the consumers -- the retail, sorry. The commercialized GLA was 27,600 square meters.

We continue to be part of the expansion of big brands. Vivara in launched 5 stores, Vivara Life, in our shopping malls. Sephora launched in Londrina, Adidas in Parque Dom Pedro, [ Barra De Sao Pip ] and Coco Bambu in Plaza Sul.

Now going to Slide 5. We have the cost of occupancy that closed in 10.5% in the second quarter of the year, a little bit below from what was reported in '23 due to the strong performance of sales. The indebtedness was liquid was 1.1%, which was 141 bps drops in regards to the second quarter of '23.

Slide 6. We see that in the second quarter of '24, our indebtedness is dropped to CDI plus 0.7%, a reduction of 10 bps in the spreads of CDI. This reflects the management of liabilities that was done all throughout the next quarters.

On the profile of our debt, we closed this quarter with 86.5%, index [ UCI ]; 13.2%, prefixed; and 0.4% in inflation. In regards to the leverage, the relationship is that indebtedness over EBITDA, 1.5x.

In April '24, we concluded the first issuance of debentures of Allos, capturing BRL 1.2 billion. This result reinforces the trust in the market, in our business strategy and the financial solidity. We had the excess of demand and we exercised the additional lot option, which allowed us to reduce the cost of debt to CDI plus 0.52% earlier. And we have an evidence of low perception of risk of the market and the strength of our brand.

Now going to Slide 7. We can talk about the media business that continues as a highlight for the growth of the company quarter-on-quarter and the invoicing of BRL 35 million in the second quarter of '24, which is a growth of 25% in regards to the same period of the previous year.

As a percentage of the gross revenue of Allos, we have the media business that advanced 90 bps in regards to the second quarter of '23, reaching 5.2%. In the second quarter of '24, helloo advanced with a strategy for growth and expansion of coverage. We did the digitalization of 4 new shopping malls for the installation of 900 stores and elevators in residential buildings, getting to 13,000 screens in buildings. So with that, we are reaching 1,100 screens in shopping malls.

helloo Live, the live marketing agency that is focused in shopping malls in residential condominiums, expanded its work, focusing in brand experience. The interesting example of helloo Live was Coke Club. Along with the media brands, Coca-Cola launched its new flavor in an exclusive launch in NorteShopping.

As a part of the strategy, we created the Coke Club experience that allowed the consumers an immersive experience. With helloo Live, the brands are having the opportunity to explore new formats for communication. And that not only promote the products but also creates a memorable experience to strengthen the connection to the consumers.

And now going to Slide 8. In the second quarter of '24, we continue to evolve in our programs of loyalty. And today, we have 2.2 million clients that use our app. It was over 2,500 benefits available for the rescue in the second quarter of '24, which is a growth of 55% in regards to the second quarter of '23.

In the second quarter, we launched the new Solar Shopping Leblon, and the results show how the loyalty program that is maturing impacts positively and significantly the journey of the consumers and tenants of Shopping Leblon. In the first quarter of the utilization of this app, the GMV captured increased by 59% facing the previous quarter of '23. So the prediction is that all the malls of the company will have their own loyalty programs after the year of '25.

Now continuing in the presentation, we bring you a few recent highlights of the sustainability journey. The commitment of Allos with sustainability, a lot of projects and initiatives that encompass several social causes. In April '24, Allos published its first sustainability report as a combined company. The report reinforces the strategy for sustainability of Allos, reviewing the commitments for the sustainable life centers that guide the investment in projects and initiatives in the forefronts that are environmental, social and governance, with goals public and internal that should be reached by 2030 and ending at 2040. These are objectives for leveraging relations in several places, promoting the full development of collaborators and clients, reducing the carbon footprint and reducing the use of nonrenewable resources.

We also, in April, in Allos, we have a transformative initiative, Abril Azul. So this is regarding the autism spectra, and this is free for -- with the brochure that was launched. We also have sensory kits that were distributed and other initiatives.

In the quarter, we also had the first edition of Arraiá in Goiânia Shopping. For 3 days, 4 families got together to celebrate the parties in June, and the event was beyond a party. Due to the generosity of the visitors, we got 6 tons of nonperishable foods that were donated for the association, [ Teatro Hubaldo Des Arrescas ], people that are homeless and families that are socially vulnerable.

Besides in agreements with -- Allos distributed potable water and food for the population of Rio Grande do Sul, besides transforming our shopping malls, which are Villagio Caxias and Praça Nova Santa Maria, in centers of welcoming and donations.

Now going to Slide 10, we would like to thank and say that we are very honored to receive, for another year, the recognition of the market with the work of the Team Allos. We got the Most Honored Company in sector of mid-cap Lat Am real estate by institutional investors. We are in first place in 6 out of the 8 categories, including Best CEO and Best CFO. Besides, we are amongst the 3 better in the other 2 categories.

Thank you very much. And now we will start the Q&A session.

[Operator]

[Interpreted] [Operator Instructions] The first question is from Ruan Argenton from XP.

[Ruan Argenton, analyst]

[Interpreted] Congratulations on the results. I have 2 things that I would like to discuss. First, capital allocation. We have the plan for capital allocation and purchasing of assets in Rio Grande do Sul. My question is more to understand. How do you evaluate new opportunities for purchasing and participation in the assets? We know that there are 2 assets that you might have a negotiation on the short term. But I wanted to understand, what is your appetite and what would be the ways of funding that you would think that would be viable for such a thing?

Second, on recycling, you commented that there seems to be less liquidity for the assets in comparison to 2023. I just wanted to understand how has that affected the -- your negotiations. Is it more difficult to get larger fractions of the assets for sale? Or was there any change in the negotiations for these assets?

[Unknown Executive]

[Interpreted] In terms of capital allocation, as you know, we've been working all throughout the next year. So we have a portfolio of shopping malls that are relevant in the market, and they can provide the consumers in every single city that we are with an experience that is differentiated at each of the markets and with an adequate mix with the characteristics of the results and also over the invested capital.

So we can continue to invest in the assets and invest in the shopping malls so that we continue to enchant people. So this is to reinforce both acquisitions and disinvestments, reinforce these characteristics. We have here today the capacity for the investment, and we are in parallel doing negotiating the debts. The cost of capital in terms of debt is very vague and the shares are still discounted. So we have obviously more resources for the repurchasing as it was done over the next -- last 12 months and as we highlighted here.

But having the opportunity of consolidating shopping malls with this type of quality that we -- with the examples that you mentioned, we have the capacity to structure ways of investing that improve the -- that improve our return, with a balance on how much we pay in terms of the initial value and the acquisition cost. So with that, I cannot really get into the detail because it ends up helping -- it might hinder our negotiations. So I cannot give you any more details besides that. But we have, yes, funding, and we can improve this with interesting structures.

So in terms of re-dimension of the portfolio and the investments that we've done, we, today in the portfolio, a great deal, as you can see on the number of sales. Of the 46 shopping malls, a great deal, 44, sell over BRL 400 million. That's a nice threshold of value of total sales when you compare to any other group of shopping malls. It's a nice pace for purchasing, and that's why our occupancy is so positive.

Other shopping malls have good results. This investment has more to do with the capital use, additional capital, and with shopping malls in places where we cannot create this environment or create an experience that is so special as other shopping malls that are in this region or since the market is smaller, less potential of growth. And then we can have a -- we can lose to a specialist in the market or someone that is dedicated to a region that can generate more value, so -- for the other. And we can reallocate the capital for the conditions that I commented and repurchasing ourselves or investments in other shopping malls, as you mentioned. So this continues to be our strategy.

Actually, it didn't change the cap rate valuation. I don't think that it was so much affected. What we have is lower velocity for the conclusion of transactions once the resource is available have a longer process for capturing. And we continue to update you on that, so we can keep the transparency. And we can give you a return perspective that we're going to keep in our guidance, both of capital returns and this indication of guidance for these investments, which is our objective. Thank you.

[Operator]

[Interpreted] Next question, Pedro Lobato, Bradesco BBI.

[Pedro Lobato Garcia Fernandes, analyst]

[Interpreted] Good afternoon, everyone. First question is in regards to the cost of occupancy. It has been below what was in the past. And with a good performance of sales, we can see that it's growing 8%. It still contributed to a drop, so I wanted to get -- to understand how do you see this indicator. Looking up ahead, how should it be the strategy in the combination of the contribution of rent for this indicator? And what should we see up ahead?

And the second one, in regards to helloo, you mentioned this point that helloo has given a great representative in the revenue. Of course, in this quarter, maybe in the year, we saw an effect of the revenue of allocation that was weaker because of IGP-M. But now thinking about the IGP-M going back to the positive threshold, how do you see the representativeness of helloo in the mix of revenue of the company?

[Unknown Executive]

[Interpreted] In terms of the cost of occupancy, this is a consequence of the work of management and expenses that allows us to have -- to grow through the last years of inflation, without really having relative increases for our tenants. This allows us to have a healthy work and allows us to, in a scenario of the contracts, we are improving our rents.

This is a gradual process. There is no radical movement because these are long-term contracts structure, and we want our tenants to bring new certain shopping malls and that they are well operated and they can offer the best price for their clients. So this transference of value to rent has been positive. And the lease spread, the total that was invoiced, it's about 10% of growth. And of the renewal, it's about 4%. So we have here today a basis of increase of rent that is relevant above the inflation that will contribute to the results in the next quarters.

Another important point is that this quarter was the bottom of the effect of the IGP-M. From July, we start to see positive IGP-M in our portfolio and contracts, and this is positive for the company and for the results as well.

And talking about helloo, we discussed with helloo our PO, that is to announce in the shopping malls and the apartments around our shopping malls. This is a trend that is positive. But we expect -- we don't bother that the growth of rent should be -- well, we have the operator -- operations of helloo continues to grow, so we want to win in the rent and helloo. We don't have a target or a goal of percentage. If there is a space for increasing rent, of course, we have -- we want to do the adjustments that are reasonable and sustainable.

And in the same time, helloo has grown in absolute terms, which is our goal, 5.4% of the net revenue as it was today. It's a positive number, but we understand that this number will continue to grow all throughout the next years. And of course, within a quarter, there might be a variation in that number. But the most important thing is that helloo increases its relevance. And we're just starting to announce the shopping malls, understanding the live commerce and media, as Dani has commented, of launching in experiences in the shopping mall. This is just at the inception, and we are very optimistic with the growth in this sense.

[Operator]

[Interpreted] Next question, UBS, [ Lima Paes ].

[Unknown Analyst]

[Interpreted] My question is a follow-up of the M&A and the capital. Given the scenario that is more challenging that you commented, how can we apply -- think about capital structure for the next year? Because our doubt is basically, how do you plan to keep this 10%? And should it be more difficult, this investment that you announced, or even if it takes longer than it was planned? And would there be more space for the repurchasing or maybe increasing the guidance of the FFO for 2024 for the distribution of dividends?

[Unknown Executive]

[Interpreted]

Talking about the capital structure and this investment, we have the guidance of BRL 1 billion, not necessarily it's locked in this year. So it's not -- it's a promise of doing this investment of BRL 1 billion but not necessarily in a time line that is closed for the year. So as we evaluate the market conditions and as the possible purchasers of these assets have evaluated more positive conditions for the market, we will evolve.

In regards to the dividends, we have the guidance, 50%. That guidance remains. As we see market conditions that the cost of capital, where it's still worth that you do the repurchasing of the sales -- shares, in our minds, we had a trade-off that was very clear between the cap that we've been selling the assets, 8%, and repurchasing the shares at a higher cap has been very worth it. And we understand that this is a positive capital.

When we see this arbitrage, we have a second program of repurchasing that is still open. We still have a space for repurchasing. And if it ends, then we will eventually evaluate something else.

[Operator]

[Interpreted] Next question comes from Alejandra Obregon, Morgan Stanley.

[Alejandra Obregon, analyst]

Mine is a little bit of a big picture question, if I may. So we are close to maybe the 2-year anniversary of the merger, and now you own the second biggest public mall portfolio in Latin America. So I just wanted to stop and reflect a little bit on where you think you guys are in terms of this integration and what is left to be done at this stage. What are the biggest opportunities and challenges that you still see from this merger? And more importantly, whether you're seeing some, let's say, tangible ability to get more favorable terms with your tenants now that you have scaled up. Is there any, let's say, material NOI growth potential from these now that we are maybe 6, 7 quarters into the merger?

[Unknown Executive]

[Interpreted] Well, in terms of integration, of course, with a company that is of the size of Aliansce Sonae and brMalls, the integration leads takes more time than 1.5 years. And we got to this point with the integration. But having said that, we have the benefit of the management that was kept of the 2 companies of embracing the integration process in a way that I call the environment was a fusion.

The merger, a merger environment, this allows us to do the merger in a more natural way. We learn with each other. It's an effort that is -- that requires -- compromises a lot of will, passion for the business. And we saw that with the new team of Allos, of these teams that created Allos. So with that, we managed to capture several aspects of the results in the first year because in the previous year, that's what we saw that happened.

This year is less be -- because the revenue comes with a weight with the numbers that were commented. And also, with the change -- strong change of big areas that were substituted by the tenants that had problems, financial problems in the past. And that created an environment that created temporary vacancies that were covered, that were replenished all throughout last year and during the period that we were having the synergy.

So in the end, the fund -- the top line of synergies will take some time for us to capture as a whole, maybe a few years, 3 years at last -- at least. But the good part is that we are being able to anticipate the big areas and transforming them in better performance areas with the substitutions that we've done. This will generate results from the second quarter onwards with good occupancy, positive occupancy, and with contracts that counter the inflation and the effects of the negotiation of contracts.

All of that allows us -- well, it gives us comfort that we still have low-hanging fruits to be captured. But these are gains that are not so impactful on the short term as it was, for example, the synergies of helloo, synergies of parking lot synergies that we captured last year in terms of expenses.

We see an important gain of operational gain and efficiency when we implement our new [ IRP ] next year that will generate a reduction of expenses of software -- licenses of software and et cetera, which is a important step. And we keep the guidance of synergies that was announced. And in fact, we are very optimistic with this guidance of synergy, and we hope to have reached 80% of that number by next year when we have the implementation happening in the systems and the technological backbone of the company at the end of 2025. So we have this year, and we have a less effect in expenses of gains, gains and expenses, and next year with the acceleration in that. And in terms of the integration, well, it's what I just mentioned from the operational standpoint, that's it.

From a cultural standpoint, we created a company that is ever more innovative, more agile, that can bring more complete experiences for the consumers, products that are different for the marketing and the partners and the tenants and commercial partners. So this is our great challenge. And we continue to bring opportunities of business, and we hope that we will continue to capture, you'll comment, the NOI growth. We can have an NOI growth above the inflation with an efficiency that we are displaying. Even with a base that is adjusted in a way that is so low or not having any readjustment, we have been, nonetheless, having growth. So we expect that over the next few years, this growth comes along with gains in capability and efficiency.

[Operator]

[Interpreted] Next question comes from André Mazini, Citibank.

[André Mazini, analyst]

[Interpreted] Two quick questions. One is to confirm that a proportion of contracts in the IPCA rate of the company was about 30%. Remember, these IPCA contracts are from Sonae. But as these contracts are due, then it's an opportunity for you to change the index if you should like to do that change. Are you going to do the change to IGP-M or maybe do you want to just have your cost hedging by the IPCA rate? Maybe IGP-M is higher, but it would be more better to have an index that is more volatile, given that you don't have a nominal decrease within negative inflation. So is that your mindset? Do you go towards GP and/or it's the step? That's the first question.

And the second on parking lot. I confess that I didn't see if you gave the opening in having an increase of ticketer flow in the 14%, so if you can give us these details. Is it correct to affirm that the flow is still below what was in the pre-pandemic? Or if that's not the case, we're just talking about flows above the pre-pandemic. What can you tell us?

[Daniella Guanabara, executive]

[Interpreted] Mazini, Dani, thank you for the question. On the first one, we have an exposure to IPCA that is less 19%, 20%. So slowly, we are migrating to GP whenever we can.

In regards to the parking lot, what we've seen is a level of flow that is positive in the 3%, 4% range, with the difference that is the increase in the ticket and that we will evaluate as some of those might.

[Operator]

[Interpreted] Next question, [ Mattias Meloni ] from Santander Bank.

[Unknown Analyst]

[Interpreted] So on my side, I have 2 questions. I think the first one is I want to understand the rollout schedule for the loyalty program in the rest of the your portfolio.

Second, I want to understand the health of the tenant. We saw that the same-store sales is about -- of the shoes and clothing is a bit below what was in the previous quarter. What do you see in general for the health of the tenants?

[Unknown Executive]

[Interpreted]

[ Mattias ], thank you for the question. On our side, we have the loyalty program, and we have -- we are sure that this model is very mature, so we can do -- implement the loyalty programs in most of our shopping malls at the beginning of this year. Still this year, we are going to have Campo Grande and Parque Dom Pedro getting into this program as well as there was Leblon at the end of last year. So we, at the beginning of this year, and now there is Parque Dom Pedro, et cetera, and in March, we should have many other shopping malls. It's about 43 shopping malls that we have in the release in our list.

That's strategic for us. We know our consumers much better because of this initiative. It's a way of marketing management that is very efficient, and we can direct the consumer for experiences and opportunities of usage and gives us the opportunity for the tenants to show their products in a very assertive way.

At the same time, we know better the journey of our consumers and for those that actually work. We -- our business is to generate opportunity and knowledge, a better experience for these clients. Especially when we talk about marketing, offering marketing that is directed to our consumers in that sense. So this CapEx is that is being offered is within what was expected for this line. We are very at ease in the rest of the guidance. Everything is going in a positive way. So we can have a rollout that is done at our shopping malls until the end of the of last year -- of next year.

[Unknown Executive]

[Interpreted]

[ Mattias ], in regards to your second question, when we look at the performance of clothing and shoes, we see that in the first quarter, it was a performance of 5% of total sales. And within this subsegment, you have a few segments that are very strong, which are sport, which has a performance that is much higher than at the beginning of the year. And here, we have segments that are very strong, cosmetics in general, beauty services, jewelry and watches are performing well.

And on the negative side, when we analyze, it's more of the same, electronics segment still a bit below of the rest. But in general, with the portfolio, health care, that is good. In the cumulative of the year, we see good numbers.

[Operator]

[Interpreted]

Next question comes from Jorel Guilloty, Goldman Sachs.

[Wilfredo Jorel Guilloty, analyst]

[Interpreted] So you didn't change the guidance for the leverage, so that it doesn't exceed 1.9 the net debt over the EBITDA. So I wanted to know, how do you get to this number? Are you thinking about M&As? If you can give us some color on how you get to the leverage that you're displaying?

And the other question, more of a follow-up from -- for the previous question, understanding post-merger, I know that you gave some discounts for the tenants of some malls. But has that finished? And how -- if we can know what is the turnover for you guys now? That would be it.

[Daniella Guanabara, executive]

[Interpreted]

Jorel, in regards to your first question, we have changed that leverage guidance in the first quarter when we announced that we were going to do BRL 1 billion of guidance. Of course, in the disinvestment program, so the continuity of the disinvestment program and telling that we had an additional resources being added, we adjusted the leverage for 1.9, 1.4. But we've done that in the previous quarter.

In regards to this follow-up of Alejandra, if I understand your question correctly, then you're talking about the qualification of the mix of the shopping malls that come from brMalls. And when we compared both portfolios, they were very much alike. And we see, since the beginning of the fusion, we are implementing our system of mixed pricing.

As Rafa has commented, we had a period of analysis of 6 months before the first day of the operations that were combined. And we used that period to prepare the database and everything that we needed to start the year of '23 running the entirety of the portfolio with this new mixed price system. There is no difference in the mix between the 2 companies, and there is a cross opportunity.

Our group had the closer proximity to retail, so we did that exchange. We saw the mix of each to try and optimize. So today, we see big brands, Sephora, Adidas, Decathlon, Coco Bambu, all these big brands are being spread throughout the portfolio, and we don't see a predominance of change in mix in shopping malls that came from one legacy or the other. It's more of a complementation that has made our results doing -- have done very well at the beginning of this -- at least at the beginning of this year. We have a scenario that is challenging in terms of inflation. And all those additional revenues, media, parking lot, we've extracted a lot of value from these lines, regardless of the very challenging rent period.

[Wilfredo Jorel Guilloty, analyst]

[Interpreted] And a follow-up on the guidance of de-leverage. So in 1.9, you have 1.5 and you get to 1.9. How do you get from 1.5 to 1.9?

[Daniella Guanabara, executive]

[Interpreted] Well, if we have the CapEx, until the end, we can increase the repurchase all throughout the year, that's a possibility. And as Rafa has said, we evaluate the opportunities -- pinpoint opportunities for investments should we have the correct structure and we can give an adequate return. We evaluate that as well, so we can be closer to the high of the guidance.

[Operator]

[Interpreted] Our next question comes from Rafael Rehder, Safra.

[Rafael Rehder, analyst]

[Interpreted] I have 2 questions. First, I wanted to approach expansion. You announced a new one of Shopping Tijuca that should start next year. And besides that, we only have Shopping Maceió ongoing. Now getting your potential for leverage and the investments and the amount of land that you still have, could that increase your appetite for another shopping mall in the pipeline?

And the second question, I wanted to talk about the works. You have a very extensive pipeline. Now within the company, I wanted to understand whether you have an internal metrics to judge the success, getting to a minimum amount of growth of works in a shopping mall. It would be more in that sense. That would really help me.

[Leandro Rocha Lopes, executive]

[Interpreted]

Rafael, Leandro. So Tijuca, we are doing a few projects of redevelopments such as L4 of Leblon, and we are in the final phase of study to launch 2 shopping mall expansions that are very dominant in the city, and we should announce it very quickly. Very relevant is that we have Maceió and soon, we're going to launch 2 expansions that are very relevant.

In regards to the reworks, usually, we try to work along with expansions or in development that seek to improve the experience of the consumer. And what we follow up is the results of the shopping malls, specifically in the areas that we are working. Usually, it comes with a renewal of mix, and an effect of that is that you can see it in Parque Dom Pedro and Bahia, which are shopping malls that we started with a revitalization in this year over the last few years. And we see results that are very pertinent.

In practice, we do our planning that takes into consideration change of mix, takes into consideration the revenue of the parking lot, takes into consideration an increase of the NOI and above all, the experience of the consumer as a whole.

[Operator]

[Interpreted] Next question, Jonathan Koutras, JPMorgan.

[Jonathan Koutras, analyst]

[Interpreted]

So I have a question. We -- you talked about the rent, so there would be a relevant growth of 6% given helloo, the media. But just to understand, do you see more space for the growth of that line via the administrative rate of managing the shopping malls of third parties or not?

[Unknown Executive]

[Interpreted]

So first, helloo is in much many more malls than the shopping malls that we are shareholders and owners. We manage here the shopping malls of helloo. These media services, they are not the same drivers of knowledge with our business of administering business of third parties. These are 2 businesses that are very distinctive.

And here, you have the same profile of choosing the shopping malls, for example, that of the shopping malls that we want to invest. These are prioritary so that the radiologists -- and we can leverage the amount of management for what we do for our shopping malls.

And the third, the shopping mall doesn't grow a lot, but it's a shopping mall that is very relevant, very important to us, and it gives us scalability. It gives us the capacity. It allows us to offer more business opportunity for the tenants and more opportunities for developing our product and getting the best opportunity for usage. We are very careful when we want to manage a second -- another mall. We're going to announce this year another management this year, but this is not something that grows as helloo, for example, grows.

[Operator]

[Interpreted]

[Operator Instructions] Since we don't have any more questions, I would like to give the floor to Mr. Rafael Sales for the closing arguments.

[Rafael Guimarães, executive]

[Interpreted]

Thank you very much for your interest in our results. Our IR team will be available to answer additional questions that you have. And we welcome back in 3 months for the next results. Thank you very much.

[Operator]

[Interpreted]

Thank you. The earnings call of the second quarter of 2024 of Allos is closed. Thank you very much for your participation. Have a nice day.

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]