Multiplan Empreendimentos Imobiliarios SA

BOVESPA:MULT3

Earnings Call Transcript 2022-Q3

[Operator]

Good morning, everyone. Welcome to the Earnings Call of the Third Quarter of 2022 of Multiplan. We have here Mr. Jose Peres, CEO; Mr. Armando d’Almeida Neto, CFO and IRO; Mr. Marcello Barnes, the CIO; Mr. Pender Cordele, CEO; Mr. Hans Melchers, Planning and Investor Relations Director; and Mr. Richard Svartman, Digital Strategy Director. We would like to inform you that this event is being recorded, and you can download it the IR multiplan.com that be our website. Also, you will only hear the earnings call during the presentation. Thereafter, we will start with the Q&A. You will receive further instructions. [Operator Instructions]

Let's mention that forward-looking statements are based on the beliefs and assumptions of multi-client management and on information currently available to the company -- they also involve risks and uncertainties because they are related to future events and, therefore, depend on circumstances that may or may not occur. Investors should understand the conditions related to the macroeconomic scenario, industry and other factors could also cause results to differ materially from those expressed in such forward-looking statements. This teleconference will last approximately 60 minutes. After this period, the Investor Relations team will be available -- should you have any further questions.

Now I would like to give the floor to Mr. Jose Peres, President. He will start the presentation. Please, Mr. Baris, the floor is yours.

[Jose Peres, executive]

Good morning to everyone that is hearing, shareholders, journalists, people that are interesting. I would like to say that it is with great satisfaction that we will present the results, even though it's not my objective yet, my objective is larger. But now, I would like to say that this was the best quarter in the company's history when the sales go to 4.8 billion. This result come over the same period of last year. As a consequence, we've had a revenue of 400 -- well, tender was a revenue of BRL 186 million. I would like to highlight that this revenue was the best result that we've had in this quarter.

We had a revenue of 1.6 billion -- all of our shopping malls, they've had a growth that was very expressive. And I'd like to highlight that while we are also evaluated by the square footage sales. And here, we have the Velma, which is the youngest that is directed towards the upper middle class. This is the third in sales for square footage in sales, and he is only losing for Morumbi and BarraShopping, which are the shopping malls that are the ones that annually are chosen as the preferred ones by the population. This year, once again, we've had a great recognition from society that talked -- that pointed to Morumbi and BarraShopping, which are the best shopping malls in their respective cities.

We've also had an alarm in third place. But we had 2 champions. Hopefully, we're going to have more. I would like to say also that Veolia that suffered a lot with the dynamic because this is an area that is very much occupied by the office buildings. They're in the pandemic. A lot of people were working remotely. I personally was not, but a lot of people was working remotely and that affected the malls. And now with the return to the office life, almost 100%, [ Floripa ] already recovered and grew in regards to the previous quarter, 51%, which is very good, and it will reach its occupancy in a short while.

There is a very important detail and it's important to mention, technology. We used to talk about -- the technology was disruptive that commerce was going to be over and then we realize the shopping malls. Are the providers of big tenants that use a lot of technology. And we have the demonstration that today with our multi-app that got started quite short a while ago, we have 3 million downloads. And then we need to understand that the technology is a reinforcement for the tenant as it is as if they're opening an extra store, they're not foregoing the on-site without the Onsite, we wouldn't have the conditions to continue, of course. And having the on-site, the sales of Onsite is much larger than digital sales than remote sales. But now you have 2 stores on outside and every boat one. But there is a setting of selling of purchasing that not -- people don't like buying everything over the Internet.

Well, if you want to solve a problem, you cannot go to the shopping mall. But the business depends on time and money. So -- and if the people don't have money at the shopping malls, they don't purchase and the people that have the most money are the ones that buy the less because they don't have time I'm not a good example because I purchased a lot. But on the other hand, with that issue of technology, we're advancing, we're advancing well. And I think that since we have the shopping malls that received 200 million, just so you realize -- in 2019, we received 47 million cars to cut into our malls.

We came back with full strength of cars, and now we have BRL 45 million, and this is our projection for this year. So as you can see, when we talk about 200 million people that fact our malls early, you have a relationship that is very honest with the number of vehicles. for each car, there is 4 visits and a Carter's usually more than 1 or 2 people, sometimes you get the whole family. But Uber today is a great -- it's a great -- they go to our malls. And we have the space to service the Ubers and we know that they're very important -- so once again, we really reinforced this.

So there is a characteristic of human beings that does not allow people to be isolated. Isolation is the worst thing that it happens. The -- well, being in prison is horrible, not having your freedom is horrible. And then you are in conflicted you, "Oh, should I leave home, should I not leave home. So unfortunately, we've gone over this, and I can tell you that our malls are extremely proactive during the pandemic. And today, we are very sustainable.

I'm going to give you the recent mall that we just built Jacarepagua. This is a mall that is very modern. And in reality, it has the treatment of waste water, the use of water and all of our shopping malls, they have stations so you can charge your electric cars. But we're always trying to be at the forefront of technology. And that's why we're creating most of you do not know this, but as we -- what we did as a pioneer in BarraShopping, 30 years ago and people said, "Oh, Well, the physicians they said, why do you want to get a medical center on top of a supermarket. And I told listen, doctor. This is a medical center and on top of a supermarket. This is more. And now BarraShopping 30 years later, we have appointments and exams per month. We have over 300,000. We have 300 physicians working there. We increased the size of the medical center.

Now we have in Hibernate. And now we launched something completely new. The Center for emotion management. This is a new innovation. The medical center is an innovation of Multiplan in the world. We were the pioneers in getting a medical center inside of a shopping mall. And now bear and we hope that it works, we are creating a center for the management of emotion. So we can capture the anguish the difficult times. But many times, people are passengers in the shopping mall, but they always realize that every person that wants to -- that Complete is carrying some suffering as well, emotional suffering. All of us have a bit of an angle emotional anguish. And sometimes that problem is not going to be sold by purchasing a new shirt.

So with the partnership with [ AutoCare ], a great psychiatrists, one of the great psychiatrists of the world. We build in [ beared ] center that services several people, et cetera. We have classes and it meets the requirements of that problem that all of those humans have are English, our depression. And I thought about this. Well, you might be having problems with your partner, but you can go to this place and try to sort this out. Maybe we can even reconcile some of these marriages, [ Helos ] -- so this year, after 2 years waiting, I think Marcelo can confirm that we're going to launch the biggest, most attractive work external the market, Jacarepagua, which is our most modern shopping mode. And this is a part where the several attractions that were imported even from Europe. It took 2 years to build it, and it was supposed to be ready before the pandemic us.

We are delivering it a bit late. Nonetheless, when we build a shopping mall, we always invest in social. So we work with schools, we work with the waste, the roadways and we become -- it is a moment of trying to be public service provider. That's what the shopping mall should be. And now we have over 100,000 people working in our malls. And I'm not even mentioning those that are indirectly working towards us because when there is one person directly working, there's usually 4 people working at the production line, so we can get a product until the distribution channel. So our company is a great company of generating these jobs.

And of course, the costs are increasing. Of course, when they were going to get robust selling articles of clothing, but still not the time. And when we get there, we're going to get robots, of course. But now let's return to another point. Our DNA is real estate Multiplan was born as a real estate company. And now through our mine life, 60 years, 60 years as an entrepreneur, -- my first entrepreneurs were always real estate. We were always big innovators in this area.

This year, we have Golden Green, which is a condominium of 14 buildings, the call field. We also do it in [ Portalatin Lake ]. Produce is a more advanced project because many times, we have to compete with ourselves. When the competition doesn't do what you do, you have to overcome. And here, I tell my companions of work that the objective is to make reality better than pleasure to make the reality larger than the 3. And we're delivering more than people expect. And Multiplan is doing at the Golden Lake. It's a condominium in Puerto Alegre.

This condominium was born from the intervention that we had at the urban setting when we build BarraShoppingSul. At that time, that was an area that was occupied by 900 small Hudson houses. It was a bit of a shantytown. So we did something with the municipality that we transferred these people to apartments of 2 bedroom apartments that were better than the public housing. We transferred all these people. So really, we had the recognition of the municipality which allowed us to do this project and this project colony, it took 10 years to be approved. And you need a lot of drive to do a project. The Golden Lake also took 6 years. Me and Florida as well I was recognized as the entrepreneur of the year and the Brazil Florida chamber by the project that we delivered recently. But here, we approved faster in the United States. One of the things that is important that curtails the development of the country as bureaucracy.

There are several problems, but bureaucracy is fatal. People give up along the way because they cannot approve a project or because it just takes too long. And we are driven nonetheless, -- and now I'm going to Portolano tomorrow, we're going to launch Golden Laith is the largest private late in the country. It's a late that is a beach, you can swim in those waters. You can fish, you can go with your boat. It's a fantasy land. And it's actually the dream there where we dream we live the day that we stop dreaming then we die. So I let you all dreaming my dream is always to try and deliver more than what people expect.

Our company has this DNA. So this project to summarize, is a project that is evaluated in HR 4.5 billion, and we should get the results of up to 30%. I'm not getting the numbers too impressive, but it will be done for 8 years. So we're now building the first sub condominium. We have 6 sub condominiums, and we are delivering the area completely urbanized. The major will be there as well is the biggest real estate enterprise in -- of the tender of the type and in the southern region of the country. And we sold 55 of the private with a revenue of BRL 550 million in sales.

So we reached 55% of that number. And now with delivery, we're going to get a new attractiveness. -- regardless of all the difficulties in this country, we continue to believe in Brazil. We believe in the potential of this country, which is not a small country. Brazil is a continent, a Portuguese continent. And all my families of Portuguese descent. We're all a mix of people and I look at people and I ask them, where do you come from? And here, that's the beauty of Brazil, we are all mixed. So the Christmas try of BarraShopping should be the largest one in Brazil. About 70 meters in height this year, maybe we're going to do 3. I love Sao Paulo, our biggest investments in Sao Paulo. I go to San Paulo for 50 years.

The important thing is what we do and what we preach I think that you have to think. In 2020, our company got to have a share, if I would in 36.1%. I think it was July, February. And I think that the company in June was valued something around EUR 20-some billion. And now we have the lower price, but I understand that the interest rate has gone up. So certainly, at that time, the interest rate was smaller. But the reality is, we delivered in these -- all of these years of activities post-IPO, what have we done? We delivered our company, let me see the numbers.

I would like to say that we delivered post IPO, we did 50 projects, including 18 new expansions, 15 M&As minority, some belong to ourselves and we purchased. And we built 12 buildings, residential, some office buildings, and they also generate some revenue for the company. Regardless, this was the best quarter without any nonrecurrent revenue. So we had a moment that we had a big revenue, but we sold our real estate that was [ 100 million ] evaluated. It's -- during the pandemic, we forgo the revenue of the company for a few months from rent and our tenants would pay half of condominium chargers.

And we believe that without that partnership, the entrepreneurs and sellers, they wouldn't be able to survive. And the reality is that our company is being recognized in that sense.

We're being a partner for being their partner to understand their difficulties. And now we have returns with exceptional sales. The company is going to have a great income, but it's still -- well, my goal is 1 billion. It's going to be a bit less -- but thank you very much to all of you. I'm sorry that I spoke a lot, but this is part of the company.

[Operator]

[Operator Instructions] Our first question is from Juan from XP Investments.

[Unknown Analyst]

Congratulations on the results. Very good. I have 2 questions. The first one is aligned with the sales expectancy. We have growth in sales that is going to be very relevant in October. And do you have a good expectation for the sales even though with the World Cup, how the events have improved the flow of people in the shopping malls. And the second question is the Golden Lake. It seems that the acceptance of the project is very relevant. And I have to understand with the sales team, do you have any idea -- and we need to understand what is the mix that you are thinking for the Golden Lake over the next few months.

[Jose Peres, executive]

You know my voice already. I'm sure as -- the expectation of selling in the shopping malls is good. We do not -- we're not expecting any retraction, any problems. But we have invested a lot, and we are building a Christmas tree that is very expensive, 70 meters. It's a big star of Christmas at BarraShopping, and we're doing a lot of events in the other events. And we know that at this time of transition, we need to do more to sell more. So I believe that the sales of the shop in all the last quarter is always good.

These are 2 very strong ones. In regards to Golden Lake, we're doing well. But the first apartments that we were making are luxury apartments, 370 square meters, up unto 500 square meters. So we have 55% sold. That's a very good evaluation. And we are building this, and the mix of projects will have but we know what the people of the sales area. There is a big demand for the 170, 200 square meter apartments, it's just that we have apartments that are double the area. So I think that with this interest rate perspective that is going to drop, I think that this is going to help. So we are not concerned. But our strategy is to sell -- we are not -- we are not working with the real numbers. We want to sell as we want to build as we sell.

[Operator]

Next question is from Pedro Lobato, Bradesco BB.

[Pedro Lobato Garcia Fernandes, analyst]

The first one, vacancy. It's still 95%. I wanted to understand how is it going with the new tenants. And I wanted to know more about the tenants of ahead. And the second one -- based on the record with -- we will get some comfort down that there is an improvement in the nonpayment -- do you think that this occupancy cost will be reaching a new threshold looking up ahead.

[Jose Peres, executive]

This is -- first of all, vacancy is much smaller than what we expected 5 months being close. What we've changed the mix of the shopping malls? It's higher than the records of the company. We have an increase in rent. And we've seen our shopping malls better, and they're generating. We have the event that was the question, and we have larger sales. And now looking at this and the economic perspective is that this vacancy will decrease with time. And there is the increase in the occupancy rate, but you have to charge for that. You have to pay for rent, a percentage. That is not our business. Our business is to value the space that we have and help our tenants to -- with the management to have high profitability in high-quality malls that are factors for growth where we are located.

[Hans Melchers, executive]

About occupancy, I think that's a wonderful question. I remember Dr. Peres was talking about that. If we're talking about 20 degrees and that is 50%, on average, they're okay, but they're dead, you remember that example. So the concern here is the sum of the occupancy of all of the malls. So to give you a more precise answer, I would have to talk about each and every one of them. So let me give you a few good examples.

Peres was talking about Village Mall, which is 10 years old, Campo Grande -- it's the same. Jundiai, 5 years in Canoas, 11 years in [ Sacatano ]. So Jacarepagua, for instance, also. So there are many things consolidating right now. And as a consequence, they have better numbers, and there's a great potential to improve -- to increase that rent, right? So I think there is a lot of space in my opinion, to increase occupancy. But in this quarter, specifically, what happened is we have this division between rent and the condominium.

And we have an increase in cars, right? So what we were discussing, by the way, is I'm just going to give you a general number. 2017 to 2022. For instance, the cost of the condominium charges went up 15% approximately, depending on the mall, but it would be around that. So we're talking about the same number for a few years. But the IPCA index was above 31%, if I'm not wrong. Let me double check that number. IPCA, September 2022 -- I mean, 2017 to 2022, 31.1% and DPI indexed 79% in that same period of time. So we are increasing much less than that -- than those indexes in the inflation in that period of time. So what we're not going to do is allow the quality of our projects to go down. No, we won't stop doing initiatives and events.

That means that we're trying to focus on sales, we're trying to focus on that quality. Yes, indeed, we had great increase in sales, good results. So relatively, we had actually a decrease in the costs for the condominium, the condominium charges. Exactly. That's what we're talking about. So -- we are promoting many things. We're looking at a very good quarter, very good fourth quarter right now. The best quarter in the year is usually the fourth. And that's one of the reasons we have high quality, we have costs under control. We have safety. We have good maintenance service. I repeat quality over and over again because it is about that.

[Operator]

Our next question is from Victor from UBS.

[Victor Tapia Migliorin, analyst]

The first point that I wanted to ask you is in regards to the development. You have the highlights in the presentation as well and some data about expansion. So in the current scenario for the development and expansion, I also wanted to understand what would be your preference? And also in the context of this question, in the 200,000 square meters of expansion. What is the necessary conditions to get this working.

And the second question in regards to promotion. We have an increase in the occupancy cost Well, we have the increase in the interest rates. But now for the fourth quarter with the World Cup, should we see this number still a bit higher? And also in a follow-up of this last question well, you haven't reached your potential. But once you do and you now charge for this promotion fund, how much should we see the -- and how proportionately should we see the occupancy costs are the occupancy rates increasing actually?

[Armando Neto, executive]

Okay, development. development. We always want to develop. We always want to grow. The DNA of the company that we create projects. We create the innovations. We develop them and, for example, all the like -- there is a cost where the cost increases a lot and a lot of people might be worried that the index might not cover the cost, but you're paying more for the concern that whether if it's the builder or -- but when you're working, we start to squeeze the orange a little bit more. So residually, the revenue of construction is affected. This is not our objective. We are entrepreneurs. So we still contract those services for building and real estate.

While we have architects and we know how to build. We built Canoas kind of shopping because there was difficulty building -- hiring the construction companies to do this. And we can always do it cheaper, but this is not the objective of the company. Now in regards to the expansion, we have projects that evidently allow us to say that we have over 200,000 square meters to start working on, and we will only do that at the time that there is, of course, a better vision of the economy, we're happy because the interest rate is stabilizing and inflation is stabilizing.

In a shopping mall 50 years ago, [ Ibirapuera ], we launched it when the inflation was 150% a year. And then we got the increase of interest rates and then we had the correction and it became a snowball effect. And we still had the shopping built 100% with full tenants, and we've got a revenue of 50% that we could account of this income because for each amortization of all the financing that we did to pay for the building.

Still, we got half of this for the company in terms of cash flow. So at that time, it was very successful. Maybe the first one, there was a shopping mall, real shopping mall in Brazil. And we are very ambitious, and we are doing a luxury enterprise in Puerto adage. Everybody is concerned -- and we are working with this issue. We have to move on forward. And here, we have a DNA of trying to make everything work. We do not like to stay on idle. There are many opportunities, many opportunities for M&A. We like to do business. But we know that at this moment, maybe purchasing is the best business maybe fusion will be better.

So we are open to all ideas, and we hope that this last quarter will be the best quarter. And it will contribute to improve the income that we are expecting, and we're working strongly towards that. Victor. So could you repeat part of your question, please? It wasn't very clear. Sure. My point is in the fourth quarter, the promotion fund should still be a bit more overloaded by the world up, and there is a lot of competition for the clients or customers. And you mentioned in your previous question that you're still not charging the total amount.

When you get to the previous potential? How much should we increase the occupancy costs. a not necessarily this is going to happen. These are opportunities that we have emulated in each event. And sometimes you would want to spend the money, but there is not a great event that will add value for the shopping mall. This is a case by case analysis. But of course, we always follow up on the situation of each company, the occupancy cost, all of your inserts, we have the minor day-to-day in regard -- it's good for cost benefit.

So in China, when people -- I think it was a record -- and we are replicating this and it improves the cost -- this is what made shopping model be on the shopping model grows exponentially. The sales in the second quarter, it was about 4% and now over 30% and 40% repeating again. Peter copromote, when Brazil plays, you certainly see a reduction of foot traffic in the shopping mall. But after the World Cup, we did a daily study to show it to the market is that you have in anticipation of sales spend the day of the game is kind of slow, but in the day before it is much higher. And this is a national passion of resilience, and it is what it is.

[Operator]

Next question, André Mazini, Citibank.

[André Mazini, analyst]

First question about the equation of animal -- is it the fact that we still had some conditions to be met essentially for this to happen? And is that happened in you pay for that installment. And if it's not the case, what are the conditions for this payment? That's the first question.

Second question about the app multi. It's interesting the amount of downloads, but a question on how do you expect to monetize this app? It generates engagement, but can you monetize directly with marketing, for example? -- direct monetization of the app or is just another way of having the digital completeness of the shopping mall.

[Jose Peres, executive]

In regards to the first question, -- we are still in the process -- it's still not definitive. We're in the normal process of contracts and evaluations due diligence, our expectation is to be 100% connected to this. We want to do it as quickly as we can. In regards to the multi-app, I'm going to ask Richard to answer, but I would like to show you another dimension. Sometimes you see revenue, how can you monetize? Well, it's the expenses that can be decreased, for example, the payment of parking. All of that was reduced communication vehicle, was multi.

So you have to think about not only what you can earn, but you can stop where you can stop spending on -- when you work with digital transformation, you have operational gains, as Armando said, you're saving money with the payment of the online party instead of having the ATM. So we have a great gain in that sense. Also, we talk about the improvement for the experience of the consumer. Our consumer is coming to the mall more frequently. We also have the tenants. And we have an increase in the flow of their stores, along with the use of Multiplan with multi-app, -- and we have the monetization of shopping malls. To monetize the online audience doesn't make sense. The big touch is in the increase of sales at the shopping mall.

That's maybe an option in the future, but not something that we are seeing right now. We want to create multi -- it's not just a channel for you to employees for you because of the size of the company, whatever you do is small, but it generates value for the consumers and the tenants. That's one of our big objectives. 200 million visits per year, 50 million cars in our parking lots. That shows the future potential that Met has -- we're not going to think that it's going to be a business. I think that in the future, it will be a business as we can offer a lot of advantage to the consumer I think it's important to explore these coupons. It's 1,500 coupons that we got here with multi and we have 600,000 people that use of coupons in the shopping mall. And this resulted in the comments. -- with sales of about 40%, 50%, this is the great value. And then you get the occupancy cost and then you solidify all of this.

[Operator]

Our next question is [indiscernible], Morgan Stanley.

[Unknown Analyst]

So going back to Golden Lake, I wanted to see if you can give us some color in regards to the project, the BGB in regards in the next years or even an idea of VTB for a next phase.

[Jose Peres, executive]

The project is very clear. We don't have a specific date. This is an opportunity. It's not a core business that we have to launch every time. The second phase has B2B, which is very similar to the first phase with a lot more units, and it's ready to be launched. So we're just waiting the right moment. Well, one in such an enterprise, you have 18 buildings, BRL 4.5 billion in sales, you don't do everything overnight. And then if you work with this project as you work with the demand, for example, -- we know, but -- and we don't want to give all the information, but there is a big demand for a certain type of apartments.

We started with big apartments, and that's how we have to work because of luxury apartments, they obviously give the perception that this is a very high-quality enterprise and it is very high. And for Rio de Janeiro and Sao Paulo the base centers you're not going to have a project soon that is as good as this one. We know perfectly that there is a big demand for products for a certain type of apartment.

But we, in the first stage is BRL 550 million. We sold 55% of this value. So we sell more, and that makes us happy because we started with the work, but we still have 2 years of a head -- of course, before this first subcon is ready, we -- the condominium is going to have their own autonomy, but it's a gated community. So privacy, safety, probably we're going to have even a school in there because it's a picture, and we paint it, we urbanize it.

It's a shame that we cannot show an image. So if we can do a teleconference that we can show it because a good image would -- this is a very beautiful project Well, my idea is a good design is worth 1,000 words. -- do a good draw. It's still worth half of the word. So anyway, it's beautiful to see but go there and see the reality. We are delivering much more than what you are saying. I am van to go to [ Fortaine ] Golden Lake. And it's very good. In joyful. We as entrepreneurs, we have to overcome. Sometimes we don't have the competition tick to [ copan ] sometimes we have to create, and we are pioneers in that creativity. But we don't create it on that based on an abstract idea. We do it with a sentiment.

So cost the pandemic, everybody wants to get to a green area. I paradise the neighbor is 100 or 150 meters. And this is open -- and from the window, I can see the sunset, and it's a beautiful sense. And maybe we're going to launch more and be sure it's going to be better than the marketing -- do you have any more questions?

[Operator]

Our next question is from Fanny Oreng, Santander.

[Fanny Oreng Avino, analyst]

I have 2 questions. The first one is the revamping of some shopping malls. But if we, for example, I wanted to know about this. And I wanted to understand that in the context of CapEx. And you're doing a reposition, for example, Veolia and the cruise as well. Those are my questions. And just a follow-up with the previous question in regards to expansion. This quarter, the Morumbi shopping is getting to 99% occupancy rate, and there is an expansion plan of 9,000 square meters. So I want to understand what needs to happen for you to talk about this expansion.

[Jose Peres, executive]

So the revamping. You know that this is a constant, we are always updating our projects. We want to improve. We improve the mix. And then there is a second question. And then you do the reposition and revamping. Actually, we have -- we are always trying to get the better malls. We have a better tenant. And sometimes you need to adapt. You need to change and need to adapt it to a new reality and do improvements that allow you to work with the shopping mall. And it will allow you for a bigger operation because we are updating the malls. And we're working together the company during the pandemic, decrease the rhythm of updates, of course. So we have a larger CapEx. I don't know -- I don't remember how much is -- and we have -- and we have improvements, for example, new common areas.

Well, we have that issue of treating the consumer well. And then they can choose their mall. We can charge more. This is a virtuous cycle. The expansion you mentioned very well the MorumbiShopping. We have a need that is much higher. And we have [ Trispan ]. And one issue that we need the return well, the world is disorganized. So the cost of materials is immensely going up. Marcelo was dealing with situations that are typical, lots and lots of months, and now we start to organize again, and then you start to have more clarity of what you can have in the projects.

[Armando Neto, executive]

Well, we have to be careful as -- we cannot just think about having more of a leasable area. We actually have to think about the right intent and what the right use of capital is for our situation. Well, and as you know, in our strategy, we are worried about the possible uncertainty that is coming ahead. We had planned everything for 2022, and we want to have a better use of our resources.

We want to lever the resources the right way. During the pandemic, we had many changes. And as was said, we're thinking about even development now, all the time there's that's what we are focusing on.

[Fanny Oreng Avino, analyst]

And by the way, Dr. Peres was saying that is that the market is ready for M&As. So could you maybe share a little bit more about that? What do you think would make sense in terms of geographies, in terms of income? I mean, what kind of details could you share with us?

[Armando Neto, executive]

Well, sorry, I have to be honest, I cannot share much info right now about that. We cannot tell you what we're going to do. I mean we can only tell you what we are doing right now. We are reviewing everything so that we're going to have the right situation. And if there is an opportunity where we have good advantages, then it might happen. But of course, with the right use of capital and everything that was mentioned. But I'm sorry, I cannot share more info than that. But yes, I have to be honest and say, I cannot share more information on that.

[Operator]

We have a question from Marcelo Motta from JPMorgan Bank.

[Marcelo Motta, analyst]

I have a quick mission for you. Do you think the actions are a little bit different from what you were doing in terms of expenses in the past, you had a more elevated expense in the past. And you were also talking about marketing and some other initiatives to have a better capital flow to have better events. I wanted to understand what is going -- what do you think is going to happen in that regard in the next few quarters?

[Armando Neto, executive]

Well, at it is hard to have a good forecast of what's going to happen, but basically, for the next few quarters. I mean -- and then in the last months, we had a higher expense for marketing campaigns. We needed to promote a few events that were recurring. We had more than one event at different malls. We also had social events. There were some legal expenses due to some legal fees. Obviously, what we want is to make sure that in the future, we're going to have everything under control, but it's not always possible. The thing is we are looking at what is recurring and nonrecurring in a very careful way. I'm sorry, I cannot share more info than that.

[Operator]

Our next question comes from Pedro Hajnal, Credit Suisse.

[Pedro Hajnal, analyst]

My first question has to do with rent increase. Now that we are thinking about the inflation level, the changes in that index, we think that now it is more of a normalized index. And from now on, we have to focus on the future and not the pandemic anymore.

[Technical Difficulty]

[Operator]

You can continue to ask your question. I think you had an issue with your connection Pedro. Well, maybe we can continue with the next question. Our next question is from Jorel from Goldman Sachs.

[Wilfredo Jorel Guilloty, analyst]

Well, I have 2 quick questions. I wanted to know how you see the turnover in the future because there was a peak in turnover in 2021, and it's still high, right? The last 12 months, approximately until the third quarter 2022. So do you think that is going to be normal again around the same percentage as before? And connected with that, my second question is how do you see leasable area between satellite and anchor? What is the percentage for the future? Do you think satellite is going to continue to increase in terms of leasable area?

[Jose Peres, executive]

If you see a longer period during the pandemic, it grew a lot. If you see a longer period since the IPO, we see a growth. I don't remember, well, 4%, it was much lower than it was comparing to Europe and the United States. It was a higher turnover than us. So there was a period of turbulence and then there is more predictability. And I believe that the turnover will decrease. To what levels, it's very difficult to predict. Because you also change habits. It's very -- we try to bring the best operations, and we're going to be very relevant, right? We're going to be very proactive. So if you get this longer period, we've recently had the before the pandemic we had the problems with the electronics stores, [ Fnac ]. So we try to use those opportunities. And we have our shopping malls and the M&As will allow us to get -- the same thing will happen with these other enterprises. We’re always trying to find the opportunities. But it's not easy. And we're going to have the high productivity data and then you can get this data, the space.

[Operator]

Next question Pedro Hajnal, Credit Suisse.

[Pedro Hajnal, analyst]

Sorry, I had a bit of a problem of connections with my question. I had 2 questions. The first question is growth in rent. We see the numbers that are overcoming. And would you say that what we have left of discount is a normal level that is part of the game. And we have to think about the growth in rent for the future. And the second one, the second question is one of the results of the quarter is one of the levers in the company. You mentioned this desire of expansion. So there is an expansion by us, but that would depend on a clear economic scenario of the country until we get a clear vision would it be a strategy for the capital allocation to have a more repurchasing of the shares and distribution of JCB or the company will want to keep its cash position until the economic scenario will signal that we can have an expansion for the greenfield project.

[Jose Peres, executive]

If I am not mistaken, you're talking about 2019 and the discounts. So I want to say the discount, there was always discount. In the best years 2010, 2011, there was discount. There is always a discount. Discount is a case by case, needs of tenants. It's part of the long term that partnership that we mentioned. What happened? If we're going to remember that period of 2014, '15, '16, '17, it was so harsh for the country with a growth above 3% growth -- sorry, no. A reduction of the GDP, less than 3.5 million interest rates that were higher than what we lived 14%. And then you created a base on discount that was much higher than what was normalized for us. And this is -- if we think about the pre-COVID, we can deliver discounts that are better than what we have there in regards to that positive sale for the value generation and growth that we've seen.

In regards to the levers, we always talk about this. We have our management of liquidity, which is -- that's the idea. This is the idea that we're going to have the cash flow that is available opportunity for growth for investments. This is key for the strategy of the company. And it is natural that as we have the last use of CapEx, for example, in a hypothetical scenario, you can return more money to the shareholders and the shareholders and whatever they want with our money. And then we can repurchase the share eventually.

The repurchasing is easy to use when we disagree from the market, but it has a factor, which is not removing to liquidity. It's important to we have a company with 2 controller shareholders that are very clear with a percentage of the company that is very significant. So what we try to do is also on this year is to think part of the events to generate the liquidity for these shares. And the repurchase will remove. So it's something that we are careful about. But when we see a disagreement with the market, we have the policy of rebuilding this access. And the acquisition of Amal that was finalized an investment for the future that we're talking about ZAR 300-some million. And if we consider that, that would be finalized this year with the CapEx that is higher than it was in the previous year. that we had Jacarepagua. And if you look at in terms of JCP, we have BRL 245 million already invoiced already accounted for in the first quarter. And this is how we are working. The idea is not to have debt or this is not the idea. We want to have a space more balance, so we can act when we think that there is a great opportunity.

[Operator]

Next question is Daniel Gasparete, Itau BBA.

[Daniel Gasparete, analyst]

Now we went through the election and now the tax reform, there is the increase in taxes and dividends. What is your opinion, having an environment such as a company would be thinking about paying extraordinary dividends. How do you think that the future scenario will play on hold on that?

[Jose Peres, executive]

That issue of the tax reform has been going on for many, many years. It wasn't just last year. There was a previous year, and we have those discussions, the resurface. We need to see next year to have a coherent decision. We have that space of accumulated profits, so we will evaluate. But we need to have more were surety with this scenario. So we can make a decision. And once again, -- it's important for us that there is a saying that we say what we want is to have a space to want more and evaluate what we want to do in the future.

Thank you for all the questions. We close the Q&A session, and we invite the participants to contact the Investor Relations department.

Now I would like to give the floor to Mr. Armando d’Almeida Neto for the final a final part of the presentation.

[Armando Neto, executive]

Well, thank you very much to all of you. Thank you. Dr. Peres has already mentioned at the beginning, our investors, analysts, journalists, collaborators, all of you that hear us. Thank you for your attention and your support. And to us, this is very important. I would like to say that once we finish the earnings call, we are only going to start -- we're only going to meet again in 2023, but we're still going to have a meeting on December 7. We're going to tell you a bit more about the company, what was done about a year and several things that we're going to explore -- and we will talk to you on December 7. Thank you very much. Have a nice weekend. The earnings call of the results of the third quarter of Multiplan is closed.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]