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Good morning, ladies and gentlemen, and thanks for waiting. Welcome to the conference call of CCP to discuss the earnings regarding the fourth quarter 2017. The audio and slides are being simultaneously webcast on the company's IR website, www.ccpsa.com.br/ir.
[Operator Instructions] Before moving on, we would like to let you know that this conference call may contain forecasts about future events, which are subject to risks and uncertainties that may make such expectations not to be true or to be substantially different from those than expected. Forward-looking statements issue the only opinion on the date they are made and CCP does not oblige itself to update them in the light of new information.
Today, with us are Mr. Pedro Daltro, CEO; and Thiago Muramatsu, CFO and Investor Relations Officer. Please, Mr. Daltro, you may go on.
Good morning, everyone. It is a pleasure and satisfaction to bring you the earnings of the fourth quarter 2017. It was a very interesting year for CCP. We had lots of activity going on, and I think it was a year that was a turning point for the company, I would consider. We had almost BRL 1,300,000,000 in real estate transactions. Probably we were, if not the most active player, one of the most active players in the industry in 2017. As for accomplishments in the year, we can highlight the delivery and leasing of the Belo Horizonte building, probably the first building that was delivered with a successful level of leasing in São Paulo in recent years. Also, we concluded Prologis and CCPIB transactions with the sold of warehouses with BRL 1.2 billion for the company cash. We had one more unit at Tamboré I Industrial Park. We were selling those assets. We started in 2015, '16, and we continued in 2017.
For those that were in the call the same period 2017, you will remember that we had a strategy to deleverage the company. So we paid BRL 730 million in debt. And we also had a payout of extraordinary dividends in the amount of BRL 345 million, returning money to the shareholders, so higher than the capital increase that we had in 2015. So with this transaction, we were able to reach several objectives at once.
Subsequent events. We had the issue of debentures. We advanced any funding for the next 24 months. We did that in advance because we did not want to be exposed to market volatility in the years of '18, '19. And also, we had the prepayment within our strategy to manage our liabilities. We had the prepayment of the first promissory note and the issuance of the sixth debenture.
On Slide #7, we talk a bit about occupancy. We had an interesting improvement compared to the third quarter 2017. The last quarter was quite active, both in the segment of shopping malls and offices. We had reduction of 1.2 percentage points in vacancy levels, physical vacancy. And in financials, we had a decrease of 1.7% because we leased areas that have a higher price per square meter. Today, vacancy, we still have 1 warehouse in Tamboré, which brings physical occupancy down a bit. But because the price for this kind of property is a bit cheaper, the financial vacancy is a bit lower. So we are at 90.5%. And for the beginning of the year, we are having those number tens or may reduce substantially along 2018.
On Slide 8, we show the performance indicators for our shopping malls. We had growth in sales in the malls in which CCP is participating of 8.2%, above the inflation, and in the parking flow of 8.7% increase. Same-store sales, with growth of 4.7% against an inflation of a bit less than 3% in the period. So we had real growth of sales. So real growth of 1.7%. And same-store rent, so it happens in CCP portfolio, sales grow very close to rent, with an increase of 4.8% for rent, again, 1.8% above the inflation in the same period.
As for offices, basically all the classes of assets that we had showed growth that was quite substantial in terms of revenues. Offices as a whole with growth of 12.9% compared to the same period last year. And Triple A, with growth of 22.8%. Class A had a drop of 10.8%. But because Class A in our portfolio is not quite relevant, it does not really impact increase of revenues. And it was concentrated in a single building and, according to demand we see, we believe that the number is going to be reversed along the years.
Shopping malls, with growth of 42% year-on-year both because we had new shopping malls open along the years and also real gain. And distribution centers, no growth at all, not applicable. So quarter-on-quarter, in terms of leasing revenues, 28.8% and year-on-year 13.2%.
I'm going now to turn the call to Thiago that is going to talk more about financial numbers.
Good morning, everyone. Carrying on with the presentation on Slide #11. The first 2 charts here show the evolution of our net revenue. Quarter-on-quarter, we had a slight decrease of 3%, but because in the fourth quarter '16, we had performed a sale. But when we compare year-on-year, we had growth of 6%. What is most important here is our evolution of leasing revenues. You see our recurring expenses and all the sales that are specific one-off events. So in the quarter, we had growth of 28% and in the year 13%. And what is a positive thing about the growth of revenues is, when we look at the NOI, we grew 32% quarter-on-quarter, which shows our constant struggle to reduce our cost and, therefore, a better and having a better NOI margin.
As for adjusted EBITDA, we also had impressive growth in the end of the year of 25% quarter-on-quarter, and in the whole of the year, growth of 13%, again, a reflect of the reduction of expenses and growth of our leasing revenues.
On Slide 12, in the very first chart, we show quarter-on-quarter our comparison of net profit. The negative effect that we had was an accounting adjustment. Out of the account adjustment, we had profit of a bit more than BRL 5 million, which is basically what we had last year. And when we compare year-on-year, this year was a record in net profit for CCP. We reached BRL 174 million, which is the highest net profit the company ever had in its history.
Going to the FFO chart, in the quarter, we remained practically stable compared to the quarter of the year before. And in the whole of the year of 2017, we had a very high number of BRL 227 million basically because of the results that we had with our sale that Pedro mentioned.
As for financial expenses, this is a clear reflect of 2 factors. Obviously, we had a reduction of 40% partially because of the macroeconomic condition and reduction of interest rates but also because of the liability management action that we had been conducting along the years, which resulted in the payout of BRL 730 million in debt and, obviously, that results in a substantial reduction of our financial expenses.
As for our indebtedness levels, we went from a level of BRL 2 billion of debt in the first quarter '16 to BRL 1,260,000,000 in the fourth quarter '17. And our net debt-to-EBITDA ratio went from 7.1x to 2.7x. So marginally, we have been decreasing that along the quarters. And we had the prepayment that was made in the third quarter, with very large impact. As for costs of that, we divide that into the cost of production, basically talking about pre-fixed costs and corporate costs that in CCP debt are connected to CDI. So we have an average cost of 9.6% for production and 8.4% for corporate.
As for our amortization schedule, basically, it's already reflecting the subsequent events that we talked in the beginning of the call, which is the issuance of the ninth debenture and the payment of the promissory notes. With that, we've reduced the amount of amortization to be made in 2019 and '20 and redistributed debt for a more linear amortization schedule.
As for our financial covenants, we still have a lot of freedom to work, considering our covenants net debt-to-EBITDA ratio of 3.5x. We are below 1.7x. This is the number that we closed at the end of 2017. I'm going to turn it back to Pedro.
We'll now start the Q&A session for investors and analysts.
[Operator Instructions] Daniel Gasparete from Bank of America would like to ask a question.
I have just a quick question. Update about the leasing dynamics in SĂŁo Paulo. I would like to know what you see in terms of growth, a return of demand, especially compared what you had before in terms of offices? What do you see the new market dynamic's like?
Well, thanks, Daniel. Well, last year, we had a very good year in terms of amount of contracts. Again, it was a record year. We had a lease of 900,000 square meters of gross absorption in the market. In CCP, we advanced and closed lots of things in the end of 2016, beginning of 2017. And we saw lots of negotiation going on, lots of people changing addresses. That seems to continue in the end of the year. There were lots of negotiations going on in terms of leasing. They will go on for the first quarter. And it might as well be that we are going to have, once again, a very good year in terms of office leasing. Of course, the political scenario can also bring some clouds to the scenario. But if we consider how the year of '17 ended, I believe that we're going to have a very good 2018 in terms of leasing. The more concentration is in the [Foreign Language] area is where you have the most movement, lots of companies moving to that area. But one thing that was interesting, and I haven't seen in the past 4 years, is the fact that rentees are moving because they want more space, more room. And this is something that we started to see in the third quarter '17, the end of the year and continues now. In the past, lessee wanted to improve price quality, decrease occupancy, change buildings to cut costs. But in the end of last quarter, and I believe that it's going to continue in the beginning of the year, we're having this new lessees that we haven't seen in the past 4 years, which are the ones that want to have more room, that want more area. So I think 2018 is going to be quite an extraordinary year in terms of activity. As for prices, perhaps we'll still not see an increase of prices. But we are going to see a decrease of concessions. So we are thinking of lower grace periods, and we are not talking about allowance now. So I think that grace periods are going to lower in 2018, and practically allowance is not going to be on the table. But prices going on, I think that will be more for 2019.
Yes. So I think that gradually, the bargaining power is moving back to the hands of the lessors. And vacancy for Triple A is going down very, very quickly. This was vacancy that was above 20% in the past and today, end of year, should be close by -- close to 14%. So we dropped very fast in the last 2 quarters, particularly in the last quarter. So I believe that even in Triple A portfolios, we're going to be very close to the point that it's going to be neutral. 14% is still a number in which the bargaining power is in the hands of the lessee. Between 10% to 12%, the scale starts to [pent] to the lessor. So I think this is something for we to see. Neutrality is something that is going to come, I believe, this quarter because this is going very fast, not in the market as a whole, but for Triple As, specifically, very, very fast. And 14% is a number that I wouldn't see in the past 3 years, I would say.
And without wanting to extend my question, in Rio de Janeiro, Leblon, what do you think the Rio de Janeiro market's like? Do you think it's going to go on deteriorating a bit more? Or do you see a turning point?
Well, despite not having too much exposure in Rio, it is a market that we are always monitoring. We are looking into opportunities there. It was a market that was very much affected because of government issues. And we know that the past 2 years were very bad for the city. I don't think the government issues are going to get stable in the next 2 years. The government is making deals. But at city or state level, we are not seeing major changes. But the oil and gas industry may show changes. Last year, we had an important pre-salt auction. New oil companies are seeking occupancy in the city. Part of them took part in the auction, others just because the price of oil is getting better. And the government does have the intention of having a try at auction that can really move the market in Rio de Janeiro. And that may bring some relief. But I would say that the Rio de Janeiro market is 1.5, 2 years behind the SĂŁo Paulo market. But if the auction this year comes out together with auctions last year, you are going to see some movement of oil companies in Rio de Janeiro. But still it is a market that is suffering in terms of supply. The port regions still with lot of empty buildings for the Barra district as well and even downtown Rio. So I think that Rio de Janeiro is 1.5, 2 years behind SĂŁo Paulo in this recovery cycle.
[Operator Instructions] Since there are no further questions, we are going to turn the call back to Mr. Pedro Daltro for his final considerations.
Well, in a nutshell, I would like to tell you that the year of 2017 showed results that were really a turning point for CCP. We are ready to grow in 2018. We have capital in place. We have expertise in place. We have pipeline in place. So we expect 2018 to be even better and more active than 2017 and that we're able to show growth compared to 2017. The political macroeconomic scenario, of course, has influence on all that. But from the prospect of CCP, I believe that the company is very much prepared in terms of structured teams and capital to resume growth and really surf on this cycle that shows increases from now on. Myself, Thiago are always at your disposal to clarify any questions you may have further on. Thank you very much.
CCP conference call is now closed. We thank you very much for joining us today, and wish you a good day.