Earnings call transcript: MultiPlan Q2 2025 sees 13% tenant sales growth

MultiPlan Empreendimentos Imobiliários S.A., with a market capitalization of $2.4 billion, reported its second-quarter 2025 earnings, highlighting significant growth in tenant sales and a record net operating income (NOI) margin. Despite these positive developments, the company’s stock saw a slight decline of 2.02% to close at 21.37. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value calculations, suggesting potential upside opportunity.

Key Takeaways

• Tenant sales grew 13% quarter-over-quarter.
• Record NOI margin of 95%.
• Stock price decreased by 2.02% following the earnings release.
• Earnings per share increased by 37% year-on-year.
• High occupancy rate of 96.1%.

Company Performance

MultiPlan demonstrated robust performance in Q2 2025, driven by a 13% increase in tenant sales and a record NOI margin of 95%. The company maintained a high occupancy rate of 96.1%, showcasing its strong market positioning in Brazilian retail real estate. The growth in service revenue by 16% and a revenue increase of 3.5%, aligning with inflation, further underscored the company’s solid performance.

Financial Highlights

• Revenue growth: 3.5% year-over-year.
• Earnings per share: Increased by 37% year-on-year.
• Service revenue: Up 16% from the previous year.
• Occupancy rate: 96.1%.
• NOI margin: Record 95%.

Outlook & Guidance

Looking forward, MultiPlan is targeting potential future expansions, including the Junjiaye and Songkatana projects. The company aims for a 50% dividend payout and is exploring greenfield and acquisition opportunities. With a strong Financial Health Score of 3.21 (rated as GREAT by InvestingPro) and analyst consensus pointing to a Strong Buy, MultiPlan remains well-positioned for future growth. The company’s attractive P/E ratio of 10.85 and comprehensive Pro Research Report available on InvestingPro suggest significant potential for value creation.

Executive Commentary

CEO Eduardo Perez emphasized the company’s commitment to shareholders, stating, "We’ve already turned back to the shareholders over R$7 billion." He also highlighted the strategic focus on innovative projects, saying, "We are selling a concept of a planned neighborhood."

Risks and Challenges

• Economic volatility in Brazil could impact consumer spending and tenant sales.
• Potential delays in future expansion projects may affect growth targets.
• Competition in the retail real estate sector remains intense.
• Dependence on high occupancy rates to maintain financial performance.

MultiPlan’s Q2 2025 earnings call showcased robust growth and strategic initiatives, yet the slight drop in stock price suggests investor caution amid broader market conditions. For detailed analysis and over 30 additional financial metrics, including exclusive Fair Value calculations and expert insights, visit InvestingPro.

Full transcript - MULTIPLAN ON N2 (MULT3) Q2 2025:

Moderator, MultiPlan: Morning, ladies and gentlemen. Welcome to the earnings call regarding the second quarter of 2025 of MultiPlan Empreendimentos Imobiliários S.A. We have here with us the Executive Directors of the company. The presentation of this conference call is available for download at the IR website of MultiPlan. Before continuing, any forward-looking statements that are disclosed in this earnings call regarding the projections, economic and financial, are based on premises and beliefs of the Board of Directors of MultiPlan. It’s based on information available to the company now. They are not a guarantee of performance. They involve uncertainties and premises in regard to forward-looking statements. They depend on circumstances that may or may not occur. Investors should know that general economic conditions, industry conditions, and other operational factors might affect the results of the company and might lead to results that are materially different in the forward-looking statements.

Now I’d like to give the floor to Eduardo Perez, the CEO of the company. He will start the presentation. Please, the floor is yours. Good morning everyone. It’s with great pleasure that I share with you the second quarter of 2025 results of MultiPlan. We’ve had one of the strongest quarters of the last decades in the operational side, with almost 13% growth in tenant sales quarter and an NOI that is a record 95% and the high occupancy rate getting to 96.1%. We continue to deliver solid results even after the repurchase of shares last year. Earnings per share has increased 37% year on year on 2024. Results are driven by the renovations and expansions of our portfolio. Expansions of DiamondMall and ParkShopping Barigüi once again demonstrate the success of our strategy of valuing assets.

Together, the malls had an average sales growth of approximately 30% with regards to the same period of last year. This month we also delivered the keys to the tenants on the Parque Shopping Maceió expansion, 45 new operations there. The expansion will be launched in November of this year. MorumbiShopping and ParkShopping Brasília continue with their construction and expansions that should be launched in April and November of 2026 respectively. MorumbiShopping has 90% of their GLA already leased. Brasília, 50% of the GLA leased. Another important point that we should highlight in this quarter is Golden Lake. It’s evolving in its two phases. We started the commercialization of the apartments with a value of R$13,000 per square meter on average. Today we’re selling at R$23,000 from the inception of R$13,000, which shows the success of the project. Lake Victoria is 73% sold and will be delivered next year month.

Lake Erie, which we started the construction two months ago, has 63% of its apartments already commercialized. Golden Lake is an important source of revenue for MultiPlan S.A. It reinforces our plan to develop multi use projects, creating synergy between residential developments and our malls. MorumbiShopping will be benefiting after the opening of the neighborhood with an increase of the cash flow and increase in sales. Our digital journey continues to grow with Multi-App. Today we have 4.5 million users within the platform with which we can connect in a more recurrent and personalized way. 20% of the sales are captured through our relationship program. This is a significant number and we want to expand rapidly with the implementation of other functionalities. I’d like to bring your attention to a very important number, relevant number for us.

Once we add the dividends, interest on capital and share repurchases, we’ve already turned back to the shareholders over R$7 billion over the period of time analyzed. We remain committed to the creation of value for all the groups guided by our long term vision and confidence in the Brazilian market. I thank all the employees for their tireless work and their dedication for this company and to the investors, analysts and journalists that follow us. Thank you. Thank you. We will start a Q and A session for investors and analysts. If you have any questions, you can raise your hand. Our first question is from Tainan Costa from UBS. You can open your audio. Oh, good morning. After a while. Thank you for the opportunity. I wanted to explore the behavior of sales. You commented on the April and May performance.

17% May, April and the consolidated of the quarter, which is 12, 12.8%. In June there was a bit of a deceleration, probably close to 7 to 8%. Of course, there is a seasonality in Rio Grande do Sul. I wanted to understand, if my reading is correct, was there this order of magnitude? Looking up ahead, what can you tell us about the performance of sales in July? Is it going to be the same thing in June? Is there any worsening, any improvement? What are the segments that have a deceleration or have performed above average? Thank you. You’re correct. In June we had a deceleration. In May, we have to take into consideration that June is a month that you have a lot of things that happen outside of the malls.

The June parties that happen throughout the country, you had, including at the beginning of the championship, world championship of soccer, which removes a lot of attention from the shopping malls. Every event that is very strong in television is not good for the shopping malls. It was very strong, the attention of the spectator for this event, for the public, for this event. It generated less attraction in the shopping malls. I can tell you June, July actually is performing in line with what happened in June. We continue to grow, but not at the levels of May, which I didn’t think it was sustainable to grow for this throughout the year. Do you want to continue? Let me go over what Eduardo Perez said. Exceptional is April and May, not only June. It was a very positive surprise in regards to the segments of the quarter.

There was a balanced performance. All the segments have had a growth in a positive way. The restaurant sector is very good. All of them performing very good. Here with the turnover, the biggest increase of GLA was in clothing in this quarter. We’ve had a positive turnover. There is a variation of the segments and the performance that is very balanced. We’ve answered. Thank you. Our next question is Gustavo Cambogova, BTG Pactual. You can continue. Hello everyone. I want to ask two questions. First, can you comment a bit on the parking lot revenue, which was a big growth year on year? You get it on the release that the flow was 3 to 4% of growth, but the revenue grew more. I wanted to understand if it’s in fact the rest is just the increase of the ticket of the parking lot.

I also wanted to understand if you can measure maybe some sort of impact of use of the Multi-App, the free flow app, how these initiatives change something in the profile of revenue or even of time at the mall. How do you see this? Second question is in regards to the reworks that you’ve done. Some were already delivered. I wanted to understand how that’s reflected in the sales performance. If you can somehow measure some impact that these revamps have, reworks have done or this is very dissipated through rent. Should we see any spikes in these specific malls as the reworks are being delivered? Thank you. Hello, Gustavo. The way that I see it, let me start by the last one. You can see with the performance of the shopping malls that is already complete as New York, the growth in sales and the rents.

DiamondMall, ParkShopping Barigüi. You will feel from now on as we finish. If there is any residue, it’s going to be residual. It’s going to be the last year of our renovations, and this effect is going to be multiplied in other assets. You can see this at BarraShopping. We also had a lot of renovations there, and you realize in the sales performance a growth that is very robust. The first part of your question, which is in regards to the increase of revenue in parking lot. Last year we had a discount of the free flow that we gave to people that got into the relationship program. These discounts are done, so the 17% is impacted by this. Speaking of Multi-App, which is an ecosystem that we could manage to work, I see in a very positive way, they’re contributing for all the sales of the shopping malls.

As we increase and implement, we’re going to get more information. Today we communicate with four and a half million people. I think, and I am certain it was very courageous of the company to continue down this path and to develop this technology of reading the car plates, because we didn’t know who were getting into the shopping mall, if they were clients or not. Now when we bring a new technology that will bring more convenience and more knowledge on who goes to the shopping malls, it’s a courageous step that the company has given. Now we will extract results, better results of the data knowledge that we have. I think that your response is very complete, but I want to show what we bring in the earnings and the reports of last quarter. Even if it’s premature, we have the growth in rent in a real way.

In this quarter we have page six. We have a growth in the same stores and some shopping malls that have done their reworks. It’s the practical examples that Eduardo Perez has already displayed. Good morning. Thank you. Our next question is Pedro Lobato, Bradesco. You can open your audio. Thank you. Good morning. Thank you for the opportunity. Two questions. We’ve seen that at Jacarepaguá you’ve had a growth that is very expressive in rent. What would be the main efforts that you’ve done to do this improvement in the performance of the shopping malls? Now thinking about the expenses and getting into the NOI margin, you had that impact in the recovery of expenses. Now it’s common that this is a recurrent effort. It has to be seen as a non-recurrent effort. What is the impact in this quarter?

What is the threshold of NOI that has to be normalized? There is going to be the occupancy in this high threshold that can improve. What is the threshold of NOI that you imagine that are more stabilized? Pedro, this is Armando. The first question about Jacarepaguá, one of the factors, the first one is consolidation. We are consolidating the shopping mall and we have brought the real increases in the second year. You start to have an impact on this growth of hired rent. Another point is that last year we had an acquisition of 9% of Jacarepaguá with a minority participation of the shopping mall that also contributed for the growth of the rent. To summarize, three: the consolidation process, the increase in participation, and the real increases in rent. In regards to the expenses I’ve had, efficiency is running. 95% of NOI margin is very strong.

We cannot be a victim of success. Thinking that we’re going to keep 96% for a long period would be a desire, but it’s not a reality. We’ve presented throughout the quarter very high margins, 90%. I think that this is what we imagine that we should have. Now remember that there are new areas, expansions. Usually we have a higher expense with vacancy and turnover of stores. We see two big expansions being delivered last year and there is another three being delivered. In Maceió, the other two in the first quarter, in the fourth quarter and ParkShopping Brasília. Thank you. Our next question is Andre Mazini, Citibank. You may open your microphone. Good morning. Good morning to all the team. Two questions.

First, what would be the threshold stabilized for the expenses of properties, the recoverables that you’ve had in the quarter that allowed for an important drop in the property expenses and it was 26 in this one. What can we expect in nominal and also the percentage of revenue up ahead? If you can show us specifically what was recovered for this gain, it would be interesting. That’s the first one. The second one is the 15% stake on Barra and 4% that is being sold by the pension fund. Can you tell us in capital allocation in your, what is your train of thought with Silica at 15% and Multi more leveraged after having repurchased the Canadian partner last year? You know, higher leverage than last year and the stake in two trophy assets that are coming to the market. How do you see this? Thank you.

Andrea, this is Eduardo. By the end of the question in regards to the sale, it’s normal. For many years it was the great investment that FAPs did in their pension fund. We talked about this. They want to monetize and change the position. It doesn’t change a lot of things here because we produced a shopping mall. I’m always looking ahead to seeing what we’re going to produce. I’m focused on the things that we want to do, which is the expansion of Brasília, Morumbi, and the expansion of Maceió, the improvement of the entirety of the portfolio, and this will generate other Morumbis and other malls in the future. Second part of the question, in regards to the properties, I would like us to improve even more because if we can get every quarter, get news to you guys and get more efficiency, it will be better.

Is it possible to do this always? No. We always try to get through agreements and a lot of things that were in the legal, getting these credits back, but we are not always that successful. Our department has worked a lot, we managed to get a lot of things back. This is what I can tell you in regards to what you asked. Thank you. All right, next question. Fanny Orang Santana, you may open your microphone. Congratulations on the results. I have a question regarding the Golden Lake. It really called our attention, the selling of both phases. Do you have in your pipeline the launch of the third phase of the project? If you can give us the vision, what is improving and accelerating the price of sales in the project? Is it going to be ready soon? People like it more.

I just want you guys, your two cents on that. Thank you, Fanny. As you implement this, it has more attractiveness. What we have announced that we are going to do later is a reality before it’s a reality. The proximity to what we announced is an important factor. The proximity of the delivery of Lake Victoria is also important. Golden Lake is going to be ready in six months. We’re going to get it done in 30 days. All of this helps with Lake Erie, which are smaller apartments, it’s a smaller ticket. Here there was a part of. There are a lot of people trying to get more apartments in a safer part of town. Porto Alegre lived the disaster a year ago. Our condominium has all the conditions that if anything happens or another climate event, we are safe there. All of this has a big weight.

We are selling a concept of a planned neighborhood, and those that visit realize what is being implemented. All of this helps a lot. The next phase, as you commented, we are still designing it. We are still discussing what are the products that we will repeat or not, but everything is okay. We’ve had a lot of difficulties. We’ve continued to the next phase, trusting that what we are doing in Porto Alegre is being delivered. In the next phases, you’re going to improve the project? Say yes. As I told you in the beginning, we’ve opened this at 13,000, 1,324, maybe 30. Since this is a concept, a new concept for Porto Alegre, Cambrio de Janeiro is very, I’m used to, takes some time to realize that you’re in a planned neighborhood. Thank you. Next question. Carla Grassa, Bank of America. Good morning everyone.

Thank you for the opportunity. I have two questions. I want to do a deep dive on how do you see the next drivers of growth of the company now that the renovations are being finalized? Do you see a new wave of expansion that might be in the future? If you can comment on the delinquency and occupation, do you think that is sustainable? What can we expect in the next quarters? It’s difficult to talk about the future in Brazil. We trust in the path that we have taken of reinforcing the shopping malls that we have. Once again, there’s a lot of potential for the expansion, for the renovations. I cannot get all of those expansions done at the same time, otherwise you dilute the value. We could deliver two, and we’re going to deliver another three that are being built.

There is another two with the projects, which is Junjiaye and Songkatana would be the next ones. There is a lot being developed by the company. It’s recurrent with the public. The public meeting, I explained that you need to have an expectation that is optimistic. I’m not saying that this doesn’t exist, but I’m saying that this is not as obvious as it was in the past, as we had the driver of growth that is very big for the country. I believe that we are going to continue to grow. We continue to pay attention. Greenfield and possible acquisitions, everything is on the table. We wanted to do renovations, expansions, because it’s more adequate for the moment that we’re living right now. How about delinquency and occupation? I wanted to add something. There is a fundamental ingredient here of a lot of importance, which is capital allocation.

You can have the opportunity of growing. This is what we ponder when we make a decision of investment. Another thesis, which is Centenary, which is the retail that grows in the shopping mall. Going over the next question on occupancy, you have occupancy 96.1%. It’s been kept high and it’s been growing. There are some factors, with sales growing 12.8%, delinquency very low. You have the occupancy 96.1% and you have the turnover 1.1%. If you look at it in a quarter, you see a high stability. The lower one has an increase in the factor of stability that shows that the upside risk where there is the rent and it doesn’t give you demand by space. For you to expand the shopping mall, it’s natural in this environment.

Our desire, as Eduardo Perez has mentioned, is very difficult to do predictions, but is to get all the investments for you to have an occupancy rate that can be kept growing and generating good sales. Keeping delinquency low, as we’ve seen, very much lower than the records, which is the delinquency pre 2021, 1.10%. We had last year very low, 0.20%. Thank you very much. Next question. You may open your microphone. Thank you for the opportunity. Two questions on the capital allocation. First of all, I wanted to understand how much CapEx are we missing to finish the renovations? The second question is, you have the works going and this with the expansions, the CapEx, most of the CapEx that you have, I wanted to understand, have you delivered those expansions? Would they change the way that you think about the payout of the dividend?

Would you think that there is a possibility of increasing the payout? How do you think about the payout? What is the framework going up? Thank you. I think that I understand your points correctly. If I don’t answer exactly, please let me know. First, the second part, the payout. When we’ve done the exercise of repurchasing the shares last year, we had a commitment that this big repurchase would not affect our capacity of investing or continuing to invest and returning capital to the shareholders. If you see how much we have distributed in the last month, R$1.12 per share, the biggest value distributed to the shareholders until now. Thanks to this repurchasing of shares that we’ve done and the great results of the company, even though we have the minimum dividends according to the laws, we are going towards the 50% and this is our mindset.

We continue to distribute in this threshold, but we will always evaluate higher or lower in accordance to the investment opportunities that we have. At this moment nothing changes. In regards to your question CapEx, we have the numbers that we’ve already discussed. We have three expansions. These expansions, if you get R$510,512 million in historical numbers, in this quarter we’ve done R$557 million CapEx of expansion. We would have R$352 million left. We already used some of that last year. About R$300 million could be the math. That is simple for getting to what we need up ahead in CapEx in these three expansions. Another important thing with the CapEx, Eduardo commented several times and we are at the final phase of this process of reworking and renovations.

They were less than last year, which was the height and you still see in our reports these numbers decreasing a lot. To help you with an indication of CapEx that is missing for the year of 2025 up ahead, I hope that I helped with the numbers. Thank you. Next question. Love of Fleming from Safra. You can open your microphone. Can you open your microphone? We’re going to continue to the next one. When you can reestablish a connection, we can go back to your question. We’re going to have the question of Jonathan Coultres, JP Morgan. Go ahead. Thank you. Eduardo, Armando, congratulations on the quarter. I have two questions on my side. First, about the 3.5% that we have in a quarter. Do you want to keep this threshold and certain segments and regions that you can share?

The second question in the revenue of services, 16%. If you can give us more detail, is there anything beyond the administration? Thank you very much, Jonathan. The 3.5% is very much aligned with the fundamental spreadsheet in our website. It is aligned and we show the strong capacity to continue to grow with the inflation and this has helped us with the recovery that we’ve had against the deflation that was presented. In regards to service, there were several factors that had a growth in the revenue above 16%. First, we have more area, more ABL because of the expansions that were opening. Secondly, we have a growth that is very strong and these are the revenues of service.

Third, we have had several rates of transference of stores and recoveries, and we had a condition regarding this with the owners, and this has pushed for the revenue of services in this quarter. Now we go back to the question of Safra. Good morning. Yes, we can hear you. Good morning. Eduardo, Armando, everyone. I wanted to do a follow up with the Golden Lake. How do you see the performance of sales in the sense of the difference in type? You have Lake Victoria, the higher units, VGV higher. Do you see any difference in that sense? Looking to the other six phases, would they be more concentrated in lower, in smaller or larger units? Hi Eduardo. The first phase, high, bigger apartments, more expensive, so more difficult sale, more it takes longer. It’s a buyer that is more susceptible to the changes in the market.

Here there are people that have a lot of investment options. They think a lot to move. It’s different from this phase that we’re now, which is Lake Erie selling, which is a smaller apartment and you don’t have the investor, oh, I’m in Brazil, I’m not in Brazil. You don’t have this type of distraction for the level of sales. For this phase we are focused. These first months of the year we saw sales in both in Victoria and Lake Erie. We’ve grown stronger with Lake Erie because it has expansion. Victoria has very few units to commercialize. I think that in 30 days we’re going to have a position that is ever more advantageous. Golden Lake is going to be ready and today there is still works. It’s difficult for people to understand how this will work.

The next phases that you mentioned, we don’t have it defined. You have a pre-approved project, but it doesn’t mean that we will execute as it is. In a pre-project, the trend is that we repeat more apartments with the size of 200, 210 and maybe smaller than that for the next phases. With an apartment building such as this, you start by, if we start by the more luxury one, the one that will give the best image for the condominium, and then you decrease the size of the unit. There is a trend in the world of a lot of people that don’t want to live in such a big apartment. People don’t want to have, you know, employees. They want to do everything by themselves. We will study the next phases so we can implement what the market will absorb better. Thank you for all the questions.

We will now close the Q&A session, and we invite the participants that still have questions to get in contact with the IR department. I’d like to give the floor to Eduardo Perez for the closing statements. Thank you. I would like to thank everyone. It was a quarter that was very intense, as it has been since I’ve taken the presidency of the company. I am very assured of the strategy that we’ve chosen. We’re going to deliver another three expansions, and we will fulfill with what we have as objectives. Improve the assets, bring more sales, and improve the experience of those that come to the malls, because our public is the one that runs our company. Thank you very much. The earnings call of the second quarter of 2025 of MultiPlan S.A. is closed. Have a nice day.

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