Good morning, everyone, and thank you for waiting. Welcome to BR Properties' first quarter of 2022 results conference call. With us here today we have Martín Jaco, CEO, and André Bergstein, CFO and IR Officer. This event is being recorded, and all participants will be in a listen-only mode during the company's presentation. After BR Properties' remarks, there will be a question- and- answer session. At that time, further instructions will be given. Should any participants need assistance during this call, please press star zero to reach the operator. This event is also being broadcast live via webcast and may be accessed through BR Properties' website at http://www.brpr.com.br/ir, where the presentation is also available. Participants may view the slides in any order they wish. The replay will be available shortly after the event conclude. Now I'll turn the conference over to Martín Jaco. Mr. Martin, please go ahead. Related to the first quarter of 2022 results. Thank you, everybody, for your time and interest. In terms of the dynamics of this call, I'll give a brief introduction and summary related to the first quarter, followed by a detailing of the results by André Bergstein, and finally, the Q&A session. We will leave enough time for any doubts, questions, and clarifications that you might need or want. Let me start with this introduction, a summary of what happened operationally in the company in the first quarter. We have this quarter, the results came in line with what the management of the company as a whole and the market was expecting. By the way, this is what we consider internally a typical quarter since we did not show any M&A activity, that is to say neither sale nor acquisition. Since we are very opportunistic, our approach is always opportunistic in the terms of investment. We usually have on the quarter some type of sales or acquisition or both. This is a quarter that we did not have any M&A activity. Therefore, we have two main comments on the two different fronts of the company. The first one is relating to the lease activity of our company and the market as a whole. Let me start from the market as a whole, then I'm talking about the office market of São Paulo and Rio de Janeiro. In general, both markets, São Paulo and Rio de Janeiro, when you consider every and all types of quality of office, they all had the third quarter in a row with a reduction of vacancy. What does that mean? That we have positive net absorption both in São Paulo and Rio for the third quarter in a row. That's a very important aspect that we see that not only the triple A assets, the best assets are working, but the market as a whole is functioning pretty well. This is owing to the pandemic, which is getting close to its end. It doesn't mean that it ended, but it's getting close to the end. The day-to-day activities of the office buildings are resuming in a fast manner. This is a fact when we analyze the market as a whole. This is a very good indicator that we have of the market. When we go trying to be to narrow more down our discussions, when we analyze the not the market as a whole, but only what we consider to be the triple A assets, which is the core of our investments. By triple A properties, we mean the properties that not only have superb technical specifications, but also prime transportation, including public transportation, subway, and the offer of retail services in the building and the surroundings of the building. This is what we believe is what the tenants are looking for. It's proved that those types of property has a much better performance than the other type of properties, class As, class B, class C, or decentralized. This is very important since all of our portfolio or 99% of our portfolio is considered to be a triple A. In fact, the market has overall had three quarters in a row with reduction of vacancy, and we are having reductions of vacancy since the beginning of the pandemic, so we're talking six, seven, or eight quarters of reduction of vacancy levels in a row. This is very important, and this proved that our strategy carried out five, four years ago of really recycling the portfolio to invest in this type of assets was very assertive. Some examples of what happened in this quarter, we have a total lease of 11,000 sq m, being 9,000 sq m of these 11,000 in Parque da Cidade. Parque da Cidade is the new investment that we acquire on the first quarter of last year, which is already 31% occupied in the middle of the pandemic. This is a fantastic number. It's quite in line with our underwriting. It was previous to the pandemic. What we're seeing now is that the movement is increasing, that we have pipeline which is very solid. Companies are taking a little bit longer to have that decision, not only because they have to think about their business as a whole, what it will be in five years, 10 years, or even 15 years. Plus, what do I have to offer internally to my staff or for the future staff that I have? It's a much more difficult decision that the companies have to take. We can say that we have identified those companies. It's a matter of maturing these negotiations of leasing. This is why we talk about occupation in office and a little bit of occupation in the logistics in our portfolio. Last year we acquired an under-construction property, industrial logistics property in Rio called Centauri Building. When we acquired, it was under construction, but it was already 100% pre-leased. By the way, we signed the pre-leasing on the same day that we made the acquisition. We leased to a very, very large multinational that will be their e-commerce platform, and the building has been completed. All documentation has been obtained. The tenant accepted the building and is already 100% operational for this tenant. This is a very good indication of what happened in the first quarter. Although, not only those 62,000 sq m, but also the other more recent leases that we have. Summing them all up, we'll be talking about 80,000 sq m of new leases. Those new leases have not passed in the top line of the company. That is to say they are not being considered as income until the first quarter of this year. It will only be recognized as revenues from the second quarter onwards. Therefore, we already have the growth of our top line already, contract already signed by the company. That's a very good indicator of what's going on in our portfolio. To finalize the logistics activity, we are finalizing now the construction of the Cajamar Complex, 150,000 sq m. The first building, 35,000, roughly, sq m, is already being completed, and the documentation for occupancy has been already obtained. In the next 60 days, we'll receive the documentation for the 110,000 sq m- 115,000 sq m of the total complex. That's a very important step, a very important landmark on the development of those properties since demand was already identified. Now that we have the permits for occupation, the tenants are moving faster, so we expect to have very good news throughout this year in this 150,000 sq m of prime logistics area in São Paulo. Cajamar, for those who don't remember, we're talking about the best logistics location in Brazil. For e-commerce, we're talking about the entrance to São Paulo, the largest consumer center in the country. This is a very important asset that we've been successfully developing, now finalizing with all the permits of occupancy. The first aspect that I want to talk was about leasing. The other aspect that I want to talk is about our financial costs. On one hand, we had a very good and expected development of the lease activities and occupancy. On the other hand, we have the financial costs increasing in the company. A little bit of context about this financial cost. We made this movement four to five years ago. We started to change the profile of our debt, changing in two main aspects. The first one, change it to CDI. That is to say the interest rate of Brazil, because we knew that this interest rate will come down over the next years, and we wanted to seize this great advantage of having very low interest rate, and we were very successful on this structure. The other strategy when we renegotiated those debts four to five years ago, was that we had conditions of prepayment all those debts. So we could exit those debt, we could prepay them and terminate those debts inside the company as soon as we see those interest rates rising in the future. Interest rates already rose. They rose faster than everybody was expecting. That's what we're seeing right now. That's what we have been suffering. Everything that we have been able to create and on the leasing side is being shadowed by the financial costs that we're having now. All this strategy of prepaying all the debt that we placed ourself in the past, as we said in previous calls, the idea right now, the strategy of the company right now is to prepay this debt in order either to reduce the debt or eliminate completely the financial cost that we have in the company. Therefore, to finalize this introduction, we have the strategy today, which is really the key. Lease will always be a priority, so I don't have to stress that. Lease is always what we have in mind in the company, but also what's our number one today priority is to reduce these financial costs. This financial cost will be made by the prepaying of those debt and the cash, the capital, the resources to make this reduction in debt will come from the sales of assets. This is something that we've been saying over the last quarters. We've been very active over the last months with several groups of all different interests. Some of those groups want a specific asset or a participation in a specific asset. Some other groups want a part of our portfolio, one, two, three properties specific. Some others want a larger portfolio. We have different conversations on the table. Some want office, some want only logistics. We have several conversations on the deals which are maturing. Unfortunately, none of them have matured to a level that we can announce them. What is that to say? We have a lot of conversations, but we haven't signed any preference or any binding documentation. We didn't sign or have anything firm with any other groups. We expect that throughout the next weeks, the next months of all the work that we're doing and all those conversations that started a long time ago will mature. Hopefully we'll be coming to the market, and as soon as we have one negotiation of sale of the asset that really matures, and we signed something binding for the company, we'll come to the market and make this announcement as soon as we can. We're working really hard on this strategy. This is number one strategy on the company today. Summing up, this is the introduction. Again, just summing it up, the leasing activity is going very well on both fronts, on office and logistics. The financial cost is something that we have this in mind, and we will reduce through the strategy of selling the assets, which conversations are along the way, but there's still a long way until we find a buyer or a group of buyers with a firm and binding proposal. This is what we have done, but let me just turn the word to André, so he can guide us into more details of the result of the first quarter 2022. André, please. Thanks very much, Martin. Good morning, everyone, and thank you very much for attending the call today. Well, regarding the financial highlights of the first quarter of 2022, I would like to talk a little bit about the following points. First, net revenue in this first quarter was BRL 83 million, 10% up versus the first quarter of 2021, considering the same property portfolio. It's worth mentioning, as Martin has already said that, around 20,000 sq m in new lease agreements, already signed, in our commercial office buildings, were not booked in the first quarter results, neither the corresponding revenues from galpoes Centauri 63,000 sq m. Those revenues will be accounted only in the second quarter. Together, considering this, almost 83,000 sq m of office buildings and the warehouse, we will get around BRL 8 million of gross revenues per quarter already signed. The average rent per square meter from same properties increased 3.7% over the last quarter of last year, and 4.9% over the first quarter of 2021. The increase over last quarter is above inflation, as we usually have 1/4 of the agreements being adjusted every quarter. About annual comparison, some contractual adjustments were the main reason for the 4.9%. Otherwise, we're gonna have more than that. If we consider only the inflation adjustments, the increase was in line with the agreement inflation indexes that we have, IGPM and IPCA, in this last 12 months. Just as a note, in this first quarter, the mix between IPCA and IGPM as inflation index in our portfolio agreements got to 50/50, much different from what we used to have before the pandemic, which was something around 90% IGPM and only 10% IPCA. In the first quarter, G&A expenses excluding vacancy expenses, stock option plan, and taxes amounted BRL 15.4 million, 8% up versus the same period of last year. This change is below inflation measured in the same period, which means that we are being able to keep our G&A above inflation. BI profit adjusted EBITDA excluding non-cash results such as stock option plan and non-recurring expenses total for BRL 54 million in this first quarter, 11% down versus the first quarter 2021. It should be noted that just in the same way as gross and net revenues, this drop was due to assets sold during 2021. Excluding those assets and the sales effect, adjusted EBITDA was down only 1% in this period, which means it was roughly in the same level last year. Our EBITDA margin achieved 65% in the quarter. Again, in the first quarter, adjusted net financial expenses totaled BRL 55 million, an annual increase of around BRL 38 million when compared to the same period of last year. The result is explained by the sharp increase in the Selic interest rate since March last year. It came from 2% per annum to today, 12.75% per annum. We posted a net loss of BRL 30 million in the first quarter, and the FFO totaled a negative BRL 1.3 million in the first quarter of 2022. The FFO margin achieved - 2% in the quarter. As mentioned above, this result is totally explained by the sharp increase in the Selic interest rate in the period. Our net debt by the end of quarter was BRL 2.1 billion, and the cash position got to BRL 861 million. At the end of the first quarter, the average effective cost of debt was around 14% per annum, which is equivalent to CDI + 2.4. On April 7th, the amount of BRL 7.6 million was credited to the shareholders as distribution of dividends based on 2021 results. Additionally, in accordance with the BR Properties new dividend policy, it was approved on the AGM that took place last week. The additional distribution of dividends in the amount of BRL 41 million, equivalent to 0.089 per share. This amount will be paid through the year in three equal installments. The first one in June 13th, the second one in September, and the last one in December 20th. On a governance perspective, in January of this year, the company audit committee was established. The audit committee is composed by two members, two of them being independent members of the board of directors. A new independent member, Maria Helena Cardoso Figueira, which is very well-recognized for her experience in corporate accounting matters and in other fiscal councils and audit committees. Additionally, in the AGM held on April 26 last week, the company approved following the new rules of Novo Mercado, changes in its bylaws, expanding the corporate governance with its shareholders and the market in general. As a final note, I would like to tell that considering the mandatory change in our independent auditors, that we have to do every five years, this quarter was the first one and already audited by KPMG. We appreciate a lot and thanks very much all the work done by Ernst & Young in the last five years, and very, very welcome, KPMG. Now those are all the financial highlights of BR Properties in the first quarter of 2022. We will now open for the Q&A session. Again, thanks very much for your attendance today. Thank you. The floor is now open for questions. If you have a question, please press star one on your touchtone phone at this or any time. If at any point your question is answered, you may remove yourself from the queue by pressing the star two. Questions will be taken in the order they are received. We do ask that when you pose your question that you pick up your handset to provide us new sound quality. Please hold while we poll for questions. Thank you. This concludes today's question- and- answer session. I would like to invite Mr. Martín Jaco to proceed with his closing remarks. Please go ahead, sir. Thanks everyone for your participation and interest, and as always, we'll be 100% at your disposal if you need any clarifications or any doubt may arise. Thanks very much and have a nice weekend. That does conclude BR Properties conference call for today. Thank you very much for your participation, and have a nice day.
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