Good day, thank you for standing by. Welcome to Mallplaza Second Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw the question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Derek Tang, CFO and Corporate Administration. Greetings and welcome to Mallplaza Earnings Conference Call. Thank you for joining us this morning. I'm here today with Fernando de Peña, our CEO and the only Latin American member of the Board of Trustees of the ICSC. Also with us is the Investor Relations team represented by Ramón Artuza, Sebastián Macchiavello, and Matías Guerra. We're pleased to introduce the company's earnings results for the second quarter of 2023. First, we will begin with a brief overview of the company's quarterly results. Second, we will highlight some strategic remarks regarding the quarter. As usual, we will end with a Q&A session. Starting in page two, the second quarter of this year continued with solid operational results. Footfall to our urban centers continued increasing, reaching 68 million visitors during this quarter, increasing 6% compared to the second quarter of 2022. Our tenants' performance continued in good shape despite a more challenging macro environment and consumption levels. Tenant sales reached CLP 1.1 trillion, decreasing 3.7% compared to the same quarter of last year, mainly due to low performance of department stores and home improvement stores, but continued to show resilience against overall retail sales in Chile. For example, in Chile, for sales in the metropolitan region, Mallplaza tenants were on average 10 percentage points above market sales for the last four quarters. In terms of occupancy costs, it reached temporary levels of 11.5% during the second quarter, mainly because of the decrease in sales of tenants and higher condominium expenses associated with inflation. All in all, revenues reached CLP 103 billion during the quarter, increasing 16% year-over-year, mainly because of readjustment of lease contracts where same-store rent showed a nominal growth of 11% for the quarter and 13% for the last six months due to the indexation of lease contracts to inflation and due to increment of lease meters, with a year-over-year increase of 110 basis points in occupancy rate to 94.5% in the second quarter of 2023. As noted in the following page, cost of sales increased 23% year-over-year, mainly because of higher expenses and contributions associated with the 2023 higher property tax. On the other side, administrative expenses increased 27% compared to the second quarter of 2022. This was mainly explained by higher bad debt provisions associated to the financial recognization process of two specific tenants in Chile due to non-recurrent expenses of severance payments related to an organizational structure simplification plan and higher than expected expenses and remunerations and incentives associated with a higher CPI. Thus, EBITDA increased 13% year-over-year, reaching an EBITDA margin of 76.5%. It is important to notice that without the one-off expenses of severance payments, the EBITDA margin would have reached levels of 77%. Lastly, turning to page five, the net income reached CLP 167.1 billion, increasing 103% year-over-year, mainly explained by other revenues line, which increased due to the fair value of investment properties methodology adopted for this quarter. Additionally, the adjusted FFO reached CLP 64.7 billion during this quarter, increasing 31% year-over-year, mainly due to better performance of the operation and less minority interest adjustment because of the purchase of the minority stake of the subsidiary Nuevos Desarrollos. The adjusted FFO margin reached 63% during the quarter. Moving to page six, I would like to highlight that from this quarter onwards, Plaza S.A. adopted a new accounting IFRS policy, changing from an accounting structure at historical cost, construction and/or acquisition value of the asset less depreciation, to a fair value methodology, which represents an estimate of the market value of the assets at a point in time according to a certain valuation methodology, which we believe will more adequately reflect the financial situation of the company and will allow Mallplaza to become more comparable with other real estate companies, both national and international. This new methodology applies to discounted cash flows methodology, where future flows are discounted at a weighted average cost of capital rate per country for each given period and in real terms. The applied methodology was reviewed by external expert advisors and will not have effect in the company's EBITDA. The effects of the fair value assessment of our investment properties can influence certain metrics of the company, such as the overall indebtedness as calculated in our bond covenants. The approximate effects can be seen in our financial statements. I would also like to highlight that on the second quarter earnings release, we provided further disclosure by Mallplaza of all of our urban centers. We believe that this information will be helpful to provide further visibility into the quality of the portfolio of assets that Mallplaza is built on, with a broad number of dominant assets in their respective markets. Now, I turn the table to Fernando, who will share important strategic remarks. Thank you, Derek. As Mallplaza, we continue to roll out our value proposition of turning our 25 urban centers into places that favor socialization and multiple visit to visit, anchored by a solid, detailed proposal with highly valued brands, an innovative gastronomic and entertainment offer, and multiple mixed-use spaces. If you dive into the details in page eight and nine, Mallplaza NQS and Mallplaza Vespucio are great examples of what can be accomplished when transforming our assets into a top-tier urban center. In terms of retail, we are proud to have a portfolio of commercial partners reinforced with important brands and strategic alliances. Examples of these are the new and upcoming openings at the regional level of H&M, 19 stores, IKEA with three stores, and Decathlon with four stores. Gastronomy and entertainment have been one of the categories with the best quarterly performance. Mallplaza continues to consolidate its external offering, increasing 33% F&B and entertainment sales in the first semester 2023. Cinemas, for example, grew 47% in sales in Chile during this quarter, year-over-year, answered by renewed movie showtimes and the renewed IMAX screens in Mallplaza Vespucio and Mallplaza Egaña. In addition to this, the second quarter brought new openings such as Centro X Event Centers in Mallplaza Los Domínicos, the Bullp adel Center in Mallplaza Oeste, and the inauguration of Arena XP, our second space for gamers now in Mallplaza Oeste. To add some final remarks, Mallplaza has one of the best portfolios of urban centers in the region, where we truly have 25 urban centers that, as a whole, are key to understand Mallplaza's performance and potential. To have 10-year-old urban centers, which are malls that generate a high return on investment and that present a strong competitive position, a high flow of visits, growth potential, and a very high productivity of residential area, is something that very few companies in Latin America achieve. We are convinced that a permanent connection with people, the understanding that our urban centers are living spaces and they are permanently transformed, allow us to respond to consumer new needs and be able to surprise and enrich everyone's lives by doing so. We are now ready for questions that will start the Q&A session. Thank you. Ladies and gentlemen, to ask a question, simply press star one one on your telephone and wait for your name to be announced. To withdraw your question, simply press star one one again. One moment while we compile the Q&A roster. All right, one moment for our first question. It comes from the line of Jorel Guilloty with Goldman Sachs. Please proceed. Good morning, everyone. I have two questions. One is on the trends of occupancy costs. We did see that you had some pricing power with rents increasing while sales were decreasing. As you think about this trend going forward, I was wondering if you think that there's any limits into how much more you could raise rents if this trend would continue, or is this something that's seen as transitory and you would be able to continue with the pricing power that you've seen? The other question is on the driver for the market of assets. You mentioned this is to keep it in line with international standards, but I was more wondering, would this have—are you also thinking about perhaps matching this increase in inflation, particularly for debt, and trying to match it with the increase in growth for the assets, sort of like not outweighing, but sort of matching those two in both the assets and liability side? Was that a driver for it as well? I guess that's my question. Thank you very much. Please stand by for our answer. Experiencing some technical difficulties. Wait, I can hear you now, sir. Yes. Hi, Jorel. Thank you for your questions. With regard to the first question regarding the trends in terms of occupancy costs, as disclosed in this quarter, we saw an increase in occupancy costs year-over-year. This was partly a common expense and promotion fund in part on the lease side. We do know that inflation has been bringing by some impact towards the common expense. Now, when looking in terms of sales and sort of sales outlook, there are certain—when you look at the macro environment, we should expect to see some level of update going forward in terms of sales. I mean, when we look at the visitor traffic and level of footfall, this has been presenting an increase of 5.6% overall. As this rolls out, this should bring by an impact in terms of occupancy costs as well. Moving to the second question in terms of the mark-to-market of assets, as you well know, this is sort of a standard practice both internationally and nationally as well when looking at other companies that have adopted it, and it is something that IFRS allows you to implement. With regards to our liabilities on our debt side, it was adjusted by inflation, and this brought by a mismatch because the assets were not adjusted by so in the same standard. We think that by doing the fair value assessment, this reflects a better impression of the overall results and the overall status of the company. Thanks. One follow-up, if I may. Therefore, going back to the occupancy cost question, the expectation is for sales to pick up going forward from this one because we have seen some weakness in Chile overall in sales progress. If I understand it correctly, the outlook is essentially that of growth. When looking in terms of the macro level overall, we did disclose that we have been outpacing overall retail sales in Chile for about 10 percentage points on average. We do expect this outpaced to continue. As this happens, this should bring by a positive effect towards occupancy costs. I think the other important factor to mention here is that we've been very active in reshuffling our tenant mix and reconverting some of the department stores as well that could potentially bring a positive impact on sales. Got it. Thank you. Thank you. As a reminder, ladies and gentlemen, if you do have a question, simply press star one one on your telephone. One moment for our next question. We have a question for Marcelo Motta with JPMorgan. Please proceed. Hey, hi everyone. Thank you for taking the questions and congrats for the improvements on the disclosure on the release. It definitely helped us with our analysis. Two questions on my side as well. I mean, the first regarding margins, right? We saw margins down on a year-over-year basis. I mean, of course, it has to do a little bit with the increase in taxes that we saw in Chile. Just wondering if this should be the new structural level of margins for Mallplaza given these additional taxes or if there is anything that the company can do to offset and bring margins back to previous levels. The second question is regarding capital structure, right? I mean, leverage, I mean, it's not an issue. I mean, we're talking about roughly three and a half times net at the day, but just wondering when we think about expansions, dividends, CapEx, greenfields, brownfields, divestments, I mean, how do you see the best capital structure and are you happy with the leverage level that you have today or not? Thank you. Hi, Motta. Thank you for participating in our call and thank you for the feedback on our earnings and for your questions. First, regarding EBITDA margin, you're correct when you do mention that part of the impact has been the impact on contributions and taxes and local taxes. This has brought a level of impact in terms of margins overall. We disclosed an EBITDA margin of 76.5% in this quarter. If we look at prior to the pandemic, this number was closer to 80%. Part of our goal here is always to see ways in which we are able to improve the efficiency of the company in spite of these impacts such as the local taxes that we mentioned. To your second question, in terms of leverage, we ended the quarter with a net debt to EBITDA with about 3.7 times. We should expect to see this number decrease towards year-end. Part of the impact why we did see this increase was due to the Nuevos Desarrollos transaction. By year-end, this number should be closer to 3 times, which provides us with a fortress balance sheet and gives us ample space to look into future investment opportunities. Hi, Motta. Sorry, it's here, Sebastián. I also wanted to add something on your first question. The thing is that structurally, we don't think that we have reached levels of EBITDA margin yet. We think that we can regain our EBITDA margins that we see in pre-pandemic levels, the 80% that we were used to. Because if you see the trend of Mallplaza in terms of margins and you compare it with how cost has been growing since, I don't know, 15 years ago, we have been able to continually reach and continue to have an EBITDA margin of 80%. I think that's something that you should take into account when making analysis to this company because Mallplaza has been able to reach and to gain levels and to maintain levels of 80% in the past, and we don't think that we cannot do it again in the midterm. We think that for the end of the year, we think that we are going to be at levels of 77-78%, but we think that in a couple of years, we can be able to pass through all these higher costs that we are seeing right now and be able to reach again levels of 80% of EBITDA margin. No, perfect. Very clear. Thank you very much. Thank you so much. I do not see any further questions in the queue. I will pass it back to Derek Tang for final comments. Thank you all for connecting in this Second Quarter 2023 Earnings Call for Mallplaza. As mentioned by Fernando, I would like to once more share with you that Mallplaza has one of the best portfolios of urban centers in the region. We did disclose, we took the advantage in this earnings in this quarter to disclose further information on all of our assets whereby this analysis can be made. We believe that it is key to understand Mallplaza's performance and potential. The top 10 tier A urban centers, which are malls that generate high return on investment and present a strong competitive position, a high flow of visitors, and growth potential for the company. Both myself, Fernando, and all of our investor relations team are available for any future further questions you might have. Thank you once again for participating in our call. Thank you. Thank you all for participating, and you may now disconnect.