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  • 1. 3Q12 Earnings Release Presentation
  • 2. Highlights 3Q12 HIGHLIGHTS AND SUBSEQUENT EVENTS• 3Q12 results were significantly stronger than 2Q12, when One Properties was merged into BR Properties;• 3Q12 net revenues totaled R$168.0 million, an increase of 83% over 3Q11, when net revenues came in at R$91.8 million. The significant growth resulted from additional rental revenues of the new properties;• 3Q12 adjusted EBITDA of R$156.4 million, an 84% increase over 3Q11 and adjusted EBITDA margin of 93%. 3Q12 non-adjusted EBITDA reached R$147.0 million, and EBITDA margin of 88% (adjusted EBITDA excludes non-cash and non-recurring expenses);• 3Q12 net income totaled R$259.2 million, impacted by the net gain on appraisal of investment properties and by the net operating profit of the quarter;• 3Q12 adjusted FFO excluding non-cash and non-recurring expenses totaled R$34.8 million, and adjusted FFO margin of 21%. It is worth mentioning that BR Properties already incurred financial expenses related to some properties under development, which are not generating any additional revenue;• During 3Q12, the Company reached leasing spreads (net of inflation) of 27.0% on new leases signed in office buildings and 45.8% in industrial properties. On market alignments of existing contracts, real gains were 20.8% in office buildings and 16.1% in industrial properties;• The financial vacancy rate was 4.5%, while physical vacancy rate came in at 3.2%. Excluding the recently delivered Paulista Building, currently under lease-up, financial vacancy drops to 1.4%. In terms of area, office, industrial, and retail properties were 95%, 97%, and 100% occupied at the end of the quarter, respectively;• In July, BR Properties concluded its first issuance of non-convertible local debentures, raising R$600.0 million in two tranches: R$369.0 million at CDI + 1.08% p.a. maturing in five years and R$231.0 million at IPCA + 5.85% p.a. maturing in seven years;• Also in July, the Company prepaid/refinanced additional R$364.5 million of debt inherited from One Properties, which had a weighted average cost of CDI + 3.7% p.a.;• In August, the Company prepaid commercial papers issued in 2Q12, utilizing part of the proceeds from its first issuance of non-convertible local debentures;• Also in August, the Company executed the sale of units of the Cetenco Plaza Building for R$47.2 million, resulting in exit cap rate of 6.5%. 3Q12 2
  • 3. Portfolio Portfolio Market Value 9M12 Revenue Breakdown 56% Straight-line 1% Leasing 98% 12.968 13.552 Services 1% 8% 11.715 36% 4.751 4.918 5.142 5.254 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 Portfolio Breakdown Portfolio Breakdown (% market value) (% GLA) 5% 5% 18% 24% 50% 15% 62% 21% Of f ice AAA Of f ice Industrial Retail Of f ice AAA Of f ice Industrial Retail 3Q12 3
  • 4. Financial Highlights Net Revenues (R$ thousand) Net Income* (R$ thousand) 83% 70% 294% 4% 210% 1.044.337 75% 430.159 253.156 160.935 168.031 259.234 264.909 91.803 83.749 3Q11 2Q12 3Q12 9M11 9M12 3Q11 3Q12 9M11 9M12 * Impacted by the net gain on appraisal of investment properties 3Q12 4
  • 5. Financial Highlights Adjusted EBITDA (R$ thousand) Non-adjusted EBITDA (R$ thousand) 93% 93% 87% 88% 87% 86% 90% 91% 91% 84% 71% 84% 84% 69% 8% 8% 70% 392.726 370.094 70% 229.376 219.445 144.568 156.380 135.752 147.034 84.923 80.070 3Q11 2Q12 3Q12 9M11 9M12 3Q11 2Q12 3Q12 9M11 9M12 Adjusted EBITDA Margin EBITDA Margin EBITDA Breakdown 2Q12 3Q12 3Q11 3Q12 x 3Q11 9M12 9M11 9M12 x 9M11 Net Income (loss) 332.390 259.234 83.749 210% 1.044.337 264.909 294% Deferred Taxes (153.916) 150.588 53.807 180% 648.611 98.549 558% Income and Social Contribution Taxes (12.104) 17.293 5.441 218% 34.381 17.004 102% Gain (Loss) on Appraisal of Investment Properties (554.489) (382.650) (180.268) 112% (1.667.045) (348.209) 379% Gain (Loss) on Sale of Investment Properties 8.525 (2.156) (485) 344% 6.369 856 644% Other Operating Income (1.646) 1.218 1.589 -23% (898) 2.308 -139% Net Financial Result 184.952 103.507 116.237 -11% 304.340 184.027 65% EBITDA 135.752 147.034 80.070 84% 370.094 219.445 69% EBITDA Margin 84% 88% 87% 0 p.p. 86% 87% -1 p.p. Bonus Provision 1.149 1.149 1.149 0% 3.447 3.447 0% Stock Option Provision 773 735 3.703 -80% 2.795 8.084 -65% Merger Expenses 6.894 - - n/a 8.927 - n/a Brokerage Fees (Ventura Building Acquisition) - 7.463 - n/a 7.463 - n/a Reversal of 2010 Bonus Provision - - - n/a - (1.600) n/a Adjusted EBITDA 144.568 156.380 84.923 84% 392.726 229.376 71% Adjusted EBITDA Margin 90% 93% 93% 1 p.p. 91% 91% 1 p.p. 3Q12 5
  • 6. Financial Highlights Adjusted FFO (R$ thousand) 46% 31% 21% 23% 5% 25% (17%) (80%) 97.195 311% 77.527 42.128 34.830 8.482 3Q11 2Q12 3Q12 9M11 9M12 Adjusted FFO Margin Adjusted FFO 2Q12 3Q12 3Q11 3Q12 x 3Q11 9M12 9M11 9M12 x 9M11 Net Income (loss) 332.390 259.234 83.749 210% 1.044.337 264.909 294% Deferred Taxes 153.916 150.588 53.807 180% 648.611 98.549 558% Taxes on Property Sales 8.525 - 323 -100% 3.905 6.803 -43% Gain (Loss) on Appraisal of Investment Properties (554.489) (382.650) (180.268) 112% (1.667.045) (348.209) 379% Gain (Loss) on Sale of Investment Properties 8.525 (2.156) (485) 344% 6.369 856 644% Non-cash Losses on Exchange Rate Variation 57.794 7.964 88.414 -91% 98.823 96.361 3% Non-cash Gains on Exchange Rate Variation (453) (5.613) (3.413) 64% (54.194) (41.742) 30% Merger Expenses 6.894 - - n/a 8.927 - n/a Brokerage Fees (Ventura Building Acquisition) - 7.463 - n/a 7.463 - n/a Adjusted FFO 8.482 34.830 42.128 -17% 97.195 77.527 25% Adjusted FFO Margin 5% 21% 46% -25 p.p. 23% 31% -8 p.p. 3Q12 6
  • 7. Non-income producing properties Months of Generated Potential Annual Non-Income Producing Properties Type Delivery Date Owned GLA Rent / sqm / Month ¹ Income in 3Q12 Revenue (R$ mm) ² Ed. Paulista Office 0,5 month Delivered in 3Q12 22.855 R$110 - R$135 R$ 30 million Centro Empresarial Senado - CES Office AAA 0 month 4Q12 95.174 R$ 87,39 R$ 100 million Cidade Jardim Office AAA 0 month 4Q12 6.792 R$150 - R$170 R$ 12 million JK Complex - Towers D&E Office AAA 0 month 1Q13 34.583 R$150 - R$170 R$ 62 million Panamérica Green Park Office 0 month 1Q13 5.185 R$50 - R$60 R$ 3 million Retail Petrobrás Retail 0 month 1Q13 2.881 R$140 - R$170 R$ 5 million WTNU - Tower III Office AAA 0 month 1Q13 14.868 R$120 - R$140 R$ 21 million DP Louveira 7 Warehouse 0 month 2Q13 30.122 R$19 - R$24 R$ 7 million Gaia Terra Warehouse 0 month 2Q13 23.017 R$18 - R$23 R$ 5 million JK Complex - Tower B Office AAA 0 month 1Q14 29.539 R$150 - R$170 R$ 53 million Souza Aranha Office 0 month 2Q14 2.019 R$65 - R$85 R$ 2 million TOTAL R$ 300 million ¹ Internal Estimate ² Considering the bottom of the estimated range Potential Annual Revenue (R$ million) 53 2 300 5 21 7 3 5 62 12 100 30 Ed. Paulista Centro Cidade JK Complex Panamérica Retail WTNU - DP Louveira Gaia Terra JK Complex Souza Total Empresarial Jardim - D&E Green Park Petrobrás Tower III 7 -B Aranha Additional Senado Revenue 3Q12 7
  • 8. Portfolio Recycling As part of its recycling strategy, the Company concluded 6 sales throughout 9M12 which totaled R$133.3 million. The rental loss in 9M12 is R$4.4 million Sale Price Rental Loss Sold Properties Type Sale Date (R$ K) 9M12 (R$ K) Paço do Ouvidor Retail Mar-12 25.000 1.285 Olympic Tower Office Apr-12 14.000 653 Paulista Plaza Office Apr-12 20.000 1.002 Cetenco Plaza (2 Units) Office Mar-12 5.448 273 Cetenco Plaza (8 Units) Office May-12 21.600 655 Cetenco Plaza (16 Units) Office Aug-12 47.210 508 TOTAL R$ 133.258 R$ 4.376 Total Sales Volume (R$ K) Average Exit Cap Rate (%) 133.258 9,3% 77.290 8,4% 9M11 9M12 9M11 9M12 3Q12 8
  • 9. Debt Reprofiling 3Q12 Prepaid Debt 3Q12 Prepaid Debt Type Institution Index Cupon Term Maturity 2Q12 Balance BR Properties (holding) Debentures Banco do Nordeste CDI 145,00% 48 months 01/03/15 178.709 BR Properties (holding) CCB ABC CDI 3,90% 23 months 09/07/12 839 BR Properties (holding) CCB ABC CDI 3,90% 24 months 09/08/12 839 Prepaid Debt - Subtotal 180.387 3Q12 Renegotiated Debt 3Q12 Renegotiated Debt Type Institution Index Cupon Term Maturity 2Q12 Balance BR Properties (holding) * Debentures Banco do Brasil CDI 113,83% 58 months 30/09/15 71.939 BR Properties (holding) ** CCB Santander CDI 1,14% 60 months 19/08/19 112.190 Debt - Renegotiated 184.130 * Renegotiated Debt (from 130,0% of CDI to 113,83% of CDI) ** Renegotiated and Extended Debt (from CDI+1,5% to CDI+1,14%) During 3Q12, the Company prepaid/refinanced R$364.5 million of debt inherited from One Properties, which had a weighted average cost of CDI + 3.7% p.a. Since One Properties merger, BR Properties has reprofiled (paid/refinanced) R$591.9 million of inherited debt. 3Q12 9
  • 10. Indebtedness 3Q12 Net Debt (R$ mn) 3Q12 Debt Index Breakdown 4.279 4.958 394 4.564 1% 6% TR 14% CDI 46% IGPM 667 INPC 13 33% IPCA ST Debt Obligations LT Debt Total Debt Cash Net Debt f or Acquisitions Net Debt 3Q12 2Q12 var % Short Term Loans and Financing 679.382 1.115.598 -39% Loans and Financing 554.331 991.441 -44% Perpetual Bond 59.526 59.253 0% Derivative Instruments 52.787 50.663 4% Payables for Acquisition of Real Estate 12.739 14.242 -11% Long Term Loans and Financing 4.278.954 3.994.751 7% Loans and Financing 3.745.869 3.464.272 8% Perpetual Bond 533.085 530.479 0% Gross Debt 4.958.336 5.110.349 -3% Cash and Cash Equivalents 394.179 609.460 -35% Net Debt 4.564.157 4.500.889 1% Portfolio Value 13.552.098 12.968.469 5% Gross Debt / Portfolio Value (Loan to Value) 37% 39% -7% Net Debt / Portfolio Value (Loan to Value) 34% 35% -3% Adjusted EBITDA / Net Financial Expenses * 1,5x 1,1x 36% Duration (years) 5,3 4,9 8% * Considering Net Financial Expenses (ex. non-cash variations) 3Q12 10
  • 11. Indebtedness Debt Amortization Schedule (R$ million) 574 525 517 387 367 385 375 213 86 106 78 64 56 39 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Principal Loan to Value: Gross and Net 45% 43% 38% 40% 40% 42% 41% 40% 39% 24% 37% 36% 35% 34% 36% 35% 30% 4% 23% 21% 21% 21% 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 LTV Gross Debt LTV Net Debt 3Q12 11
  • 12. Operating Highlights Leasing Spreads Leasing Spread - Market Alignments 3Q12 3Q11 9M12 9M11 Leasing Spread - Office 20,8% 24,1% 25,6% 23,4% Renegotiated GLA (sqm) 10.819 26.099 41.406 50.104 % Office portfolio 2% 9% 9% 17% Leasing Spread - Warehouse 16,1% 0,0% 15,5% 20,6% Renegotiated GLA (sqm) 22.760 783 29.600 15.581 % Warehouse portfolio 2% 0,1% 3% 2% Leasing Spread - Retail n/a 17,1% n/a 15,8% Renegotiated GLA (sqm) - 4 - 97.435 % Retail portfolio 0% 0% 0% 97% Leasing Spread - New Leases 3Q12 3Q11 9M12 9M11 Leasing Spread - Office 27,0% 12,0% 25,8% 14,6% Leased GLA (sqm) 4.592 1.257 14.046 27.043 % Office portfolio 1% 0,4% 3% 9% Leasing Spread - Warehouse 45,8% n/a 3,2% 15,6% Leased GLA (sqm) 1.761 - 57.555 18.019 % Warehouse portfolio 0,2% 0% 5% 2% Leasing Spread - Retail n/a n/a n/a n/a Leased GLA (sqm) - - - - % Retail portfolio 0% 0% 0% 0% 3Q12 12
  • 13. Operating Highlights Vacancy Breakdown Financial Vacancy per Segment Physical 4,0% 4,5% Financial Of f ice 3,2% Industrial Retail 2,3% 1,9% 1,9% 1,5% 1,5% 1,7% 1,3% 1,3% 0,9% 0,9% 0,9% 0,4% 0,5% 0,0% 0,0% 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 2Q12 3Q12 Excluding the recently delivered Paulista Building, financial vacancy drops to 1.4%. Property Type Financial Physical CBOP - Jacarandá Office 0,2% 0,1% Ventura - Torre Oeste Office 0,1% 0,0% Bolsa do Rio Office 0,2% 0,1% Icomap Office 0,0% 0,0% Santa Catarina Office 0,2% 0,1% Paulista Office 3,1% 1,0% Brasília Office 0,2% 0,1% Total Office 4,0% 1,4% BP Itapevi Industrial 0,1% 0,2% BP Jundiaí Industrial 0,1% 0,3% BBP CEA Topázio Industrial 0,1% 0,2% BBP Barão de Mauá Industrial 0,1% 0,2% Cond.Ind.SJC Industrial 0,2% 0,9% Total Industrial 0,5% 1,8% Total Portfolio 4,5% 3,2% 3Q12 13
  • 14. Operating Highlights Lease Contract Expiration Schedule % Revenues % GLA 57% 74% 22% 2% 16% 2% 18% 8% 2012 2013 2014 >2015 2012 2013 2014 >2015 Lease Contract 3 Year Market Alignment Schedule % Revenues % GLA 15% 9% 39% 38% 18% 23% 33% 24% 2012 2013 2014 >2015 2012 2013 2014 >2015 3Q12 14
  • 15. Capital Markets Shareholder Value Creation Gain of R$2.5 billion in 9 months 29,00 Market Cap 8.000 8.208 million 27,00 7.000 Stock Price R$26.45 6.000 25,00 5.000 23,00 4.000 21,00 3.000 19,00 Market Cap 2.000 3.330 million 17,00 1.000 Stock Price R$18.50 - 15,00 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Stock Performance (BRPR3) 3Q12 3Q11 var % 9M12 9M11 var % Total Number of Shares 310.307.396 180.003.919 72,4% 310.307.396 180.003.919 72,4% Free Float (%) 99% 99% 0,0% 99% 99% 0,0% Stock Price (average for the period) 23,80 17,23 38,1% 22,48 17,40 29,2% Stock Price (end of period) 26,45 17,08 54,9% 26,45 17,08 54,9% Market Cap end of period (R$ million) 8.207,6 3.074,5 167,0% 8.207,6 3.074,5 167,0% Average Daily Trading Volume (R$ million) 24,77 16,23 52,6% 27,79 11,94 132,8% Average Daily Traded Shares 1.057.065 941.962 12,2% 1.237.891 686.207 80,4% Average Daily negotiations 4.074 1.508 170,2% 3.550 896 296,3% 3Q12 15
  • 16. IR Contacts Investor Relations Pedro Daltro CFO & Investor Relations Officer Marcos Haertel Investor Relations Manager Gabriel Barcelos Investor Relations Analyst Phone: (55 11) 3201-1000 Email: ri@brpr.com.br www.brpr.com.br/ri 3Q12 16