Parque Arauco (PARAUCO) Q2 2024 earnings summary

Executive summary

• Achieved strong operational and financial results in Q2 2024, with sales up 19.2%, revenues up 24.8%, and EBITDA up 25.3% year-over-year, driven by core assets, new Colombian acquisitions, and a successful growth strategy.

• Operates 57 multi-format real estate assets across Chile, Peru, and Colombia, with 1,182,000 sqm of GLA and 96.1% occupancy as of June 30, 2024.

• Portfolio includes iconic assets such as Parque Arauco Kennedy, MegaPlaza Independencia, and Parque La Colina, with the top six assets generating over 60% of NOI.

• Diversified tenant base with over 35% of tenants present in multiple centers and a strong mix of international, luxury, and local brands.

• Major projects include the first multifamily project within a shopping center in Chile, master plans for key malls, and full ownership of Parque Alegra in Barranquilla.

Financial highlights

• 2Q24 sales totaled USD $771M, up 19.2% year-over-year; revenues up 24.8%, EBITDA up 25.3%, and FFO up 19.4% compared to 2Q23.

• EBITDA margin improved to 72%, with net income margin at 33% and FFO margin at 59.6%.

• Net profit reached Ch$25,039M (+30.2% YoY); EPS Ch$21 (+21.4% YoY); DPS Ch$40 (+60% YoY); dividend yield 2.8%.

• Gross financial debt increased to Ch$1,501,464M (+16.6% YoY); net financial debt/EBITDA stable at 5.2x.

• Consistent revenue and EBITDA growth over the last decade, with a 10-year CAGR of 8.9% for revenues and 7.9% for tenant sales.

Outlook and guidance

• CapEx strategy targets ~$200 million annual investment, supporting growth and maintaining leverage between 5x-6x.

• Remaining CAPEX of US$279M, with 77% allocated to multifamily projects and major expansions in Chile, Peru, and Colombia.

• Upcoming openings include Parque La Molina (4Q24), multifamily projects in Bogotá and Lima, and further phases at Parque Arauco Kennedy and MegaPlaza Independencia.

• Continued focus on asset renovations, expansions, and multifamily integration to drive future growth.

• Expect gradual increase in variable rent share as sales rise, but fixed rent remains the core strategy.