Q2 2026 Plaza SA Earnings Call
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Speaker #2: Good morning, everyone, and welcome to Mall Plaza 2nd Quarter 2026 results conference call. Today with us are Pablo Pulido, CEO; Derek Feng, CFO; and Rodrigo Serran, Finance Manager.
Speaker #2: Today's presentation will follow the following structure: First, we'll review our financial and operational performance during the second quarter. Next, we'll share key strategic milestones and progress on value creation initiatives. Lastly, we'll open the floor to Q&A.
Speaker #2: This presentation and the 2nd Quarter 2026 earnings release are available on our investor relations website and will also be available for download in the chat.
Speaker #2: During the company's presentation, all microphones will be disabled. Later, we will begin the question-and-answer session. To ask questions on audio, click on "Raise Hand" and state your name and company.
Speaker #2: During the second quarter, Mall Plaza advanced in the execution of its growth strategy, highlighting the advancement in our brownfield investment plan, which currently totals more than $600 million and the optimization of our tenant mix toward high-productivity formats.
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Speaker #2: Currently, operating 2.36 million square meters of consolidated GLA, our management focus remains on elevating the value proposition of our urban centers and increasing our share of TRA assets across the Andean regions to ensure long-term value generation.
Speaker #2: Please be aware that the company's name must be visible for the question to be addressed. I will now turn the call over to Rodrigo Serran.
Speaker #2: Please go ahead, sir.
Speaker #2: With that, I will now turn it over to Derek, who will walk us through the details of the quarterly results.
Speaker #3: Good morning, everyone, and welcome to Mall Plaza 2nd Quarter 2026 earnings conference call. I am Pablo Pulido, Chief Executive Officer, joining me today on the call are Rodrigo Serran, our Director of Finance and Investor Relations, Felipe Ramirez, our incoming Chief Financial Officer, and Derek Tang, who recently stepped down as CFO after taking on new strategic leadership challenges within the Falabella Group.
Speaker #3: Thank you very much. It has been a privilege to lead Mall Plaza's financial team and work alongside our colleagues and investors. During the second quarter, financial and operational results were driven by commercial management footfall and occupancy rates in Tier A urban centers.
Speaker #3: We also continued our portfolios renovation expansion projects. Turning to our operational performance on slide 5, footfall across our urban centers reached 95.8 million visits, representing a 3.2% increase year over year.
Speaker #3: Before we walk through our numbers, I'm delighted to formally introduce Felipe to our investor community. Felipe brings over more than 20 years of international executive experience, spanning financial management, corporate strategy, real estate development, and retail real estate across Latin America.
Speaker #3: This footfall growth was supported by the value proposition of our tenant mix and the performance of specific assets. Mall Plaza premium outlets concepcion and Mall Plaza Iquique both in Chile grew by 24.1% and 16.1% respectively.
Speaker #3: Meanwhile, Mall Plaza Bella Vista in Peru and Mall Plaza Buenavista in Colombia grew by 11.3% and 10.4% respectively. This traffic generated a $6.7% increase in tenant sales year over year, totaling $1.69 trillion pesos for the quarter.
Speaker #3: We are thrilled.
Speaker #4: Goodbye.
Speaker #3: This result was supported by a 3.7% growth in same-store sales, reflecting performance across our portfolio in a more stabilized consumption environment than the previous quarter.
Speaker #3: At the asset level, top-performing urban centers included Mall Plaza premium outlets concepcion with a 26.9% increase in tenant sales, Mall Plaza NQS at 21.5%, and Mall Plaza Atacongo at 15.7%.
Speaker #3: Reflecting healthy market dynamics across all three countries, with particularly strong performance in Colombia. Additionally, our consolidated same-store rent increased by 5.4% during the quarter, outperforming regional inflation, supporting our operating margins and revenue generation.
Speaker #3: We recorded these metrics while maintaining a consolidated occupancy rate of 95.6%, as we advanced with our portfolio transformation and expansion projects. Furthermore, occupancy costs for our tenants remained at a healthy 9.6%.
Speaker #3: Moving to our financial performance on page 6, net revenue for the second quarter totaled $174.1 billion pesos, an 8.7% increase year over year. Our average remaining duration of lease contracts is 7.1 years, with 57% of those contracts extending beyond five years.
Speaker #3: Furthermore, 93% of our rent is fixed. Commercial activity included $472 lease agreements negotiated during the quarter, a 9.3% increase compared to the first quarter, and the physical opening of more than 156 new stores, representing over 24,000 square meters of operational GLA.
Speaker #3: In the second quarter of 2026, total costs and expenses reached $35.8 billion pesos, representing an 8.8% increase compared to the same period in 2025. This was driven by higher employee benefits, allowances for doubtful accounts, and expenses in adjacent businesses.
Speaker #3: EBITDA for the quarter reached $140.3 billion pesos, increasing 9.6% year over year, closing the quarter with a reported EBITDA margin of 80.6%. This represents a 0.6 percentage point expansion compared to the 80% recorded in the second quarter of 2025, reflecting the operational performance of our assets.
Speaker #3: On page 7, net income attributable to the controlling interest, excluding fair value adjustments, reached $78.6 billion pesos, primarily influenced by an increased expense from inflation indexation units of 137.8% year over year due to the indexation of our UF-denominated debt liabilities.
Speaker #3: Adjusted FFO per share grew 8.8%, preserving our adjusted FFO margin. This performance was supported by operational execution and financial management, which enabled us to reduce financial expenses by 8.7%.
Speaker #3: Additionally, financial income rose by 110.3% due to a higher average balance of cash and equivalents, as well as higher yields on investment funds. Regarding capital markets, Mall Plaza recorded an increase in stock liquidity and valuation during the quarter.
Speaker #3: Our $180-day average daily trading volume reached $10.36 million, representing a 72.4% increase year over year. Furthermore, our market cap grew by $84.9%, ending the quarter at $9 billion.
Speaker #3: This trading activity was accompanied by our increased visibility in international indices, such as the MSCI Mid Large Cap Index and the FTSE Large Cap Index, these developments contributed to expanding our investor base and stock liquidity, reflecting Mall Plaza's presence among active and passive institutional investors.
Speaker #3: On page 9, we outline our financial position. We closed the quarter with cash and equivalents of $347.6 billion pesos, ending financial debt of $1.63 trillion pesos.
Speaker #3: Our net financial debt-to-EBITDA ratio stands at 2.4 times, with a loan-to-value ratio of 16%. Our debt maturity profile is long term, with 95% of our maturities exceeding one year, and 22% exceeding a term of ten years or more.
Speaker #3: Furthermore, financial debt is denominated in the same currency as the associated cash flows, whether it's for repayment, with 79% denominated in UF. This structure is backed by our investment-grade ratings: Baa2 from Moody's, BBB from Fitch, and AA+ from Feller Rate and Humphreys.
Speaker #3: This financial position and credit ratings provide us with a framework to execute our growth plan. With that, I will hand it over to Pablo, who will guide you through our strategic roadmap.
Speaker #2: Thank you, Derek. This quarter was defined by our ability to execute our growth roadmap with the speed and impact. Grounded in our conviction that salir es vivir, the guiding principle that positions Mall Plaza as a true cash social capitalist in our communities, during this second quarter we continue to advance initiatives that positively impact our visitors' daily lives.
Speaker #2: Our growth roadmap is structured around three main verticals: driving solid growth backed by our portfolio of dominant urban centers, continually transforming our value proposition to remain attractive to our clients; and leveraging the strength of our urban centers to generate adjacent business.
Speaker #2: Central to this strategy is the execution of our brownfield investment plan, which totals more than $600 million through 2028 to expand and transform over 1 million square meters of GLA.
Speaker #2: The objective of this capital allocation is to elevate the value proposition of our urban centers, ensuring they adapt to evolving consumer needs while increasing our share of TRA assets to 70% of our portfolio.
Speaker #2: Regarding organic growth, our focus remains on executing this expansion pipeline, currently more than 50% of this commitment capitalized allocated to strategic assets where construction has already begun.
Speaker #2: Such as Mall Plaza Travel, Mall Plaza Oeste, Mall Plaza La Serena, Mall Plaza Norte, Mall Plaza Trujillo, and Mall Plaza Piura. These new square meters will enhance our tenant mix, specifically incorporating categories such as food and beverage, entertainment, and specialty retail.
Speaker #2: This execution aims to strengthen the value proposition of each asset while improving the overall productivity of our portfolio. In terms of value creation for our current assets, we are making progress in the transformation of large services.
Speaker #2: This project includes renovating the food court and services at Mall Plaza Oeste, along with retail and F&B transformation at Mall Plaza Norte. Aligned with our focus on experiential offering, we enabled over 3,000 square meters dedicated strictly to entertainment this quarter, reinforcing community gathering as a key driver of footfall.
Speaker #2: Furthermore, at Mall Plaza Los Dominicos, which is currently under transformation to enhance its value proposition, the center will welcome the first Prize Martin Chile—a milestone highlighting the confidence that international brands have in our platform to drive traffic and generate value.
Speaker #2: At a regional level, we have introduced new dining options and terraces at Mall Plaza Arequipa and Mall Plaza Huancayo, as well as new entertainment areas at Mall Plaza Buenavista.
Speaker #2: Regarding our new business verticals, the premium outlet format continues to show positive results. During the quarter, Mall Plaza premium outlets Concepcion grew by 26.9% in tenant sales and 19.1% in net revenue.
Speaker #2: On page 13, we detail the performance of our adjacent business. Revenue from this vertical primarily advertising and parking grew by 23.7% over the last 12 months.
Speaker #2: During this same period, consolidated parking revenues reached $72.9 billion. Increasing its contribution to the total revenues from $5.6% to $10.8% over the last 5 years.
Speaker #2: This steady growth is driven by an ongoing rollout of our digital parking platform, ParkFlow. Finally, on page 14, we outline our ESG progress and recent milestones.
Speaker #2: Mall Plaza was honored with the ESG 2025 award for excellence in environmental, social, and governance management. Additionally, we were named Chile's most valued mall brand, in line with our social commitment we launched a dedicated community initiative at Mall Plaza Gaña making it its first center in Chile certified as a senior-friendly environment.
Speaker #2: Diving into the transaction of Grand Plaza in Colombia, and as I mentioned at the beginning, this strategic acquisition incorporates eight high-quality assets adding $180,000 square meters of GLA across five new growth markets.
Speaker #2: By expanding our performance from 5 to 10 cities in Colombia, with 13 consolidated assets, Mall Plaza decisively scales its regional presence. This acquisition nearly doubles our national market share in Colombia from 4% to 7%, establishes a market-leading position in Bogotá, and increases Colombia's weight in our portfolio from 12% to 18% of GLA.
Speaker #2: Beyond immediate scale and regional diversification, these assets bring clear avenues for future growth, including more than 15,000 square meters of potential brownfield expansion and space transformation.
Speaker #2: This will allow us to capture synergies, enhance our commercial value proposition, and increase overall productivity per square meter across our platform. With that, I will hand you back to Derek.
Speaker #1: Thank you, Pablo. Turning the financial milestones of the transaction, the acquisition was agreed at an estimated firm value, EV, of $1.178 trillion. Equivalent to approximately $376 million.
Speaker #1: With an equity value of $786 billion, equivalent to $251 million USD, representing a cap rate of 9.4%. The transaction structure considers a combination of cash and debt assumption, which preserves our balance sheet flexibility.
Speaker #1: In terms of execution, following the signing of the share purchase agreement on July 31, we are finalizing due diligence this August while progressing with regulatory antitrust approval.
Speaker #1: We expect to finalize transaction closing during the fourth quarter of 2026. With that, I'll turn the call back over to Pablo for his final remarks.
Speaker #2: Thank you, Derek. To conclude, Mall Plaza closed the second quarter of 2026, demonstrating operational stability and financial discipline. Achieving an EBITDA of $140.3 billion expanding by 9.6% year over year.
Speaker #2: While maintaining an EBITDA margin of 80.6%, all while actively execution of our portfolio transformation. We continue to advance with the execution of our $600 million investment plan, focused on a strategic expansion and transformation that will elevate our urban centers and increase our share of TRA assets.
Speaker #2: Furthermore, our transformational acquisition in Colombia marks a decisive milestone in our growth roadmap. Enhancing our geographical diversification across the Indian region while reinforcing our financial flexibility and cash flow resilience.
Speaker #2: Throughout 2026, we will maintain our focus on growth, tenant mix transformation, regional integration, and operational efficiency. I want to thank our team for their dedication, and our investors for their continued trust in our vision.
Speaker #3: Thank you. We will now start the Q&A session. To ask questions on audio, click on raise hand and state your name and company. We will then receive a request to activate your microphone.
Speaker #3: Please activate your microphone to ask questions. To ask questions in writing, just queue the question in the Q&A button. Please be aware that your company's name should be visible for your question to be taken.
Speaker #3: Our first question comes from Marius Simplicia from Morgan Stanley. Please go ahead.
Speaker #1: Hi, good morning. Thank you, Mall Plaza team, and congrats, Derek, on your new role. Thanks for the partnership in the last years, and welcome, Felipe.
Speaker #1: So my question is on the Colombian transactions. I wanted to know what are your plans about maybe retrofitting some of the assets you acquired to better suit the Mall Plaza value proposition?
Speaker #1: And if you guys already have any capex expectation for this retrofits, and if perhaps if you can give more column expected synergies identifying the transaction.
Speaker #1: Thank you.
Speaker #2: Thank you, Mario, for your question. First of all, we are really happy with this transaction. We are acquiring this platform, which was really well managed by the PACTIA team.
Speaker #2: So we are we have a very good occupation and a very good proposal that we are buying. We expect to have synergies also commercial and in expenses in the near term.
Speaker #2: As it happens, with the portfolio we acquire in Peru, which we could improve the results of the assets. We have also work on to grow via brownfield because we believe they have some propositions that we can improve as the value proposal we can improve the value proposal of FMB entertainment and also specialty retail.
Speaker #2: We believe there is a lot of room to improve the tenant mix that we are acquiring. So we expect this to have value. We have a very good cap rate of acquisition.
Speaker #2: We expect to have value also in synergies commercial and in expenses. And also we expect to have value growing our assets mainly the assets we acquire in Bogotá which are the ones that we believe we can get more value in the future.
Speaker #1: That's very clear. Thank you.
Speaker #3: Our next question comes from Jorel Guillochi, from Goldman Sachs. Please go ahead.
Speaker #1: Can you hear me?
Speaker #4: Good morning. So I had two quick questions. One is on same trade sales for Chile. So if I see that figure for year to date, it was $3.3% versus $8.1% in 2025.
Speaker #4: We know that 2025 had a tailwind of Argentine tourists, which is not the case in 2026. So as we go into second half of 2026, we should see softer comp.
Speaker #4: So generally speaking, I wanted to know a how are you seeing sales so far this quarter? And B, how do you expect the same store sales figures for the second half of the year?
Speaker #4: If we should see an acceleration vis-à-vis 2020 what we've seen so far. And then the second question is on the Colombia portfolio that you whose purchase you announced recently.
Speaker #4: You mentioned that you've negotiated to buy it at a $9.5% cap rate. Unannounced TMNY basis. You also mentioned that there's some synergies and so what I want to understand is when I look at this $9.4% cap rate, what are you thinking about possible uplift for this in incoming NOI yield?
Speaker #4: Do you see it rising? If so, by how much? And is that more driven by rents? Is that more driven by cost efficiencies? So those are my questions.
Speaker #4: Thank you.
Speaker #5: Hi, Jorel. Thank you for your question. And also just thanking Mario as well for the comment in the previous question as well. So with regards, Jorel, to your question, first starting off in terms of same store sales, I think it's also important to highlight here that when you look for Chile, I mean specifically even in the second quarter, we saw an uptake in footfall by 4.4% overall sales increase by 5.3%.
Speaker #5: And yes, same store sales was 1.7%, which is lower than what we posted for the second quarter of last year. We are making some changes in the tenant mix as well and adjusting.
Speaker #5: So and that's why what helps to explain also this difference between the overall tenant sales of that grew 5.3% versus the same store sales of 1.7%.
Speaker #5: I think also important to highlight here that when you look at in terms of what is the appetite or sort of the retailer confidence into opening stores, we were able to expand our occupancy rate by 0.9 percentage points.
Speaker #5: So year over year, so going from 95.2% to 96.1%. And while maintaining an occupancy cost, basically flat year on year. So about 10.3%. And in the case of Chile and tying into some of the strategy of the company of seeking how to maximize our value proposition for our clients, I think it's also relevant here to highlight what has been the premium outlet in Mall Plaza premium outlet in Concepción.
Speaker #5: As we detailed in the earnings release as well, the footfall for this particular asset in the second quarter increased by 24.1% with this new value proposition that we brought by converting this asset into a premium outlet concept.
Speaker #5: Sales for that particular asset increased by 26.9%. And revenue 19.1%. So this is an example of ways in which Mall Plaza seeks to generate incremental value of the assets we have and enhancing the value proposition for our clients.
Speaker #5: Now, with regards to your second question in terms of the acquisition in Colombia, as we announced, it was a 9.4% cap rate on a last 12 months basis.
Speaker #5: So this acquisition is accretive on an entry cap rate level. For the company, and as Pablo well mentioned, in a previous answer, it starts off with a good occupancy we do see synergies for this asset.
Speaker #5: Based on the scale that it will be able to generate for us in Colombia, I mean, we're going to move from having five assets in Colombia to a total of 13 assets.
Speaker #5: And we won’t. In terms of GLA, that is north of a 60% expansion, and we do not expect to increase the structure. There’s no need to increase the structure in the same way. We do believe—and similar to what was the example and what we've been alluding to in previous conference calls and interactions with the market—when you look at what was done in Peru as an example, and all the transformation that has been done and is still in place, we do see incremental value to be generated in Colombia as we add more F&B, entertainment, specialty retail as well.
Speaker #5: Just tying into that example in Peru, if you look over the last couple quarters, the margin expansion that we were able to generate in that particular market sort of post acquisition and enhancing the scale and also as an example of the transformation that is being made rent per square meter in Peru increased by 10%.
Speaker #5: Now, tying into the Colombian acquisition, I think if you look at the fundamentals also for Colombia, there are quite solid. So if you were to look in the second quarter, sales in Colombia increased by 14.6% in spite of an increase of two and a half percent in terms of footfall.
Speaker #5: In terms of same store sales, we posted a 9% increase in Colombia, an EBITDA increase of 13.8%. So and an occupancy expansion to 97.5%.
Speaker #5: So, we do see Colombia—I mean, performance tying in well in Colombia—and we're confident that this portfolio that will be integrated to these acquired portfolios will drive important synergies and turnaround opportunities.
Speaker #4: Thank you, Derek, for the answer. The partnership and good luck to you in the next role.
Speaker #5: You're much, Jorel.
Speaker #2: Our next question comes from Marcelo Mota from JP Morgan. Please go ahead.
Speaker #6: Hi everyone. Thanks for taking the question. You know, looking at our company leverage posted this Colombia M&A, it remains relatively at a low level.
Speaker #6: You know, let's say around three times net debt to EBITDA. The company we still have room on the balance sheet to continue to grow, to continue to perform M&A.
Speaker #6: Now you have decent size in Colombia, Chile, and Peru. So, just trying to pick your brands, and, you know, could you continue to expand in the same regions?
Speaker #6: Does it make sense to think that you still have room to grow through M&A? You know, it has been very accretive as you point out with the Peru acquisition.
Speaker #6: You know, could it be a new geographic, a new region? You know, so just your thoughts given that you still have room to continue to grow.
Speaker #6: Thank you. Thank you. Thank you, Marcelo, for your question. We are very happy because we still have room I mean, we are working in the Andean region to continue growing.
Speaker #6: We expect to continue having not also acquisition, but in terms of growing in our in our malls, we have also room for brownfield. So we expect to continue having transaction like we did in Colombia.
Speaker #6: We have a good market in the Andean region and we expect to continue doing so. We expect to be this transaction is very important for us in Colombia because this gives us leadership in Colombia in terms of a BDA so what is important for us is to continue improving our portfolio we still see room in the Andean region and of course is a good time also to we are starting different markets in the future for the not for the short term but for the long term we believe different markets could be interest for Mall Plaza also.
Speaker #6: Perfect. Thank you, Pablo.
Speaker #2: Remembering to ask questions on audio, click on raise hand and state your name and company. For questions in writing, just queue the question in the Q&A button.
Speaker #2: This concludes the question and answer section. At this time, I would like to turn the floor back to Derek. Thanks for any closing remarks.
Speaker #5: Well, thank you all very much for connecting to the second quarter earnings call for Mall Plaza. On me and personally, it's been a pleasure interacting with all our investor community and analyst community over these past couple of years.
Speaker #5: In Mall Plaza, and just to highlight, I think some of the key points that we mentioned here throughout the call and the earnings release as well, in terms of the growth potential that we've been seeing, right?
Speaker #5: So one, on the organic side, I mean, this is a company that we've been growing, same store rents over inflation. On top of this, when we look at the adjacent businesses, opportunities this grew by 26.7%.
Speaker #5: We mentioned about all the transformation that has been done in the portfolio, be it in Chile and Peru and the uptake in terms of rent per square meter that this has generated.
Speaker #5: Going forward, in terms of new GLA and expansion plan, more than 200 square meters that will be added through our expansion plan, in which we are not only adding new GLA, but transforming more than a million square meters of GLA.
Speaker #5: New uses such as premium outlet conception, which I highlighted through the call, and also the acquisition in Colombia, which we do believe that not only it's an entry at an entry point and a creative acquisition, but will add incremental value for the company.
Speaker #5: And as Pablo well mentioned, I mean, the Andean region as a whole is still a fragmented market. So when you look in terms of Chile in the markets in which we operate, have a 33% market share in Chile, 20% market share in Peru, and a 7% market share in Colombia with this transaction.
Speaker #5: So still leaving us room to further consolidate the market. Well, thank you very much. And as always, if you have any further questions, all the Mall Plaza team is available.
Speaker #5: Thank you.
Speaker #2: Thank you. This does conclude today's presentation. You may disconnect now and have a nice day.
