News

BRMALLS ANNOUNCES 4Q17 AND FY17 EARNINGS RELEASE

Highlights:

. Net revenue for the fourth quarter of 2017 reached R$370.6 million, down by 4.6% versus 4Q16 and, excluding divestments, the negative variation was 2.2%. In 2017, the negative variation stood at 1.6% or 0.3% excluding divestments when compared to the previous year, totaling R$1,348.0 million.

. Same store sales (SSS) grew by 1.6%, up 2.2 p.p. when compared to 4Q16. For the year, SSS reported a growth of 2.8%, up by 3.3 p.p. when compared to 2016. Sales/m² increased by 4.2% in 2017, a 1.4 p.p. increment over the recorded SSS. This dispersion between SSS and sales/m² is explained by our efforts in qualifying our portfolio mix, reinforcing our long-term vision of our assets.

. We reached a quarterly average occupancy rate of 96.2%, 1.0 p.p. increment over 3Q17. At the end of the year, we reached an occupancy rate of 97.4%. Our 15 most representative assets in NOI achieved an average occupancy rate of 98.2%.

. We recorded an adjusted EBITDA of R$235.4 million in the quarter, with a margin of 63.5%. For the year, adjusted EBITDA decreased by 13.8%, totaling R$876.0 million, with a margin of 65.0%. The main impact were the provisions for doubtful accounts, which totaled R$61.9 million, of which R$25.2 million refers to a non-recurring effect from the change in the provisioning criteria from 360 days to 180 days (see Appendix V of the earnings release). Excluding the effects from the change in criteria for provision for doubtful accounts and divestments, adjusted EBITDA decreased by 9.3% in the quarter over the same period last year.

. In the quarter, we amortized the Citi 4131 debt in the amount of R$184.4 million and, after the closing of the quarter, in January 2018, we also fully amortized the J.P. Morgan 4131 debt that totaled R$159.8 million.

. The company accelerated its deleveraging process after the divestments carried out in December and ended the year with a net debt ofR$1,637.4 million. Our reduction in leverage and average cost of debt contributed to a 42.0% reduction in our cash financial result.

. In 4Q17 adjusted FFO was R$133,5 million. The figure is 13.5% higher than the reported on 4Q16, with a margin of 36.0%, the best AFFO margin since 4Q14. In 2017, we reported an increase of 64.1% in our AFFO, totalling R$ 491.1 million, with a 36.4% margin.

. In 4Q17 the Company took another important step in its portfolio recycling strategy. We sold our equity stakes in 5 malls for a total of R$717.3 million. Thus, we ended the year with a total of R$824.3 million raised.

. Aiming to optimize capital allocation, in March, 2018, a share repurchase program was approved of up to 41,597,300 shares, corresponding to 4.76% of the total shares for a maximum period of 12 months.

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Conference Call:

English:

March 15th, 2018
10:00 a.m. US ET (11:00 a.m. Brazil)

Phone number:
+55 11 3127-4971
+55 11 3728-5971
1-516-300-1066 (U.S.)

Webcast:

cast.comunique-se.com.br/BRMalls/4Q17

Replay:

+55 11 3127-4999
ID: 54861441

Portuguese:

March 15th, 2018
09:00 a.m. US ET (10:00 a.m. Brazil)

Phone numbers:
+55 11 3127-4971
+55 11 3728-5971

Webcast:

cast.comunique-se.com.br/BRMalls/4T17

Replay:

+55 11 3127-4999
ID: 91894453

BR MALLS PARTICIPAÇÕES S.A.
Investor Relations Officer
Frederico da Cunha Villa