first quarter 2015 earnings release

FIRST QUARTER 2015 EARNINGS RELEASE
CONFERENCE CALL
DATE: MAY 4, 2015 | TIME: 9:00AM EST / 10:00AM SANTIAGO TIME
PARTICIPANTS CALLING FROM: US (TOLL FREE): 1-888-317-6003 | CHILE (TOLL FREE): 1230-020-0479 | INTERNATIONAL: 1-412-317-6061 | PARTICIPANT ELITE ENTRY NUMBER: 6520021
HTTP://SERVICES.CHORUSCALL.COM/LINKS/PARQUE150504.HTML
CONTACTS
SAMANTHA ZERBE (HEAD OF INVESTOR RELATIONS) | EDUARDO PEREZ MARCHANT (CORPORATE FINANCE MANAGER)
CLAUDIO CHAMORRO CARRIZO (CFO) TEL: (562) 22990510
- 1 - | FAX: (562) 22114077 | EMAIL: [email protected]
DISCLAIMER
This document has been prepared by Parque Arauco for the purpose of providing general
information about the company. The Company assumes no responsibility for, or makes any
representation or warranty, express or implied, with respect to, the accuracy, adequacy or
completeness of the information contained herein. The Company expressly disclaims any liability
based on such information, errors therein or omissions therefrom.
This presentation includes certain statements, estimates and forecasts provided by the Company
with respect to it’s anticipated future performance and involves significant elements or subjective
judgment and analysis that may or may not prove to be accurate or correct. There can be no
assurance that these statements, estimates and forecasts will be attained and actual outcomes
and results may differ materially from what is estimated or forecast herein.
The information contained herein has been prepared to assist interested parties in making their
own evaluation of the company and does not purport to be all - inclusive or to contain all the
information that a potential counterparty may desire. In all cases, interested parties should conduct
their own independent investigation and analysis of the Company. Interested parties can only
rely on the result of their own investigation and the representations and warranties made in any
definitive agreement that may be executed.
- 2 -
EXECUTIVE SUMMARY
As of the first quarter of 2015, 50.0% of Parque Arauco´s GLA is located in Peru and Colombia
—
EBITDA grew 19.4% to Ch$ 22,330 million
—
Funds from Operations (FFO) increased 22.2% over 2014, reaching Ch$ 16,522 million
—
First quarter 2015 revenues increased 19.0% over 2014, reach Ch$ 33,474 million
—
Consolidated occupancy rate of 94.2%
—
17.7% increase in total gross leasable area (GLA) to 815,500 m2 with the incorporation of three
new properties in Peru and the completion of one expansion project in Chile
—
Tenant sales grew to Ch$ 337,315 million, a 14.4% increase as compared to 2014
- 3 -
TABLE OF CONTENTS
FINANCIAL AND OPERATING RESULTS P.5
BALANCE SHEET REVIEW P.11
CASH FLOW REVIEW P.14
MAIN FINANCIAL INDICATORS P.15
PORTFOLIO P.16
PROPERTY LEVEL RESULTS P.17
HIGHLIGHTS BY COUNTRY P.19
FUTURE DEVELOPMENTS P.26
LANDBANK P.27
ANALYSIS OF MARKET RISKS P.28
CASE STUDY P.29
CONSOLIATED FINANCIAL STATEMENTS P.32
- 4 -
FINANCIAL AND OPERATING RESULTS
INCOME STATEMENT - CONSOLIDATED
CH$ THOUSANDS
31.03.2015
31.03.2014
Chg. %
Revenues
33,474,306
28,122,059
19.0%
Cost of sales
(8,228,590)
(6,526,475)
26.1%
Gross profit
25,245,716
21,595,584
16.9%
Administration expenses
(3,704,324)
(3,630,940)
2.0%
Operating income
21,541,392
17,964,644
19.9%
(788,973)
(740,739)
6.5%
EBITDA
22,330,365
18,705,383
19.4%
Other income / expenses
(1,676,863)
(580,714)
188.8%
642,774
747,870
-14.1%
(6,451,006)
(5,934,607)
8.7%
1,633,366
1,265,659
29.1%
(1,516,892)
137,276
-1205.0%
97,752
(3,384,201)
-102.9%
Non-operating income (expenses)
(7,270,869)
(7,748,717)
-6.2%
Profit before income tax
14,270,523
10,215,927
39.7%
Income tax
(1,900,697)
(2,029,226)
-6.3%
Net profit (loss)
12,369,826
8,186,701
51.1%
10,955,328
6,911,449
58.5%
1,414,498
1,275,252
10.9%
12,369,826
8,186,701
51.1%
Depreciation & amortization
Financial income
Financial expenses
Share of profit (loss) of associates accounted
Foreign exchange differences
Income (loss) for indexed assets and liabilities
Attributable to:
Equity holders of the company
Minority interests
Net profit (loss)
- 5 -
FINANCIAL AND OPERATING RESULTS
KEY PERFORMANCE INDICATORS
31.03.2015
31.03.2014
Chg. %
EBITDA margin %
66.7%
66.5%
20 b.p.
Net income margin %
32.7%
24.6%
820 b.p.
FFO (Ch$ Million)1
16,522
13,519
22.2%
FFO margin %
49.4%
48.1%
130 b.p.
Total tenant sales (Ch$ Million)2
337,315
294,860
14.4%
Total GLA (m2)3
815,500
693,100
17.7%
Owned GLA (m2)3
629,494
520,518
20.9%
814.50
728.88
11.7%
13.45
9.48
41.9%
1,196.30
1,047.20
14.2%
888.12
1,447.30
-38.6%
Weighted average shares (Million)4
EPS (Ch$)5
Stock price (Ch$)
Daily traded volume (Ch$ Million)
“During a period with a challenging macroeconomic scenario, we have focused our efforts on diversifying
company risk both geographically and in terms of formats. In recent years, we have achieved important
geographic diversification, and for the first time in our history, 50.0% of Parque Arauco´s gross leasable area is
located outside of Chile. We have also achieved relevant diversification in terms of formats, and currently 16.2%
of our gross leasable area comes from formats other than regional shopping centers. The growth of the gross
leasable area has contributed to the company´s strong EBITDA growth, which increased by 19.4% during the
quarter as compared to the same period last year.”
Juan Antonio Álvarez, Executive Vice President
(1) FFO = Net profit + financial income - financial expenses I (2) Total tenant sales = tenant sales within consolidated assets
(3) GLA of Marina Arauco not considered I (4) Excludes 3,250,000 treasury shares
(5) EPS = Net income attributable to the equity holders of the company/weighted average number of shares outstanding
- 6 -
FINANCIAL AND OPERATING RESULTS
REVENUES
Revenues for the first quarter of 2015 increased 19.0%
the opening of MegaPlaza Pisco in Peru and the expansion of
year-over-year to Ch$ 33,474 million. The growth was
Arauco Premium Outlet Buenaventura in Chile.
primarily the result of additional GLA, as well as improved
Consolidated occupancy remained stable at 94.2%. Total
rental revenues and tenant sales across nearly all of the
tenant sales for the quarter increased by 14.4% to Ch$ 337.315
Company´s existing properties. Total GLA for the Company
million.
at the end of the first quarter was 815,500 m2, up 17.7%
compared to the end of the first quarter of 2014, with 50.0%
Operating income during the first quarter of 2015 increased
of Company GLA outside of Chile. The increase reflects the
19.9% to Ch$ 21,541 million. Cost of sales and administration
acquisition of El Quinde Ica and El Quinde Cajamarca and
expenses increased 17.5% to Ch$ 11,932 during the period, in
line with GLA expansion.
REVENUES (CH$ MILLION)
TENANT SALES (CH$ MILLION)*
+19.0%
+14.4%
28,122
1Q14
33,474
294,860
1Q15
1Q14
* Tenant sales in Peru and Colombia are expressed in CLP using the following exchange rates: US$ 1 = 624.74; US$ 1 = PEN 3.059; US$ 1 = COP 2473.46.
- 7 -
337,315
1Q15
FINANCIAL AND OPERATING RESULTS
In keeping with the Company’s regional expansion strategy,
In addition Parque Arauco continues fortifying its strategy
revenue participation of assets outside of Chile continued
of diversification of formats. During the first quarter the
to increase in the first quarter. Revenues from Colombia and
Company opened the sixth neighborhood shopping center in
Peru represented 37.1% of total revenues, up from 34.0%
Peru, MegaPlaza Pisco and it opened the 6,500 m2 expansion
during the same period in 2014. During the first quarter
of Arauco Premium Outlet Buenaventura in Chile. As of the
of 2015, revenues from Chile totaled Ch$ 21,070 million,
end of the first quarter of 2015 16.2% of Parque Arauco´s
revenues from Peru were Ch$ 10,112 million, and revenues
GLA is concentrated in non-traditional formats.
from Colombia amounted to Ch$ 2,292 million.
REVENUES BY COUNTRY 1Q15
REVENUES BY COUNTRY 1Q14
6.9%
30.2%
26.1%
COLOMBIA
7.9%
COLOMBIA
PERÚ
PERÚ
62.9%
66.0%
CHILE
CHILE
- 8 -
FINANCIAL AND OPERATING RESULTS
EBITDA
EBITDA BY COUNTRY 1Q15
The Company reported EBITDA of Ch$ 22,330 million during
the first quarter of 2015, a 19.4% increase over 2014. The
27.8%
consolidated EBITDA margin was 66.7%, compared with the
PERÚ
4.4%
COLOMBIA
previous year’s EBITDA margin of 66.5%.
Colombia and Peru´s first quarter EBITDA contribution
increased from 28.9% in 2014 to 32.2% in 2015. During the first
67.8%
quarter of 2015, EBITDA from operations totaled Ch$ 15,150
CHILE
million in Chile, Ch$ 6,194 million in Peru and Ch$ 987 million
in Colombia.
EBITDA (CH$ MILLION)
EBITDA BY COUNTRY 1Q14
+19.4%
23.3%
18,705
PERÚ
22,330
5.6%
COLOMBIA
71.1%
CHILE
1Q14
1Q15
- 9 -
FINANCIAL AND OPERATING RESULTS
Net non-operating expenses during the first quarter of 2015 totaled Ch$ 7,271 million, compared to net non-operating
expenses of Ch$ 7,749 million in 2014. Other expenses, composed mostly of expenses not related to the company´s
principal activities, increased to Ch$ 1.677 million. Financial expenses increased 8.7% as compared to the same period
last year, in line with the increase in financial liabilities. Share of profit (loss) of associates accounted increased 29.1%
due to the increase in net profit reported by Marina Arauco.
The company reported an expense of Ch$ 1,526 million due to foreign exchange rate differences caused by the 5.0%
depreciation of the Peruvian New Sol and its impact on the revaluation of company debt held in U.S. dollars, which
matches the rental agreements in Peru that are also held in U.S. dollars. Due to the deflation of the unidad de fomento
(UF, inflation linked currency in Chile) during the quarter, the company reported an income for indexed assets and
liabilities, as the company holds debt in UF.
CH$ THOUSANDS
Current tax
31.03.2015
Chg. %
(1,978,006)
(1,478,797)
33.8%
77,309
(550,429)
-114.0%
(1,900,697)
(2,029,226)
-6.3%
Deferred tax
Total tax
31.03.2014
Income taxes for the quarter decreased to Ch$ 1,901 million as compared to the 2014 figure of Ch$ 2,029 million.
Income taxes were lower due to a lower level of deferred taxes. Excluding the non-cash deferred tax expense, first
quarter 2015 real income tax totaled Ch$ 1,978 million compared to Ch$ 1,479 million in 2014.
Net profit was up 51.1% in the first quarter due primarily to improved operating results. Net profit attributable to
equity holders of the Company was up 58.5%, and earnings per share increased from Ch$ 9.48 to Ch$ 13.45. The total
number of shares outstanding increased to 814,497,054. This does not include the 3,250,000 treasury shares. FFO for
the quarter were Ch$ 16,522 million, as compared to Ch$ 13,519 million in 2014, representing a 22.2% increase.
- 10 -
BALANCE SHEET REVIEW
ASSETS
CH$ MILLION
31.12.2014
Chg. %
Diff.
124,416
161,736
-23.1%
-37,321
Non current assets
1,333,496
1,252,021
6.5%
81,475
Total assets
1,457,912
1,413,758
3.1%
44,154
Current assets
31.03.2015
Current assets decreased to Ch$ 124,416 million from Ch$ 161,736 million in the prior quarter due
primarily to a decrease in cash and cash equivalents that was used in the acquisition of Ekimed S.A.C
in January of this year. Cash and cash equivalents decreased to Ch$ 57,410 million from Ch$ 110,061
million as of December 31, 2014.
Non-current assets increased to Ch$ 1,333,496 million as compared to the Ch$ 1,252,021 million the
Company possessed as of December 31, 2014. The increase was due primarily to the acquisition of
Ekimed S.A.C. as well as additional investment properties corresponding to the ongoing development
of projects which include growth in Chile of Ch$ 5,343 million, growth in Peru of Ch$ 6,884 million and
growth in Colombia of Ch$ 16,167 million.
- 11 -
BALANCE SHEET REVIEW
LIABILITIES AND EQUITY
CH$ MILLION
31.03.2015
31.03.2014
Chg. %
Dif.
Current liabilities
110,918
95,651
16.0%
15,267
Non current liabilities
560,513
537,979
4.2%
22,534
Total liabilities
671,431
633,631
6.0%
37,801
Equity
786,481
780,127
0.8%
6,353
1,457,912
1,413,758
3.1%
44,154
Total liabilities and equity
Current liabilities increased Ch$ 15,267 million, due primarily to the increase of other current nonfinancial liabilities which reflect a pending payment related to Ekimed S.A.C.
Non-current liabilities increased by Ch$ 22,534 million as a result of the acquisition of the Ekimed
S.A.C.´s debt. Total equity increased by Ch$ 6,353 million due to positive operational results.
- 12 -
BALANCE SHEET REVIEW
UNIT
31.03.2015
31.12.2014
Gross financial debt
Ch$ Million
492,089
473,328
Net financial debt
Ch$ Million
434,679
363,267
FINANCIAL INDICATORS
Covenant
Limit
Net financial debt / EBITDA (12 months)
times
4.87
4.25
EBITDA / financial expenses (12 months)
times
3.39
3.31
> 2.5
Liabilities / equity
times
0.85
0.81
< 1.4
Net financial debt / equity
times
0.55
0.47
<_ 1.5
Current liabilities
%
17%
15%
Non current liabilities
%
83%
85%
Net financial debt at the end the first quarter was Ch$ 434,679 million. The Company remains
comfortably within its financial covenants, with liabilities/equity of 0.85x as compared to a limit of 1.4x;
net financial debt/equity of 0.55x as compared to a limit of 1.5x; and EBITDA/financial expenses of
3.39x, above the limit of 2.5x.
31.03.2015
CONCEPT
CH$ MILLION
CURRENT
31.12.2014
NON CURRENT
CURRENT
NON CURRENT
Financial leasing
3.064
27.753
1.360
8.781
Bank loans
48.512
253.589
48.236
261.471
Bonds
1.613
135.551
2.459
135.693
-
22.007
-
15.328
53.190
438.900
52.055
421.273
Hedge liabilities
TOTAL
- 13 -
CASH FLOW REVIEW
CH$ MILLION
From operating activities
31.03.2015
31.03.2014
Chg. %
Diff.
21,134
17,205
22.8%
3,929
(67,987)
(24,009)
183.2%
(43,978)
(5,690)
94,404
-106.0%
(100,094)
(108)
1,614
-106.7%
(1,722)
Net cash flow during the period
(52,543)
87,600
-160.0%
(140,143)
Cash and cash equivalents at beginning of period
110,061
68,946
59.6%
41,115
57,410
158,160
-63.7%
(100,750)
From investment activities
From financing activities
Eff. of var. exchange rate on cash and cash equi.
Cash and cash equivalents at end of period
Cash flow from operating activities increased by 22,8% to Ch$ 21,134 million, due to additional GLA,
higher rental revenues, and improved tenant sales in almost all of the properties in the Company´s
portfolio. Investment activities during the quarter generated a negative cash flow of Ch$ 67,987
million which is explained by the use of cash for the development of new properties and the expansion
of existing properties. Financing activities generated a negative cash flow of Ch$ 5,690 million.
- 14 -
MAIN FINANCIAL INDICATORS
INDICATOR1
UNIT
31.03.2015
31.03.2014
Liquidity level
Current assets / current liabilities
times
1.12
2.79
Short term debt
Current liabilities / total liabilities
%
16.52
13.24
Long term debt
Non current liabilities / total liabilities
%
83.48
86.76
Net profit
Net profit
12,369.83
8,187.00
Basic EPS
Net profit att. equity holders / N° shares - treasury shares
Ch$
13.45
9.48
Return on equity
Net profit att. equity holders / average equity 2
%
7.95
8.48
Return on assets
Net profit att. equity holders / average total assets
%
4.45
4.62
Return on operating assets
Net profit / average operating assets 2
%
5.79
5.85
Dividend yield
Dividends paid LTM / last share price
%
2.26
2.58
Gross profit margin
Operating profit / revenues
%
64.35
63.88
Ch$ million
2
(1) The operational and financial indicators presented are calculated based on standards set out by the superintendencia de valores y seguros, and they don´t necesarrily
coincide with the calculations used to calculate the company´s debt covenants.
(2) Calculated using results from the last twelve months.
- 15 -
PORTFOLIO
NAME
Parque Arauco Kennedy
TOTAL GLA M2
% OWNERSHIP
OWNED GLA M2
115,000
100%
115,000
Arauco Maipú
75,000
100%
75,000
Arauco Chillán
31,500
100%
31,500
Arauco Estación
68,500
83%
56,855
Arauco San Antonio
28,500
51%
14,535
Arauco Quilicura
32,000
100%
32,000
Arauco Express (Stripcenters Chile)
18,500
51%
9,435
Arauco Premium Outlet Buenaventura
25,500
100%
25,500
Arauco Premium Outlet San Pedro
6,500
100%
6,500
Arauco Premium Outlet CuraumaTOTAL
7,000
100%
7,000
TOTAL CHILE
408,000
92%
373,325
MegaPlaza Norte
110,500
50%
55,250
7,000
50%
3,500
Larcomar
26,000
100%
26,000
Parque Lambramani
30,000
100%
30,000
MegaPlaza Chimbote
28,000
34%
9,380
MegaPlaza Express Villa El Salvador
9,000
50%
4,500
MegaPlaza Express Chincha
7,000
50%
3,500
16,500
50%
8,250
9,500
50%
4,750
MegaPlaza Pisco
14,000
50%
7,000
InOutlet Faucett
7,500
51%
3,825
Viamix Chorrillos
4,000
51%
2,040
El Quinde Cajamarca
30,000
100%
30,000
El Quinde Ica
37,000
100%
37,000
TOTAL PERÚ
336,000
67%
224,995
Parque Arboleda*
33,000
30%
9,999
Parque Caracolí
38,500
55%
21,175
TOTAL COLOMBIA
71,500
44%
31,174
815,500
77%
629,494
MegaPlaza Express Villa
MegaPlaza Cañete
MegaPlaza Express Barranca
TOTAL**
*Parque Arboleda does not include office tower. **GLA of Marina Arauco not included.
- 16 -
PROPERTY LEVEL RESULTS
CHILE IN MMCLP / PERU IN MPEN
COLOMBIA IN MMCOP
GLA
SALES
1T15
1T14
Chg%
115,000
115,200
0%
89,413
82,683
8%
9,537
8,651
10%
8,625
7,809
10%
Arauco Maipú
75,000
74,000
1%
37,719
35,364
7%
2,848
2,605
9%
2,779
2,326
19%
Arauco Chillán
31,500
25,000
26%
16,929
15,069
12%
1,174
1,002
17%
873
760
15%
Arauco Estación
68,500
68,000
1%
26,352
24,232
9%
3,599
3,381
6%
3,159
2,848
11%
Arauco San Antonio
28,500
29,000
-2%
9,868
9,369
5%
996
951
5%
579
795
-27%
Arauco Quilicura
32,000
31,260
2%
10,691
9,425
13%
911
720
26%
743
554
34%
Arauco Express (Stripcenters Chile)
18,500
12,222
51%
3,713
2,731
36%
725
557
30%
419
363
15%
Arauco Premium Outlet Buenaventura
25,500
20,000
28%
8,184
7,155
14%
939
702
34%
805
540
49%
Arauco Premium Outlet San Pedro
6,500
-
-
2,463
-
-
217
-
-
145
-
-
Arauco Premium Outlet CuraumaTOTAL
7,000
-
-
1,369
-
-
119
-
-
25
-
-
TOTAL CHILE
408,000
374,682
9%
206,701
186,029
11%
21,064
18,569
13%
18,152
15,995
13%
MegaPlaza Norte
110,500
107,400
3%
263,534
245,691
7%
20,705
17,262
20%
15,499
14,749
5%
7,000
7,000
0%
16,235
14,989
8%
1,122
1,156
-3%
896
717
25%
Larcomar
26,000
26,000
0%
56,381
53,649
5%
8,641
7,290
19%
5,506
4,679
18%
Parque Lambramani
30,000
29,390
2%
33,973
33,398
2%
3,312
2,563
29%
1,755
1,105
59%
MegaPlaza Chimbote
28,000
28,000
0%
49,216
50,009
-2%
2,532
2,950
-14%
1,858
1,633
14%
MegaPlaza Express Villa El Salvador
9,000
9,000
0%
15,969
13,977
14%
1,378
1,426
-3%
1,036
918
13%
MegaPlaza Express Chincha
7,000
7,224
-3%
6,780
6,461
5%
1,142
1,185
-4%
841
715
18%
16,500
16,397
1%
27,583
26,221
5%
1,589
1,367
16%
1,091
711
54%
9,500
9,507
0%
9,134
7,289
25%
1,160
1,030
13%
800
501
60%
MegaPlaza Pisco
14,000
-
-
7,387
-
-
433
-
-
205
-
-
InOutlet Faucett
7,500
5,000
50%
15,476
8,767
77%
1,656
799
107%
1,492
442
237%
Viamix Chorrillos
4,000
-
-
2,298
-
-
333
-
-
165
-
-
El Quinde Cajamarca
30,000
-
-
22,713
-
-
2,449
-
-
1,739
-
-
El Quinde Ica
37,000
-
-
30,596
-
-
2,705
-
-
2,312
-
-
TOTAL PERU
336,000
244,918
37%
557,274
460,451
21%
49,159
37,029
33%
35,194
26,171
35%
Parque Arboleda
33,000
34,000
-3%
38,019
33,373
14%
4,727
4,307
10%
3,533
3,570
-1%
Parque Caracolí
38,500
39,500
-3%
28,505
25,196
13%
4,347
3,750
16%
2,971
2,857
4%
TOTAL COLOMBIA
71,500
73,500
-3%
66,524
58,570
14%
9,075
8,057
13%
6,504
6,428
1%
Parque Arauco Kennedy
MegaPlaza Express Villa
MegaPlaza Cañete
MegaPlaza Express Barranca
1T15
1T14
EBITDA
REVENUES
- 17 -
Chg%
1T15
1T14
Chg%
1T15
1T14
Chg%
PROPERTY LEVEL RESULTS
OCCUPANCY
EBITDA MARGIN
1T15
1T14
1T15
1T14
1T15
1T14
Parque Arauco Kennedy
97.9%
97.0%
91
90.4%
90.3%
18
266,019
246,390
8%
28,373
25,780
10%
Arauco Maipú
96.5%
97.3%
-78
97.6%
89.3%
825
174,250
163,717
6%
13,159
12,058
9%
Arauco Chillán
94.9%
87.9%
697
74.4%
75.8%
-143
194,693
223,495
-13%
13,498
14,863
-9%
Arauco Estación
97.1%
98.9%
-181
87.8%
84.2%
352
132,077
120,532
10%
18,039
16,818
7%
Arauco San Antonio
93.7%
94.3%
-55
58.2%
83.6%
-2.539
123,716
114,383
8%
12,485
11,610
8%
Arauco Quilicura
99.4%
97.4%
205
81.6%
77.0%
465
112,684
103,343
9%
9,601
7,897
22%
Arauco Express (Stripcenters Chile)
88.6%
100.0%
-1.144
57.8%
65.2%
-738
77,090
75,122
3%
15,050
15,310
-2%
Arauco Premium Outlet Buenaventura
78.0%
95.3%
-1.733
85.8%
76.9%
886
146,487
123,390
19%
16,799
12,111
39%
Arauco Premium Outlet San Pedro
96.7%
-
-
66.9%
-
-
131,343
-
-
11,592
-
-
Arauco Premium Outlet CuraumaTOTAL
67.1%
-
-
20.7%
-
-
97,170
-
-
16,859
-
-
TOTAL CHILE
94.9%
96.60%
-174
86.2%
86.1%
4
179,179
171,060
5%
18,259
17,075
7%
MegaPlaza Norte
93.7%
95.8%
-208
74.9%
85.4%
-1.059
848
821
3%
66,646
57,671
16%
MegaPlaza Express Villa
98.3%
99.9%
-164
79.9%
62.0%
1.782
787
714
10%
54,355
55,093
-1%
Larcomar
89.6%
96.0%
-640
63.7%
64.2%
-48
786
724
9%
120,541
98,377
23%
Parque Lambramani
94.7%
91.6%
310
53.0%
43.1%
986
401
413
-3%
39,068
31,670
23%
MegaPlaza Chimbote
98.9%
99.6%
-68
73.4%
55.3%
1.803
592
597
-1%
30,475
35,191
-13%
MegaPlaza Express Villa El Salvador
98.4%
95.3%
307
75.2%
64.3%
1.083
601
544
11%
51,889
55,524
-7%
MegaPlaza Express Chincha
98.0%
100.0%
-200
73.6%
60.3%
1.330
329
315
4%
55,490
57,870
-4%
MegaPlaza Cañete
98.9%
97.7%
124
68.7%
52.0%
1.671
563
593
-5%
32,449
30,938
5%
MegaPlaza Express Barranca
98.0%
87.3%
1.070
69.0%
48.7%
2.031
327
317
3%
41,517
44,758
-7%
-
-
-
47.3%
-
-
744
-
-
-
-
-
InOutlet Faucett
91.9%
89.0%
291
90.1%
55.4%
3.475
763
664
15%
81,691
60,535
35%
Viamix Chorrillos
63.5%
-
-
49.6%
-
-
304
-
-
44,087
-
-
El Quinde Cajamarca
-
-
-
71.0%
-
-
n/a
-
-
-
-
-
El Quinde Ica
-
-
-
85.5%
-
-
n/a
-
-
-
-
-
TOTAL PERU
94.4%
95.6%
-127
71.6%
70.7%
92
665,461
671,450
-1%
58,702
53,998
9%
Parque Arboleda
93.1%
93.7%
-62
74.7%
82.9%
-817
412,564
350,499
18%
51,300
45,230
13%
Parque Caracolí
86.1%
87.7%
-165
68.3%
76.2%
-785
284,555
244,821
16%
43,397
36,439
19%
TOTAL COLOMBIA
89.3%
90.5%
-118
71.7%
79.8%
-811
345,942
295,606
17%
47,191
40,664
16%
MegaPlaza Pisco
Chg b.p.
1T15
1T14
MONTHLY REVENUES PER M2
MONTHLY SALES PER M2
- 18 -
Chg b.p.
Chg%
Chg%
HIGHLIGHTS BY COUNTRY
CHILE
PERU
- 19 -
COLOMBIA
HIGHLIGHTS BY COUNTRY / CHILE
PARQUE ARAUCO KENNEDY - SANTIAGO
ARAUCO MAIPÚ - SANTIAGO
ARAUCO QUILICURA - SANTIAGO
ARAUCO EXPRESS (STRIPCENTERS CHILE)
ARAUCO CHILLÁN - CHILLÁN
PREMIUM OUTLET MALLS - BUENAVENTURA, SAN PEDRO AND CURAUMA
- 20 -
ARAUCO ESTACIÓN - SANTIAGO
ARAUCO SAN ANTONIO - SAN ANTONIO
HIGHLIGHTS BY COUNTRY / CHILE
During the first quarter in PARQUE ARAUCO KENNEDY, Tiffany & Co,
In ARAUCO QUILICURA our success in the community was reflected in
the prestigious North American jewelry brand, announced its arrival to
the first quarter´s strong results, during which tenant sales, revenues and
the Chilean market with its store which will open in the newly expanded
EBITDA increased by double digits as compared to the same quarter of
Luxury District. Additional prestigious international brands including
last year.
Jimmy Choo, Michael Kors, Ralph Lauren and Tory Burch also announced
their incorporation in the Luxury District and will open during the first
In the premium outlet format in Chile, we improved the commercial mix
half of this year. Parque Arauco Kennedy maintains its position as the
in the new expansion of ARAUCO PREMIUM OUTLET BUENAVENTURA
preferred shopping mall for new brands to enter the Chilean market. We
with the opening of Helly Hansen, DBS and Todo Piel, among others. In
continued to add valuable and innovative services for our customers
ARAUCO PREMIUM OUTLET CURAUMA new brands including Nike and
with the inauguration of the new area of premium parking, which also
Guess opened their doors to the public. In addition, in March we began
includes valet parking.
construction on a new Arauco Premium Outlet in Coquimbo in the north
of Chile. This shopping center will open during the first half of 2016,
In ARAUCO MAIPÚ we presented 8 days of Open Air Theater during
offering 6.000 m2 and will require an investment of US$ 12 million.
which families could enjoy their afternoons watching popular theatrical
plays. More than 9,000 customers attended the shows. Additionally
In ARAUCO EXPRESS we announced three new projects: Arauco
some of the tenants from the shopping center offered their merchandise
Express Recoleta and Arauco Express Ciudad Empresarial II in Santiago
at stands throughout the theater. Maipú´s most popular mall enjoyed
and Arauco Express Antofagasta in the city of Antofagasta. These three
strong results during the first quarter, mainly due to the renegotiation of
strip centers will add 14,000 m2 to our portfolio of strip centers.
tenant contracts at better conditions.
Finally during the first quarter of 2015 Parque Arauco announced the
In ARAUCO ESTACIÓN we continued remodeling one of the food courts
construction of ARAUCO ANTOFAGASTA, a neighborhood shopping
and we have added new brands to the commercial mix. In ARAUCO
center in Antofagasta.
CHILLÁN we continued the renovation of Tower 1. The tower will include
development, will add 10,500 m2 to the company´s portfolio.
more than 20 new stores and a new movie theater. In ARAUCO SAN
company´s first shopping center in Antofagasta will require a US$ 34
ANTONIO during the quarter we opened additional stores and a new
million investment. Parque Arauco will own 55% of this shopping center
restaurant.
- 21 -
This shopping center, which is currently in
The
HIGHLIGHTS BY COUNTRY / PERU
MEGAPLAZA NORTE - LIMA
MEGAPLAZA EXPRESS VILLA - LIMA
INOUTLET FAUCETT - LIMA
MEGAPLAZA CAÑETE
MEGAPLAZA EXPRESS CHINCHA
VIAMIX CHORRILLOS - LIMA
LARCOMAR - LIMA
MEGAPLAZA EXPRESS BARRANCA
PARQUE LAMBRAMANI - AREQUIPA
- 22 -
MEGAPLAZA EXPRESS VILLA EL SALVADOR - LIMA
MEGAPLAZA CHIMBOTE
HIGHLIGHTS BY COUNTRY / PERU
In January 2015 Parque Arauco acquired two regional shopping
We opened our sixth neighborhood shopping center in the city of
centers in Ica and Cajamarca, two important cities in Peru. EL QUINDE
Pisco, MEGAPLAZA PISCO, and at the end of March, 2015 Plaza
CAJAMARCA, opened in 2006, is a 30,000 m2 mall with Falabella, Paris
Vea (supermarket), Promart (home improvement store), Inkafarma
(department stores) and Metro (supermarket) as its anchor stores. EL
(pharmacy), and other smaller stores were open to the public. The official
QUINDE ICA, opened in 2012, offers 37,000 m2 and offers Falabella,
inauguration of the mall took place on April 9, 2015. Parque Arauco´s
Ripley, Paris, Metro, and Maestro (home improvement store) as its anchor
neighborhood shopping centers have shown solid results during the first
tenants. Both are leading malls in their respective cities.
quarter, with double digit EBITDA growth across the board.
LARCOMAR remains firm in its position as Lima´s most iconic shopping
INOUTLET FAUCETT continued strengthening its commercial offering
center. During the quarter we have strengthened the gastronomic mix
as new operators opened their doors and added to the mix of brands.
by inaugurating restaurants including Trattoria, KO, Popular and Tanta.
During the first three months of the year the mall experienced sales and
During the quarter work began to prepare space for H&M, which will
customer visits above what was forecasted. In Parque Arauco´s first
open in the coming months.
strip center in Peru, VIAMIX CHORRILLOS, we continued improving the
In Parque Lambramani we continued
strengthening the commercial mix with the opening of stores offering
commercial mix as well as the infrastructure.
merchandise for the whole family. EBITDA grew importantly due to the
renovation of the commercial mix carried out at the end of 2013 which
Finally, we have announced the construction of Parque Arauco´s second
included the replacement of a Wong supermarket with Metro and Paris,
premium outlet mall in Peru in the south of Lima. OUTET LURIN will
thereby improving the anchor store offering.
have 8,500 m2 and open during the first half of 2016. Parque Arauco will
own 100% of the mall that will require a US$ 25 million investment.
During the quarter we announced a new expansion of MEGAPLAZA
NORTE which will add 17,500 m2. In Peru´s most visited mall, we began
seeing the positive results of the expansion we have carried out during
the last two years.
- 23 -
HIGHLIGHTS BY COUNTRY / COLOMBIA
PARQUE ARBOLEDA - PEREIRA
PARQUE CARACOLÍ - BUCARAMANGA
- 24 -
COUNTRY LEVEL HIGHLIGHTS / COLOMBIA
During the first quarter, PARQUE ARBOLEDA and PARQUE CARACOLI
In March, PARQUE CARACOLI held its second fashion week, showcasing
were awarded the silver medal in the Cause Related Marketing category
various brands of clothing, shoes and accessories. Additionally three
of the 2015 Latin American Shopping Center Awards. The medal was
lucky customers that participated in the “Dress Fashionably” campaign,
awarded for the “This Christmas, My Gift is Education” campaign which
won a consulting session with Hernán Zajar, the renowned designer
gave scholarships to children from low income families instead of a
and fashion expert. Finally we continued to work towards the opening
traditional Christmas gift.
of a new supermarket in the shopping center.
In PARQUE ARBOLEDA we continued strengthening the commercial
In Bogotá, construction continued on PARQUE LA COLINA, the iconic
mix with the opening of the gym Spinning Center. Additionally the office
project in Colombia´s capital. Commercial negotiations for the project
tower reached an 85% occupancy level after successful negotiations
advanced, and there was a high level of interest from national and
with new tenants. The office tower offers high quality, well equipped
international retailers. The 63,500 m2 mall will begin operating during
office space to businesses in the city of Pereira.
the first half of 2017.
- 25 -
FUTURE DEVELOPMENTS 2015 AND ONWARD
Parque Arauco has announced projects that will add 277,500 m2 of GLA over the next few years. Developments have
been announced in Chile, Peru and Colombia and the total investment is estimated at US$ 730 million.
Parque Arauco has a land bank valued at US$ 202 million (at acquisition cost), which will be used to support future
growth and to develop shopping centers, outlet malls and strip centers in Chile, Peru and Colombia.
Country
Format
Opening
date
Total GLA
(m2)
%
Ownership
Arauco Premium Outlet Coquimbo
Chile
Outlet
1H16
6,000
100.00%
6,000
12
Various Projects Arauco Express
Chile
Strip center
In development
14,000
51.00%
7,140
30
Arauco Antofagasta
Chile
Neighborhood
In development
10,500
55.00%
5,775
34
MegaPlaza Pisco1
Peru
Neighborhood
1Q15
14,000
50.00%
7,000
16
Various Projects MegaPlaza
Peru
Various
In development
40,000
50.00%
20,000
46
Outlet Lurín
Peru
Outlet
1H16
8,500
100.00%
8,500
25
Various Projects SCP
Peru
Strip/Outlet
In development
25,000
51.00%
12,750
73
El Quinde Cajamarca1
Peru
Regional
1Q15
30,000
100.00%
30,000
38
El Quinde Ica1
Peru
Regional
1Q15
37,000
100.00%
37,000
47
Colombia
Regional
1H17
63,500
55.00%
34,925
289
169,090
610
GREENFIELD PROJECTS
Parque La Colina
Subtotal
248,500
Total
Owned GLA
Investment
(m2)
Country
Format
Opening
date
Total GLA
(m2)
%
Ownership
Parque Arauco Kennedy Luxury District
Chile
Regional
1H15
1,000
100.00%
1,000
9
Arauco Premium Outlet Buenaventura
Chile
Outlet
1Q15
6,500
100.00%
6,500
20
MegaPlaza Express Villa
Peru
Neighborhood
2H15
500
50.00%
250
2
MegaPlaza Express Chincha
Peru
Neighborhood
2H15
1,000
50.00%
500
2
MegaPlaza Chimbote
Peru
Regional
2H15
2,500
50.00%
1,250
4
MegaPlaza Norte
Peru
Regional
In development
17,500
50.00%
8,750
31
18,250
68
EXPANSIONS
Subtotal
29,000
Total
Owned GLA
Investment
(m2)
52
New land bank
Total
(1) Incorporated into portfolio during the first quarter of 2015.
(2) Incorporated into land bank during first quarter of 2015.
277,500
- 26 -
187,340
730
LANDBANK
NAME
Total Cost
(MMUS$)
M2
% Ownership
25,486
100%
3
115,864
100%
18
Chicureo
47,614
100%
8
Los Andes
39,254
100%
5
Other in Chile
55,577
100%
18
283,795
100%
52
Parque El Golf
14,813
70%
37
Chimbote - El Quinde
42,500
100%
6
Talara - El Quinde
31,000
100%
3
Ica - El Quinde
12,500
100%
4
6,500
100%
2
Land bank IPSA
156,355
50%
27
Total Peru
263,668
69%
79
El Rosal
137,104
100%
19
Neiva
49,537
100%
8
Valledupar
46,000
100%
12
Barranquilla
56,166
100%
32
Total Colombia
288,807
100%
71
Total
836,270
90%
202
Quilicura 2
Buenaventura
Total Chile
Chiclayo
- 27 -
ANALYSIS OF MARKET RISKS
The following are potential risks that the Company may face:
The level of activity/sales of our tenants are linked to economic
growth and consumption growth in each economy in which we
operate. The decline in economic activity may adversely affect the
level of sales of our tenants and therefore affect the Company’s
revenues, as a percentage of our income depends on the level of
sales of certain tenants. Of the 84% of Parque Arauco´s revenues
Parque Arauco does not hold speculative positions in the
derivatives market, the coverage taken will eventually be used
to hedge exposures to foreign exchange risk and interest rates
risks due to the nature of the business sources of financing. The
Company primarily maintains its operational and financial income
and expenses in the same currency and in the local currency of
each operations location.
that are derived from rental revenues, approximately 86% are
The Company is also subject to risks regarding return on
fixed revenues and 14% are variable revenues that depend on the
investment in Colombia and Peru, given the evolution of economic
volume of sales of our tenants.
variables such as exchange rates, interest rates and taxes, among
A general deterioration in the economy could also affect the
other factors.
occupancy of our shopping centers. However, the contracts
between Parque Arauco and its tenants are generally medium to
long term and stipulate a minimum fixed rental fee. The Company
has a solid contractual framework as well as a conservative
financial position enabling the Company to be prepared to face a
potential economic decline.
- 28 -
CASE STUDY
PARQUE ARAUCO´S INTERNATIONALIZATION PROCESS
As of the first quarter of 2015, Parque Arauco reached an important milestone: 50.0% of the
company´s total gross leasable area (GLA) is located outside of Chile.
Parque Arauco inaugurated Parque Arauco Kennedy in 1982 as the
most visited shopping mall in Peru. Today, Parque Arauco owns
first shopping center to open in Chile. Later, in 1993, the company
50% of Inmuebles Panamericana S.A., which has developed an
inaugurated Arauco Maipú. Currently, these two shopping centers
important portfolio of shopping centers that includes MegaPlaza
are Parque Arauco´s most important assets in Chile in terms of
Chimbote, MegaPlaza Cañete, MegaPlaza Express Barranca,
gross leasable area.
MegaPlaza Pisco, MegaPlaza Express Villa, MegaPlaza Express
In the mid 2000s, Parque Arauco decided to diversify its
geographic exposure and thereby reduce its country level risk.
In 2006 the company took an important step in the process of
internationalization by entering into an agreement with Grupo
Wiese, an important Peruvian economic group, to acquire 45% of
the shares of Inmuebles Panamericana S.A., a company controlled
by Grupo Wiese that owned the MegaPlaza Norte shopping
center. This regional shopping center, located in northern Lima,
received more than 2 million visitors a month, making it the
Villa El Salvador and MegaPlaza Express Chincha. In 2010, Parque
Arauco inaugurated Parque Lambramani in the city of Arequipa,
and that same year acquired Larcomar, the iconic shopping
center located in the Miraflores district of Lima. In January of
2015, Parque Arauco completed the acquisition of El Quinde Ica
and El Quinde Cajamarca, in the cities of Ica and Cajamarca. The
company is now the second largest developer and operator of
shopping center in Peru in terms of gross leasable area, with a
total GLA of 336,000 m2 which, as of the first quarter of 2015,
represents 41% of the company´s total GLA.
- 29 -
In 2009, Parque Arauco S.A. signed an agreement with Grupo
Parque Arauco´s international expansion process has really
Bancolombia to jointly develop commercial real estate space that
progressed and developed during the last 4 years with the
would be rented to tenants, and thereby continue the company´s
incorporation of Parque Lambramani (2010), Larcomar (2010),
geographic diversification.
In Colombia, the shopping center
MegaPlaza Express Villa El Salvador (2012), MegaPlaza Chimbote
industry had been developed by real estate companies that built
(2012), MegaPlaza Cañete (2013), MegaPlaza Express Chincha
and then sold space to retailers. Parque Arauco, convinced of
(2013), MegaPlaza Express Barranca (2013), InOutlet Faucett
the viability of its rental model, officially entered the Colombian
(2013), ViaMix Chorrillos (2014), MegaPlaza Pisco (2015), El
market in 2010 with the inauguration of Parque Arboleda in the
Quinde Cajamarca (2015) and El Quinde Ica (2015) in Peru.
city of Pereira, the capital of the coffee region. In 2013, Parque
The developments in Colombia have also contributed to the
Arauco inaugurated its second shopping center in Colombia,
internationalization process with Parque Arboleda (2010) and
Parque Caracolí in Bucaramanga.
Parque Caracolí (2013) adding to the company´s GLA.
The company is currently
building its third and most important shopping center, Parque La
Colina in Bogotá. As of the first quarter of 2015, Parque Arauco
has 71,500 m2 of GLA in Colombia, which represents 9% of the
company´s total GLA.
- 30 -
Today, Parque Arauco has six regional shopping centers,
three outlet malls, and eleven strip centers in Chile, in a
total of 408,000 m2; six regional shopping centers, six
neighborhood shopping centers, an outlet mall and a strip
center in Peru, offering 336,000 m2; and two regional
shopping centers in Colombia with a total of 71,500 m2
of GLA in the country. Parque Arauco has become one
of the leading companies in the Andean region to offer
commercial real estate for rent, and now has a portfolio of
diverse shopping centers with a total GLA of 815,000 m2.
Going forward, the company will continue its regional
expansion process.
A new investment plan valued at
US$ 730 million was recently announced which will
add 277,500 m2 of GLA. 63% of the new GLA will be
in Peru, 23% in Colombia and 14% in Chile, furthering
the geographic diversification of the company. The new
growth plan will bring Parque Arauco´s total GLA to
over one million square meters for the first time in the
company´s history.
- 31 -
CONSOLIDATED FINANCIAL STATEMENTS
BALANCE SHEET
CH$ THOUSANDS
BALANCE SHEET
31.03.2015
CH$ THOUSANDS
31.12.2014
ASSETS
31.03.2015
31.12.2014
LIABILITIES
CURRENT ASSETS
CURRENT LIABILITIES
Cash and cash equivalents
57,410,419
110,061,086
Other current non financial assets
37,251,183
Trade accounts rec. and other rec.
53,189,863
52,055,207
22,250,935
Commercial credits and other accounts payable 29,483,098
28,379,202
19,085,612
19,959,586
Current accounts payable to related parties
2,217,948
2,195,857
Accounts receivable from rel. comp.
6,433,742
6,177,439
Current provisions
2,603,359
1,603,946
Current tax receivable
4,234,844
3,287,411
Current tax liabilities
6,062,374
6,188,840
124,415,800
161,736,457
Current provisions for employees
3,618,288
3,511,827
13,743,167
1,716,500
110,918,097
95,651,379
Total current assets
Other current financial liabilities
NON CURRENT ASSETS
Other current non financial liabilities
32,584,979
31,711,183
238,891
326,999
Share of profit (loss) of associates accounted
55,172,417
53,585,634
Other non current financial liabilities
438,899,615
421,273,192
Intangible assets excluding surplus value
14,276,576
14,750,880
Deferred tax liabilities
108,906,521
106,378,627
Surplus value
35,360,525
16,383,094
Other non current non financial liabilities
12,706,898
10,327,322
2,965,535
2,836,519
Total non current liabilities
560,513,034
537,979,141
1,150,134,566
1,090,631,422
Total liabilities
671,431,131
633,630,520
42,762,357
41,795,417
1,333,495,846
1,252,021,148
336,925,246
336,925,246
(3,736,839)
(3,736,839)
Accumulated earnings (losses)
319,503,114
309,444,765
Premium on new issued shares
200,964
200,964
(9,311,106)
(4,950,870)
Equity attributable to shareholders of the company
643,581,379
637,883,266
Minority interest
142,899,136
142,243,819
786,480,515
780,127,085
1,457,911,646
1,413,757,605
Other non current non financial assets
Non current accounts receivable
Property, plant and equipment
Investment properties
Deferred tax assets
Total non current assets
Total current liabilities
NON CURRENT LIABILITIES
EQUITY
Issued share capital
Treasury shares
Other reserves
Total equity
TOTAL ASSETS
1,457,911,646
1,413,757,605
TOTAL LIABILITIES AND EQUITY
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CONSOLIDATED FINANCIAL STATEMENTS
CASH FLOW STATEMENT
CH$ THOUSANDS
31.03.2015
31.03.2014
Chg. %
NET CASH FLOW FROM OPERATING ACTIVITIES
49,597,174
43,963,239
12.8%
(17,591,469)
(18,522,503)
-5.0%
Payments on behalf of employees
(4,057,899)
(2,773,000)
46.3%
Income taxes refunded (paid)
(2,112,462)
(305,698)
591.0%
Other inputs (outputs) in cash
(4,701,218)
(5,157,069)
-8.8%
Net cash flow from operating activities
21,134,126
17,204,969
22.8%
(28,226,712)
(3,327,404)
748.3%
Interest received
549,725
578,069
-4.9%
Purchases of property, plant and equipment
(72,465)
(186,698)
-61.2%
Purchases of intangible assets
(13,967)
(19,433)
-28.1%
Proceeds from related entities
-
542,191
-100.0%
Purchases of other long-term assets
(27,416,096)
(18,127,571)
51.2%
Other inputs (outputs) of cash
(12,806,990)
(3,467,750)
269.3%
Net cash flow from investment activities
(67,986,505)
(24,008,596)
183.2%
Share issuance
2,426,568
111,864,890
-97.8%
Proceeds from long term debt
9,610,689
-
-
Receipts from sales of goods and services
Payments to suppliers for goods and services
NET CASH FLOW FROM INVESTMENT ACTIVITIES
Cash flows used for acquiring subsidiaries or other businesses
NET CASH FLOW FROM FINANCING ACTIVITIES
-
105,015
-100.0%
(12,637,083)
(12,703,350)
-0.5%
Financial leasing payments
(497,706)
(379,043)
31.3%
Dividends paid
(142,834)
-
-
(5,414,740)
(5,697,033)
-5.0%
964,865
1,213,058
-20.5%
(5,690,241)
94,403,537
-106.0%
(52,542,620)
87,599,910
-160.0%
Proceeds from short term debt
Loan payments
Interest paid
Other inputs (outputs) in cash
Net cash flow from financing activities
Net increase (decrease) in cash and cash equivalents, before the effect of changes in the exchange rate
(108,047)
1,614,382
-106.7%
Increase (decrease) in net cash and cash equivalent
(52,650,667)
89,214,292
-159.0%
Cash and cash equivalents at beginning of period
110,061,086
68,945,796
59.6%
57,410,419
158,160,088
-63.7%
Effects of variation in the exchange rate on cash and cash equivalents
Cash and cash equivalents at end of period
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