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GICSA Announces Consolidated Results for Second Quarter 2018

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GRUPO GICSA, S.A.B. de C.V. ("GICSA" or "the Company") (BMV:GICSA), a
Mexican leading company specialized in the development, investment,
commercialization and operation of shopping malls, corporate offices,
industrial buildings and mixed use properties, announced today its
results for the second quarter ("2Q18") and six-month ("6M18") periods
ended in June 30, 2018.

All figures have been prepared in accordance with International
Financial Reporting Standards ("IFRS") and are stated in millions of
Mexican pesos (Ps.) GICSA's financial results presented in this report
are unaudited; therefore figures mentioned throughout this report may
present adjustments in the future.

GICSA's financial results presented in this report are unaudited;
therefore figures mentioned throughout this report may present
adjustments in the future.

Main Highlights

Corporative

  • On July 3, via a press release the Company announced the approval and
    formalization of the restructuring of the joint portfolio that it had
    with various investors that participate in certain developments of the
    Company's real estate portfolio, as well as the signing of a real
    estate services contract previously provided in various projects. In
    summary, this transaction had the following effects:
    • Starting in 3Q18, the Company will report 100% of the result for
      the following properties: Forum Culiacan, Tower E3, Capital
      Reform, Masaryk 111, City Walk and Forum Buenavista in its
      results. Forum Coatzacoalcos will be reported at 50%, while Forum
      Tlaquepaque, Las Plazas Outlet Lerma and Reforma 156 will be
      dis-incorporated from the Company's portfolio.
    • The abovementioned will generate an additional annual proportional
      NOI for GICSA of Ps. 115 million, beginning in 3Q18; Ps. 919
      million will be paid upon the signature of this agreement.
    • The real estate services contract previously provided and agreed
      to by the Company generated revenues of Ps. 1,128 million, of
      which the Company charged Ps. 282 million upon the signature of
      this agreement and will receive an additional payment of Ps. 846
      million in the next 15 months. This is already reflected in the
      2Q18 results.

Operational

  • GICSA reported a total of 831,004 square meters (m²) of Gross Leasable
    Area (GLA) comprised of 13 properties in the stabilized portfolio and
    3 properties in the stabilization process at the conclusion of 2Q18.
    GICSA's proportional GLA during 2Q18 was 529,460 m2, an
    increase of more than 124 thousand m2, 17.47% higher than
    the figure reported for the same period of the previous year.
  • As of 2Q18, the occupancy rate of the stabilized portfolio was 93.76%,
    an increase of 3.41 bps. This was due to the occupancy increase at
    Capital Reforma, Masaryk 111 and Paseo Arcos Bosques.
  • Average leasing rate per square meter of the stabilized portfolio at
    the end of 2Q18 was Ps. 359, a 9.30% increase compared to 2Q17, which
    was Ps. 328.
  • GICSA registered an accumulated occupancy cost of 7.8% in 6M18, and an
    increase in same-store sales of 5.20% for the same period.
  • At the close of 6M18, GICSA had a total of 37 million of visitors in
    the shopping malls of the stabilized portfolio, an increase of 11.36%
    compared to 6M17.

Financial

  • Net operating income (NOI) of the stabilized and under-development
    portfolio reached Ps. 727 million, a decrease of 3.68% compared to
    2Q17. This was explained by a lower proportion of key money collected
    during the quarter, higher expenses at Forum Cuernavaca, as well as
    the impact of the credit notes granted to certain tenants for the work
    carried out for the construction and opening of the Paseo Interlomas
    expansion.
  • Consolidated EBITDA in 2Q18 reached Ps. 1,863 million, while GICSA's
    proportional EBITDA was Ps. 1,582 million, an increase of 146.18% and
    234.84%, respectively, compared to 2Q17. This was derived from the
    recognition of real estate services provided and charged in the recent
    agreement concluded together with a group of important investors.
  • At the close of 2Q18, net income was Ps. 3,126 million; while GICSA's
    proportional net income was Ps. 2,092 million.
  • Consolidated debt at the close of 2Q18 was Ps. 22,671 million; while
    GICSA's proportional debt was Ps. 17,497 million.

Pipeline

  • As of June 30, 2018, the commercialization of properties under
    development reached progress of 332,884 square meters of GLA under
    contract. This represents 61.35% of the total space comprising
    projects under construction, representing an increase of 12.02%
    compared to 1Q18.
  • On April 26, 2018, La Isla Merida successfully opened with 59,900 m2
    of GLA. As of June 30, 81% of the area was under contract with
    anchor and sub-anchor stores such as: Liverpool, Cinépolis, H&M and
    Zara.
  • During 2Q18, the Explanada Culiacán construction began; due to the
    wide acceptance of the concept by our commercial partners, this
    project concluded the quarter with 27.54% of area under contract.
  • At the close of 2Q18, 100% of the GLA for Masaryk 169 aimed for
    commercial use is under contract.

***

For a full version of GICSA's Second Quarter 2018 Earnings
Release, please visit:
http://www.gicsa.com.mx/en/investors-relationship/financial-information

 

Conference Call

 

GICSA cordially invites you to its Second Quarter 2018
Conference Call

 

Wednesday, July 25, 2018

12:00 PM Eastern Time
11:00 AM Mexico City Time
 

Presenting for GICSA:

Mr. Diódoro Batalla, Chief Financial Officer
Mr. Rodrigo Assam Bejos – Financial Planning and Investor Relations
Officer
 

To access the call, please dial:

1 (877) 830 2576 U.S. participants

1 (785) 424 1726 International participants

Passcode: 44272

 

About the Company

GICSA is a leading company in the development, investment,
commercialization and operation of shopping malls, corporate offices and
industrial warehouses well known for their high quality standards, which
transform and create new development spaces, lifestyles and employment
in Mexico, in accordance to its history and executed projects. As of
June 30, 2018, the Company owned 16 income-generating properties,
consisting of ten shopping malls, four mixed use projects (which include
four shopping malls, four corporate offices and one hotel), and two
corporate office buildings, representing a total Gross Leasable Area
(GLA) 831,004 square meters, and a Proportional GLA of 529,460 square
meters. Since June 2015, GICSA is listed on the Mexican Stock Exchange
under the ticker (BMV:GICSA B).

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