Good afternoon, and thank you for standing by. Welcome to the first quarter of 2025 E arnings Conference Call of ALLOS. Today with us are Mr. Rafael Sales, CEO; Mr. Vicente Avellar, COO; and Ms. Daniella Guanabara, CFO and IRO. This conference is being recorded, and all participants will be in a listen-only mode during the company's presentation. After the presentation, we will have a question-and-answer session for analysts and investors when further instructions will be provided. This conference is being broadcast simultaneously on the company's website at ri.allos.co, where you can also find the slide deck. The replay will be available right after the conference for a period of one week. Questions can only be submitted through the Zoom app. In case you are watching on the website, please email your question directly to the investor relations team at ri@allos.co.
We would like to inform you that any statements that may be made during the call related to the company's business perspectives, operating, and financial targets are based on the company's management's beliefs and assumptions, as well as on currently available information. Forward-looking statements do not guarantee performance. They involve risks, uncertainties, and assumptions, as they refer to future events and therefore depend on circumstances that may or may not occur. Investors should understand that general economic conditions, industry conditions, and other operating factors may affect the future performance of the company and lead to results that differ materially from those expressed in such forward-looking statements. Now, I'd like to turn the conference over to Mr. Rafael Sales. The floor is yours.
Good afternoon, everybody. Thank you very much for your interest in ALLOS' results.
As we step in 2025, we believe that Brazil will be in a very challenging business environment. However, the country's top shopping malls will have the opportunity to showcase their strength and resilience. In our current portfolio, which was modeled and has been developed over the past years, should deliver consistent results despite the more adverse economic scenarios. From a financial standpoint, we have been generating operating results and allocating capital in a responsible way. We structured our balance sheet with long-terms and balanced rates so that we are able to weather any turmoil. The performance that we had this quarter bears witness to that, to the trend that we have seen since the last quarter. Now, I'd like to go to slide two to show you some operating results.
In the first quarter of 2025, our sales increased by five percent, rather, although there was a mismatch in time in Eastern, which took place in March last year and April this year. The highlights are the Southeast, the South, and the North of Brazil, and also the Midwest, especially in those regions where we have agribusiness. In these markets, we are very well located, and our average performance has been better than the average of the company, which has been driving our growth. Also, in April, there was a 16.4% increase in our total sales. In same-store sales, we grew by 2.4%, which showed that there was a seasonal effect, but we are going to have positive indicators. Sales per square meter, which has been posting good performance over the years, shows on this chart our track record in sales per square meter since 2019.
We delivered a CAGR of seven percent throughout this period and a total increase of 52% since 2019. I would also like to highlight our commercial relationship with the tenants. Although the interest rates have been higher than last year, the tenants, entrepreneurs, and business owners continue to show a good demand for the area. In one queue, we signed 137 contracts, including two Sephora stores, one in Campo Grande shopping mall and the other in Mooca Plaza, one farm in Maringá, and Tommy Hilfiger as well, which are brands that are growing in Brazil. Our occupancy rate was 96.8%, 50 bips better than the first quarter of 2024. Later in the presentation, you are going to see other operating indicators. Now, let me give you an overview of the financial results on slide three. We can see that the strong operating performance translated into consistent results.
Our net revenue was BRL 618 million, five percent more year- on- year. As I said, that happened despite the seasonality effect because of Easter. We had strong sales related to Easter in April in the second quarter. We can see that there has been a resumption in the growth in leases driven by the contractual renewals. Our EBITDA grew, although it was below the growth in our guidance, but that happened because of the seasonal effects. It grew by five percent, reaching BRL 443 million in 1Q 2025. These results happened basically because of the net revenue increase, and our costs grew below the inflation. We are very confident about delivering our guidance between BRL 2 billion and 70 million and BRL 2 billion and 150 million. We are still committed to that guidance, and we have been delivering on our guidance over the past years.
FFO came to BRL 275 million despite the increase in the SELIC rate, which went from 10.75% - 14.70%. Still, we were able to grow by four percent in nominal terms this quarter. If we look at our FFO per share, which should be the main indicator here for profitability for shareholders, we had a 13% increase year- on- year, which basically reflects not only the growth in our total FFO, but also the buyback that happened in the last 12 months in the amount of BRL 230 million, which is another way of delivering value to shareholders, rewarding those who stay with us for a long time and also creating opportunities for growth despite the year with such high interest rates, as was the case in the last 12 months.
Before I turn it over to Dani, I'd like to mention that in April, we had our shareholders' meeting electing three independent members of the board. We now have four in total. We had an increase in the number of women in our board. We have two women in our board of directors, which confirms our trajectory of advancing to the highest levels of corporate governance, not only according to official indices, but also in the market's perception. Now, I'd like to turn it over to Dani, and I'll be back to take your questions after the presentation. Thank you.
Thank you, Rafael, and good afternoon.
Now, on the last slide, we can see that in 1Q 2025, ALLOS continued to have a high demand for new areas and finished the quarter with 96.8% in occupancy rate, 50 bips more year- on- year, and the same rate that we had in 4Q 2024 despite the seasonal effects. In 1Q 2025, we signed 137 contracts across our shopping malls. I'd like to highlight here two Sephora stores, one in the Campo Grande shopping mall and another one in the Mooca Plaza Shopping, a farm store at Catuaí Maringá, and Tommy Hilfiger at the Goiânia Shopping. We also had Fogo de Chão store being opened in Tamboré and Adidas in the Boulevard Shopping Bauru. Now, on slide five, our occupancy cost came to 11.2%, a little bit more than 1Q 2024 due to the resumption in leases.
That delinquency in the period was 2.5%, a 110 bips drop year- on- year, also because of the strong sales performance, which has an impact on the tenants' financial health. Now, on the next slide, we can see that in 1Q 2025, our net debt over EBITDA ratio was 1.8 x, and the rate that we had in the debt breakdown was thanks to the financial discipline. 97.9% of our debts are related to the CDI, and two percent are a fixed rate, and 0.1% to inflation. We are pursuing costs below our average rate, and also we want to extend the term of our debt. In January, we finished the issuance of another CRI, which reached BRL 625 million with a cost of 99.5% of the CDI, increasing the maturity of our debt. Now, let's talk about our media business.
Media delivered BRL 35.8 million in revenue, 9.5% higher year- on- year, which accounts for 5.6% of ALLOS' revenue in the quarter, 70 bips more than 1Q 2024. Helloo now has almost 2,000 screens, a significant number, and also it has additional potential, especially if you incorporate the data from the app to create directed targeted campaigns. Now, on the next slide, let's take a look at the benefits program. In the beginning of the year, we celebrated the second phase of the rollout. In April, we launched 34 malls in total until April, and tenants recognized the program as a powerful tool to increase traffic and to boost sales. We had 25% of tenants engaged, making over 1,000 benefits available. The program is also driving our media business, which is a highlight in terms of performance in the company quarter- over- quarter.
Now, I'd like to show you some recent highlights in our sustainability journey. In April, we published the second sustainability report, reaffirming our strategy and commitment to responsible actions and positive impact. The document reviews the Sustainable Life Center's commitment, which provides guidance on actions related to sustainability and governance. These spaces inspire people, and it drives more engagement in the communities. You can see the document in full by accessing our Investor Relations website. ALLOS is now one of the 82 companies included in the Sustainability Index of B3, the Brazilian Stock Exchange. We believe that innovation and sustainability walk hand in hand. Also, for the second consecutive year, ALLOS was the sponsor of Rio Open, the biggest South American tennis tournament, and also the Wheelchair Tennis Elite, providing support to extraordinary athletes. This partnership strengthens our commitment to sustainability, to accessibility, and inclusivity.
With that, I would like to thank you for your interest in ALLOS, and we are now going to open the Q&A session. Thank you.
Ladies and gentlemen, we will now begin the Q&A session exclusively for analysts and investors. If you have a question, please click the raise hand button. To remove yourself from the queue, please click lower hand. The first question comes from Bruno Mendonça with Bradesco BBI. Please go ahead.
Hello, good afternoon. Thank you very much for taking my question. I have a question about your EBITDA guidance. In the presentation, you mentioned that you continue to be confident about your EBITDA guidance. The first quarter seasonally is usually lower in terms of EBITDA, but I understand that this is a seasonal effect.
My question is, what is your confidence about your EBITDA guidance, and how does that relate to the top line and costs and expenses, and also about your guidance? The consensus right now points towards a strong slowdown in activity in the second half of the year and also GDP. What is the scenario that you are considering in your guidance, and how much does your guidance rely on strong sales performance in the second half of the year?
Thank you for the question. This is Rafa. About seasonality, we should take into account that in the first quarter of the year, we had lower seasonality. Last year, it accounted for 22% of the revenue. 22% of the revenue of the company came in the first quarter. Without Easter, that number was even lower. Historically, the fourth quarter accounts for 32%-34% of the revenue.
At least in our case, there was indeed a concentration in a few malls. For example, there are 10 malls that are important. Actually, I should give you more color on this because many people ask questions about April. We had negative same-store sales in 10 malls between six percent and 16% in the month of March. Those malls, the same 10 malls in April, grew by 14%-17% in same-store sales. The same-store rent in April was nice percent, and in the quarter, it was five percent. That part of the portfolio had strong recovery in April, driving our total revenue from rents to grow nine percent. I believe that those numbers point to the trends that I'm mentioning because the rent revenue is increasing. That shows that the first quarter was really an outlier out of the ordinary.
If it is a weaker quarter, any impact will hurt us a little bit more in percentage terms. Of course, we had a decrease in costs and expenses. We have strong conviction in our guidance because we already had accounted for that slowdown in our budget. Now we have lower delinquency than we expected, and the demand for stores is a little bit better than we had projected. The slowdown was a scenario that we factored in, so much so that we had an adjustment in percentage terms that was a little bit more modest than we expected. The growth in lease was lower than expected, but things are very healthy right now. Although the same-store sales was lower, the same-store rate was higher. Now, when it comes to costs and expenses, this is a great question. Some people left, and that drove expenses in SG&A.
Also, in the second quarter, we have the effect of not having that many people in the company in the second quarter. In the second half of the year, we believe that we are going to have more opportunities of that sort, of gaining efficiency in SG&A expenses. Overall, demand for area is strong, occupancy is strong. We had 10 malls impacting same-store sales, but they all grew in percentage terms in April, in the second quarter. It is not common, of course, for us to give you color on April, but in this case, I think it was important to do so. If we thought that we were at risk of not meeting the guidance, we would let you know as soon as possible because it would not make sense to not do it. We have been giving guidance for four years.
We have been meeting our guidance every year since. If we have any perspectives of not meeting it, we would let you know as soon as possible. We are actually very comfortable about it. The new stores, the new contracts, and delinquency and occupancy make us believe so much in our guidance. We have some decreases in expenses after the merger, two years after the merger. ERP is running well. We have some redundancy expenses until the end of the year, but all of that tends to drive costs down.
Expense dilution that you mentioned, is it related to any initiative? Is it related to Helloo or media contracts or any other point that you deem relevant?
No, I mentioned the decrease in expenses because the decrease in headcount. Helloo is actually growing.
If you look at any negative variation in lease, it has the opposite effect. Helloo is not big enough yet to cause such a decrease in expenses this year. Maybe after next year, that would be possible. Maybe we are going to have sufficient top line for that. I am just referring to expenses of ALLOS, especially SG&A expenses, now that we have a more efficient structure, especially two years after the merger and after the implementation of the ERP system.
Okay, thank you.
The next question comes from Ana Júlia Zerkowski with UBS.
Hello, good afternoon. I would like to ask a question about Helloo. It has been growing, becoming more and more relevant, as you mentioned. You announced also a partnership with Now.
If you can share with us a little bit more about your expectations about the growth of Helloo and how this partnership should boost your brand and also the share of revenue that we should expect coming from Helloo this year.
The growth opportunities with Helloo are very synergistic with the mall business. We are still confirming the conditions with Aena, so we can only give you the same information that we disclosed in the material facts. We can't really announce anything new about this. Strategically speaking, malls and airports have a lot of synergy with this business because we have a number of malls in cities where there are major airports. Helloo already has a track record that shows strong execution. Media is a completely different business model. You need to gain scale, and you need to have more footprint than malls.
There is a synergy. Also, we have 5,000 residential buildings in regions close to airports. We have indoor, out-of-home media, and we are growing in that space. We are focusing on that and growing more in the environment that we know how to operate. The ALLOS business is B2B2C, naturally, and our relationship with tenants can be used to boost national, international brands across all segments in our malls. They are all levers for Helloo to grow. Just like airports will continue to be because this dynamic makes a lot of strategic sense because this market is also B2B2C, and that is where we decided to focus our efforts. In terms of financial projections, we are working on it. We just received news that we were chosen, and we are going to sign the contract. There are a number of important steps.
As I said, Helloo is synergistic with our malls, and it's going to help us leverage the Helloo brand and get more partners to be present in our ecosystem.
Okay, thank you.
The next question comes from Ygor Altero with XP. Please go ahead.
I have two questions. First, I'd like to know more about your growth avenues in an interest where we have higher interest rates. If you can break it down in expansion and M&As, that would be great. The second question is about the capital market. It is now improving. If we continue like that, do you think you could resume recycling in the second half of the year?
Thank you for your question, Ygor. As I said in the first question, the lease increase should play an important role this year.
We continue to be very comfortable about it for this year. It is going to be the main driver for sure because it is the main pillar for return in the company. In the release, I do not know if you had time to take a look at it. Our CapEx includes a few projects with significant returns, and it will allow the company to grow. If you have not had time to take a look, please do it because we are going to provide—we actually provided guidance in that chapter in our release. We gave you important information on how to assess Maintenance CapEx and also Growth CapEx. Of course, media is very important. The loyalty program grew a great deal as well. It is present in most of our malls, 40 malls virtually, and it is running very well.
Today, we have over 400 brands providing rewards to the customers under the loyalty program and a number of benefits as well. That shows the potential for growth coming from this segment. Divestment, which reduces revenue naturally, is also an option. Obviously, we can go back to the market to sell minority stake or malls that do not make sense for us anymore. Our portfolio right now is already in an appropriate size, in our opinion. We have 30 malls fewer if we put together br Malls and Aliansce 10 years ago when we had the three companies, and the three companies started to resize their portfolio. We have 44 malls. If we had 30 malls fewer, that would be a significant decrease, right? Considering that we decreased the number of malls in the past. We used those funds to buy shares back.
We already ensured to shareholders a growth in the line that is the most sensible to shareholders, which is the increase of FFO per share and also dividends per share. If we look at those two indicators, we continue to grow despite the interest rate, which is so high. There was an increase of 400 bips . Imagine to do business in Brazil with so much leverage. You should consider that our net income increased a lot this quarter. Those increases are not top-line increases, but they are value that is returned to shareholders. We are returning that value to shareholders in the way we can with such a high capital cost.
If we have better opportunities in the second half, we can take a look at the options to reduce the average cost of that or resize the portfolio and maybe resume growth with a different perspective. We should remember that next year is an election year, so we need to be careful in our assessments. We are not going to have significant debts maturing in 2026 and 2027 because we do not want to refinance our debts in the two years that will probably be more volatile.
Thank you.
Next question with Andre Mazini with Citi.
Hello, Rafa and Dani. I have two questions as well. The first one is about the chart that you included in page 21 in the release. I was curious about the great dispersion in Recife and Amazonas. They have three times as many vehicles as the average in your portfolio.
Malls that sell so much like Leblon, they are not even in the top eight. Is that related to how the cities are planned? Is it harder for pedestrians to walk in the shopping mall in Recife, for example? If you consider that, can you increase the tickets in those two malls? Is there any upside in terms of tickets in those two malls? The second question, you mentioned your contracts with airports in the amount of BRL 1.4 billion in the next years. If you can give us more color on the economics, there is a BRL 15 million payment upfront. Are you going to invest CapEx? What about the margins in this business? It seems to me that the margins are high. I'd like to know your take on that, please.
Hello, Mazini. Thank you for your questions.
I'm going to address your question about media first, and then I'll turn it over to Vicente to talk about the parking lots, which is a curious topic. About media, we are in the process of negotiating the contracts. We can't really give you details about the contract and also the profitability model. This business provides a high return on invested capital, but the margins are lower because it requires more people. The operating cost is different. Everything is different from operating a shopping mall. CapEx is better because you just need to install those screens, the displays, and we buy the displays with a large scale. That reduces CapEx. We can only give you more information about that after we finish the negotiation of the contract. Now over to Vicente to talk about the parking lot business.
This business is more related to the profile of the shopping mall, really. Depending on the physical structure, the location, and the access to the shopping mall, all of that interferes in the shopping mall's ability to absorb more or less traffic. It also depends on the number of activities around the shopping mall. In the case of Amazonas and Recife, those are two shopping malls where we have large parking lots, and also the malls are extremely important in their region. In regions where you have a lot of activity and that can attract the population around that area where you can capture the population that lives in the neighboring areas, you also capture traffic, Uber traffic, taxi traffic, and they need to go into the parking lot due to the design of the area to drop off passengers or pick them up.
All of that interferes with the absolute number that you see on the release. For sure, those are two shopping malls that are very dominant in their area, and there are plenty of opportunities in them, and they have been performing well. Now, when it comes to increasing the cost, the price or not, that analysis is different because it all depends on the availability of parking spots in the surrounding areas, the level of the competition, the prices in the region. We usually make a deeper analysis asset by asset to determine our ability to increase prices and bring in more revenue. The absolute volume is more related to the design of the shopping mall itself.
Okay. Thank you.
The next question comes from Jorel Guilloty with Goldman Sachs.
Good afternoon. Thank you for taking my question. The first question is about the spread trend.
You talked about the new tenants, Fogo de Chão, and others. I would like to know more about the leasing spread for new tenants and also the leasing spreads in renewals. The second question is about liability management. You worked very hard on the maturity, and you have a leverage of 1.8 x. Over the next two years, you might have some different situations. When you look at your capital structure, the 1.8 x ratio, is it the ideal level or should it be more? Should it be less? I just wanted to know more about your thoughts on capital structure.
Hello, Jorel. This is Dani. About the leasing spread, when you look at the occupancy, it is very high already, and there is a positive trend. As the IGPM inflation rate recovers, last year it was negative for most of the year.
It is now stronger, and it should become stronger and stronger. The environment has been great for leasing spreads. When it comes to renewals, the rate should be 10%. For new contracts, it is 10% and renewals six percent of adjustment. Liability management, the capital structure today with 1.8 x in leverage is a structure that we believe to be comfortable. It is a structure that allows us to keep the portfolio up to date and to have a deleveraged balance sheet so that we are better protected in volatility times and still provide good returns to shareholders. Our policy, our practice actually in terms of dividends is a monthly one, and we keep the guidance of paying 50% of the FFO in buyback or dividends.
With such low leverage, we can do all of that, give back to shareholders, keep malls growing and modern, and have a more defensive balance sheet at this time. The liability management that was done this year and last year with a debt that has a cost below the CDI, and we can strengthen our FFO per share, which was 13%, and our increase in the FFO was 3.8%. I'd like to add some thoughts about the leasing spread. To increase the lease requires that business is doing well. If we exclude same-store sales, there was affected by Easter. If we look back, same-store sales has been a very healthy indicator over the years. The first four months of the year were very strong as well.
In parallel, when you look at the retail publicly listed companies, they are all reporting better numbers in terms of sales and margins, which means that retail, the omnichannel retail, is resuming growth with good margins. Consequently, the ecosystem will have room for better leases because the tenants are being successful right now, and they are good partners. If our partners do well, we also have the opportunity of increasing lease. Since the environment for retail is better, that helps us do better as well.
Okay. Thank you.
The next question comes from Antonio Castrucci with Santander. Please go ahead.
Hello. Thank you for taking my question. I'd like to ask a follow-up question about Helloo. The partnership with Aena, was it already included in your guidance, and do you have projects of signing contracts with other airport operators?
About same-store sales, the negative performance in the food and beverage segment was expected, but also it has been lower in convenience and home goods. Do you have any color to give us on sales in the months of April and May?
Starting with your second question, that's exactly why we gave you color on the sales in April, because food and beverage and convenience sectors are very much linked. When you have a lot of traffic because people are coming to the malls to buy presents for Easter or Mother's Day, you have an additional demand for services and entertainment. When you have a holiday or celebration date, you bring more traffic into movies, parking lots, and restaurants. That's why April makes a lot of sense, complementing what happened in March.
We saw that recovery in our portfolio, but we still do not have the numbers for May. What we are publishing here are the numbers until April. About Helloo, as Rafael said, we can only disclose information that you saw in the material factor. We are right now waiting for the authorization from the antitrust authority and the board of Aena to move ahead.
Okay. Thank you, Dani.
The next question comes from Mariangela Castro with Itaú BBA.
Good morning. Thank you for the presentation. I have just one question. What is your perspective about the market's willingness to receive more divestment? I believe that appetite has decreased, but I would like to know if you are still receiving proposals to acquire your assets, or is there any room for funds to absorb any potential divestment actions?
Hello, Mariangela. Thank you for your question.
About divestment, as we said earlier, two years ago, we had almost BRL 3 billion in divestment. If we think there is a good opportunity, we are going to seize it. If there was a company that knew how to make the most of the good windows with the CRI bonds and CDI rates, that is our expertise. Of course, we are not going to give you the recipe of the secret sauce here, but if we have the opportunities to do it, and Brazil fluctuates so much and we cannot really foresee it, we are getting ready for different scenarios. Our balance sheet is prepared to weather any storm that comes our way in Brazil. If we have the opportunity, we will do it. If not, we will not. We do not need to do it.
The mall that gives us the lowest results will give us BRL 30 million-BRL 40 million per year, and we have already sold 30 shopping malls. Now our thesis is to grow again in leases, generating return for shareholders, investing in the assets in the amount of BRL 200 million or BRL 300 million in CapEx for new projects, and grow in media additional revenues as well, which affected positively the results. Everything is going well. We do not need to sell anything, but if there is anyone that can seize any opportunity that arises, that is us.
Okay. Thank you.
The next question comes from Elvis Credendio with BTG.
Hello, Rafa and Dani. About the multi-use contracts, I would like to know more about the BRL 54 million in the contracts. Do you think you can expand your contracts of this category? Also about consolidation. It has been two years since the merger.
I'd like to know if you can envision more consolidation in the industry. Are you analyzing the big movements that happened since 2019? Is there any operation that would make sense for you? Or even outside Brazil in Latin America, have you considered anything of the sort? Would it make sense for you? Thank you.
Hello, Elvis. This is Dani. About multi-use contracts, it's part of our strategy to strengthen the leadership position of our malls in the primary areas. We have 6.8 million square meters in constructive potential, and we have buildings being built at this moment, and we have been receiving cash from these projects. We provide you with guidance about how we are going to receive in cash from these projects in the medium and long term. In each of our malls where we have potential for construction, we are going to explore the potential.
The master plan is considered in the medium and long terms. Over the next 30-40 years, we can calculate the number of expansions possible in the shopping malls, and we also complement the numbers with real estate exploration, strengthening the shopping mall and also the number of people living in the surrounding areas. You can increase the frequency of visits, driving up sales, and in the medium and long term, the return will also go up. It is part of our strategy to focus on multi-use contracts, and we have been accelerating that vertical in our strategic plans.
About consolidation, Elvis, this is Rafa.
We had two significant mergers, and we are still in the process of building ALLOS as a company that provides good results as we expect over the years, creating a culture which is so important for the development of a company in the long run, and also creating a method that is an evolution of what the other companies do separately, creating a team spirit so that we can evolve more and more in our execution capacity, extract more value, and deliver more value to the shareholders and to our team because they are our shareholders as well. Our biggest focus right now is to operate the company better, make progress in our management, capturing operating efficiency, as I mentioned as I was answering the question about EBITDA. That is the main focus of the company.
The company is already generating BRL 2 million in operating cash per year or more than that. We have 54 million people visiting us every month. That is a size that puts us in a good position to help tenants and to expand. If the capital cost was not so high, we would have even more expansions. We have a major expansion potential in our malls, as Dani said. The BRL 200 million-BRL 300 million per year to be invested in expansion and growth, that is the appropriate number in the current scenario here in Brazil with interest rates so high as they are right now. If we have the opportunity to grow even more, the trend is for us to focus on expansion, develop our portfolio, improve customer experience, becoming more and more relevant.
You can see the growth in this quarter in the Leblon Shopping mall. We invested not in expansion, but area allocation and reallocation of anchors and transforming customer experiences, and the mall grew by 15% in the quarter. Mind you, it is a very consolidated mall. We want to invest in the portfolio to get returns and make customers more loyal and to increase their visits. The consolidation was very successful. Now the opportunities should be assessed on a case-by-case basis. Thank you.
The next question comes from Marcelo Motta with JPMorgan.
Hello. Good afternoon. About the ERP integration, if I am not mistaken, you had a phase to roll out in April with SAP and Oracle. I would like to know if that has already started and if that caused any impact in your operations in April and May.
Hello, Motta. Thank you for your question.
I believe our coordination was very thorough in terms of the ERP integration. We had seasoned teams who had worked in previous integrations, and we did not have any hiccups in the rollout. We went through the most sensitive phases we built in all of our shopping malls. It is business as usual now. We got ready for that experience, and everything is now going according to plan without any hiccups since day one.
Okay. Thank you.
The next question comes from Rafael Rehder with Safra.
Hello. Thank you for taking my question. I also wanted to talk about M&A in terms of acquiring assets. You have a very strong cash position, and now with higher interest rates, are you talking to the minority shareholders that may want to sell their stake? Would that make sense in terms of capital allocation?
Hello, Rafael. Thank you for your question.
Indeed, some malls in our portfolio are owned by minority shareholders. They have some stake in those malls. Although they have operating numbers that are very strong and they are dominant in their markets, and because of that, we want to continue investing in them, and it would make sense for us to increase our stake in those malls that have such great potential for growth because they are leaders in their markets, right? Making our operating numbers stronger and improving our strategic footprint in specific markets that have that characteristic. We want to be the main destination for consumers and the place where tenants can do good business. Investing in those malls makes sense. In a country with interest rates in the level as they are right now, it makes things harder because the company needs to have higher return than the cost of capital.
In order for us to acquire stake, we would need to have a very clear growth perspective. Let me give you an example that happened in the past. In 2021, December 2020, January 2021, we acquired significant stake in Leblon from Brookfield. It was in the middle of the pandemic, and our cap rate was low considering the level that the company had. The mall almost doubled their NOI in two years. In 2022, we already had more than twice as much the level of NOI that we had when we acquired it. If we have opportunities like that, we are going to consider it with malls with that characteristic, with such great growth potential. If you look at the occupancy rate per mall, you are going to see that there is a number of malls that are still ramping up.
We still have a potential to capture more same-store rent increases. That dynamic is very important, and it's going to decide whether or not to acquire more stake in the existing malls. Yeah, that's a great question. The scenario right now makes it harder for us to make those deals, but we are ready to consider those possibilities if necessary. Thank you for your question, Rafael.
No, thank you.
Thank you.
Ladies and gentlemen, that concludes the Q&A session. I'd like to turn the conference over to Mr. Rafael Sales for his closing remarks.
Again, thank you very much for your attention, your questions. The discussion about the company was very good, very positive. We're here to take any more questions you might have if you need to schedule a meeting or if you want to discuss any point further. Thank you.
That concludes the 1Q 2025 ALLOS conference call. Thank you for your participation. Have a good day.