Thank you for joining us today, investors, analysts, journalists, shareholders. Thank you, all of you, for your patience and your time to listen to us quarter after quarter. Today, I would like to begin my presentation addressing something which is very important, very dear to our hearts, which is precisely what recently happened with President-elect Jair Bolsonaro. I believe Brazil, yesterday, woke up as a new country, a country that leaves us more bullish, far more excited with the outlook set by its new administration in terms of development and the economy.
In his first speech as President-elect, we had the chance to listen to something that sounded like music to our ears. Reduction in the size of the state, privatization of government-owned companies, lower taxes, reduction of red tape, trade opening to the world, deficit reduction, and above all, incentives to private companies so they can deliver more.
This means boosting our economy and making our society more prosperous and egalitarian. The removal of these roadblocks for trade is a significant headway for the country and raises very positive expectations to investors in Brazil and abroad. For the last five years, there was a significant decrease in growth rates of the economy in Brazil. Despite all that, our company has continued to thrive.
The figures below speak better than words. Now we're making a comparison. These five years, since 2014- 2018, they were all critical times. Let me share some comparison data about this timeframe, always comparing October 2013 to October 2018. For instance, our GLA was 710,000 sq m. I'm rounding up the numbers. It increased to 921,000 sq m. Our target is 1 million sq m. I believe that now with the construction of Jataí-Baguá extensions, we'll get there soon.
As for sales at that time, the quarter in October, these sales were BRL 10.9 billion, and today, our sales amount to BRL 50.2 billion, 50% increase. The company is growing. Also, in that quarter, last quarter, if we analyze last 12 months, amounted to BRL 355 billion, and this year, BRL 495 billion. EBITDA was BRL 643 billion, and today, our EBITDA totals BRL 952 billion, close to BRL 1 billion. We'll soon get there.
As to net debt over EBITDA, there was a reduction. It was 2.6x , and today, 2.19x . The company continued to grow, having more revenue, more income, but net debt over EBITDA went down. We significantly increased our revenue and debt went down. The occupancy rate, believe it or not, remains pretty close to what it was at that time, at 98%. On that occasion, the rate was around 99%, something almost the same, but 1% doesn't make a difference.
I'm perfectly aware that the market was dramatically affected and was involved in issues of many companies in the industry. But we managed to overcome this critical time very successfully. I would also like to talk about some of our operations, which showed extraordinary growth. I think it's a sign of the vitality of the company. Above-standard growth this quarter year-over-year. For example, Barbacena Shopping, which is a young shopping center we made seven years ago, already reached a growth of 24.2% on sales.
Shopping Santa Úrsula is a shopping center in Ribeirão Preto . We had a lot of challenges in the past, but already growing by 17.2%. JundiaíShopping, 11%. These figures really make us more bullish and encouraged. These are newer shopping centers, are near recently, but already consistent mature results.
To some extent, we find expansion growth given us opportunities to increase our number of projects. I simply have to mention one phenomenon that happened in Rio. As you know, Rio de Janeiro has been through a crisis for the last three years. We have one mall, Village Mall, an outdoor mall, which posted growth of 8.5%. It has been affected during the crisis.
However, people flow increased, and it has pushed Village Mall up in the digital neighborhood. To like the start of the meeting, I would like to highlight to all of you that at the end of last year, we had plans to start ParkJacarepaguá. Despite the crisis, it is under construction. Just finished the first lap. We also made the decision as a company. To some extent, we have to show that we will be confident about our project.
We also had a terrible crisis in 2018, but today this project is doing very well. ParkJacarepaguá will begin sales. I think provides a lot of confidence, and the population in the neighborhood is looking for areas. 100,000 people, high income, and select many services. In this sense, I think we managed to improve the lives of the people in the neighborhood, provide leisure and entertainment.
You know that we managed it well. Also important that we always increase our facilities with each new shopping center we launch. I emphasize now ParkShopping Canoas opened last year, and this was participated in ICSC, the International Council of Shopping Centers. It was a competition. Canoas was just acknowledged by ICSC as the best design in Latin America. We won the Gold Award, and the shopping center was something that we introduced with many innovations.
We were bold at that time. We broke it down in three areas: nature, entertainment, and stores. The formula proved to be very successful, and we were awarded. All the speakers at that meeting said beforehand that this would be a model for future years. The anticipation of projects already acknowledged to be the best design in Latin America, and now we have the chance to run for an intercontinental contest.
We have no intentions to be necessarily the best in the world, but it was a unique project, a very bold project, and it is nice to see that it is being acknowledged. We opened the shopping center during crisis, so this is good evidence that we have to look at our consumers and think deeply of what the population really desires, what people are thinking. I think we have the right answer now.
Our philosophy as a company is to keep on innovating and pursuing the best quality and service standards, always focused on our customers. Tenants are very important, but one thing is a natural consequence of the rest. If you manage to meet people's needs and desires I always tell people when they ask me if my business is retail or construction.
What I say is, our business is delighting people. That is what people need, and this is what we pursue. We are not going to say that we are to delight people so they have a more heartwarming, joyful atmosphere. This is the motto that is the international knowledge. We continue to invest the renovation of our shopping center. ParkShopping is being renovated. It was one of our first shopping centers, and it will turn 40 next year.
We are doing everything that we can in order to provide a new design to the city with its pioneering shopping center. We also have other projects involving renovation, like Ribeirão Shopping Center, for instance, will undergo an increasing renovation. BarraShopping as well.
For all these reasons, we believe that the last quarter of the year, the one that ends in December, may prove to be far more positive, not only to our company but to the country as a whole, particularly if we consider all the guidelines set by the new administration, which match very well with what all of us expect to happen in Brazil. I wish you all, I wish ourselves and all Brazilians, at this time, I'd like to say that more important than the company is our country. More important than our company is the city of Rio de Janeiro.
The city's, the country's needs are always above our personal interests. I'd like to say that we will have a happy ending this year with a new cycle of prosperity, growth, less violence. I believe that now we are getting to a right path to bring a lot of economic and social progress to our country. Thank you very much. Let us wait and see what happens at the end of the year. Thank you very much.
Thank you, Dr. Peres. Ladies and gentlemen, good morning. Thank you for joining us again in our Q3 2018 earnings conference call. Armando speaking now.
Before we comment on our operations, we'd like to highlight that although the events of [uncertain] has brought so many challenges to retail this year, we are proud to say that our initiatives allowed us not only to overcome these challenges, but to deliver better results than in previous quarters.
It's always important to remember that the productivity level of our tenants is already quite high, and this brings continuous challenges to grow on top of a strong base and to continue our tradition to post sales growth in all 46 quarters since the company went public in 2007. In the first quarter, our sales increased 7%, with same area sales and same-store sales increasing 4.9% and 3.7%, respectively. This quarter, we chose the highest growth in the same basis of the year.
On top of the highest growth of last year, this is even more relevant. Our strategy to change the mix, marketing, and improvement in our properties exceeded the distraction of the World Cup, the comparison base, and uncertainties about the elections. This strategy had a positive effect on our sales as lowering the occupancy cost, and also increased the occupancy rate in 42 basis points to 97.7%.
Therefore, increasing the demand for area in our portfolio when compared with the second quarter of 2018. Gross revenue increased 3.9%, resulting from a 4.9% growth in rental revenue, 7.5% in service revenue, 14.2% in parking lots, and offset by a lower contribution of Rio state sales revenue, which amounted to BRL 5.7 billion higher in the same quarter of the previous year.
Rental revenue increased mostly due to same-store rent, 4.1%, and the contribution of new areas like ParkShopping Canoas and higher merchandise revenues in our shopping centers. The real growth in same-store rent on top of inflation adjustment was 2.3%, maintaining the real growth recovery started in the second quarter of 2017. Please note that this growth is also followed by a drop in delinquency, both gross and net delinquency.
In terms of expenses, shopping center expenses were 18.7% below the third quarter of 2017, despite the 7% increase in G&A year-over-year. G&A expenses went up 11.8%. Here we highlight the growth in our digital innovations team and also the cost to establish the fiscal council. Share-based compensation expenses totaled BRL 1.6 million, lower than in the previous year due to mark-to-market. Moving now to our results.
Our net operating income, NOI, went up 10.8%, with a margin increase of 360 basis points, totaling 89.9% in the third quarter, close to 90%. Our EBITDA increased 35.5%, with a margin of 74.7% and a strong growth of over 12 percentage points. Our Funds From Operation, FFO, increased 44.3%, expanding its margin over 50 percentage points, totaling 57.4%, supported by our operating performance, lower financial expenses, and better provision of share-based compensation.
Lastly, our net income increased 54.1%, totaling BRL 116.4 million in the quarter and BRL 360.3 million in the first nine months of the year, therefore getting close to the amount of BRL 369.4 million that we generated as income in full year 2017. At the end of the quarter, net debt over EBITDA ratio was 2.19x , as Dr. Peres said, and the average cost of gross debt remains flat at 7.65% per year.
In September, we announced another distribution of interest on capital of BRL 80 million, which added to the announcement in June, total BRL 190 million interest on capital announced this year to date. This quarter, our CapEx totaled BRL 46.1 million, primarily driven by the investment in the new shopping center, ParkJacarepaguá, at BRL 227.7 million to date. We keep on growing and improving. Now, with a new chapter in the history of our country, we remain optimistic and ready to deliver even more. I will stop here so we can start the Q&A session.
We will begin now the question and answer session. If you have a question, please press star nine on your phone at this or any time. First question from Alex Ferraz from Itaú BBA. Good morning.
Good morning, Dr. Peres and Armando. Thank you for this call. I have two questions.
My first question is, if you think about delinquency, we can see there is a gap between gross and net delinquency here. Could you assume the company is trying or needs to recover overdue receivables? Do you think tenants are, by now, more encouraged with these receivables? Or if you think about the spike in delinquency owing to the truckers' strike, is just about to recover.
The second question is about the breakdown of same-store sales. If you think about services more specifically, for three quarters, approximately, the activity is weaker. Is this one-off? I mean, the movie theater, or could you assume that perhaps there is a saturation because we had a lot of change in mix of services and now we are at a maturity time, having an impact on same-store sales.
Alex, Armando speaking. How are you? Thank you for your question.
About gross and net delinquency, I think it will help to address your first question. Naturally, if you consider month-over-month, in May, owing to the one-off event, there was a stronger delay, and this has been diluted over quarters. For one or two months, things are getting calmer. June would have been different than May, but there was an impact in terms of delinquency.
Added to that, there is also an increase in sales. Are tenants more excited? Well, I guess the whole country is more excited, and higher sales show this very well. Think about August and September. They were very positive. June, still tough owing to the World Cup, in fact. Now, answering your second question about movie theaters, I am not an expert of this. However , we also had many distractions, which eventually made people stay home.
The World Cup, for instance. Every four years, that keeps us spend more time at home. Now, if you think about other segments, service, for instance, like drug stores, they have performed well. This quarter, more specifically, the performance was not so significant, and the share is around 20% of total sales, including services and leisure. I don't attribute this necessarily to the expansion of the service area. I think it is simply a natural cycle of performance in different segments. Okay?
Great, Armando. Thank you.
Thank you.
The next question is from Luis Stacchini from Credit Suisse. Luis, good morning.
Good morning, everyone. Thank you for your presentation. I have two questions. Firstly, I would like to better understand how excited you are about the rents. This quarter, we can see a lower occupancy cost for a third quarter since 2008 and delinquency close to zero, the sales dynamic improving a lot.
How do you see this dynamic of rent growth? We know there will be a higher inflation impact, but you have been trying to maintain the real growth in rents, particularly now, which we expect to see a slightly lower turnover because delinquency or the occupancy rate is already at nearly flat levels. Could you give us some color, please? It would be very interesting.
Secondly, Dr. Peres, could you make a comment about the upturn of investments in real estate development? We know Multiplan has a lot of property in the south, close to BarraShopping. So some developer companies are investing there with good performance, sales speed, with very good price dynamics. Multiplan sales and real estate development also have a positive volume again. So could you give us more information about your strategy in the development segment? Thank you.
Luis, good morning. Armando speaking.
Let me begin by answering the first part of your question, and Dr. Peres will answer your question about investments in real estate development. In terms of rents, to answer your question more directly, the answer is yes, we are more excited about rents. Let me tell you why. Let me give you the reason.
Firstly, if you think about inflation going up, we also have an effect of IGP-DI, which is decoupled of IGP-M in the year. So this will be passed on over future quarters. If you add to that the fact that we have a growth in sales, at the end of the day, we can have a very beneficial environment in terms of rentals. Second point, we already have a huge number of leased stores already paying company the costs with a positive impact on the occupancy rate. However, they are not delivering yet.
These stores, as months go by, we expect some of these stores to be ready to sell, not immediately, but early next year. Then we are going to have better predictability, both in terms of sales and rentals. Now, I will turn the floor to Dr. Peres to answer your question about real estate development.
Luis ,Peres speaking. Let me answer your question. The company has approximately 1 billion sq m as land, and we estimate that this billion. If you think about, if we are conservative, the occupancy rate usually 2x the size of the land. This is quite modest. We can do 1x the area. Naturally, it does not happen overnight. However, in recent times, we have been busy. There was a huge inventory of land for sale, taxation, and the market has absorbed it. The market should be stable.
We have to think about credibility. Sometimes there is uncertainty. People do not want to invest so much. I go into São Paulo, Rio, Miami, Porto. People do think about these things. We always work with enough sales segments. These are the people who felt uncertain, who were hit by [uncertain]. We have several projects ready to roll. All we have to do is to put them into practice.
Naturally, being careful enough and not trying to sell a higher volume compared to demand. This development activity is complementary to what we do. We always want to integrate our shopping centers with other services like offices, hotels, hospitals, a set of other activities. I would say that we purchased land at a very low cost in the past to expect to have a big profit margin once we work on these projects.
Termination is something that blocked the real estate market much more than recession, I would say. What really made the real estate market bankrupt was just closing the eyes to a law, a federal law approved for civil construction for 50 years, and then suddenly, this thing about termination. This is somewhat made in consumer protection.
However, purchase and sale of real estate was addressed as a consumption. How can you have the same treatment to land and a bridge, for instance? This market with a large inventory was misresolved. Prices plummeted, and chances are now there will be a recovery in property values that were hindered for a while. Now we can be very comfortable with what we have, but we will remain cautious. We have amazing projects in the pipeline. It is not more of the same.
Very creative projects and designs based on the market's expectations. This is our positioning. We are going both ways, but naturally focusing more on income and also benefiting from real estate development as an additional means to get in sync with our project and generate additional income, which is always nice to have profit from purchase and sale of land.
We had some projects, and if we decided to sell them today and to accept proposals, perhaps you would have BRL 1 billion as profit. But we do not want to kill the chicken off the golden eggs. We want to keep on being where we are safely. If our pension would not be enough, at least we can have the income guaranteed in our turn. Thank you very much.
Thank you, Dr. Peres and Armando, for your questions. Have a good day.
The next question is from [Uncertain] from Bank of America. Nicole, good morning.
Hello, good morning. I am Nicole from Bank of America. Thank you for your presentation. I have two questions. The first question is about rental revenue. For some shopping malls, it was weak. There was a slight drop. I am referring to BarraShopping & New York City Center, BarraShoppingSul. Was there any reason for this drop in revenue?
For some shopping centers, the occupancy rate remains very high. This is my first question. The second question is about delinquency levels. It was very low, like we said before, for the quarter, and I would like to know more about next quarter, next year. Do you think there is room for a further drop, or do you think it has already reached a historical level as far as delinquency is concerned? This is my question. Thank you.
Nicole, thank you for your question. Armando speaking now. Answering your first question about rental revenue, my answer is that the main driver is the change in mix. Within this change in mix, we also have something specific, the exit of a big anchor store, Fnac, which left the country. In several of our shopping centers, actually seven shopping centers, we had this change in mix, change in areas, and the vast majority of these areas are already repositioned.
Future productivity is expected to be even better. But right now, we are renovating the areas in order for other tenants to work on their own stores. That is why we have this gap. It is a change in the mix, getting new stores, renovate the area. Of the overview of low inflation environment, we are passing on inflation.
If I am not mistaken, this period was 1.8%, still very low, but any changes will make a difference. As for delinquency, the answer is we will always do everything to improve the picture, particularly when we think about a more positive scenario owing to sales with a better operation atmosphere. I see it as a benefit, so we can have even lower overdue rates. We will be working in this direction.
Great. Thank you, Armando. Thank you, Nicole. The next question is from Luiz Mauricio Garcia from Bradesco. Mauricio, good morning.
Good morning, everyone. I have two questions. I would like to better understand this stronger interest by tenants. I think there are many indicators that you highlighted, like lower delinquency, increase in occupancy, higher interest. Just to better understand this move. Right now, what about the new tenants that are coming in and have allowed lower occupancy at this pipeline?
Do you think these tenants are mostly those who already make this decision-making process and which are now moving forward? Or can we see new tenants and new groups that are becoming more interested, unlike the recent past? Just to better qualify and to know if this is a first wave with a second wave still to come.
Second question is about growth. Coming back to this topic. Just one thing that I think was not mentioned, but we talked about Greenfield expansion, a significant possibility to grow. So what about this new scenario, and how does this unblock several expansions that you already have mapped and even Shopping Ouro Preto in São Paulo? Can you tell us more about expansion? Not only your appetite to move forward, but perhaps conversations with interested tenants.
Luiz, Armando speaking. Thank you for your question.
First of all, there are many factors to take into account, in my opinion, factors that improve the occupancy rate. First of all, like you said for a while, I apologize the expression in English, but it is multi-policy. Sometimes tenants want to be online, offline, but in areas where they can be highly productive. In the online world, they would like to be in marketplace websites where they can sell a lot. The same goes in brick-and-mortars.
They want to be where they can sell a lot. We can see that our shopping centers are performing very well. Improvements, physical improvements that we have made and also changes in mix. When you put these together, they are improving productivity, boosting energy, bringing more people flow. At the end of the day, in the virtual cycle, bring in new tenants that perform well and things go on.
Basically, we are speaking of the same tenants. They select where they want to be in their portfolio management. We also think about new store models. Some stores are concept stores or bigger stores. Stores where a consumer can have a unique brand experience compared to simply getting to the store, buying it, and leaving. They want to try out new products. They want to know more the store. This is what you see as something new.
However, segmentation is very different. Like Dr. Peres said before, our shopping center model compared to the U.S., I think we are ahead again. Changing segmentation, making physical changes to our stores in order to meet the demands of consumers of the future. We see these trends, and I think this brings good results. As for expansion, we are very excited. We have always been very excited.
Even in more recent times, we never stopped expanding. If I am not mistaken, we have had five or six expansions for the last two or three years. Am I right, Marcelo? Significant expansions. We are still working on further expansions. Not only what we want to place in our segmentation or bring in a more modern atmosphere as well, considering worldwide consumers. In parallel to that, we are going through approval processes as well.
We are very excited. As we know, we have 150,000 sq m. We want to make that happen as soon as possible. As soon as we have the approval, naturally, but also a demand for healthy cities.
Just to connect the dots. Flight to quality, I think this is very clear. Flight to quality, prudent expansion.
Connecting the dots again, you want to see a second moment of expansion in retail, so you get to buy those at fewer multiples. Am I reading correct?
Marcelo is going to make a comment. It is not only a matter of flight to quality. Some tenants also benefited from the occasion to expand when they had the chance to have access to the leasing points. I think it was a great opportunity.
Marcelo speaking now. Good example for instance, Barigüi, this shopping center is growing consistently and also at very healthy levels for a while. Now it has proved to be ready for expansion. We have a third floor approved, and it will be the first in the line to be launched next year. Ready to start rent. It will be ready for the next 24 months.
Ouro Preto is also being approved for a big expansion. São Paulo takes longer to approve things, but yes, we believe we will have approval in 6 months, which is another idea of future expansion.
Marcelo, just adding. It is not more of the same, but adding new experience to consumers. Adding more pleasure, satisfaction, something that is naturally more attractive, including people with a medical center, for instance, and also restaurants. Perhaps several different activities, great areas, rooftops. It is a unique project to bring new things to the shopping center.
Great. Thank you.
Thank you. The next question is from Andre Mazini with Citibank. Andre, good morning.
Good morning, Dr. Peres. Good morning, Armando. Thank you for your call. My question is about digital innovation. I guess it is technical study people. Now, you speak about Flow, a minority investment. Is there a competition for digital marketplace?
You said you also want to be in the best marketplace. So what about this? I would like to better understand the difference. Flow and digital innovation area within Multiplan.
Andre, thank you for your question. Flow is a software provider. It is independent, but for us, it helps us with software development, supporting our business as usual. With shopping centers, there is no competition with our digital innovation area. Our digital innovation area is very different. We have a lab, running tests about consumption, consumer influence, consumer convenience.
We also have a critical area for marketplace, and we want to work on sales as well in order to add more convenience to consumers' homes. If you also check more detail opportunities for investment, there is a Multi dynamic asset and it does not compete with Flow whatsoever. Flow has investments with Multiplan, and it provides software solution for us.
Great, Armando. Just a follow-up about timing for the marketplace. We have several competitors, Cencosud and others, which mention a rollout for early next year. What about the time?
Andre, this is José Isaac Peres speaking. So how do you take this challenge about digital and click and orders? We perfectly know that consumers want malls in the main areas, the major parts of the city. So goods and services can be provided more efficiently. In our real world, we have been working for three or four years on IT in order to take the shopping center to consumers' homes. In other words, buy her shopping at home, in her own home. You can see the stores. But how can we make it feasible? What we want is to add convenience to consumers, because when you make other people's easier, you do not make yours more complex.
So how can I better cater to current customers' needs and also new commerce, those who can visit us online? That is our first concern. Secondly, we want to give our tenants a new distribution channel, a software platform. Therefore, this will allow to have savings as well. Our intention is not to have additional fees on tenants.
We want to offset this cost, but our main goal is to add value to our assets. So they can be more visible, they can be more present, adding convenience. On the other hand, we also expect that. Well, there is no such a thing as doubling sales overnight, but we believe this might have an increase of 10% or 15% on sales, which is already quite good. So our operators and particularly our customers may have a better quality service. We have been following the digital world for many years now.
We can see e-commerce companies with extremely high levels in terms of price and profit. We have to continue in our real world, innovating inside our real world, bringing more experience to our consumers. Recently, we were awarded with this amazing prize from Latin America. One of our shopping centers is not so big, but always with innovation. It was considered to be the best shopping center in Latin America.
We believe consumers today want something different. They are no longer interested in having this closed box. They want to have outdoor experience, leisure, entertainment, feel welcome, good service. At the same time, we improve the quality of our facilities. So I believe our company was successful despite the crisis because we only focus on top quality. We cannot do things without taking quality into account. We're not going to have a timeline.
We already had a bolder timeline, but this market has plenty of opportunities to innovate, and sometimes you better step back and rework your plans. So right now, I would not like to make any promises about our timeline, even though we have a dedicated team to do that.
Perfect, Armando and Peres thank you.
The next question is from Marcelo from JP Morgan. Marcelo, good morning.
Good morning. Thank you for taking my question. Two questions. First, could you tell us more about the breakdown of revenues, parking lot revenues, 40% growth year-on-year? Also, I would like to understand better what's price, volume, and also your expectation for October and the fourth quarter and the strong volume in terms of recovery.
As for same-store sales, could you tell us more about the month-on-month level and any color about October so we can have an idea of how things are unfolding?
Marcelo, as of this evening, parking lot revenue was. Well, there are three factors here. I cannot tell you precisely the percentage in each one of them. But there was an adjustment earlier this year. So compared to the third quarter of last year, we posted growth. Also flow through the new areas, and we highlight ParkShopping Canoas, but also the expansion of RibeirãoShopping and Parque Sabará.
Also flow growth in the same shopping centers or the same parking spaces, so to speak. There was real growth. Not real growth, but in terms of people and cars, but a growth in volume in the parking lot flow. That's in general.
Perhaps in a couple of shopping centers, it might be lower, but overall speaking, it was very positive. This just reminded me. It was additional 3% add of new spaces.
Thank you. Can I ask for same-store sales?
I didn't want to say this. I didn't want to speak much about October because we're talking about the third quarter. So let me tell you about the third quarter. July was negative as expected. World Cup, high base. Third quarter last year was the best quarter in terms of operation performance, both on a nominal basis and same-store basis. August was a good surprise. We thought August would show recovery. Recovery was very strong into September. We also had good months, not as good as October, though, but still very strong.
October, just answering your question, I cannot give you any figures, but the first two weeks in October were slightly slower. Always positive, but slower growth. In the second half, stronger.
Thank you, Armando. Thank you, Marcelo. The next question is from Mariana Taddeo with UBS. Mariana, good morning.
Good morning. Thank you for taking my question. I would like to understand more about the current level of EBITDA margin. If you think about last 12 months and compare the previous years, it is way above. I would like to understand if this margin is sustainable or if there is further room to lower costs down the road. Thank you.
Mariana, thank you for your question.
In terms of margins, if you think about long-term, there is room to increase margin because newer shopping centers, we tend to joke, takes five Christmas to consolidate, and the five Christmas were like a rollercoaster. New shopping malls, if you think about a growth scenario in the country, they can grow, consolidate. So it's a better result with a positive impact on revenues.
As they grow over time with more stability, more funds, they won't need much to promote the project. That's a positive impact on NOI and EBITDA margin. More specifically about EBITDA margin, it has to compare with last year. Mark-to-market, for instance, and the share-based compensation. It took a lot of margin always into the appreciation of shares, creating big provisions last year.
It meant, okay, there was a drop in the shares, and this year we had the opposite effect, a positive impact on margin. So think about a comparison to last year. Over the years, when you think about long-term, then you can see there was strong growth. In our reports, we have an indicator known as adjusted EBITDA.
By the way, there is a footnote explaining what it's all about. It is net of share-based compensation in order not to raise distortion. This quarter, when expenses were lower with share BRL 1.6 billion compared to the previous quarter, which was higher, if I'm not mistaken, BRL 24.5 million. There was a growth of 166 basis points. Adjusted EBITDA margin by compensation expenses.
In other words, net of the third quarter of last year, growth would be 75.2% in May, showing that the operation, if you think about mark-to-market, share-based compensation, at the end of the day, it was very positive.
Thank you very much.
The next question is from [uncertain] with Santander. Helena, good morning.
Good morning, everyone. Thank you for taking my question. My question is about Fnac or [uncertain. Have you mapped the impact of Fnac on sales? Sales already had a significant impact this quarter, but could have been even stronger, perhaps. My second question is about what was already rent after Fnac expired. Was there any replacement with other anchors or stores?
I apologize. We couldn't hear you well. Would you mind repeating your question please? I know you wanted to know about Fnac.
The next question is from Jordão with Morgan Stanley.
Good morning, everyone.
I have two questions. First of all, this quarter, Class A shopping centers performed better than Class B. Do you believe there will be a difference in the performance of the portfolio of shopping centers driven by quality in the future?
Good morning. Armando speaking. Could you repeat the second part of the question, Jordão ?
The e-commerce competition. They continue to grow, you are correct. However, because you are upgrading your Class A does not mean everything is far more important to have more touch with more efficient, with dual leisure, entertainment, and service areas. Sadly, in a shopping center, you always know when it opens, but you never know when it will end. Some shopping centers, for instance, are always waiting for the expansion. We start with 20,000 m, then you can have 100,000 m. This construction, known as corporate.
These strong shopping centers, which are top quality, will always be like a monopoly. In terms of answers to your question, we at Riachuelo prefer more contacts here. My theory, people are the greatest attraction at a shopping center. If you think about the high-end world, the more power you give human beings, the more isolated they become.
What I can see is that people are forgetting they need more contact. In Brazil, more specifically, shopping centers have made this term. It is a place where you can be safe and have some fun. More than 50 years ago when I started the company, I already thought about this. If you do not have a traction in maintaining the business with children, sometimes families do not come to the shopping center. Our model has proved to be successful. It has been acknowledged.
As for acquisition, et cetera, we are a buyer. If anybody is willing to sell a good shopping center, we go for it. But there is no need to buy a chain of shopping centers if you have only one, which is good. What really prevails is good quality. The search for top-quality services, not only shopping centers, but in all activities.
As to where in the world, you know this market well. Any Class A has a low cap rate. It is thanks to that we can see changes in the market. When you physically have to change the shopping center, and not only adding online, but also change or renovate your brick-and-mortars. At the end of the day, you have to think a lot with additional investments to make this venture more attractive. This is part of our DNA.
We want to start from scratch with a vision of the future, planning for the future. We can see a big opportunity to develop new shopping centers as the main strategy right now. But well prepared there. We have the right balance sheet. Our capital structure allows us to do it. But we always want to think about alternatives that always stick to the principles of the company. Our main competitors will be shopping center companies that have the same purpose as ours, and not only focusing on price, right? That is how I see it.
Thank you.
Thank you, Jordão . This concludes the question and answer session. Now we turn the floor over to Mr. José Isaac Peres for the final remarks. Mr. Peres, you have the floor.
Thank you very much. I would like to thank you very much for your time and your patience today.
We just wanted to go deeper into our discussions today. There were many very good questions, but I would like to say that our greatest excitement about our business, and differently about Brazil, is that our country now is in a path towards growth and prosperity, as seen based on the preliminary guidelines announced by the president-elect. We wish all the best to this new administration and the project for generations to come and a better Brazil. Thank you very much.
Thank you. This concludes today's Multiplan Q3 2018 earnings conference call. Thank you for joining us today. Have a great day.