Parque Arauco Reports Fourth Quarter and Full Year 2013 Results

24% Increase in GLA and Tenant Sales Underpin Revenue Growth of 15% in 2013

Regional Expansion and Portfolio Diversification Continues

SANTIAGO, Chile--()--Parque Arauco S.A. (Santiago Stock Exchange: Parauco; Bloomberg: PARAUCO:CI), one of Latin America’s leading shopping center developers and operators, reported financial results for the full year and fourth quarter ended December 31, 2013. The following financial and operating information, unless otherwise indicated, was prepared and presented in accordance with IFRS. Accordingly, we no longer consolidate the financial statements of three of our malls: Marina Arauco, Boulevard Marina Arauco and Mall Center Curico, but now account for our interests under the equity income method. 2012 has been adjusted for comparison purposes. For a more detailed review of these results and the filing with the SVS (Chilean Securities and Exchange Commission), please visit Parque Arauco’s website www.parauco.com.

  • Net profit attributable to the equity holders of the company totaled Ch$ 55,280 million, a 51.8% increase over 2012. Net profit totaled Ch$50,016 million, a 12.8% increase over 2012.
  • EBITDA grew 14.1% to Ch$74,456 million on an EBITDA margin of 69.4%.
  • Funds from Operation (FFO) increased 21.3% over 2012, reaching Ch$56,635 million.
  • 2013 revenues increased 14.9% over 2012, reaching Ch$107,319 million; consolidated occupancy rate of 93.7%.
  • 23.9% increase in total Gross Leasable Area (GLA) to 693,100 m2 with the incorporation of seven new shopping centers and the completion of expansions of existing properties.
  • Continued diversification of portfolio with the acquisition of Strip Center Ciudad Empresarial in Chile, Lima Outlet Center in Peru and the initiation of the construction of two outlet malls and two strip centers in Chile.
  • Board of Directors approved a capital increase of Ch$ 115,000 million, to take place in the first quarter of 2014 in order to finance the company´s growth plan.
  • 196.3% increase in the value of the strategic landbank in 2013 to enable future growth in all three countries.

“Parque Arauco delivered strong revenues and operating results, and registered double digit growth in tenant sales in all three countries in which we operate. Overall, GLA increased by 24% to 693,100 m2 as compared to the same period in 2012, while we delivered a steady EBITDA margin despite the number of new properties and expansions inaugurated during the year. We continued to deliver on our strategy of both regional and format diversification and saw Colombia’s participation of total revenues and EBITDA continue to grow. We also continued to set new standards in the region with the launch of Arauco Mapps, and the inauguration of the first Luxury District in Chile, which has thus far delivered results beyond our expectations.”

“We are optimistic about the continuing long term opportunities for Parque Arauco. Our strong operations and innovative formats are proving a successful formula for growth. During 2013 we significantly increased our strategic land bank in Chile, Peru and Colombia and our Board of Directors approved a capital increase to fortify our capital structure, ensuring the company´s future growth” said Executive Vice President Juan Antonio Álvarez.

Revenues for 2013 grew to Ch$ 107,319 million, a 14.9% increase as compared to 2012. The growth was primarily the result of additional GLA as well as improved tenant sales in all three countries in which Parque Arauco operates; Chile, Peru and Colombia. Total GLA for the company at the end of 2013 increased to 693,100 m² as a result of the additions of Mall Arauco Quilicura and Strip Center Ciudad Empresarial in Chile, MegaPlaza Express Chincha, MegaPlaza Cañete, MegaPlaza Barranca, and Lima Outlet Center in Peru and Parque Caracolí in Colombia. Additionally, the expansions of Parque Arauco Kennedy in Chile, and MegaPlaza Norte and Parque Lambramani in Peru, contributed to the Company´s GLA growth. Consolidated occupancy remained stable at 93.7%. Total tenant sales for the year increased by 13.7% to Ch$ 1,156,657 million.

The Company continues to fortify its portfolio diversification and regional expansion strategy. During 2013 Parque Arauco increased GLA of outlet malls and strip centers by 21.9%. Furthermore the Company began construction on two strip centers and two outlet malls in Chile and is renovating and expanding the Lima Outlet Center in Peru, projects that will add over 20,000 m2 of GLA to the portfolio by the end of 2014.

Revenue participation of assets outside of Chile continues to evolve and in 2013 revenues from Colombia represented 7.2% at Ch$ 7,699 million, up from 3.7% in 2012. During 2013, revenues from Chile were Ch$ 75,584 million, accounting for 70.4% of the total and revenues from Peru were Ch$ 24,035 million, accounting for 22.4% of the total.

Operating income in 2013 increased 12.7% to Ch$ 71,675 million, while administration expenses increased to Ch$ 13,337 million. The main drivers for the increase in administration expenses were an amortization related to the acquisition of the Buenaventura Premium Outlet Mall and other expenses related to additional GLA.

The Company reported EBITDA of Ch$ 74,456 million in 2013, a 14.1% increase over 2012. The consolidated EBITDA margin was 69.4%, slightly lower than the previous year’s margin of 69.9% due to the higher number of new shopping centers in the company´s portfolio that are still in the process of maturation.

Colombia’s EBITDA participation for the year grew substantially, from 1.3% to 4.9%, as compared to 2012. 2013 EBITDA was Ch$ 56,711 million in Chile, Ch$ 14,132 million in Peru and Ch$ 3,613 million in Colombia.

In 2013, net profit increased 12.8% to Ch$ 50,016 million. Net profit attributable to equity holders of the company increased 51.8% in 2013 and the earnings per share rose from Ch$ 51.82 to Ch$ 78.66. The weighted average number of shares outstanding during the year did not change and remains at 702.75 million. FFO (“Funds from Operations”) for 2013 was Ch$ 56,635 million, as compared to Ch$ 46,673 million in 2012, representing a 21.3% increase.

The company will conduct a conference call to review the 2013 results March 3, 2014 with a live webcast available through its website. A real-time webcast of these results will be available online at http://services.choruscall.com/links/parque140228.html beginning at 10:00 a.m. Eastern time/12:00 p.m. Santiago.

 
Key Performance Indicators
                         
4Q13 4Q12 Chg.% 2013 2012 Chg.%
EBITDA Margin % 68.8% 69.0% -20 b.p 69.4% 69.9% -50 b.p.
Net Income Margin % 88.7% 42.3% 4640 b.p. 51.5% 39.0% 1250 b.p.
FFO (Ch$ Millions)1 21,206 10,746 97.3% 56,635 46,673 21.3%
FFO Margin % 66.2% 39.5% 2670 b.p. 52.8% 50.0% 280 b.p.
Total Tenant Sales (Ch$ Millions)2 358,421 308,632 16.1% 1,156,657 1,017,039 13.7%
Total GLA (m2)3 693,100 559,242 23.9% 693,100 559,242 23.9%
Own GLA (m2)3 520,518 421,121 23.6% 520,518 421,121 23.6%
Weighted Avg. Shares (Millions) 702.75 702.75 0.0% 702.75 702.75 0.0%
EPS ($) 40.42 16.34 147.4% 78.66 51.82 51.8%
Stock Price (Ch$) 965 1,185.5 -18.6% 965 1,185.5 -18.6%

Daily Traded Volume (Ch$ Millions)

1,328 1,146 15.9% 1,333 983 35.6%
 
1. FFO = Net Profit - Depreciation & Amortization - Income (loss) for indexed assets and liabilities - Negative Goodwill - Gains (losses) from the difference between the previous book value and the fair value of financial assets - Deferred Taxes

2. Total Tenant Sales = Sales of Consolidated Assets

3. GLA of Marina Arauco not considered

 
Income Statement - Consolidated
                         
Ch$ Thousands 4Q13 4Q12 Chg. % 2013 2012 Chg. %
Revenues 32,022,966 27,174,391 17.8% 107,318,830 93,397,036 14.9%
Cost of Sales (6,462,743) (5,457,463) 18.4% (22,307,202) (19,693,435) 13.3%
Gross Profit 25,560,223 21,716,928 17.7% 85,011,628 73,703,601 15.3%
Administration Expenses       (4,258,926)     (3,328,186)     28.0%     (13,336,635)     (10,113,735)     31.9%
OPERATING INCOME       21,301,297     18,388,742     15.8%     71,674,993     63,589,866     12.7%
Depreciation & Amortization       (719,104)     (355,778)     102.1%     (2,781,469)     (1,650,922)     68.5%
EBITDA       22,020,401     18,744,519     17.5%     74,456,462     65,240,789     14.1%
Other Income / Expenses (1,624,235) (2,141,864) -24.2% (6,393,858) (2,933,696) 117.9%
Financial Income 1,235,033 1,133,943 8.9% 3,983,554 7,477,320 -46.7%
Financial Expenses (5,356,601) (4,577,670) 17.0% (19,150,007) (19,062,501) 0.5%
Share of Profit (Loss) of Associates Accounted 5,833,555 2,147,649 171.6% 9,663,436 5,544,631 74.3%
Foreign Exchange Differences (684,806) (101,975) 571.5% (279,889) (595,228) -53.0%
Income (Loss) for indexed assets and liabilities (2,312,843) (2,493,914) -7.3% (5,129,628) (5,254,523) -2.4%

Gains (losses) from the difference between the

previous book value and the fair value of financial assets

      4,459,032     16,020,489     -72.2%     4,459,032     16,020,488     -72.2%
NON-OPERATING INCOME (EXPENSES)       1,549,135     9,986,658     -84.5%     (12,847,360)     1,196,491     -1173.8%
Profit before Income Tax 22,850,432 28,375,398 -19.5% 58,827,633 64,786,357 -9.2%
Income Tax       (2,583,423)     (11,270,032)     -77.1%     (8,811,313)     (20,429,518)     -56.9%
NET PROFIT (LOSS)       20,267,009     17,105,366     18.5%     50,016,320     44,356,839     12.8%
                                       
Attributable to:
Equity holders of the company 28,408,539 11,481,785 147.4% 55,280,589 36,417,448 51.8%
Minority interests (8,141,530) 5,623,581 -244.8% (5,264,269) 7,939,391 -166.3%
NET PROFIT (LOSS)       20,267,009     17,105,366     18.5%     50,016,320     44,356,839     12.8%
 
 
Balance Sheet
                       
2013 2012 2013 2012
Ch$ Millions
Assets Liabilities
 
Current Liabilities
Current Assets Other Current Financial Liabilities 35,726 36,330
Comm. Cred. and Other Acc. Payable 20,428 18,346
Cash and Cash Equivalents 68,946 103,782 Current Acc. Payable to Rel. Parties 1,902 1,994
Other Current Financial Assets 0 0 Current Provisions 9,002 6,328
Other Current Non-Financial Assets 3,149 2,964 Tax Liabilities 5,083 4,936
Trade Accounts Rec. and Other Rec. 18,886 21,685 Other Current Liabilities 3,923 2,733
Accounts Receivable from Rel. Comp. 4,836 4,198 Total Current Liabilities 76,064 70,666
Current Tax Receivable 21,291 13,041
Total Current Assets 117,108 145,671 Non-Current Liabilities
Other Non-Current Fin. Liabilities 405,652 318,804
Non-Current Liabilities 0 0
Non-Current Acc. Payable to Rel. Part. 0 1,476
Non-Current Assets Deferred Tax Liabilities 75,999 62,507
Other Non-Current Liabilities 8,934 7,674
Other Non-Current Financial Assets 0 0
Other Non-Current Non-Fin. Assets 26,458 10,728 Total Non-Current Liabilities 490,585 390,461
Non-Current Accounts Receivable 808 233
Non-Current Acc. Rec. with Rel. Part. 542 1,802 Total Liabilities 566,649 461,128
Share of Profit (Loss) of Associates Accounted 49,634 41,339
Intangible Assets exc. Surplus Value 14,988 16,258 Equity
Surplus Value 15,629 2,964 Issued Share Capital 229,907 229,907
Property, Plant and Equipment 2,724 2,448 Accumulated Earnings (Losses) 290,550 251,255
Investment Properties 947,839 814,292 Other Reserves (10,113) (8,729)
Deferred Tax Assets 26,225 15,630 Attrib. to Shareholders of the Company 510,344 472,433
Minority Interest 124,963 117,806
Total Non-Current Assets 1,084,848 905,695 Total Equity 635,307 590,239
                           
TOTAL ASSETS     1,201,956     1,051,367         TOTAL LIABILITIES AND EQUITY     1,201,956     1,051,367
 

SUMMARY OF KEY PROPERTY OPERATIONS

2013

 

Chile in MMCLP/ Perú in

    GLA             Sales             Revenues         EBITDA        

MPEN/Colombia in MMCOP

    2013     2012     Chg. %     2013     2012     Chg. %     2013     2012     Chg. %     2013     2012     Chg. %
Parque Arauco Kennedy 115,200 108,000 7% 349,560 365,952 -4% 36,297     35,323 3% 33,270 32,084 4%
Arauco Maipú 74,000 74,000 0% 153,117 113,634 35% 11,360 10,088 13% 10,567 8,673 22%
Plaza El Roble 25,000 25,000 0% 62,707 61,148 3% 4,231 4,225 0% 3,316 3,538 -6%
Paseo Arauco Estación 68,000 68,000 0% 99,379 92,194 8% 13,267 13,249 0% 11,508 11,572 -1%
Arauco San Antonio 29,000 29,000 0% 31,594 30,621 3% 3,460 3,725 -7% 2,197 2,613 -16%
Arauco Quilicura 31,260 9,700 222% 30,954 10,594 192% 2,046 692 196% 1,421 517 175%
Arauco Express (Stripcenters Chile) 12,222 10,542 16% 12,476 5,946 110% 2,210 1,268 74% 1,423 769 85%
Buenaventura Premium Outlet Mall 20,000 20,000 0% 29,821 11,263 165% 3,323 1,036 221% 2,174 676 222%
Total Chile 374,682 344,242 9% 769,606 691,350 11% 76,194 69,606 9% 65,877 60,442 9%
Megaplaza Norte 107,400 83,000 29% 1,025,287 1,036,599 -1% 62,273 62,274 0% 49,236 49,205 0%
Mega Express Villa Chorillos 7,000 7,000 0% 56,772 48,451 17% 3,988 3,444 16% 2,830 2,451 15%
Larcomar Fashion Center 26,000 26,000 0% 191,647 185,004 4% 28,583 29,108 -2% 18,147 19,128 -5%
Parque Lambramani 29,390 28,000 5% 132,722 128,663 3% 10,337 9,665 7% 3,271 3,175 3%
Mega Plaza Chimbote 28,000 28,000 0% 207,496 132,218 57% 10,112 5,534 83% 6,552 2,521 160%
Mega Express Villa El Salvador 9,000 9,000 0% 51,982 28,396 83% 4,507 2,487 81% 3,174 1,125 182%
Mega Express Chincha 7,224 20,450 2,734 1,650
Mega Plaza Cañete 16,397 49,769 1,268 548
Mega Plaza Barranca 9,507 6,382 316 - 51
Lima Outlet Center 5,000 39,212 3,109 2,494
Total Peru 244,918 181,000 35% 1,781,719 1,559,332 14% 127,226 112,512 13% 87,851 77,605 13%
Parque Arboleda 34,000 34,000 0% 156,018 141,939 10% 18,013 16,965 6% 15,279 14,257 7%
Parque Caracoli 39,500 71,891 11,011 7,030
Total Colombia 73,500 34,000 116% 227,909 141,939 61% 29,025 16,965 71% 22,309 14,257 56%
 
Occupancy EBITDA Margin Monthly Sales per m2 Monthly Revenues per m2
      2013     2012     Chg. b.p.     2013     2012     Chg. b.p.     2013     2012     Chg. %     2013     2012     Chg. %
Parque Arauco Kennedy 97.2% 97.4% -20 91.7% 90.8% 83 266,959 287,254 -7% 27,720 27,727 0%
Arauco Maipú 97.3% 97.4% -10 93.0% 86.0% 704 176,941 146,889 20% 13,128 13,040 1%
Plaza El Roble 91.9% 97.9% -600 78.4% 83.7% -536 219,504 208,092 5% 14,811 14,377 3%
Paseo Arauco Estación 98.2% 98.3% -10 86.7% 87.3% -60 123,517 114,819 8% 16,489 16,501 0%
Arauco San Antonio 94.0% 98.2% -420 63.5% 70.2% -665 95,241 90,549 5% 10,430 11,014 -5%
Arauco Quilicura 97.1% 100.0% -290 69.5% 74.8% -528 105,950 130,015 -19% 7,003 8,493 -18%
Arauco Express (Stripcenters Chile) 98.3% 100.0% -170 64.4% 60.7% 372 88,478 55,873 58% 15,674 11,913 32%
Buenaventura Premium Outlet Mall 98.0% 100.0% -200 65.4% 65.3% 17 133,641 69,522 92% 14,892 6,395 133%
Total Chile 96.9% 98.0% -112 83.8% 84.0% -15 180,954 180,395 0% 17,915 18,162 -1%
Megaplaza Norte 90.0% 99.9% -985 79.1% 79.0% 5 1,015 1,045 -3% 62 63 -2%
Mega Express Villa Chorillos 100.0% 97.0% 300 71.0% 71.2% -19 686 594 15% 48 42 14%
Larcomar Fashion Center 94.0% 87.1% 690 63.5% 65.7% -223 668 659 1% 100 104 -4%
Parque Lambramani 92.0% 92.4% -40 31.6% 32.8% -120 446 415 8% 35 31 11%
Mega Plaza Chimbote 100.0% 88.0% 1200 64.8% 45.6% 1924 650 442 47% 32 19 71%
Mega Express Villa El Salvador 95.0% 74.0% 2100 70.4% 45.2% 2518 519 321 62% 45 28 60%
Mega Express Chincha 89.0% 60.4% 339 45
Mega Plaza Cañete 82.0% 43.2% 1,234 31
Mega Plaza Barranca 74.0% -16.2% 302 15
Lima Outlet Center 87.0% 80.2% 969 77
Total Peru 91.0% 93.6% -261 62.9% 62.8% 11 789 760 4% 56 55 3%
Parque Arboleda 93.0% 85.1% 792 84.8% 84.0% 78 404,653 386,677 5% 46,720 46,217 1%
Parque Caracoli 86.0% 63.8% 246,617 37,773
Total Colombia 89.2% 85.1% 416 73.5% 84.0% -1049 336,611 386,677 -13% 42,868 46,217 -7%
 

Contacts

Investor Relations (Chile)
Parque Arauco S.A.
Samantha Zerbe, +562.2299.0510
Fax: +562.2211.4077
szerbe@parauco.com
or
Investor Relations (International)
MBS Value Partners
Monique Skruzny, +1.212.750.5800
Fax: +1.212.661.2268
monique.skruzny@mbsvalue.com

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Contacts

Investor Relations (Chile)
Parque Arauco S.A.
Samantha Zerbe, +562.2299.0510
Fax: +562.2211.4077
szerbe@parauco.com
or
Investor Relations (International)
MBS Value Partners
Monique Skruzny, +1.212.750.5800
Fax: +1.212.661.2268
monique.skruzny@mbsvalue.com