By Brazil Stock Guide – Iguatemi SA’s recurring adjusted net income rose 22.1% in the second quarter, supported by higher mall sales, stronger rental revenue and increased exposure to more productive assets.
Adjusted profit totaled R$133.8 million, while tenant sales across the Brazilian mall operator’s portfolio reached R$6.6 billion, up 4.6% from a year earlier, according to an earnings release published Tuesday. Iguatemi trades in São Paulo under the ticker IGTI11.
The company’s adjusted net revenue reached R$396 million. That represented a 2.7% decline on a reported basis but an 11.6% increase from the pro forma comparison of R$354.8 million, which accounts for changes in ownership stakes across the portfolio.
Adjusted earnings before interest, taxes, depreciation and amortization were R$290.6 million. Ebitda fell 34.8% from the reported year-earlier figure but increased 10.8% from a pro forma base.
The difference reflects an unusually strong comparison in the second quarter of 2025, when Iguatemi booked a R$139.1 million capital gain from selling stakes in the Market Place complex and Galleria mall. Temporary consolidation of partner interests in the Pátio Higienópolis and Pátio Paulista properties also boosted the earlier period.
Excluding those items, recurring adjusted profit increased from R$109.6 million. Adjusted funds from operations, a closely watched measure of cash generation among real estate companies, rose 21% on a recurring basis to R$170.9 million.
Net operating income from the mall portfolio reached R$298.5 million. The NOI margin hit a record 94.6%, reflecting cost controls and a larger contribution from higher-productivity properties.
For the first six months of 2026, adjusted net income rose 15.8% to R$373.3 million. Adjusted FFO increased 17.6% to R$445.6 million, while adjusted net revenue gained 3.8% to R$764.9 million.
World Cup weighs on match-day sales
Total tenant sales rose even as the 2026 FIFA World Cup disrupted shopping patterns during Brazil matches. Same-area sales increased 4.2%, while same-store sales gained 1.7%.
Sales per square meter increased 13.3% when measured in proportion to Iguatemi’s ownership stakes. On a full-portfolio basis, the metric advanced 4.6%.
From June 11 through June 30, same-store sales were equivalent to 97.8% of the comparable 2025 level. On the four days Brazil played during the month, sales fell to 68.5% of the year-earlier comparison.
On days without Brazil matches, sales increased 6.3%, suggesting that consumers shifted some purchases to other dates and offset most of the match-day decline.
Rent growth outpaces contract adjustments
Rental revenue on a full-asset basis grew 3.4%. Same-area rent increased 2.5%, exceeding the average 0.9% impact of Brazil’s IGP-M inflation index on the company’s contracts. Same-store rent advanced 2.7%.
Rent per square meter rose 3.3% for the full portfolio and 11.8% when adjusted for Iguatemi’s ownership stakes. The performance reflected positive leasing spreads, increased percentage rent and the occupation of previously vacant space.
Occupancy climbed 0.5 percentage point to 96.9%. Tenant occupancy costs rose 0.3 percentage point to 10.8% of sales, remaining below historical levels.
Net delinquency fell to 0.1% from 0.3% a year earlier, helped by recoveries of past-due receivables and what the company described as healthy operating conditions for tenants.
Retail Ebitda more than triples
Iguatemi’s directly operated retail businesses, which include I-Retail and the Iguatemi 365 platform, posted gross revenue of R$67.1 million, a 25.8% increase.
Net revenue grew 23.6% to R$49.1 million, while segment Ebitda surged 225.5% to R$8.1 million. The Ebitda margin widened to 16.5% from 6.3%.
Same-store sales at the retail operation increased 15%, supported by new stores and the maturation of units opened in previous periods.
Finance costs decline despite high rates
Recurring net financial expenses fell 32.8% to R$84.5 million. Financial income increased 72.8% to R$61.6 million, benefiting from higher returns on investments and the appreciation of assets held in foreign currencies.
Financial expenses declined 9.5% to R$146.1 million, reflecting lower borrowing costs and reduced obligations linked to earlier acquisitions.
Gross debt ended June at R$4.44 billion, while cash and financial investments totaled R$2.30 billion. Net debt increased 12% from March to R$2.14 billion.
Net debt to adjusted Ebitda rose to 1.62 times from 1.29 times in the previous quarter. Excluding capital gains from minority-stake sales, leverage would have been 1.81 times.
Iguatemi raised R$535 million through real estate receivables certificates on June 25. The eight-year transaction was priced at 97% of Brazil’s CDI interbank rate and attracted demand equivalent to 1.2 times the offered amount.
The company used part of the proceeds to redeem R$236.1 million of debentures on July 1. Management expects the transaction to reduce the average cost of debt from 101.9% of CDI to between 100.5% and 101%, while extending average maturity to 4.9 years from 4.7 years.
Iguatemi invested R$132.3 million during the quarter. Including acquisitions and asset sales, net investment totaled R$186.6 million.
The company completed the acquisition of an additional 3% stake in Pátio Paulista for R$75.6 million on April 9, raising its ownership to 14.5%. It also approved a share buyback program of as much as R$60 million through December 2027.
Fitch reaffirmed Iguatemi’s AAA(BRA) rating. The company is also advancing expansions at Iguatemi São Paulo and Iguatemi Brasília, alongside the Iguatemi Campinas office tower and Casa Figueira development.
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