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CONSOLIDATED FOURTH QUARTER
RESULTS
2015
2
FIBRASHOP ANNOUNCES CONSOLIDATED RESULTS FOR THE FOURTH
QUARTER OF 2015
Total operating revenues for the quarter (rent and maintenance) amounted to Ps. 234.0 million. This amount represents a 16.59% increase from the same quarter last year.
Net operating income (NOI) for the quarter was Ps. 168.01 million, which represents an 18.72% increase when compared the to same quarter last year.
NOI margin over total operating revenues was 71.58%, representing an increase of 129 basis points when compared with the same quarter last year, and of 6 basis points when compared to the previous quarter.
EBITDA for the quarter amounted to Ps. 154.03 million, an increase of 19.34% when compared to the same quarter last year.
EBITDA margin was 65.63%, representing an increase of 152 basis points when compared to the same quarter last year, and 18 basis points compared to the previous quarter.
Net income for the quarter (adjusted by investment properties revaluations) reached Ps. 133.69 million, representing an increase of 17.20% when compared to same quarter last year.
Net income per CBFI was Ps. 0.2801 (adjusted by investment properties revaluations), representing an annual distribution rate of 6.55% using the average CBFI price during the quarter, and a rate of 6.75% considering the closing price of February 19, 2016.
The occupancy of the gross leasable area ("GLA") of the shopping centers, with more than 18 months in our portfolio, was 96%. Total occupancy for the 17 shopping centers owned by FibraShop at the close of December 31, 2015 amounted to 92%. The lower occupancy rate mainly stems from recently acquired shopping centers that are currently under development to increase their occupancy levels.
Total operating revenues for 2015 totaled Ps. 834.99 million, a 45.36% increase from the prior year.
Accumulated NOI for 2015 amounted to Ps. 595.43 million, a 52.45% increase from the previous year.
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Accumulated NOI margin over total operating revenues was 71.31%, representing an increase of 487 basis points from 2014.
Accumulated EBITDA in 2015 reached Ps. 545.29 million, increasing 52.87% from the prior year.
EBITDA margin over total accumulated revenues in 2015 was 65.30%, a 517 basis point increase from 2014.
Accumulated net income for 2015 (adjusted by investment properties revaluations) totaled Ps. 492.03 million, representing an increase of 30.01% from the previous year.
Accumulated net income (adjusted by investment properties revaluations) per outstanding (weighted) CBFI amounted to Ps. 1.0909, a 4.23% increase from the prior year. It is worth nothing that in March 2015 we launched a subscription rights offering, which increased the total outstanding amount of CBFIs by 30.88%, or 112,650,311, from 2014 to a total of 477,245,984 million CBFIs. This represents a distribution rate of 6.30% for 2015 using as a reference price the average CBFI price of the year.
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Financial Metrics
The table below shows the key financial metrics for the quarter and its comparison
with the same previous year period:
4th Quarter 2014
4th Quarter 2015
Increase % Accumulated
2014 (Audited)
Accumulated 2015
(Non-Audited) Increase %
Revenues 201.31 234.7 16.59% 574.42 834.99 45.36%
NOI 141.51 168.01 18.73% 390.58 595.43 52.45%
EBITDA 129.06 154.03 19.35% 356.70 545.29 52.87%
Net income in the period
114.07 133.69 17.20% 372.62 492.03 32.05%
NOI Margin 70.29% 71.59% 1.84% 68.00% 71.31% 4.87%
EBITDA Margin 64.11% 65.63% 2.37% 62.10% 65.30% 5.17%
Net income per CBFI
0.3129 0.2801 -10.48% 1.0466 1.0909 4.23%
Outstanding CBFIs (M)*
364.6 477.2 30.88% 356.02 451.01 NA
Total Assets 8,981.9 12,089.5 34.60% 8,981.9 12,089.5 34.60%
Total Liabilities 2,200.0 3,000.0 36.36% 2,200.0 3,000.0 36.36%
Shareholders’ Equity
6,476.3 8,812.1 36.07% 6,510.8 8,812.1 35.35%
LTV 24.49% 24.81% 1.29% 24.49% 24.81% 1.29%
P/E ratio** 16.60 15.71 -5.34% 16.60 15.71 -5.34%
EV/EBITDA*** 22.57 17.16 -23.95% 22.57 17.16 -23.95%
The accumulated net profit results in this table are adjusted by the investment properties revaluations. * Weighted annual average. ** P/E ratio – calculated as the average closing price, divided between the net income in the 12-month period and the weighted outstanding CBFIs in the period. *** EV/EBITDA – calculated as the capitalization plus liabilities minus cash and cash equivalent divided between the EBITDA of the past 12 months.
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Mexico City, February 22, 2016 - FibraShop (FSHOP) (BMV: FSHOP13). CI
Banco, S.A. Institución de Banca Múltiple, Irrevocable Trust F/00854, the first real
estate trust specialized in shopping centers, announced today its results for the
fourth quarter ending December 31, 2015. The results were prepared following the
International Financial Reporting Standards (IFRS) and are stated in nominal
pesos.
CEO COMMENTS
Salvador Cayón Ceballos, FibraShop’s Chief Executive Officer, commented: "2015 was a year of growth and consolidation for FibraShop, during which we continued executing our growth plan and expansion, as we strengthened our capital structure and successfully tapped the capital markets. Total revenues from our portfolio rose by 45%, while NOI and EBIDTA increased 52%, and the net income for the period grew 30%. These solid figures were translated into competitive margins, especially when compared to industry peers globally, resulting in an EBITDA margin of 65.63% and a NOI margin of 71.58% recorded during the last quarter of the year. As we have mentioned in the past, and as our margins can attest, FibraShop continues to focus on operating its shopping centers, making more efficient its operations, expanding its margins and taking advantage of the GLA at the shopping centers as it offers an opportunity to expand its GLA, in cases like Cibeles in Irapuato, Texcoco, Cuautla, Jurica and now the expansion at Galerias Mall Sonora in Hermosillo, a Liverpool store of approximately 12 thousand square meters and the new expansion area of 9 thousand square meters that will be built in stages. We expect to complete the Liverpool store in November and the additional space for other stores in March 2017. Additionally, we expect to expand existing shopping centers, closing new rental contracts with large retailers this year. With the acquisitions and executed expansions, we continue strengthening our portfolio, achieving operating synergies that translated in better results.
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All our efforts have been transformed into an (annualized) dividend yield that today is of 6.75%. We have defined our work plan for 2016 and have set the goals to grow between 160 and 200 thousand square meters, representing a GLA growth of 35%. We are closing a revolving credit with a group of syndicated banks in the amount of Ps. 3 billion at very competitive rates, which will allow us to meet our goal. In addition, this credit line will also help us maximize the capital of our shareholders. We continue our search for new investment opportunities, focusing on further strengthening our portfolio and increasing our domestic footprint, always focusing on generating the most value and a larger dividends our shareholders."
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ACQUISITIONS
Plaza Cruz del Sur
As announced on October 2, 2015, FibraShop acquired Plaza Cruz del Sur, a shopping center located in the city of Puebla, in the state of Puebla.
The shopping center has a total gross leasing area (GLA) of approximately 29.9 thousand square meters. It is worth noting that, both Cinepolis and Chedraui own their stores, so the acquired GLA by FibraShop totals 12.4 thousand square meters. The current occupancy rate of the whole property is of 98.82%, and of 97.16% for the portion acquired by FibraShop. The shopping mall has prestigious tenants such as Coppel, La Parisina, Marti and others, as well as a strong component of bank branches are like Santander, Scotiabank, Banamex, HSBC and BBVA Bancomer.
It is worth highlighting that Plaza Cruz del Sur tenants began paying their rent to FibraShop’s portfolio as of October 1st, 2015.
OTHER RELEVANT FACTS
1. GALERIAS MALL SONORA EXPANSION
We recently signed a contract to include a Liverpool store of approximately 12,000 square meters at Galerias Mall Sonora. Additionally, and given the interest of domestic and International Brands to join the shopping center, we are planning its expansion.
The expansion (excluding Liverpool) implies an increase of the GLA on 9,200 square meters. The land was acquired as a land reserve with the acquisition of Kimco (please refer to the relevant fact released on August 13, 2014). As a result, the shopping center will have approximately 21,200 square meters more.
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2. CREDIT RATINGS RATIFICATION
Following the annual review that the credit rating agencies conduct for debt issuers, both HR Ratings and Fitch ratified their credit ratings for FibraShop.
HR Ratings ratified its HR AAA rating with stable outlook for FibraShop, as well as the HR AAA with stable outlook for the FSHOP15 placement and HR+1 for the short-tem dual program.
Fitch Ratings ratifies its ratings for FibraShop reassigning for its long-term domestic debt a AA(MEX) rating with stable outlook, while reaffirming for the FSHOP15 issuance maturing 2020 a AA(mex) and for its short-term domestic debt an F1+(mex).
The ratification of both credit rating agencies are based on the solid business profile of FibraShop that is centered in the shopping centers segment, its high quality assets and tenant diversification, as well as high occupancy levels, improvement of its financial indicators and healthy financial structure.
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3. COMPLETION OF EXPANSIONS
During the quarter, several projects that were under development were concluded.
Puerta Texcoco: Last November we completed the incorporation of Fabricas de Francia.
Puerto Paraiso: The renovation process was completed and the marketing efforts are showing results. We signed a contract with Forever21, located in the second floor of the expansion area, representing a store of approximately 900 square meters.
Plaza Cibeles: The expansion process was completed, some marginal work is pending to access and hallways. Some retailers have opened their Doors, and the majority of the tenants are in the process of readjusting their stores. As of today Plaza Cibeles has among its tenants well-known local and international retailers such as: HM, Sears, Starbucks, some of the brands from Grupo Inditex, Italianis, Sphera, among others. 4. VAT REFUND
During the quarter we got the authorization to get a VAT refund in the amount of Ps. 18.6 million, of which Ps. 17.7 million correspond to the requested amount and Ps. 838 thousand to inflationary adjustments. The VAT refund is mostly related to the acquisition of Nima Shops.
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BUSINESS PLAN PROGRESS
1. Shopping center expansion
A relevant factor in FibraShop’s business model is its constant search to add value to the properties in its portfolio through operating synergies that are seen as costs optimization, as well as a good mix of tenants, expansions and other aspects.
As part of the process we have implemented, some of our shopping centers, renovations and expansions made to consolidate the portfolio, are seeing an increase in their valuation and profitability.
The shopping centers that have been subject to works are:
Los Atrios, added Fabricas de Francia (completed)
Plaza Texcoco, added Fabricas de Francia (completed)
Puerto Paraíso, shopping center renovation (completed)
Kukulcan, shopping center renovation (completed)
Cibeles, shopping center expansion, addition of Sears and parking expansion (completed)
Jurica, shopping center renovation, addition of Cinemex and parking expansion (in process)
Galerias Mall Sonora, shopping center expansion, addition of Liverpool (in process)
As a result of this process, the gross leasable area (GLA) of the properties has changed the composition of the portfolio as see below:
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In previous reports FibraShop had solely reported owned GLA, starting this quarter FibraShop will report owned GLA but also the GLA it manages.
As seen in the table above, FibraShop’s owned GLA (including expansions in process) totaled 471,130 square meters, while the GLA under management totaled 558,766 square meters.
Plaza Original GLAUpdated GLA owned by
FibraShop
Undergoing
expansions*
Tenants with own
stores
Total GLA
administrated
Plaza Cibeles 56,065 76,134 76,134
La Luciernaga 21,807 19,384 9,000 28,384
Kukulcán Plaza 20,986 20,986 1,160 13,254 35,400
Puerto Paraíso 19,914 19,221 16,738 35,959
U.C. Jurica 8,524 8,524 3,011 1,597 13,132
U.C. Juriquilla 9,705 9,490 9,490
U.C. Condesa 1,454 1,454 1,454
U.C. Xalapa 8,548 8,273 8,273
Puerta Texcoco 60,003 63,725 63,725
Nima Shops 3,991 3,837 3,837
Plaza Atrios 50,967 50,457 50,457
Galerías Mall Sonora 40,623 40,710 21,218 61,928
Galerías Tapachula 33,879 33,872 33,872
Las Misiones** 51,128 28,573 29,612 58,185
City Center Bosque Esmeralda 29,588 29,520 29,520
Plaza Cedros 19,300 19,300 19,300
Cruz del Sur 12,470 12,282 17,434 29,716
Total 448,952 445,741 25,389 87,636 558,766
* approximate square meters
** In previous reports the GLA for las Misiones, was presented as if the whole GLA was owned FibraShop, in this report the distiction is made betweenthe GLA owned by
FibraShop and the those tenants wich own their stores.
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2. Shopping center occupancy rate
During the quarter, progress was made in the marketing of available spaces in shopping centers as shown in the following tables.
Here below is the occupancy of the properties in FibraShop’s portfolio that have been at least 18 months:
% of Occupancy
Plaza 4Q 2014 1Q 2015 2Q 2015 3Q 2015 4Q 2015
Plaza Cibeles (Original) 100 100 100 100 100
La Luciernaga 88 88 91 91 94
UC Jurica 100 100 100 96 96
UC Juriquilla 90 90 94 94 94
UC Condesa 100 100 100 100 100
UC Xalapa 97 97 97 97 97
Puerto Paraiso 99 99 99 99 99
Plaza Kukulcan 99 99 85 85 85
Puerta Texcoco 95 96 93 93 94
UC Nima Shops 82 82 97 97 100
Total 96 97 95 95 96
The occupancy rate of the properties with at least 18 months in the portfolio is 98%, representing a high occupancy rate when compared with international standards. It is worth noting that in the case of Plaza Cibeles the table shows the shopping center with its original tenants to facilitate comparison. The following table shows the expansion of Plaza Cibeles and its new tenants with the goal of showing the current occupancy rate after the expansion process.
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The following table shows the occupancy rate of the properties that have less than 18 months in FibraShop’s portfolio:
% of Occupancy
Plaza 4Q 2014 1Q 2015 2Q 2015 3Q 2015 4Q 2015
Galerias Mall Sonora 85 85 85 88 88
Galerias Tapachula 92 92 86 88 87
Los Atrios 83 83 84 84 84
Las Misiones 86 86 86 86 89
City Center Bosque Esmeralda - - 87 87 89
Plaza Cedros - - - 92 96
Cruz del Sur 97
Cibeles (Expansion) 96
Total 86 86 86 87 89
It is worth noting that in these properties we are implementing a work plan to increase their occupancy levels.
The following table shows FibraShop’s complete portfolio, which has a weighted occupancy average of 92%:
% of Occupancy
Plaza 4Q 2014 1Q 2015 2Q 2015 3TQ 2015 4Q 2015
Plaza Cibeles 100 100 100 100 99
La Luciernaga 88 88 91 91 94
UC Jurica 100 100 100 96 96
UC Juriquilla 90 90 94 94 94
UC Condesa 100 100 100 100 100
UC Xalapa 97 97 97 97 97
Puerto Paraiso 99 99 99 99 99
Plaza Kukulcan 99 99 85 85 85
Puerta Texcoco 95 96 93 93 94
UC Nima Shops 82 82 97 97 100
Galerías Mall Sonora 85 85 85 88 88
Galerías Tapachula 92 92 86 88 88
Los Atrios 83 83 84 84 84
Las Misiones 86 86 86 86 89
City Center Bosque Esmeralda - - 87 87 89
Plaza Cedros - - - 92 96
Cruz del Sur 97
Total 91 92 90 91 92
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In terms of the GLA acquired and still pending to be paid at Kukulcan Plaza and Puerto Paraiso, the table below shows the current status.
Properties Owned by FibraShop
Pending acquisition
Tenants with own stores
Total shopping center
Plaza Kukulcan 20,986 4,929 9,484 35,400
Puerto Paraíso 19,221 11,836 4,901 35,959
The table above shows FibraShop’s properties, what we have acquired and paid. Additionally, we present the GLA that FibraShop is pending to pay. Finally, we present the GLA that is property of the retailers in our shopping center and is not owned by Fibrashop. The GLA pending to be acquired in both shopping centers has been modified due to the renovations and space reconfiguration that the properties have undergone, as a result we have reduced the GLA to generate open areas and make the shopping centers more appealing.
3. Expansions and renovations
Plaza Cibeles
The expansion of Plaza Cibeles has been completed; marginal work is pending related to access and hallways. As mentioned previously, the expansion area has shown good process in terms of marketing, we expect that tenants to finalized their adjustments between the second and third quarter of 2016.
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As per the second stage, Cinepolis VIP is already in operation and we expect that Sears to open its doors soon.
Urban Center Jurica
The progress made in the expansion of the Urban Center Jurica property is on schedule and significant advances are seen. Cinemex has plans to open its doors to the public next April 2016.
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Galerias Mall Sonora
Works to add a new Liverpool store of approximately 12,000 square meters to Galerias Mall Sonora have begun. The plan is to have the store ready and open in the fourth quarter of the year.
Presently, they are working on the executive project to expand the shopping center and the works will begin as soon as the plan is elaborated and approved. The shopping center expansion will be of approximately 9,200 square meters, which added to the Liverpool store will bring the total expansion to 21,200 square meters, expected to be completed at the beginning of 2017.
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4. GLA and geographic distribution
The current GLA (gross leasable area) of FibraShop (including all acquisitions and expansions) amounted to 471,130 square meters, while the total managed GLA of FibraShop amounted to 558,766 square meters.
The graph below shows the geographical distribution of FibraShop’s portfolio, which is currently present in 12 states and Mexico City:
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5. Tenant Contracts Analysis
Aside from continuously seeking to improve its footprint in more states and cities, FibraShop has also the objective of achieving a strong diversification of its portfolio in terms of tenant type (by income and square meters). This strategy contributes to decrease the Company’s dependence on a few tenants for the majority of its revenues (excluding parking lots).
The chart below illustrates the distribution of lease agreements by type of tenants, both in terms of total revenues (rent and maintenance) and percentage of the total GLA in the portfolio.
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Sector %
Food 19.03%
Fashion 16.96%
Department Store 9.73%
Supermarket 7.95%
Movie Theater 5.99%
Sports 5.46%
Financial Services 4.99%
Entertainment 4.45%
Others 4.29%
Shoes 3.75%
Electronics 3.55%
Health and Beauty 3.03%
Furniture 2.29%
Optics 1.94%
Gifts and Accesories 1.88%
Stationary 1.62%
Jewelry 1.42%
Cars and Motorcycle 0.96%
Services 0.71%
Total 100%
19%
17%
10%
8%6%
5%
5%
4%
4%
4%
4%
3%
2%
2% 2%2%
1%
1%
1%
Income by tenant sector
Food
Fashion
Department Store
Supermarket
Movie Theater
Sports
Financial Services
Entertainment
Others
Shoes
Electronics
Health and Beauty
Furniture
Optics
Gifts and Accesories
Stationary
Jewelry
Cars and Motorcycle
Services
Sector %
Supermarket 20.60%
Department Store 17.37%
Fashion 11.18%
Food 11.09%
Movie Theater 10.77%
Entertainment 5.00%
Sports 4.19%
Financial Services 3.07%
Others 2.76%
Gifts and Accesories 2.53%
Furniture 2.19%
Stationary 2.17%
Electronics 1.74%
Shoes 1.57%
Health and Beauty 1.45%
Cars and Motorcycle 0.79%
Optics 0.61%
Jewelry 0.58%
Services 0.32%
Total 100%
21%
17%
11%11%
11%
5%
4%
3%
3%
3%
2%
2% 2%
2%1%
1%
1%
1%
0%
GLA by tenant sector
Supermarket
Department Store
Fashion
Food
Movie Theater
Entertainment
Sports
Financial Services
Others
Gifts and Accesories
Furniture
Stationary
Electronics
Shoes
Health and Beauty
Cars and Motorcycle
Optics
Jewelry
Services
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As seen in the previous charts, no sector represents more than 20% of FibraShop’s total revenues. As a result, this fragmentation strengthens the diversification of revenues by economic activity, and brings an adequate balance to the portfolio.
Currently, the top 30 tenants represent approximately 38% of total revenues and 65% of total GLA, as seen in the following tables.
Commercial Name Total % Commercial Name %
Liverpool 38,142.02 8.2% 1 Liverpool 4.7%
Walmart 35,121.31 7.5% 2 Cinépolis 3.6%
Sears 33,498.58 7.2% 3 Walmart 2.7%
Cinépolis 30,466.69 6.5% 4 Cinemex 2.0%
Soriana 24,839.15 5.3% 5 Sears 1.6%
Cinemex 17,513.26 3.7% 6 Soriana 1.5%
Luxury Avenue 15,624.68 3.3% 7 C&A 1.4%
Fábricas de Francia 12,687.60 2.7% 8 Forever 21 1.3%
Home Depot 11,511.58 2.5% 9 BBVA Bancomer 1.2%
Sam's Club 9,176.54 2.0% 10 Office Depot 1.1%
Comercial Mexicana 7,549.64 1.6% 11 Suburbia 1.1%
Office Depot 6,130.89 1.3% 12 Telcel 1.0%
Suburbia 5,752.07 1.2% 13 Caliente 1.0%
C&A 5,006.20 1.1% 14 Fábricas de Francia 1.0%
Caliente 4,439.17 0.9% 15 Comercial Mexicana 1.0%
Promoda 4,059.52 0.9% 16 Deportes Martí 1.0%
Total Fitness 3,748.46 0.8% 17 Ruth's Chris 1.0%
Coppel 3,602.11 0.8% 18 Home Depot 0.9%
Fresko 3,582.81 0.8% 19 Sanborn's 0.9%
Office Max 3,530.40 0.8% 20 Sonora Grill Prime 0.8%
Muebles Dico 3,520.63 0.8% 21 Coppel 0.7%
Deportes Martí 3,165.45 0.7% 22 Nike 0.7%
Toks 3,072.22 0.7% 23 Hacienda Tequila 0.7%
BBVA Bancomer 3,057.93 0.7% 24 Promoda 0.7%
High Fitness 2,910.16 0.6% 25 Famsa 0.7%
Telcel 2,583.62 0.6% 26 Luxury Avenue 0.7%
Happyland 2,486.98 0.5% 27 Muebles Dico 0.7%
Sanborn's 2,362.92 0.5% 28 Banamex 0.6%
Starbucks Coffee 2,199.67 0.5% 29 High Fitness 0.6%
Forever 21 2,148.63 0.5% 30 Banorte 0.6%
TOTAL 303,490.89 64.9% TOTAL 37.6%
TOP 30 by Leased Area TOP 30 by Total Income
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It is noteworthy to say that amongst the top 30 tenants, 28 tenants are large domestic or international corporations. Similarly, it is worth highlighting that no tenant represents more than 4.7% of revenues (excluding parking lots).
The current portfolio has two types of lease agreements:
Those with a fixed monthly rent (also known as “fixed rent”)
Those with a base monthly rent and a variable component related to the tenant revenue stream (also known as “variable rent”)
Tenants with fixed rent represent 68.37% of the total GLA, and tenants with variable rent represent the remaining 31.63%. As a percentage of revenues, the tenants with fixed rent represent 73.23% of revenues, while those with variable rent represent 26.7%. The variable rent portion of leases amounts to approximately 7.73%1 of total rental revenues.
Finally, the following graph shows the maturity profile of the lease contracts of the current portfolio.
1 The calculation is based on information from the last quarter.
9%12% 14%
9%6%
49%
0%
10%
20%
30%
40%
50%
60%
2016 2017 2018 2019 2020 2021 +
Profile of lease agreements(% of GLA)
Year Cibeles Luciénaga U.C. Jurica
U.C.
Juriquilla
U.C.
Condesa U.C. Xalapa
Puerto
Paraíso Kukulcán
Puerta
Texcoco
2016 12% 20% 8% 4% 0% 15% 8% 4% 4%
2017 16% 17% 9% 31% 71% 51% 16% 8% 18%
2018 20% 3% 16% 8% 18% 7% 14% 26% 9%
2019 6% 0% 1% 49% 0% 5% 26% 6% 1%
2020 5% 5% 34% 1% 0% 1% 3% 3% 12%
2021 + 42% 55% 32% 7% 11% 20% 33% 51% 57%
TOTAL 100% 100% 100% 100% 100% 100% 100% 100% 100%
22
As you can see in the chart above, there is not a single year in which contract maturities are concentrated by a larger share than 14% of the GLA within the shopping center portfolio. The average remaining life of simple-term contracts is approximately 8.1 years weighted by GLA contracts.
FibraShop has a total of 1,419 contracts with tenants where anchors correspond to 2.33%, 4.23% sub-anchors and 93.44% are local stores, fast food, common areas, kiosks and more.
Year Nima Shops
Galerías Mall
Sonora
Galerías
Tapachula Atrios Las Misiones
City Center
Bosque
Esmeralda
Cedros
Civac Cruz Del Sur Total
2016 40% 10% 14% 2% 5% 5% 3% 40% 9%
2017 11% 12% 12% 5% 5% 2% 5% 7% 12%
2018 4% 46% 1% 19% 7% 12% 6% 8% 14%
2019 4% 5% 13% 17% 4% 37% 9% 3% 9%
2020 41% 4% 1% 6% 1% 7% 1% 8% 6%
2021 + 0% 22% 59% 52% 79% 37% 75% 34% 49%
TOTAL 100% 100% 100% 100% 100% 100% 100% 100% 100%
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Shopping center Anchor Sub
Anchor Free
Standings Store Other
Total general
Cibeles 3 6 1 155 56 221
Galerías Mall Sonora 2 13 4 119 40 178
Las Misiones 4 1 4 118 32 159
Galerias Tapachula 2 10 2 94 36 144
Cruz Del Sur 2 2 4 92 34 134
Puerta Texcoco 5 9 4 69 33 120
Atrios 3 2 2 98 6 111
Puerto Paraíso 2 2 76 26 106
Luciérnaga 1 3 2 73 15 94
Kukulcan 1 56 14 71
Cedros Civac 2 10 39 11 62
C.C. Bosque Esmeralda 1 1 1 55 3 61
UC Xalapa 1 1 41 1 44
UC Jurica 3 36 2 41
UC Juriquilla 1 1 26 5 33
Nima Shops 23 1 24
UC Condesa 4 1 5
Total general 33 60 20 1,177 129 1,419
* It doesn’t consider tenants that are owners of their stores. ** “Other” considers kiosks, island, advertising spaces and other contracts that are not part of the shopping center’s GLA but are considered in FibraShop’s revenues.
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Tenant type 1Q 2015 2Q 2015 3Q 2015 4Q 2015
Anchor 34,984 38,673 38,990 41,932
Sub Anchor 21,578 21,257 23,572 28,939
Stores 122,574 124,987 133,259 148,206
Parking 12,294 13,839 14,280 15,628
Total 191,431 198,756 210,101 234,706
Weight 1Q 2015 2Q 2015 3Q 2015 4Q 2015
Anchor 18.28% 19.46% 18.56% 17.87%
Sub Anchor 11.27% 10.69% 11.22% 12.33%
Stores 64.03% 62.88% 63.43% 63.15%
Parking 6.42% 6.96% 6.80% 6.66%
Total 100.00% 100.00% 100.00% 100.00%
Anchors; 17.9%
Sub Anchors; 12.3%
Stores; 63.1%
Parking; 6.7%
Income distribution per tenant type
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6. Debt profile
At the close of the quarter FibraShop has a loan-to-value of 24.81%, considering the issuance of debt for Ps. 3,000 million issued last quarter, which is within the limits defined by the Technical Committee FibraShop and the provisions of the current legislation.
It is noteworthy that current liabilities are not guaranteed, which leaves unimpaired the current investment portfolio FibraShop.
As such, the only bearing liabilities that FibraShop has presently are the trust bonds with ticker symbol FSHOP15 that have the following characteristics:
Ticker Expiration Currency
Issued Amount (mp)
Rate Warranty
FSHOP15 22/06/2020 Pesos 3,000 TIIE + 0.90 Quirografaria
7. Debt Covenants2
In terms of the issuance of debt FSHOP15, FibraShop has the obligation to stay within the following parameters:
Covenants from Debt issuance (FSHOP15) Limit Current Comply
Limits on Outstanding Debt No Greater Than: 60% 24.81%
Limits on Secured Debt No Greater Than: 40% 0%
Debt Service No less than: 1.5 4.45
Limits of Financing No Greater Than: 50% 24.81%
2 For additional information please refer to the supplement information of the FSHOP15 issuance.
26
8. Level of Indebtedness and Debt Service Coverage Ratio
In compliance with the regulation established by the Comisión Nacional Bancaria y de Valores (CNBV)3, FibraShop should inform the market of its Level of Indebtedness and the value of the debt service coverage ratio.
At the close of the fourth quarter, FibraShop’s level of indebtedness was 24.81%. It is worth noting that the regulatory limit is 50%. The calculation was made by dividing the total liabilities, amounting to Ps. 3,000 million, by total assets of Ps. 12,090 million.
Additionally, the debt service coverage ratio was 4.03 (this index must be greater than 1). In the calculation of the index, we assume the current distribution policy, which includes the fiscal and financial results that there is no revenue growth and the expansion costs for the shopping centers was estimated at Ps. 204.2 million recorded under non-discretionary development items. Also included are interest payments for the debt in the next 18 months amounting to Ps. 220.5 million, and there is no amortization in the period. Here below is a table containing relevant calculations.
AMOUNT FOR THE CALCULATION OF THE DSCR
AL0 Liquid Assets 1,506,352
IVAt Recoverable VAT 207,091
UOt Estimated Operating Income -
LR0 Revolving credit lines -
It Estimated Interest Amortizations 220,500
Pt Estimated Principal Amortizations -
Kt Estimated Recurring Capital Expenditures -
Dt Estimated Non-recurring Capital Expenditures 204,242
ICDt Debt Service Coverage Ratio 4.03
3 Article 35 Bis 1 of the Resolution that modifies the general dispositions applicable to security issues and
other market participants. Published in the Federal Register on June 17, 2014.
27
9. 2016 Work Plan and Financing
Presently FibraShop is still working to finalize the contract of a revolving credit line amounting to Ps. 3,000 million, syndicated between 4 to 5 banks (which are currently under their own internal approval processes). As of today, we have a mandate signed by the managing agent (BBVA Bancomer) and we expect that in the following weeks the line will be approved. With the credit line, and once all of the investment plans are implemented, FibraShop will have a leverage of 39.76%, up from 24.81%.
Considering that FibraShop’s cash flow as of December 31, 2015, amounted to Ps. 1,506.35 million plus the Ps. 3,000 million, minus the estimated expansions, we have Ps. 202.2 million in liquid resources to use for the expansion plan of 2016, which is estimated at Ps. 4,300 million.
10. FUTURE ACQUISITIONS
FibraShop is currently in due diligence for the acquisition of one additional shopping center, which would be the 19th property in Fibrashop’s portfolio.
11. CBFI PERFORMANCE ON THE MEXICAN STOCK EXCHANGE
Market Indicators 4Q 2014 1Q 2015 2Q 2015 3Q 2015 4Q 2015
Price at the end of the Quarter
19.52 17.42 17.39 16.76 17.39
Average Price during the Quarter
17.62 17.72 17.28 17.17 17.10
Number of CBFI 364,595,673 477,245,984 477,245,984 477,245,984 477,245,984
Average market cap (Ps mn.) 6,424.17 8,456.79 8,246.81 8,194.31 8,160.91
Average daily volume 796,093 850,003 776,200 649,069 380,548
Average daily CBFI traded (Ps mn.)
13.86 15.21 13.43 11.01 6.42
NOI (Ps mn.) 142.96 135.7 141.4 150.3 168.0
NOI per CBFI 0.39 0.28 0.30 0.31 0.35
Dividend per CBFI 0.315 0.2333 0.2482 0.2693 0.2801
Dividend Yield at the IPO price
7.15% 5.26% 5.75% 6.27% 6.55%
Investment Properties (Ps. mn)
7.20% 5.33% 5.67% 6.16% 6.40%
Propiedades de Inversión (MDP)
7,629.61 7,655.04 8,291.33 8,631.31 10,197.41
Number of shopping centers 14 14 15 16 17
28
SOURCE: THOMSON REUTERS
SOURCE: THOMSON REUTERS
SOURCE: THOMSON REUTERS
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
1Q 2014 2Q 2014 3Q 2014 4Q 2014 1Q 2015 2Q 2015 3Q 2015 4Q 2015
Average daily volume
29
RESULTS AS OF THE FOURTH QUARTER OF 2015
1. Total Revenues
During this quarter, the total revenues of FibraShop rose to Ps. 234.70 million, of which Ps. 198.76 million were rental revenue, and Ps. 34.94 million were maintenance revenue and others (figures are in line with the forecast, considering the corresponding seasonality). This represents an increase of 16.6% compared to the same last year quarter.
Operating Expenses
The operating expenses during the period amounted to Ps. 80.68 million and were distributed as follows:
- Expenses related to the shopping centers’ daily operations, including corporate expenses, amounted to Ps. 64.39 million.
- Insurance, property taxes, legal fees, auditing and independent members’ compensation amounted to Ps. 3.68 million.
- The fee to the advisor of 7.5% of net operating income (NOI) amounted to Ps. 12.61 million.
NOI & EBITDA Net operating income (NOI) during the fourth quarter rose to Ps. 168.01 million, representing a margin over total revenues of 71.58%, which represents a 6 basis points increase from the previous quarter. NOI margin increased from 70.30% during the same quarter of last year to 71.58% presently.
Similarly, EBITDA was Ps. 154.03 million with a margin of 65.53%, represented an increase of 18 basis points from the prior quarter. It is noteworthy that this margin has increased from 64.11% in the same quarter of last year to 65.63% currently.
30
Quarterly evolution of operating margins
The graph below shows the calculations for the net operating income (NOI):
Net Operating Income ("NOI")For the period between October 1st
to December 31, 2015
(figures expressed in thousands of MXP) 31/12/2015
Margin
Rental Revenues 198,756
Other operating income 35,948
Operating margin of shopping malls 234,704
Operative expenses 64,391
Insurance 2,307
Total expenses 66,698
Net Operating Income ("NOI") 168,006 71.58%
31
If we annualize the NOI (multiply this quarter by 4) would be about Ps. 672.0 million, representing an increase of approximately 12.86% on the annual results in 2015.
It is worth noting that for accounting purposes no depreciation was recorded as FibraShop adopted the fair-value valuation method to register its properties, following IFRS. Thus, the audited financial statements of 2014 recognize an asset revaluation income (related to the valuation of the original properties) of Ps. 386.3 million.
On the other hand, if we analyze the operating result of the shopping centers portfolio (isolating corporate expenses and expenses that are not inherent to the pure operation of properties, such as insurance, appraisals, property taxes, etc.) it is Ps. 187.1 million, and the margin over total revenues is 79.72%.
Operating margin calculation of shopping mallsFor the period between October 1st
to December 31, 2015
(figures expressed in thousands of MXP) 31/12/2015
Margin
Total income 234,704
Operating expenses of shopping malls 47,587
Operating margin of shopping malls 187,117 79.72%
Other expenses (insurance, property tax, appraisals and systems) 5,609
Net income of shopping malls 181,509 77.34%
32
2. Comprehensive Financial Cost
At the close of the quarter, FibraShop had cash amounting to Ps. 1,506.4 million, mainly derived from the subscription rights offering and the debt issuance, minus completed acquisitions.
During the quarter, interest income of Ps. 13.7 million was recorded and interests on current debt were paid in the amount of Ps. 34.9 million. Thus, the comprehensive financing result for the quarter shows an expenditure of Ps. 21.2 million.
3. Total Net Income
Net income for the quarter reached Ps. 133.7 million, or Ps. 0.2801 per CBFI, considering that only 477,245,984 CBFIs were outstanding, which, in annualized terms, amounts to a yield of 6.55%, considering the average closing price in the period of Ps. 17.10 per CBFI and 6.75% considering the closing price of February 19, 2016.
If we compare the net income in the fourth quarter of 2015, which amounted to
Ps. 133.7 million, there is an increase of 17.2% over the fourth quarter of 2014.
Net income per CBFI declined in the fourth quarter by 10.48% due to the issuance of CBFIs in 2015, increasing the number of outstanding CBFIs by 30.9%.
33
4. Balance Sheet
FibraShop's balance sheet at the end of the quarter, emphasizing that its cash level which amounted to Ps. 1,506.4 million, comes mostly from debt issuance after paying down its bank liabilities and Plaza Cedros and Cruz del Sur’s acquisitions.
It is noteworthy that most of the cash flow is already committed to acquisitions and expansions.
Also worth noting is the VAT refund increase to Ps. 207.1 million, which mainly comprises the VAT related to the acquisitions of City Center Esmeralda, Plaza Cedros and Cruz del Sur.
RELEVANT EVENTS
VAT Refund During the quarter we received the authorization to get a VAT refund amounting to Ps. 18.6 million, of which Ps. 17.7 million is related to the requested amount and Ps. 839 thousand related to inflationary adjustments. Said VAT is mainly related to the acquisitions of Nima Shops and was deposited on January 8th, 2016.
Cruz del Sur Acquisition On October 2nd, 2015, we announced the acquisition of the shopping center known as Cruz del Sur located in the city of Puebla in the state of Puebla. Cruz del Sur opened in 2004. The total amount to be paid for the shopping center amounted to Ps. 519 million, divided into two payments; the first totaling Ps. 481.9 million corresponding to the NOI of the following 12 months, ranging between Ps. 42 -43.3 million, which implies a CAP rate between 8.7% and 9%.
34
Distribution to CBFI Holders
On February 18, 2016, the Technical Committee of FibraShop determined to grant a cash distribution corresponding to this quarter. The total distribution for the quarter amounted to Ps. 133.7 million, which will be paid on March 2nd, 2016. Of the total distribution, Ps. 45.8 million is taxable income (Ps. 0.0959 pesos per CBFI) and Ps 87.9 million (Ps. 0.1842 per CBFI) corresponding to the depreciation for fiscal purposes, amounting to Ps. 0.2801per CBFI.
Under the Mexican laws, a Fibra has the obligation to pay at least 95% of its net taxable income to the holders of CBFIs by March 15 of the following year.
35
ABOUT FIBRASHOP
FibraShop (BMV: FSHOP 13), is the only real estate option in Mexico offering a specialization in the shopping malls segment that has a long-track experienced management in the commercial sector, a solid operating and corporate governance structure, which guarantees transparency, efficiency and a profitable and secure growth vehicle. FibraShop is an infrastructure and real estate trust formed to acquire, posses, administer and develop real estate in the shopping center segment in Mexico. FibraShop is administered by a group of experienced management specialized in the industry with a long track record and is advised externally by Fibra Shop Portafolios Inmobiliarios, S.A.P.I. de C.V. FibraShop’s goal is to provide attractive returns to CBFIs holders, through the stable distribution and capital appreciation.
FORWARD LOOKING STATEMENTS
This report may contain certain forward-looking statements. Said forward-looking statements are not based on historic events but on the current views of the administration. We caution that certain declaration or estimates imply risks and uncertainties that can changed due to different factors that are not under the Company’s control.
INVESTOR RELATIONS’ CONTACT IN MEXICO:
Gabriel Ramírez Fernández, CFO, FibraShop.
Tel: +52 (55) 5292 1160
Email: [email protected]
Alan Patricio Umaña Villaseñor, Treasury and Investor Relations, FibraShop.
Tel: +52 (55) 5292 1160
Email: [email protected]
INVESTOR RELATIONS’ CONTACT IN USA:
Lucia Domville, Grayling USA
Tel: +1 (646) 284 9416
Email: [email protected]
36
MEDIA CONTACT IN MEXICO:
Jesús A. Martínez-Rojas R.
Grayling México
Tel: +52 55 56441247
Email: [email protected]
Quarterly Earnings Conference Call:
FibraShop will host a conference call to discuss 4Q15 and give an update on the business.
Date: February 23, 2016
Time: 11:00 am ET/ 10:00 am Mexico City
Speakers: Salvador Cayón Ceballos, CEO, FibraShop
Gabriel Ramírez Fernández, CFO, FibraShop
Irvin García Millán, Controller, FibraShop
Alan Patricio Umaña Villaseñor, Subdirector Treasury & IR, FibraShop
Dial-in (U.S.): +1-877-407-8031
Dial-in (Mexico): +1-201-689-8031
Conference Call Replay:
Dial-in (U.S.): +1-877-660-6853
Dial-in (Mexico): +1-201-612-7415
Conference ID#: 13629621
37
CI Banco, S.A., Institución de Banca Multiple
Trust Number F/00854 and Subsidiaries
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the periods ended at December 31, 2014 and 2015
(Expressed in thousands of Mexican Pesos)
(Unaudited)
Unaudited Unaudited Audited Unaudited
4Q 2014 4Q 2015 31-Dec-14 31-Dec-15
Oct-Dec Oct-Dec Accumulated Accumulated
Rental revenues 167,031 198,756 468,649 696,924
Other operating income 34,282 35,948 105,766 138,070
Total Income 201,313 234,704 574,415 834,993
Operating expenses 57,881 64,391 177,203 230,653
Insurance 1,918 2,307 6,634 8,906
Advisory fees 10,614 12,609 29,283 44,666
Other professional fees 1,836 1,368 4,598 5,475
Total expenses 72,249 80,676 217,718 289,701
OPERATING PROFIT 129,064 154,028 356,697 545,292
Finance income 10,502 13,682 38,640 54,614
Finance expenses 25,694 34,857 36,813 122,407
Finance charges (15,193) (21,176) 1,828 (67,793)
Fair value adjustments of investment properties - 386,272 41,167 386,272
Update of VAT recovery 198 838 19,758 8,840
Other recoveries - - 41 5,691 Gain on sale of assets - - 198 -
NET PROFIT FOR THE PERIOD BEFORE TAXES 114,069 519,962 419,689 878,301
Current and deferred income tax - 5,906 -
NET PROFIT FOR THE PERIOD PER CBFI 114,069 519,962 413,783 878,301
NET PROFIT ADJUSTED
(Investment property revaluations adjustment) 114,069 133,690 372,616 492,029
Weighted Average Number of CBFIs 364,595,673 477,245,984 356,022,023 451,012,350
NET PROFIT ADJUSTED FOR THE PERIOD PER CBFI 0.3129 0.2801 1.0466 1.0909
38
CI Banco, S.A., Institución de Banca MultipleTrust Number F/00854 y SubsidiariesINTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As of December 31, 2015
(Expressed in thousands of Mexican Pesos)
(Unaudited)
Audited Unaudited
31-Dec-14 31-Dec-15
ASSETS
Current assets
Cash and cash equivalents 560,257 1,506,352
Accounts receivable 84,250 118,752
Related parties 5,961 3,763
Recoverable VAT 405,344 209,534
Prepaid expenses 8,610 10,737
Other Current assets 34,516 33,502
Total current assets 1,098,938 1,882,640
Investment properties 7,655,330 10,197,409
Work in process and proyects 227,448 3,184
Intangible assets an other long term assets 35 6,192
Deferred taxes 121 121
Total Assets 8,981,872 12,089,546
LIABILITIES
Current liabilities
Suppliers 5,932 6,528
Related parties 13,191 14,620
Creditors 27,087 56,209
Bank loans 2,184,087 -
Tenants prepayments 1,733 2,146
Total current liabilities 2,232,030 79,503
Tenants deposits 54,214 65,829
Long term creditors 177,492 168,012
Employee benefits 5,713 7,539
Deffered taxes 1,625 1,625
Long term debt 2,954,918
TOTAL LIABILITIES 2,471,074 3,277,426
NET ASSETS
Net contributions 6,028,344 7,589,665
Retained earnings 68,671 344,154
Net profit for the period 413,783 ## 878,301
TOTAL NET ASSETS 6,510,798 8,812,120
TOTAL LIABILITIES AND NET ASSETS 8,981,872 12,089,546
39
CI Banco, S.A., Institución de Banca MultipleTrust Number F/00854 and SubsidiariesCONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
For the periods ended at December 31, 2014 and 2015
(Expressed in thousands of Mexican Pesos)
(Unaudited)
Retained
Net contributions earnings TOTAL
Total net assets as of december 31, 2013 6,078,330 165,508 6,243,838
Distributions (237,152) (96,032) (333,184)
Equity contributions 187,166 187,166
Net profit of the period 412,978 412,978
Total net assets as of december 31, 2014 6,028,344 482,454 6,510,798
Distributions (334,783) (138,300) (473,083)
Equity contributions 1,951,127 1,951,127
Issuance expenses (55,023) (55,023)
Net profit of the period 878,301 878,301
Total net assets as of december 31, 2015 7,589,665 1,222,455 8,812,120
40
CI Banco, S.A., Institución de Banca MultipleTrust Number F/00854 and SubsidiariesCONSOLIDATED STATEMENTS OF CASH FLOW
For the periods ended at December 31, 2014 and 2015
(Expressed in thousands of Mexican Pesos)
(Unaudited)
Audited Unaudited
Dec 14 Dec 15
Operating activities:
Net profit for the period 413,783 878,301
Adjustments for:
Income Tax 4,435 -
Finance income (38,640) (54,614)
Employee benefits 1,567 1,992
Fair value adjustments of investment properties (41,167) (386,272)
Depreciation and amortization 1,118 1,633
Finance expenses 36,813 117,400
377,909 558,440
Accounts receivable (54,566) (34,502)
Related parties 30,104 3,626
Recoverable taxes and other current assets 119,581 196,824
Prepaid expenses (2,378) (2,127)
Suppliers 3,906 596
Creditors 11,633 28,957
Tenants deposits 838 413
Long-term debt 30,458 11,615
Long-term creditors - (9,480)
Net cash (used in) generated by operating activities 517,485 754,362
Investing activities :
Debt payment of initial investment portfolio - -
Finance Income 38,640 54,614
Acquisition of investment properties and other assets (3,516,518) (1,930,334)
Investments in working process and proyects (216,454) (2,026)
Acquisition of intangible assets and other assets (215) (6,974)
Net cash (used in) investing activities (3,694,547) (1,884,720)
Financing activities:
Proceeds from the issuance of CBFIs, net of issue expenses - 1,896,104
Equity contributions 187,166 -
Finance expenses (36,813) (117,400)
Bank loans 2,200,000 (2,200,000)
Long term debt emission - 3,000,000
Expenses associated to debt (15,913) (29,168)
Distributions (333,184) (473,083)
Net cash generated (used in) investing activities 2,001,256 2,076,453
Net increase in cash and cash equivalents (1,175,806) 946,095
Cash and cash equivalents at the begining of the period 1,736,063 560,257
Cash and cash equivalents at the end of the period 560,257 1,506,352
41
CI Banco, S.A., Institución de Banca Múltiple
Irrevocable Trust Number F/00854 and its Subsidiaries
Notes to the intermediate financial consolidated statements
For the period starting January 1 to December 31, 2015
(Non-audited)
(Figures in thousands of pesos)
1. GENERAL INFORMATION
FibraShop (FSHOP) is a real estate trust formed by the contract Fideicomiso F/00854
dated June 21, 2013, that was celebrated between FibraShop Portafolios Inmobiliarios,
S.A.P.I de C.V. (Trustee), The Bank of New York Mellon, S.A. IBM (Fiduciary) (now CI
Banco, S.A. IBM), Deustche Bank Mexico, S.A. IBM (Common representative) through the
public notarization of the act number 39,222 granted by Mr. José Luis Villavicencio
Castañeda, Public Notary number 218 in Mexico City. FSHOP headquarters are located in
Juan Salvador Agraz number 40, 15 Floor, Col. Lomas de Santa Fe, Zip Code 05109,
Mexico City, Mexico.
On July 24, 2013, FibraShop began trading at the Bolsa Mexicana de Valores under the
ticker symbol FSHOP13, through the initial public offer of CBFIs (certificados bursátiles
fiduciarios inmobiliarios), launched its operation with 353,780,507 outstanding CBFIs, and
nas made payments in CBFIs to acquire properties in the amount 10,815,166; additionally
it placed another 112,650,311 CBFIs with the subscription rights offer made in March
2015. Presently there are a total of 477,245,984 CBFI outstanding.
FibraShop is a trust created to acquire, posses, administer and develop real estate
properties in the shopping mall segment in Mexico. The initial portfolio includes eight
properties in four states of the Mexican Republic, and one in Mexico City, as shown in the
table below.
42
Properties Type Location
1 Plaza Cibeles Super Regional Irapuato
2 La Luciernaga Regional San Miguel de Allende
3 Urban Center Jurica Community Center Queretaro
4 Urban Center Juriquilla Community Center Queretaro
5 Urban Center Condesa Durango Community Center Mexico City
6 Urban Center Xalapa Community Center Xalapa
7 Plaza Puerto Paraiso Regional Cabo San Lucas
8 Kukulcan Plaza Regional Cancun
9 Puerta Texcoco Super Regional Texcoco
10 Urban Center NIMA Shops Community Center Puerto Vallarta
11 Galerias Mall Sonora Regional Hermosillo
12 Galerias Tapachula Regional Tapachula
13 Los Atrios Regional Cuautla
14 Las Misiones Super Regional Juarez
15 City Center Bosque Esmeralda Regional Chiluca
16 Plaza Cedros Regional Cuernavaca
17 Cruz del Sur Regional Puebla
2. PREPARATION BASIS
(a) Declaration of compliance
The consolidated financial statements were prepared in accordance with the International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (IASB). The consolidated financial statements of FibraShop and its controlled entities will be addressed going forward as FSHOP. FSHOP has been chosen to present a single consolidated integral financial statement and present its expenses. The cash flow from the operating activities is presented using the indirect method. The rental revenues of the properties, along with deposits received and paid, will be treated as cash flow from the operating activities. The acquisition of investment properties are presented as cash flow from investment activities and represent more directly the commercial activities of FSHOP. These condensed consolidated financial statements were prepared in accordance with
NIC 34 Intermediate Financial Information. The explanatory notes are included to reveal
events and relevant transactions in order to understand FSHOP. The intermediate
consolidated condensed financial statements do not include all information and events
required in the annual consolidated financial statements.
43
On February 18, 2016, the Technical Committee of FSHOP approved the presentation of
the condensed consolidated financial statements corresponding to the fourth quarter of
2015.
(b) Estimates and criteria
The preparation of the condensed consolidated intermediate financial statements requires
that the administration makes estimates and assumptions that affect the application of the
accounting policies, and thus, the amounts reported under assets and liabilities, revenues
and expenses. The real results can differ from the said estimates.
For the preparation of the condensed consolidated intermediate financial statements, the
administration adopted the accounting policies described in the present notes, which will
be applicable consistently going forward, unless some relevant changes need to be
applied because of economic conditions or activities of FSHOP that justified said changes.
The notes to the consolidated financial statements establish areas that involved a greater
sense of complexity or areas where the assumptions are relevant for the consolidated
financial report, such as the estimate of the reasonable value of the investment properties,
the estimates of past due accounts receivables, among others.
(c) Corporate information
The NIC 34 requires statements for the net income, the changes to the shareholders’
equity, cash flow for the intermediate comparing quarters (for the period and accumulated)
for the prior year.
3. SUMMARY OF RELEVANT ACCOUNTING POLICIES
The main accounting policies adopted for the preparation of the condensed consolidated
intermediate financial statements are consistent with those that will be used in the
preparation of the consolidated annual financial statements at the end of the period of
December 31, 2014.
Consolidation Basis
The consolidated financial statements of FSHOP incorporate the assets and liabilities of
the controlling entities of FSHOP as of December 31, 2015, and its results for the period
from October 1, 2015, to December 31, 2015. The effects on the balance and transactions
are eliminated within the Group, as well as all of the revenues and non-realized expenses
derived from the transactions within the Group in preparing the consolidated financial
statements. The controlling Groups are those whose main financial and operating policies
are determined by FSHOP in its ruling capacity. When control is gained over of one of the
entity during the year, its results are included in the integral consolidated statements as of
the date in which it took control. When control of an entity stops in the year, the results are
included only during the part of the year when it was controlled.
44
Financial information by segment
The operating segments are identified as those according to the internal reports of
management that are part of the Group, which are being reviewed by senior management
and have been identified as key to the operational decision making process, to assign
resources to certain segments and evaluate their performance.
The information presented by senior management for the effect of assigning resources
and evaluating the performance is mostly focused on the size of the properties, which
correspond to three segments or formats. The commercial properties which have a GLA
above 40,000 square meters are denominated as Super Regional, those with a GLA
above 10,000 square meters are denominated Regional, and finally, the properties below
those dimensions are known as community centers. The information regarding investment
assets and segments are based on the financial information derived from the application of
the main accounting policies.
Revenue recognition
Sale revenues are quantified as reasonable value of the service provided or to be
received. Sales revenues per income source are the following:
Rental revenues
Rental revenues on investment properties are recognized as sale revenues in the financial
statements in terms of the lease contracts and in direct line during the contract period.
Certain incentives for tenants can be offered to sign operating contracts that are not
cancellable. Said incentives can be assumed in various forms, including non-rental
periods, variable or stepped rents, among others.
Maintenance revenues
Maintenance revenues of investment properties are mainly derived from the cost of
maintenance in the commercial properties that are charged to tenants for the correct
functioning and adequate maintenance of the shopping centers.
Other revenues
Other revenues include the payments received in relation to the termination of
maintenance contracts as well as other extraordinary revenues that can be present in the
course of operations of FSHOP.
4. NET INCOME FOR THE PERIOD
Operating income for the reported quarter amounted to Ps. 154,028 thousand, which
includes revenues, costs and expenses incurred in the normal course of the operation and
maintenance of the shopping centers that make up its portfolio.
45
Such operating income includes expenses proper investment properties for a total amount
of Ps. 66,698 thousand during the quarter, as well as costs of corporate, i.e. those
necessary for the administration of FSHOP and maintenance as a public company, which
in this period include advisory fees, auditor and independent directors and during the
quarter amounting to Ps. 13,977 thousand.
Financial products for the quarter amounted to Ps. 13,682 thousand, which come from the
resources held in cash and investments in short-term securities amounting at period end
Ps. 1,506,352 thousand reported. In addition, an income of Ps. 838 thousand for updating
balances in favor of the VAT, which was reimbursed by the Tax Administration Service in
the current quarter.
Additionally, we registered an income related to investment properties in the amount of Ps.
386,272 million related to the net integral income of the quarter amounting to Ps. 519,962
thousand. If we adjust said income deducting the revaluation of the properties during the
period, the income amounted to Ps. 133,690 thousand in the quarter.
5. FINANCIAL INFORMATION BY SEGMENT
The following segment information is presented with information about the average
monthly income revenues in the fourth quarter.
The table above considers information for the current quarter, while in previous
periods estimates included the shopping centers as if they were in operations year
round.
6. OPERATIONAL SEASONALITY
Seasonality effects do affect FSHOP’s operations given the characteristics of the
properties and the contracts due to summer vacation, holiday season, among
others.
Segment Revenue By
Rent
(thousand Ps.)
Current leasable area
m2
Investment assets
(thousand Ps.)
Average income per m2
(pesos)
1 Super Regional 23,338,674 160,769 3,765,000 145.17
2 Regional 34,877,012 218,0470 5,482,527 159.64
3 Community Center 6,523,585 29,874 929,600 218.37
Total 64,739,271 409,114 10,177,127 158.24
46
7. PAID OR DECLARED DISTRIBUTIONS
The Technical Committee of FSHOP has determined the payment of quarterly
distributions to holders of CBFIs, and during the current reported period it reported
a total distribution amounting to Ps. 128,523 thousand (Ps. 0.2693 per CBFI),
which corresponds to the fourth quarter of 2015. It is worth noting that during the
meeting on February 18, 2016, the Technical Committee determined a distribution
for the current reported period as stated in the following item 8.
8. DISTRIBUTION PER CBFI
The table below presents the income per CBFI (certificado bursátil fiduciario) of
FSHOP, corresponding to the reported period as well as the previous ones.
Concept Quantity 4Q14 Quantity 1Q15 Quantity 2Q15 Quantity 3Q15 Quantity 4Q15
CBFIs Outstanding 364,595,673 477,245,984 477,245,984 477,245,984 477,245,984
Net Distribution for the Period
(thousands) $114,850
$111,339 $118,473 $128,528 $133,690
Distribution Per CBFI (pesos) $0.3150 $0.2333 $0.2482 $0.2693 $0.2801
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9. INVESTMENT PROPERTIES
As of December 31, 2015, the investment properties portfolio of FSHOP was
composed of 17 shopping centers, as follows:
Properties
Current
leasable area
m2
Expansions
in GLA
GLA with
expansions
Asset value
(thousand
pesos)
1 Plaza Cibeles 76,134 - 76,134 1,700,000
2 La Luciernaga 19,384 - 19,384 277,100
3 Urban Center Jurica 8,524 3,011 11,535 279,700
4 Urban Center Juriquilla 9,490 - 9,490 252,600
5 Urban Center Condesa Durango 1,454 - 1,454 73,700
6 Urban Center Xalapa 8,273 - 8,273 204,200
7 Plaza Puerto Paraiso 19,221 - 19,221 1,020,300
8 Kukulcan Plaza 20,986 1,160 22,146 884,400
9 Puerta Texcoco 63,725 - 63,725 1,100,000
10 Urban Center NIMA Shops 3,837 - 3,837 119,400
11 Galerias Mall Sonora 40,623 21,218 61,928 726,700
12 Galerias Tapachula 33,872 - 33,872 560,000
13 Plaza los Atrios 50,457 - 50,457 550,000
14 Las Misiones 28,573 - 28,573 965,000
15 City Center Bosque Esmeralda 29,520 - 29,520 536,400
16 Plaza Cedros 19,300 - 19,300 387,447
17 Cruz del Sur 12,282 12,282 540,180
Total 445,741 25,389 471,130 10,177,127
The value of the assets presented in the prior table do not consider the Liverpool
store investment of approximately 12 thousand square meters or the GLA
expansion at Galerias Mall Sonora.
The first eight investment properties were contributed to the start of operations,
Puerta Texcoco was acquired during the first quarter of 2014, NIMA Shops in the
second, KIMCO Portfolio in the third, Las Misiones during the fourth quarter, City
Center Esmeralda was acquired in the second quarter of 2015, Plaza Cedros in the
third quarter and Cruz del Sur during the fourth quarter. Investment properties are
subject to an annual independent valuation, which is reflected in the audited annual
financial statements.
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10. DEBT
The short-term liabilities are exclusively Ps. 6,528 thousand and correspond to
supplier payments, Ps. 14,620 thousand to related parties, Ps. 56,209 thousand in
accumulated liabilities, and Ps. 2,146 thousand in clients’ down payments.
The long-term liabilities that FSHOP had at the close of the quarter were related to
the deposits in guarantee for tenants of different shopping centers, which
amounted to Ps. 65,829 thousand, Ps. 168,012 thousand corresponding to the
acquired but not paid portion of Las Misiones and Plaza Cedros, Ps. 7,539
thousand in labor liabilities, Ps. 1,625 thousand taxes on deferred rent and Ps.
2,954,918 related to the senior secured notes (FSHOP15) which have a five-year
term and an interest rate of TIIE + 90 basis points.
11. CONTRIBUTED NET ASSETS (EQUITY)
The CBFIs are traded at Bolsa Mexicana de Valores under the ticker symbol
FSHOP 13, following the initial public offer on July 24, 2013, at a price of Ps. 17.50
per CBFI. The shareholders’ equity of FSHOP as of December 31, 2015 was
comprised by 477,245,984 certificates, and the shareholders’ equity total value is
of Ps. 8,812,120 thousand, including Ps. 7,589,665 thousand in net contributions,
Ps. 344,154 thousand in accumulated revenues, and Ps. 878,301 thousand
corresponding to net income from January to December 2015.
The CBFIs issued by FSHOP grants holders the right to a portion of the benefits,
products, and if entitled, the residual value of the assets and rights of FSHOP, and
the product of the sales of the assets or property rights or the trust’s fund, following
the terms established in the trust’s contract.
12. CAPITAL AND FINANCIAL RISK ADMINISTRATION
The goals and policies of the financial risk administration of the Group are
established by the Technical Committee, following its corporate by-laws.
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13. COMMITMENTS AND CONTINGENCY LIABILITIES
FSHOP, as part of the initial portfolio, had a GLA of 16,765 square meters of
commercial space acquired and not paid. Among the said space there is an area
undergoing renovation and revitalization processes by one of the contributing
members and, following the terms of the agreement, will be acquired once they
have been rented, after having been approved by the Technical Committee.
14. RELATED PARTIES INFORMATION
Following are the information highlights of FSHOP related parties:
Grupo Cayon, Grupo Frel and Central de Arquitectura, the contributing members of the initial FSHOP portfolio are the controlling members of the Trust. Said groups will continue sharing its expertise in the sector, generating new investment opportunities for investment for FSHOP. Through the refer contract of the control group of the Trust, FSHOP has the first refusal right for the acquisition of properties in development by the three groups, although all transactions must be approved by the Technical Committee, and have to have the favorable vote of the majority of the independent board members. Additionally, the control group of the trust has a non-compete clause.
15. SUBSEQUENT EVENTS
HR RATINGS RATIFIES FIBRASHOP’S HRAAA RATING
On January 20, 2016, HR Ratings ratified Fibrashop’s HR AAA rating with a stable outlook, as well as its HR AAA with stable outlook for FSHOP15 and HR+1 for the short-term dual program of FibraShop.
FITCH RATINGS RATIFIES FIBRASHOP’S AA(mex) RATING
On February 12, 2016, Fitch Ratings ratified its ratings for FibraShop reassigning for its long-term domestic debt a AA(mex) rating with stable outlook, while reaffirming for the FSHOP15 issuance maturing 2020 a AA(mex) and for its short-term domestic debt an F1+(mex).
