July 5, 2019 / 8:55 PM / a month ago

Brazil malls firm Iguatemi sees lower revenue growth amid sluggish economy

SAO PAULO, July 5 (Reuters) - Brazilian upscale mall operator Iguatemi Empresa de Shopping Centers SA has delayed removing the discounts it gave to retailers during a recession, making 2019 growth targets tougher to reach, its chief financial officer said on Thursday.

The country’s sluggish economic recovery has made it more difficult for the company to raise prices, CFO Cristina Betts said. Still, Iguatemi should be able to deliver revenue growth of at least 5% this year, she said.

“We expected a stronger year when we worked on our budget. If the economy booms, then we will certainly reach the top of our 5-10% guidance,” she added.

Iguatemi is likely to keep capital expenditures between 150 million reais and 200 million reais ($39 million to 52 million) in 2019, according to Betts.

Betts said the company was focused on expanding existing malls and boosting the stakes it owns in its portfolio of 16 malls, two premium outlets and four commercial towers.

Iguatemi currently owns 450,000 square meters of its 750,000 square-meter portfolio. “We have 300,000 square meters more to buy from investors,” she said.

Betts said she believed the sector was likely to experience more consolidation in the mid-term and long-term.

On June 6, Aliansce Shopping Centers SA struck a deal with smaller rival Sonae Sierra Brasil S.A. to create Brazil’s second-largest mall group in terms of gross leasable area, with a total of 40 malls.

$1 = 3.8160 reais Reporting by Gabriela Mello, Editing by Rosalba O'Brien

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