GICSA Group Provides update on COVID-19

MEXICO CITY, March 25, 2020 (GLOBE NEWSWIRE) -- GRUPO GICSA, S.A.B. de C.V. ("GICSA") [BMV: GICSAB], a Mexican company specialized in the development, investment, commercialization and operation of shopping malls, corporate offices and mixed-use properties, today provided an update on the impact of the COVID-19, as well as prevention and mitigation measures.

On March 24, 2020, Mexico’s Federal Government declared the beginning of phase 2 of the COVID-19 epidemic. We are facing an unprecedented and ever-changing situation; thus, we cannot reasonably foresee the magnitude and extent of the effects of COVID-19. We will need to be flexible and maintain the ability to adapt responsibly to global and local circumstances.

We expect traffic and consumption levels in our shopping and entertainment centers to decrease significantly, and, at this stage 2, the impact is expected to be magnified, either by prudent measures, such as social distancing or voluntary isolation, or by the required temporary closure by local authorities of some shopping malls or establishments with certain business lines, where GICSA has presence. These health measures and practices adversely impact revenues of our tenants and, consequently, our business. We are working with our tenants during this crisis to mitigate in the best possible way, the adverse effects for both.

In Mexico, we are at an early stage in the new phase of the spread, which is uncertain in duration; therefore, we anticipate even a greater negative impact on our income for rents in the upcoming weeks. To this end, we are continuously analyzing and implementing prevention measures, such as the following:

Health Actions: We are monitoring the progression of the effects of the COVID-19 virus and implementing health protocols, in addition to complying promptly with the health measures enacted and suggested by our authorities, across the different places where we operate. In our shopping and entertainment centers that remain open, we have strengthened our healthcare, cleanliness and precautionary efforts. We constantly monitor the health of the staff working in the facilities, intensify the monitoring and maintenance of air conditioners, and install anti-bacterial gel stations at the entrances and throughout our shopping centers, among others. In locations where the authorities have requested closures of establishments, we have promptly abided by these requests. We continue to monitor any changes to guidelines issued by federal and local public health authorities. Our commitment is to continue to offer security and tranquility to our customers, visitors and employees.

Operational and Financial Actions: In general, we continue to cooperate with our tenants and suppliers to implement measures designed to maintain business continuity or to try to reduce any adverse impact caused by COVID-19 on our business. Our employees, as their functions allow, are continuing to work albeit remotely. In addition, we have implemented strict hygiene protocols in all our workplaces.

We remain constantly vigilant and collaborative to mitigate the negative financial impact to our business. To date, we have implemented various plans, which we will adjust as circumstances change. Among others, we have restricted non-essential investments, expenses and costs, and many other promotional and travel expenses. We are also reviewing our budget for the 2020 financial year, including capital expenditures.

We consider it fundamental in this crisis scenario to preserve liquidity. As of today, we have enough cash to fulfill with our debt maturities, bilateral and market, imminent payments, upcoming tax obligations, as well as payroll. Furthermore, we will not propose at the Shareholders' Meeting any distribution of resources to our shareholders. We are working to preserve working capital, obtain additional sources of financing, and negotiate agreements with third parties, suppliers, customers and creditors to enable business continuity. We will continue seeking to preserve liquidity and negotiate with creditors and will do what is necessary to protect our shareholders’ capital and business continuity.

Considering that we are facing an unpredictable phenomenon, it is neither possible nor prudent to set an accurate future scenario. However, GICSA is a resilient company, our administration and all our employees are focused on navigating this unprecedented crisis in the best possible way for the benefit of our society, our community and all people that have a relationship with GICSA.

We will continue to inform the investing community about future relevant updates regarding our business and operations, as well as on measures that we are required to undertake to preserve our liquidity and business continuity.

Forward-Looking Statements

This press release may contain forward-looking statements and involve risk and uncertainty. The words “estimates”, “anticipates”, “projects”, “plans”, “believes”, “expects”, “seeks” and similar expressions, are intended to identify forward-looking statements. GICSA warns readers that declarations and/or estimates mentioned in this document, or stated by GICSA’s management team, are subject to a number of risks and uncertainties that could be in function of various factors that are out of GICSA’s control. Future expectations reflect GICSA’s judgement at the date of this document. GICSA reserves the right or obligation to update information contained in the report or derived from it. Past or present performance is not an indicator of future performance. GICSA warns that a significant number of factors may cause actual results to differ materially from estimates, objectives, expectations, and intentions expressed in this report. Neither GICSA nor any of its subsidiaries, affiliates, directors, executives, agents or employees may be held responsible before third parties (including shareholders) for any investment, decision, or action taken in relation to the information included in this document, or by any special damage or similar that may result. GICSA provides no assurance that the transactions described herein will be consummated or as to the ultimate terms of any such transactions.

About the Company

GICSA is a leading company in the development, investment, commercialization and operation of shopping malls, corporate offices and mixed used well known for their high-quality standards, which transform and create new development spaces, lifestyles and employment in Mexico, in accordance to its history and executed projects. 

As of December 31, 2019, the Company owned 16 income-generating properties, consisting of ten shopping malls, five mixed use projects (which include five shopping malls, five corporate offices and one hotel), and one corporate office building, representing a total Gross Leasable Area (GLA) 910,707 square meters, and a Proportional GLA of 771,624 square meters. Since June 2015, GICSA is listed on the Mexican Stock Exchange under the ticker (BMV: GICSAB).