Hello, good morning, and welcome to the webcast from Metrovacesa on the first quarter results of 2023. My name is Juan Carlos Calvo. I am Director of Strategy and Investor Relations. We have today with us Jorge Pérez de Leza, CEO of Metrovacesa, and Borja Tejada, CFO, who will be presenting an overview of our activity and key developments during the first quarter of the year. The slides of this presentation have been released to the market this morning, and they are available through the CNMV website and in the company website. We have also sent it by email to our usual distribution list for analysts and investors. At the end of this presentation, there will be a question and answer session.
You will be, If you wish to ask a question via conference call, you can register by pressing star five in your telephone keypad at any time, and you can cancel your question by pressing star five again for a second time. I repeat, you can press star five if you wish to ask a question. If you are participating via webcast, you can type your question directly in the webcast platform, and we will read it at the end of the presentation. Now, I hand it over to our CEO to start the presentation. Please, Jorge.
Yes. Good morning, everyone, and welcome to our quarterly results presentation. I would like to start with a brief list of highlights and somehow a positive view. We just started with a positive stand on the year and I think somehow better than we all thought. With housing demand clearly holding up, having a good pre-sales performance as we will see later, compared to the three prior quarters. Also confirming our high activity volumes in terms of units under construction and commercialization launches, both of them being above 2,000 units.
We also have a strong visibility for the next few years with the sales backlog now exceeding EUR 1 billion for the first time, with a sales coverage for deliveries in 2023 and 2024, which is quite high at 85% and 60% respectively, and with a good construction progress as well, with 100% of the 2024 deliveries under construction and also a little bit more than 35% of 2025 deliveries already under construction. A dividend update, as we already announced that would be proposed to the shareholders meeting. We will be distributing a dividend of EUR 0.33 per share to be paid on May 18th. It was approved, as I mentioned, in the shareholders' meeting, general shareholders meeting of yesterday.
This represents an 85% payout of on our full year 2022 cash flow generation. Following our cash flow, sorry, our dividend policy, once again this year. With this, I will hand it over back to Juan Carlos, who will give us a brief comment about the sector dynamics.
Yes. Thank you. We want to highlight a few ideas about the sector, starting with housing transactions. We highlighted the figure of transactions, both used and new homes, is holding up pretty well according to the INE statistic. We have already figure reported for January and February, and it's fairly stable as you can see in the chart. Actually, with a more, much more positive tone than we were perceiving at the end of last year. We think that the outlook for new housing demand remains solid, particularly for new housing with a demand supply dynamic, which is favorable. Therefore, we think that the reasonable expectation is to have some modest positive price appreciation, in particularly new homes.
Switching to supply, continues to be very limited. The volume of housing completions last year was clearly below 100,000. It was around 80,000 units. It remains very low levels in the last few months. With respect to construction costs, we see them stabilizing, certainly not as tight as it was about a year ago. The situation is becoming much more normalized. This is very much supported by the most recent microdata. If we look at the job creation, perhaps the statistics that is most relevant for the demand of housing, that continues to grow. Job creation continues to be positive in the last few months and quarters.
We have seen actually some positive upward revisions in our GDP forecast for 2023. For instance, the expectation from the OECD is an increase of 1.7% for Spain compared to 0.5% for the average of the European Union. Perhaps one important piece of data is about the household finances, which are pretty solid. I mean, we can see that the volume of deposits and cash by the families, owned by the families continues to rise, and it's at almost all-time highs, whereas the debt of household is decreasing. This is a factor that probably explains the good performance for housing demand.
Back to Jorge.
Yes. Moving on to the Metrovacesa performance during the quarter, I'm now moving to page number nine. In terms of pre-sales, we had a net pre-sale figure of 425 units. I think it's important to highlight that this is a better figure than in the last three quarters. Again, demonstrating that demand is still solid and that the situation is not as great as some people out there put it. We are also experiencing an increased number of visits throughout the quarter, which, you know, encourages us to see the situation holding up for the following quarter as well.
The ASP for the first quarter was EUR 302,000 per unit, which represents a 4% increase compared to the last year. This is not just a matter of a mix of the products sold, but rather that we represent that we have had HVA across the last year.
In terms of operational activity, as I mentioned before, our pre-sales backlog is above EUR 1 billion for the first time, with a total of 3,265 units now being pre-sold, with an average selling price of close to EUR 320,000, with a very healthy mix of 80% grown contracts and 20% reservation, and 82% of our clients being retail and 18% being institutional or BTR clients. In terms of construction starts, as I mentioned before, we are over the 2,000 unit figure, which, you know, longer term or midterm will represent that we will be above the 2,000 figures in deliveries.
We started 470 construction units during the quarter and 2,006 units in the last 12 months. 100% of our 2024 deliveries are under construction and a little bit more than 35% of 2025 as well. In terms of construction costs, normalization and smooth execution, I would say are the highlights of the quarter as well. In terms of units under commercialization, we started or we did commercial launches of 600 units in the quarter and 2,100, close to 2,100 in the last 12 months, with an average selling price that keeps growing, EUR 330,000 units per house, 7.5% year-on-year and with 50% already pre-sold.
The active, total active units, is now 7,824 units. In terms of delivery, we delivered according to our plan, exactly what was planned, which is 331 units, representing EUR 779.2 million. 134 of these units are a BTR project handed over in Valencia and another one in Madrid. The average selling price is lower than what we will see in the in the second part of the year, with EUR 239,000 per unit. Mainly driven, this lower figure by the BTR units, which have a selling price of EUR 208,000.
This mainly again, being one project in Valencia in Port de Pollença where the average selling price, both for BTR and BTS is lower than our average for the company. The gross margin stands at 21.5%. Again, in line with our guidance for many quarters in the past where we said that we would be in the low 20s. Just to reiterate, we are in line with the internal plans in terms of number of deliveries this quarter and on track to hit the full-year targets, expecting a higher ASP in the second part of the year.
As I mentioned, in the highlights at the beginning as well, more than 85% of the deliveries of the year are already pre-sold. In terms of land activity, and progress on land management, I think, we are very happy to announce that, after a few years of managing this land, the Tres Chimeneas sector in Barcelona, in the coast in Barcelona finally saw the approval of the master plan, or the PDU as it is called in Spain. This, as many of you already know, is a strategic location in the edge of Barcelona and Sant Adrià de Besòs and Badalona, and right in the front of the sea.
The master plan in, you know, in broad figures represents 1,800 residential units, and an additional 100,000 sq m of commercial uses, mainly offices. We still have to do the urbanization plan and the reparcellation or reallotment that will be done in the during 2023 and 2024. Metrovacesa, as you know, holds close to 40% of a JV that we have with Endesa in this in this area.
According to that 40%, we would have land for over 400 residential units and somehow 25,000 sq m of commercial, depending on what the final distribution will be again, when we do the reallotment. In terms of land sales, we had a slow activity in the first quarter with just EUR 0.3 million of revenues, plus another in revenues, meaning notarial deeds, plus another EUR 2.6 million that we signed in private contracts. That seems to be a low figure. However, the sales pipeline is much stronger than that, with EUR 21 million sales backlog that will be signing notarial deed in the next quarters. Another EUR 20 million in advanced negotiation in due diligence.
I think, again, even if the figure for the first quarter seems low, I think, you know, our view is actually more positive than in the end of last year in terms of land activity and also in terms of commercial land activity. Kind of becoming more active than what we saw in the last two quarters. Okay. This would be it for the operational update. I now hand it over to Borja, our CFO, for the financial overview.
Thank you, Jorge, and good morning, everyone. There are some key figures about our profit and loss account. EUR 79 million of revenues from residential development with 21.5% of gross margin in line with our guidance. Positive EBITDA and close to breakeven in recurring pre-tax profit. Concerning our net debt. Very solid financial structure with 11.5% of loan-to-value that will reach 13.6% after dividend payment distribution of EUR 50 million in May. In terms of gross debt, close to EUR 400 million and no relevant maturities up to 2026, with corporate debt hedged at fixed rates. I will hand over Jorge with closing remarks.
Thank you, Borja. I think, again, I will be brief with the closing remarks as well as I was with the highlights and with, again, a positive tone. What we see is an encouraging market in early 2023, with a resilient housing demand, increased interest in our land assets and, however, we still, you know, are in times of high uncertainty. What I can say is that, you know, we remain as usual in the last uncertain times, with a high degree of flexibility to adapt to the situation of the market in any time.
The outlook for the year is reiterated with, you know, our forecast of EUR 100 million-EUR 150 million cash flow generated still holds in place. In terms of project launches and construction starts, being consistent with our mid, term target of more than 2,000 units per annum. That meaning that, we are not in any way slowing activity or anything like that, but quite the opposite, just being, you know, in line with our, with our plans. With that, I close it, and hand it over back to Juan Carlos.
Thank you, Jorge. We are now ready to start the question and answer session. We will be starting with our participants in the conference call. As a reminder, if you wish to ask a question, you can dial star five in your key, telephone keypad, and you can cancel the question by pressing again star five for a second time. We will now allow a few seconds so you can register for your questions. Okay, we start with the first question coming from Ignacio Domínguez from JB Capital. Please, Ignacio.
Good morning. Thank you for taking my questions. I have three. Firstly, could you provide more color on the increase in number of visits in the first quarter? Is this because there are more units under commercialization? Has there been any change in the time it takes a customer to make a decision on the purchase? Secondly, with regards to land management, you flagged that you are perceiving an increased interest in the company's land assets. Could you provide more color on this? What can we expect for 2023? Finally, why has the sales coverage for 2024 deliveries not increased during the quarter? Has there been more cancellations or probably there are more macro headwinds? Thank you.
Excuse me, Ignacio, would you mind repeating the, because the sound of the line was not totally clear. Can you repeat questions number one and two, please?
Yes. the firstly, could you provide more color on the increase in number of visits in the first quarter? Is this because there are more units under commercialization? Has there been any change in the time it takes a customer to make a decision on the purchase? The second question was, with regards to the land management, that you flagged that you are perceiving an increased interest in the company's land assets.
If you could provide more color on this and what can we expect for the year?
Thank you, Ignacio. I'm sorry about that. We had an incoming call and that's why we didn't listen to your questions properly the first time. In terms of number of visits, we measure visits not on an absolute term, but proportionally to the projects under commercialization. What we see is when I say increasing number, it means, you know, that is in absolute terms, increasing more because also we are increasing the units under commercialization. Compared to the last two quarters, it's, you know, it's a figure that is growing. It is true that the decision period is probably a little bit longer than what it used to be for the client to sign that one it used to be a year ago.
You know, it, the contacts and visits is, you know, is the first measure that we follow, because that, you know, transforms into contacts. Sorry, into sales. That's a sign, an encouraging sign again, that will result, what we believe, at least for the second quarter for now, because, you know, to estimate, a year from now is difficult. The figures in the second quarter should continue to be strong. Regarding your question about land management, I think separating between land management and then land sales, I think land management, we, you know, we will continue, working on, the transformation on land.
For the next two years, we see about 5,000 units becoming transformed into fully permitted land in key locations that will allow us, you know, to improve the mix of our launches. In terms of land sales is what I mentioned in the presentation, which is we have more than EUR 21 million to be closed shortly and another EUR 20 million in negotiations. That will turn into some of them into private contract plus notarial deed this year and some of them into private contract and notarial deed next year. We will give more clarity on that as the figures close.
What is important is that there is activity and there is interest. In terms of sales coverage for 2024, I think, yeah, it is true that we mentioned in our prior presentation more than 60%, and now that figure is repeated. The reality is that the more than 60% in March is actually 65%, which is, you know, significantly or I would say, it compares, it's higher than what it was in December. It's 65%, even though we put more than 60%.
Okay. Thank you.
Okay.
Thank you.
Thank you, Ignacio. The next questions comes from Javier Velderrain, Analyst, from Berenberg. Please, Javier.
Yes. Hello, good morning. Thank you for the presentation and for taking my questions, two on my side. The first one would be regarding the distribution of deliveries during the year. If I'm not mistaken, you have a high concentration during the second half of the year, due to the high ticket deliveries in Málaga. Could you give us some color on the distribution for each quarter, if possible? The second one on the loan-to-value by year, and I understand this will depend on the final figure of land sales during the year and perhaps on any changes in valuation. Do you have a rough estimate or a range where you see the loan-to-value by year-end? Thank you very much.
Yes, Javier. We, in terms of deliveries, I think, we disclose figures for, you know, for the full year and we stick to our range, just not to be measured on the deliveries per minute, which I think, you know, that kind of, you know, puts pressure, without needing it. That said, you know, we're not going to deliver 1,000 units in the last month. Okay? It will not be as evenly distributed as, you know, one quarter of the target every signal, sorry, every quarter. It will be more back-ended, but again, not, you know, not a high distribution, not a high figure in the last month. Okay? You will see it, as it comes.
The deliveries for this quarter of 320 units were actually the exact figure that we had in our budget. Again, we stick to our total figure for the year, and you will see it happening along the months. In terms of the LTV, you know, that will depend on several things. First of all, the land sales, in which, you know, the more we sell the V will decrease obviously. On the CapEx that we invest in both, in work in progress and construction as well as in urbanization. Our, you know, let's say, targeted figure for the running rate is probably at around 20%-22%.
I think at the end of this year, we will get closer to that figure without being at 20% yet.
Perfect. Thank you.
Okay. We don't have more questions from the conference call, but we do have some questions from the webcast. We are changing to that now. We have the first question is coming from Gerardo Ibáñez, Analyst from Oddo BHF. He said there's been no change in the sales coverage for the full year 2020... I mean, from the full year figures to the, to the first quarter if you look at 2024. Can you give us some color here, and what can we expect for year-end? Can you provide us some color on the absorption rate in the first quarter, as there was no figure indicated?
Yes, Gerardo. I think the first one was already answered in for 2024. In December, it was closer, close to 60%, and now we stand at 65%, so it has definitely increased. Then in terms of the sales ratio and the way we measure it, which is net sales over total units under commercialization, sold and unsold, this has also increased compared to the last quarter. I think in second quarter of 2022, it was 2.3%. Third quarter of 2022, it was 2.1%. In the fourth quarter of 2022, it was 1.8% excluding BTR or 2.8% with BTR. Now in this quarter, we stand at 2.3%.
It has, compared to the prior three quarters, we are better off.
We have another question is from an investor, is asking about the new Housing Law. According to the press, this doesn't look very encouraging for the BTR business. Is the details as bad as it seems? Do you have any feedback from investors that you are talking to, on the BTR segment?
Yeah. Yes, Miguel, I think, we also expressed our opinion about the, about the Housing Law yesterday at our shareholders meeting. In fact, our president talked about it during his speech. We believe that, you know, the, this law will actually mean probably, you know, a decrease in the output of housing units, which is not very good news. In terms of BTR, I think, we are right now in a kind of, hold position in the sense that, you know, we have several drivers that are uncertain, and until they clarify, I don't think we will see many BTR transactions. Hopefully in the second part of the year, these drivers, and I will mention what they are in a second.
I think they will clarify. Given that the equity searching for these kind of deals is high, we will hopefully see some transactions. The uncertainty comes from, first of all, the interest rates. I mean, that's no news about, you know, what is the financing cost and what is the yield on yield on cost or net yield at the end, the exit that I can use. I think the analysts there from the investors are not yet fully confident on what to use in their models. I think there is still been, you know, some lack of stability until we see interest rates holding more still.
Second part I would say, or second driver is construction costs, and I would say that is more stable now. If we compare to, you know, what we had last year, that it was more difficult to estimate. I think now, it's a little bit easier to estimate. Nevertheless, construction costs have gone up, and that obviously puts some pressure as well on the prices that we can sell for. I think another driver is the strong BTS market. Right now, you know, given that the output is quite small in the market in general, I think developers, we are not feeling the pressure of having to sell a BTR project. Rather we can, you know, we can put it as BTS selling to the client.
Given that the sales performance is quite okay, we are seeing some price increases in some areas where demand is high. You know, we are not in a rush to close any BTR, but rather, I think we've seen this in the market, some BTR projects actually turning into BTS. Finally, you know, the Housing Law and what it means in terms of what is the rent increase that the analysts can put in the model. Once we see the final law and how that is implemented in the different regional governments, then we will have more clarity. Transactions might come back to the table.
Lots of uncertainty in summary that I think will be more clear in the next months. Probably in the second part of the year, we will see some transactions.
Okay. We don't have any more questions in the webcast or in the conference call. We can conclude here the results presentation for the first quarter of 2023 at Metrovacesa. As usual, the investor relations team will be available to take any follow-up questions that you may have. We thank you for your participation, and we hope to speak with you again in the next quarter. Thank you and good day.