Good morning, ladies and gentlemen. Welcome to Cury's Q2 2025 earnings video conference call. This conference is being recorded and will be available for replay at the company's website, ri.cury.net, where the respective slide deck can also be downloaded. All participants will be in attendee mode, and later on, a Q&A session will be held when further instructions will be provided. Before moving on, we'd like to stress that any forward-looking statement made during this conference is based on Cury's management beliefs and assumptions, as well as information currently available to the company. These statements may involve risks and uncertainties since they relate to future events. Therefore, rely on circumstances that may or may not occur. Investors, analysts, and journalists must understand that events related to the macroeconomic environment, the industry, and other factors could lead to materially different results than those expressed in said forward-looking statements.
Today, we are joined by Mr. Leonardo Mesquita , Commercial Vice President of Sales, Mr. João Carlos Mazzuco, CFO, and Mr. Ronaldo Cury , IRO . Now, I'd like to turn it over to Mr. Ronaldo Cury , who will start the presentation. Please, Mr. Cury, you can proceed.
Good morning, everyone. Thank you once again for your interest in Cury and for joining our Q2 2025 earnings conference call. Today, joining us from Cury are Leonardo Mesquita , our Executive Vice President of Sales, and João Carlos Mazzuco, our CFO. During this call, we'll walk you through the key highlights of Cury's operational and financial performance. At the end, we will open the floor for a Q&A session. Next, let's hear a message from our CEO, Fàbio Cury.
The first half of 2025 was marked by consistent progress for Cury across multiple fronts. The company recorded BRL 5 billion in new launches and BRL 4.4 billion in net sales, + BRL 2.6 billion in net revenue and BRL 400 million in net income. In Q2, we posted record net revenue and net income, with ROE reaching 70.1%, underscoring the efficiency of our business model and our ability to convert equity into returns. We also achieved operational records this quarter, including land bank expansion and transfer. New land acquisitions increased our presence in key central areas of São Paulo and Rio de Janeiro. Cash generation remained solid despite recent changes implemented by Caixa Econômica Federal, demonstrating our financial resilience and disciplined execution. The implementation of the new Bracket 4 of the Minha Casa, Minha Vida housing program, which raised the price cap to BRL 500,000, is already having a positive impact.
This quarter, 92.8% of our sales were priced within this program's threshold, broadening our eligible customer base and strengthening Cury's performance in the affordable housing segment. We maintained a strong base of launches, with notable projects in August, such as Next Guarulhos, with 1,310 units and PSV of BRL 334 million, and Residencial Cartola in São Cristóvão, Rio de Janeiro, with 512 units and PSV of BRL 179 million. Both projects strengthen our presence in strategic regions and enhance the attractiveness of our portfolio. As for organizational culture, Cury was recognized as a Great Place to Work, reflecting our commitment to an ethical, inclusive work environment aligned with the long-term strategy. Cury was also included in B3's first preview of the theoretical portfolio for the IBOVESPA Index, effective from September 1st. This milestone highlights our progress and growing relevance as a listed company.
We close Q2 with optimism and confidence, ready to seize new opportunities and continue building a promising future for Cury, its clients, employees, and shareholders. Now, I'd like to discuss the highlights of our operational and financial performance for Q2 2025. In operational terms, we launched at BRL 2.2 billion and achieved BRL 2.3 billion in net sales, with BRL 103.3 million operating cash flow. Our 25th consecutive quarter of positive cash generation. Financially, we posted BRL 1.3 billion in net revenue, adjusted gross margin of 39.8%, net margin of 19.8%, and ROE of 70.1%. Now, I'd like to turn it over to Leonardo Mesquita.
Good morning, everyone. Last quarter, we launched nine projects, six in São Paulo and three in Rio de Janeiro, totaling BRL 2.2 billion in PSV, as previously mentioned. Key highlights include the One Granja Julieta, São Paulo, launched in April with BRL 221 million in PSV, with all units sold.
Cidade Villa Lobos - Maestro, São Paulo West Area, launched in May with BRL 203 million in PSV, also fully sold. And Residencial Pixinguinha, Porto Maravilha, Rio de Janeiro, launched in May with BRL 397 million in PSV, over 70% of units sold. Moving to the next slide, let's review sales performance. In Q2 2025, we recorded BRL 2.3 billion in net sales, a 29.3% increase year- over- year and 7.4% above Q1 2025. Our SOS was 47.5%, up 2.1 percentage points from Q1 2025 and down 3 percentage points from Q2 2024. On slide 10, we can see the average price per unit, which increased both in the quarter and year- to- date. This quarter, the average sales price per unit was BRL 309,700, a 2.7% rise compared to Q2 2024 and a 0.2% dip compared to Q1 2025. For this quarter, 92.8% of sales had a unit price of up to BRL 500,000.
To wrap up operational metrics, our land bank at the end of Q2 2025 had a potential PSV of BRL 21.1 billion, representing 72,928 units. On slide 12, we also see BRL 103.1 million operating cash this quarter. Now, let me turn it over to our CFO, João, for further financial details. Please go ahead.
Good morning, everyone. On slide 13, we highlight our net revenue. This quarter, we reached BRL 1.3 billion, a 34.9% increase year- over- year. For the first half of 2025, revenue totaled BRL 2.6 billion, up 39.6% compared to the first half of 2024. On slide 14, our gross profit. In Q2 2025, it rose 39.3% year- over- year and 12.2% from Q1 2025. Gross margin was 39.6% this quarter, up 1.3 percentage points year- over- year and a 0.6 percentage point increase quarter- over- quarter.
For the first half of 2025, gross profit rose 44.1% compared to the first half of 2024, with a 1.2 percentage point increase in gross margin. On slide 15, we share net income attributable to Cury, which totaled BRL 236.7 million in Q2 2025, up 37.5% year- over- year and 10.9% compared to Q1 2025. For the first half of 2025, net income reached BRL 450.2 million, up 43.6% year- over- year. On slide 16, total net income for the entire operation. It totaled BRL 267.2 million in Q2 2025, up 52.4% year- ove- year and 14.3% quarter over quarter compared to the first quarter. For the first half of 2025, net income exceeded BRL 0.5 billion in a 52% year- over- year increase. On slide 17, details about our debt profile. We closed the quarter with BRL 1.3 billion in gross debt and BRL 1.5 billion in cash, resulting in net cash of BRL 227.8 million.
Net cash decreased 33.3% since March 31st, 2025, mainly due to BRL 154 million dividends paid. It's worth noting that for the first half of 2025, Cury paid BRL 390 million in dividends. Our net cash to equity ratio closed the quarter at 14.4%. On slide 18, we report our return on equity with ROE reaching 70.1% for the 12 months ending Q2 2025. We generated BRL 708 million in earnings and distributed BRL 694 million dividends over that period paid to our shareholders. Thank you very much. Now I'd like to turn it over to the operator.
We will now open our Q&A session for investors and analysts. If you have any questions, please click on raise your hand. If your question is answered, you can leave the queue by clicking on lower your hand. First question from Mr. Pedro Lobato with Bradesco BBI. Please, sir, go ahead.
Good morning, everyone. Two questions. First, can you give more color about the announcement made yesterday? Was that caused by dividends paid or are they related? Can we still expect 100% of payout this year as you did last year? My second question is related to land bank. I see it's green. Our ROE is also increasing. What about this land bank that's being added? Does it follow the same ROE and profitability parameters? Thank you.
Good morning, Pedro. Good morning, everyone. Thank you for your question. Let me start by answering the plan to repurchase dividends. There is no intention of replacing dividends by repurchasing shares. As for the dividends, we always have 70% - 80% of payout vis-à-vis profit earned. If we have a surplus of cash and if it's possible to pay them out, we will do it just as we did two years before.
There is no intention on holding cash, but this is a decision that will be done timely. As for repurchase, we have a plan to repurchase shares, but once again, that will be done in a timely manner. When we find that appealing, we will be ready to do so. As for the dividend payout policy, it's the same.
Good morning, Pedro. This is Leo. As for land bank, the goal is the same. We keep on looking for areas in Rio de Janeiro and São Paulo with good infrastructure. This is the policy that we have been keeping, and there are no changes regarding our land bank strategy. Nothing has changed.
Great. Thank you both, and have a great day.
Our next question comes from Mr. Andre Mazini with Citi. Please, Mr. Mazini, go ahead.
Hello, team. Thank you very much for this conference call. Two questions. First, about the launches in the region of São Cristóvão and Pixinguinha. You mentioned 77% and now Cartola, also in August. Can you talk about this region, consolidated neighborhoods such as Tijuca, for example, and maybe a turnaround? Can you please address that region and also the land bank considering the port area, the new port? Do you believe that the results will be achieved the same as the first one? Second one, about direct sales. What about the scope of that strategy? Will Bracket 4 be used in order to decrease the size of your portfolio? We see that that has increased. It seems that there is a 24% sales vis-à-vis what was expected last year, which was 17%.
Good morning, Andrea. Let me answer your first question. The concept that's being built at the port area in Rio de Janeiro, and just as you mentioned, you called it new port. The major goal is to promote full integration to the port area and São Cristóvão. For those of you who know Rio de Janeiro, we'll have a neighborhood starting at Quinta da Boa Vista and ending at the Museum of Tomorrow. The City Hall of Rio de Janeiro also plans on expanding public transportation, reaching Quinta da Boa Vista. Today, we see also construction works on Leopoldina. There is this project not only by Cury, but also the City of Rio de Janeiro administration so that this area becomes appealing to future residents. As you mentioned, we already have a consolidated infrastructure in the area of Quinta da Boa Vista. Cartola is just next to the subway and train station, the São Cristóvão station.
We see that as a continuation, an area to be tapped so that low-income and mid-income people can live there. It's the best place for them to actually live at. As for your second question about the portfolio, increased portfolio and Bracket 4 of Minha Casa, Minha Vida. Bracket 4 started last June. Now we see more transfers. Today, we also see a change when brokers offer potential customers this product. Today, they presented the new funding type. This is a customer that was not used to this model. Cury is unique when working with transfers till when at the project level. They can do that. I believe that this model will be further used by our customers. I believe that this will lead to either a decrease or a stabilization of our portfolio as we start to focus on Bracket 4.
Thank you very much.
Our next question comes from Mr. Y gor Altero with XP.
Hello. Good morning, everyone. Let's think about pricing power with the improvement of the program and also a more stable inflation rate, especially related to construction items. Your margin will probably increase, right? Second, we also see the program focused on the middle class. Which would be the new measures for these mid-income people? We know that affordability is an issue. We see that this is also an issue regarding housing.
This is João to talk about increasing gross margin. Today, we have inflation of items. That has been stable, but we also keep on having the pressure regarding labor. We don't see that inflation rate index going down. When you talk about the stabilization of inflation rate, that allows us to carry on with our budget and also sustain gross margin.
Increasing gross margin from now on is not our major scenario. We'd like to keep this gross margin going around 39%. It increased this quarter because this was a very good quarter and also the first half, especially regarding the quality of launches, new launches that increased our gross margin as well as our REF margin, right? That can be diluted by future inflation rates. REF margin is the third revenue and profit margin. Just to add on what you talked about pricing power, we know that our pricing is really high compared to other companies. We have also the current legislation. Pricing power, affordability. We don't consider increasing our gross margin. About a new funding program for the middle class, with this implementation of Bracket 4, using royalties from the pre-sold program in order to offset this decreased funding coming from other sources.
This is a means to offset the SBPE funding. We also have the Brazilian Central Bank involved. We all know that especially the savings program is facing challenges. The Central Bank is working in order to develop and to have a new funding line.
Thank you very much, Ronaldo and João.
Our next question comes from Mr. Matheus Meloni with Santander. Please, Mr. Meloni, go ahead.
Hello. Good morning, everyone. First of all, congratulations for another successful quarter. I have two questions. First, about the provision for doubtful debts or allowance for doubtful accounts, PDD. What do you expect for the next quarters? The other question is for Leo. Can you give us an update about this, the program in Rio de Janeiro? Minha Casa, Minha Cidade. That's it.
Matheus, good morning. Actually, it was about this PDV. I'd say that delivery is a landmark. We know that this is a portfolio with risks. It's under construction, and this is one of the elements regarding that. I believe that's important to say that we faced some challenges. We need to consider the year in which we delivered the units. As I mentioned, we have a very broad policy. If you check that against some other indicators, our full payment guarantee portfolio has increased. Our revenue has increased. If you go over just PDD, and if you compare it against the historical levels, it's very consistent. We don't see a decrease or a negative impact on our customers. I believe that is aligned to our operation and our financial results as a whole. We expect to have that index stabilized.
Hello, Mateus. Regarding the second point, second question, I don't foresee anything new. So far, the state government has not mentioned any new programs, if that was your question, if I understood your question correctly.
Thank you very much, guys.
Our next question comes from Ms. Carla Graça with Bank of America. Please, Ms. Graça, go ahead.
Good morning, everyone. Thank you for taking my question and for the presentation. I have a question. Can you please follow up on repurchase? What is the timeline you foresee? Do you foresee any opportunities for repurchase? My second question is about the land. What about the competition for purchasing land in Rio and São Paulo? Do you also see any opportunities in the central region of São Paulo and also in Rio de Janeiro? Do you still plan on keeping 1/3 of the projects there as scheduled?
Carla, this is João. Of course, there are opportunities, especially considering our expectations on growing, also target pricing that you and your colleagues actually mentioned, right? There is no intention on immediately start repurchasing Cury's stocks at this price. As I mentioned, we, of course, have a plan for doing that, but this will not be done immediately. In answering your second question, Carla, there is a competition for land, for sure. We know which companies operate on the same level and lines that we do. As for São Paulo, I believe there are many opportunities in the central region of São Paulo. We know that there are some early-stage construction projects that have not been approved yet. We have a very broad area that will be regulated and that will give us new opportunities. We also have the Arco do Tamanduateí that was recently regulated.
This is certainly a new area for HSE projects, Mooca, Ipiranga, a very appealing area in São Paulo. I believe we still have many offers available in São Paulo. There is this wish of having people coming to live in these areas. I believe that will keep on being like that in São Paulo. As for Rio de Janeiro, I see the same trend. We see the city administration indicating the north region or the new port, the port area, as areas in which there is this willingness for promoting their growth, for having these areas developing. Even with the port area providing good results, now we also see new opportunities for purchasing land over there, also for having people moving to these areas. As for Rio and São Paulo, the ratio is the same.
Just as we mentioned earlier, the two cities are very appealing, and we see good opportunities, and that should not change new launches for the coming years.
Perfect. Very clear. Thank you very much.
Our next question comes from Ms. Ana Zerkowski with UBS. Please, Ms. Zerkowski , go ahead.
Hello, everyone. Thank you very much. Thank you for this video conference call. As for new launches, you closed the second quarter launching BRL 5 billion. Now, let's think about 2025 and also 2026. Can you provide us with an update? How does the company see that? New launches for the entire 2025 and also for 2026. Which bottlenecks do you foresee? Is it engineering, commercial? My second question is about Bracket 4. Can you please talk about, have you seen any bottleneck or transfer issues? Thank you.
In answering your first question, we always consider having the first half of the year with more robust results. This has happened in previous years, and this year, same thing. Actually, we expect to have a third quarter with very robust results. As for 2025, with this new opportunity that emerged with Bracket 4 and good sales, we expect to have a better year regarding new launches. We don't have a figure to share, but we expected something around 7%, 7.5%, and we believe that this number will actually go up considering the launches we have to date. As for Bracket 4, today, as I mentioned, brokers, they started to increase this offer. May and June, funding was really offered by brokers. As I mentioned, we see Bracket 4 customers buying with a transfer taking place still when we have the blueprint of this project.
We are increasing this product offer, and we believe that is also now time for educating not only our sales team, but also customers on using this funding. I believe you also asked about the bottlenecks, right? For expanding Bracket 4. I'd say that the bottleneck is related with the time to educate customers. As I mentioned, some companies are using this type of credit line when they deliver the keys to the buyer. The trend is to see this type of funding also increasing in the market. The government is also keeping track of these numbers, and the numbers are still below what the government expected. They may increase the income and also increase the cap of Bracket 4.
Thank you very much.
Our next question comes from Mr. Rafael Rehder with Safra. Please, Mr. Rehder, go ahead.
Good morning, everyone. Thank you for taking my question. I have two questions. First, let's talk about deliveries. Most of them were concentrated for the second half. Qualitatively speaking, what can you share? Do you see any bottlenecks? We have been discussing some issues with the laborers, with contractors. Do you believe that you will be able to fulfill the planned schedule? Also for Bracket 4, I want to focus on the portability of your direct sales portfolio to Bracket 4. How many customers would meet the income necessary and what to expect regarding that?
Good morning. As for deliveries, they follow the schedule that we determined at the beginning of this year. As João mentioned, we call this year the year of deliveries. We have delivered many units in the first half of the year, and we are now on the inspection phase of many other projects. There is nothing different from what we had planned.
Of course, considering the number of projects of units we face, it's challenging regarding the number of inspections. We don't have actually much time. After this boom in deliveries, we also foresee a number a bit lower for 2026, but we don't foresee any issues with construction contractors, nor labor, nor anything affecting deliveries. As for Bracket 4 and our portfolio, let me talk about Cury. When we talk about Cury, it's important that we have a direct sales pricing table in which customers need to pay 60% of the total amount until we hand them the keys. That means a very robust payment done. Some customers accept that, and some also feel comfortable in doing that. When we go over our portfolio, we don't see a huge migration of our customers from direct sales to Bracket 4.
They prefer to still keep on working with us directly than moving to funding. When we go over this direct sales program, we see also many customers who provide us full payment. Some of them do not want to have any funding because they know that they will be able to provide a full payment. I'm talking about how we manage our direct sales.
Thank you very much.
Thank you and good morning.
Our next question comes from Juliana Vega with Itaú BBA. Please, Mr. Vega, go ahead.
Good morning, everyone. Thank you for taking my question. Congratulations for the results achieved. I have a question. Can you give more color about operational expenses? We see an increase in sales by 17%. Say actually, sales expenses. Can we consider this the new level for the following quarters? Also, about other expenses.
We know that there is the PDD, so the allowance for doubtful accounts. Can you please give more color about this decrease on other expenses?
Good morning, Juliana. Let me try to answer your questions. As for sales expenses, they relate mostly to variable expenses. Commissions paid, that is certainly a variable. Another item in sales expenses are sales regarding the transfer that happens before. Once you see a strong sales increase, we also see an increase in sales expenses. As for commissions, we recognize them as well. If you go over our sales expenses, you see they fluctuate around 9.5% or 10%. Sometimes they go a little bit below, sometimes it's likely above that. Here, we don't see an increase in scale. We can consider again, if we see a decrease in sales, then there's also expenses with transfers and registrations will go down.
When you think about also the development of construction works, then sales expenses may go down. As for admin expenses, we see an opportunity also for operational leverage, which is what we had this quarter. You can see we have increased results. If you go over our revenue and also future revenue, you can see an increase by 50%. This will become a revenue in the future. As I mentioned before, operational leverage, especially related to SG&A. As for other expenses, we have this allowance for doubtful accounts, PDD. I already talked about it, but when you go over the provisions we have done every quarter, revenue over accounts receivable, we don't see any possibility for immediate gain. We also have provisions for any potential issues.
We also tend to see an increase as the operation grows, but nothing related to really gains or losses regarding the growth of the company. Here, we're talking about the losses of some assets. The lands to be bought and also our land banks, any cancellation, they are reported as losses. You can also see some oscillation quarter after quarter. Sometimes we have a cancellation of purchases of land, and then we will recognize that considering the stock we have. We also have some other items that are not really relevant, such as, for example, some land taxes, property tax. We expect some operational leverage, but I can tell you that this will come from SG&A.
Thank you very much.
Our next question comes from Mr. Antonio Pascale with BTG Pactual. Please, Mr. Pascale, go ahead.
Good morning, everyone. Thank you for taking my question. I'd like to ask you to give more color about price and pricing. Do you foresee any price increase, especially for Rio and São Paulo? Are there any differences considering the two cities? Thank you.
Good morning, Antonio. As mentioned earlier, in São Paulo, we are operating below HMP, but we feel very comfortable considering the price cap that we have been applying. Also, some projects in some better neighborhoods, and also when we have R2V. This pursuit for land in more central areas, the idea is to also explore these regions as a whole. That varies from case to case. We examine project by project, region by region. Of course, also complying with the current regulation. As for Rio de Janeiro, I'd say that we are actually operating at a higher level, especially considering the regions in which we operate at. We have strong operations at the port.
The average price is above BRL 300,000. Also, the average income is slightly higher. There is no income cap. That allows us to benefit more. We also have no launches. For example, we will launch a project this year in which we have more square meters involved. It's a matter of product and its characteristics. Also, in the city of Niterói, very similar to the port area. The average price in Rio is higher. At the end of the day, I'd say that this is an assessment that is done project by project. We consider many factors.
Thank you very much.
Our next question comes from Mr. Marcelo Motta with JP Morgan. Please, Mr. Motta, go ahead.
Good morning. Two questions. Can you please add more color about the construction cycles for the next 12 or 18 months?
You had mentioned working with a larger project that would also extend the construction period. How is that plan going? A second question is about margins when delivering the projects. You mentioned there is a concentration of deliveries. What about the margins? Are there any savings? Would that explain this stronger margin? Is that related to any savings regarding construction works?
Good morning, Motta. I'll answer the first question, and João will answer the second one. As for the construction cycle, it's true. We have some larger projects which add to complexity. Today, projects with 1,200, 1,300 units or the Pixinguinha. It's not only the cycle of construction works, but also the cycle of delivery. You need to carry out more than 1,000 inspections. Sometimes you need to re-inspect. That's why we are extending the timeline so that we are already covered for anything. Our engineering team is prepared.
Whenever a challenge comes up, we'd rather work on that rather than having to do many things at the end. I'd say that considering also the legislations in Rio de Janeiro and São Paulo, we are being able to really benefit from these lands now, building projects that are larger and more complex. I'd say that our engineering team is aligned, also working with a timeline that's necessary for doing that.
As for margin and delivery of our projects, our margin is being supported by these new deliveries. Today we are delivering what we launched when the inflation rate was very high in 2022, right? Now we are in mid-2025. Projects that were launched in the first half of 2022, and some of them in the second half of 2021. We don't see any gain in margin.
We are actually delivering with margins that are lower than those seen at launches. Let me see if I understood your question. If you're asking if we have recognized margins or launches that did not take place, no. On the contrary, these are projects in which we had readjusted margins. Now, will we now recognize that? As I mentioned, right, some buffer, right? It would be great if at the end of a project we could recognize some gains related to launches. We don't work with that scenario. We may have surprises in the future, but not this year. I'd say the delivery of projects, we are now delivering projects that were launched at a time in which the inflation was lower, right? We will deliver those only starting mid-2026.
Perfect. Thank you very much.
With that, we close our Q&A session. We have concluded Cury Construtora video conference. Thank you all for participating and have a good afternoon.