Good morning, ladies and gentlemen. Welcome to Cury Construtora's Q1 2024 earnings conference. This conference is being recorded and will be available for replay at the company's IR website, ri.cury.net, where the slide deck will also be available for download. We'd like to inform you that all participants will be only watching the conference during the company's presentation. Following that, we will open the floor for questions and further instructions will be provided. Before moving forward, I'd like to reinforce that forward-looking statements are based on Cury's management's beliefs and assumptions, as well as information currently available to the company. These statements may involve risks and uncertainties, seeing as they relate to future events and, therefore, rely on circumstances that may or may not materialize.
Investors, analysts, and journalists must consider that events relating to the macroeconomic environment, the business, and other related factors may lead to materially different results than those expressed in said forward-looking statements. Joining us for this conference are CEO Mr. Fábio Cury, CFO Mr. João Carlos Mazzuco, and IRO Mr. Ronaldo Cury. I will now turn over to Mr. Fábio Cury, who will begin the presentation. Please, Mr. Cury, you may proceed.
Good morning, everyone, and thank you so much for joining us for Cury's Q1 2024 conference. Joining us today from Cury, in addition to myself, we have Ronaldo Cury, who is our IRO, and João Mazzuco, our CFO. Over the course of this conference, we'll be showing you the highlights of Cury's operating and financial performance, and in the end we'll open the call for questions.
We are very excited to report our Q1 results, marked by accomplishments that reflect Cury's determination and commitment to reaching new levels of excellence and success. We're reporting unprecedented operating results in terms of new property launches, sales, and the expansion of our land bank. The strong demand has confirmed our decision to grow our operations even more than we did in 2023. Our financial results followed the same standard of our operation, with a historical revenue and increased net profit, as well as a net margin that's higher than it was one year ago. Mirroring the tailwinds that we should experience in the next few years and solid results the company has shown, in March, Standard and Poor's Global Ratings has increased our corporate credit grade in the long term to brAAA.
As for our new property launches, we'd like to highlight a new enterprise in the Porto Maravilha area of the city of Rio de Janeiro, where we've already launched over 7,000 units. This is our greatest project in the area, with an overall potential for over 1,800 apartments, a project named after painter and composer Heitor dos Prazeres, who lived and drew inspiration from the area, where some of his works will inform the visual identity of the buildings. In the first month after we've launched stage 1, which includes 810 units, our PSV has come to BRL 310 million, with over 50% of units sold. Now I'll turn over to Ronaldo, who will detail our operating financial results.
Good morning, everyone. On slide six, I'll go into our operating and financial performance in Q1 2024. We've reported an overall BRL 1.9 billion in new launches, net sales of BRL 1.6 billion, SOS of 47.9% net, and cash generation of BRL 17.1 million, as well as a net revenue of BRL 837.4 million, adjusted gross margin of 38%, net profit of BRL 154.1 million, and a net margin of 18.4%. In this quarter, we've launched 10 new projects, which amounted to BRL 1.9 billion PSV, five of which were located in São Paulo and other five in Rio de Janeiro. The highlights were Mirante Guanabara, launched in Rio de Janeiro with a BRL 107 million PSV, located in the Porto Maravilha area of Rio de Janeiro, with nearly 90% of units already sold. Yunes Park, located in the Southern side of São Paulo and launched in February with an overall PSV of BRL 217 million, with over 90% of units sold.
Live Campo Limpo, launched in March with a PSV of BRL 176 million in the South side of São Paulo with 100% of units sold. On slide eight, we'll look into our sales performance. In Q1 2024, our net sales came to BRL 1.6 billion, up 43.9% over one year earlier and 71.6% increase over Q4 2023. Our SOS rate in the first quarter of 2024 was 47.9%, up 4.5 percentage points over the first quarter of 2023 and 9 percentage points over the previous quarter. As for the SOS in the last 12 months, that came to 73.2%, growing 1.2 percentage points over Q1 2023 and down 1.3 percentage points versus the fourth quarter of 2023.
We've ended the first quarter of 2024 with a BRL 1.7 billion inventory, 98.5% of which is in units that have been launched and whose construction is either underway or has not started yet, and only 1.5% of units which have been completed. On slide nine, you can see on the chart to the left-hand side that in Q1 2024, our sales mix focused on the highest tiers of the program, and even outside of the Minha Casa, Minha Vida program make up the most of it. On the charts on the right-hand side, we show you the progress for the average price per unit sold. In Q1 2024, the average price was BRL 292.2 thousand, up 9.4% versus Q1 2023 and 3.4% over Q4 2023. On slide 10, we show you our land bank.
In Q1 2024, we reported a record figure which came to BRL 15.6 billion in potential PSV, or over 52,402 units. Also on slide 10, we have operating cash generation, which came to BRL 17.1 million in the quarter. With that, I'd like to turn over to our CFO, João Mazzuco, for more details about our financial results. Please, João, you may proceed.
Good morning, everyone. Still on slide 12, I'd like to stress our net revenue. Over the quarter, we came to BRL 837.4 million, up 40.7% over the same period last year. Also on slide 12, we show you our gross profit, which went up 41.8% in the quarter versus one year earlier, in line with the fourth quarter of 2023. Our adjusted gross margin, which came to 38% this quarter, increased by 0.3 percentage points versus the first quarter of the previous year.
On slide 13, we highlight our net profit, which on the controller company side came to BRL 141.2 million in Q1 2024, up 53.8% versus Q1 2023. Also on slide 13, we have the net profit for the entire operation, which came to BRL 154.1 million in Q1 2024, a 63.8% increase versus the BRL 94.1 million profit recorded in the first quarter of 2023. On slide 14, we stress our gross debt profile. We ended Q1 with an overall debt of BRL 601.9 million, 1.9% below December 31st, 2023. We ended Q1 with a net cash of BRL 409.8 million, an increase over the BRL 378.9 million from December 31st, 2023. Our net profit over P/L ended the quarter at 35.4%, in keeping with the reported history of sums, which mirrors a consistent policy of maintaining our capital structure. Our debt amortization timetable extends to 2028.
On slide 15, we reported solid return over net equity at 57.4%, considering the last 12 months, meaning our operations are still the same. Thank you so much, and I'd like to turn the conference back to Fábio.
As we continue to enhance our ESG, we'd like to extend our welcome to Viviane Mansi, our new board member. Her expertise in corporate communication and sustainability will be a valuable asset to enhance our efforts on this journey. We are confident and prepared for the growth-related challenges that lay ahead, not only in 2024 but the following years as well, convinced we will continue to reach new significant milestones. Thank you so much, everyone, for attending our conference and for your interest in Cury. If you have any question, Cury's IRO team is fully available for investors and the market at large.
On that note, we conclude our presentation, and I'd like to ask the operator to open our Q&A session.
We will now begin the Q&A session for investors and analysts. If you have a question, please click the raise hand button. If at any point your question is answered, you may leave the queue by clicking lower hand. Please wait as we poll for questions. Our first question comes from Mariangela de Castro with Itaú BBA. Ms. Castro, your mic is open.
Good morning, everyone. Thank you for the results, and thank you for taking my question. I'd like to talk about the FGTS, if you have any expectation of composing the budget. How do you see the budget for this year? Is it healthy? Should it require any additional complement? And also, talk about your participation in Porto Maravilha. The units are selling very quickly.
What do you expect to recoup from the area? Do you have plans for acquiring or launching more units in the area, or how do you plan to explore the area further? Thank you.
Thank you, Mariangela. Good morning. This is Ronaldo talking. I'll be answering your FGTS-related question, and then I'll turn over to Fábio. Well, about FGTS, we started the year with a budget of over BRL 106 billion for housing, which is a record-breaking budget in and of itself. But every year, we also rely on a potential migration of funds that come from sanitation and urban mobility. We know that the initial budget for sanitation is BRL 6 billion and mobility, another BRL 6 billion. If left unused, those funds may migrate to FGTS.
The Vice President of the Caixa Federal, the federal bank, already reported that they're working on an additional BRL 20 billion over those BRL 106 billion for housing. The consumption of used properties, which was high in the first quarter, is making up a lot of that. The Ministry of Cities has already reported that there will be a restriction in the use of those funds for used properties. If that's not enough, they plan to restrict it even further three months from now. We understand that with that additional budget, that is enough for us to move on in 2024. On that, I'd like to turn over to Fábio, who will be talking about the Porto Maravilha project. Thank you.
Good morning, Mariangela. Thank you for your questions. Well, as you've seen, Porto Maravilha has been a huge success. We have already launched 13 projects, actually, 12 of the 13 that were launched. The last one was the Heitor dos Prazeres, which we launched this quarter with BRL 300 million PSV. We've already launched 200 units, with 17 new units in the area. And we understand that we already have acquired a large land bank, and there's a still large piece of that that is still to be developed in the area. So it's not just the area of Christ the Redeemer where we're developing these units. There's another area of the port that's closer to downtown that's still underdeveloped. So there's still a long way to go, but it's long-lasting work.
So alongside the urban planning, there's another act for the area of São Cristóvão, an adjacent area to Porto Maravilha with the same characteristics, where we will enjoy the same regulatory framework to develop São Cristóvão, which is very much a thriving neighborhood and a very important one where Cury is already developing. In addition to that, we have always worked in the Northern side of the city, and now with Rio's new urban planning, that grows even further. So our footprint includes a much larger building area, and we're also working in the Western side, especially the Recreio district. So that's all we have, Mariangela.
That's perfect. Thank you so much, guys.
Our next question comes from Aline Caldeira with Bank of America. Ms. Caldeira, your line is open. You may proceed.
Good morning, everyone. Thank you for the opportunity to ask a question, and congratulations on your results. Well, I have two topics to address. One is more institutional, and the other more on the corporate side. First, I'd like to hear from you about the return of the payroll tax. How have discussions been between you and the government? And on the corporate side, I'd like to understand a little bit better, how do you see a room for an increase in prices? I know that Cury at large has been working on that, also boosted by the new environment with the program. So I'd like to understand a little bit more how much leeway there is for increasing your prices or widening your margins, or should we expect what we see right now to be what we're going to see for Cury moving forward?
Hi, Aline. This is Mazzuco speaking. I'll be talking about the return of the payroll tax, and then I'll turn over to my colleagues for the price side of your question. Well, as you've seen in the media, every entity in connection with our industry is rallying behind this. And if I'm not mistaken, they have a meeting with Finance Minister Fernando Haddad tomorrow to discuss this topic. Well, we believe that the tax will not be reinstated immediately and that there might be an influence from the other branches of power. And if this actually comes through, it will take place in a more gradual and a piecemeal way. Here at Cury, we've been conducting a few studies on the impact that that could have on our operations. And let me tell you, it wouldn't be a significant impact, Aline. It would maybe eat away at our margins, could be very well absorbed by us.
These studies are considering these last projects as an example, but this is not something that's very concerning for us, honestly. And when it comes to Cury's payroll, we enjoy essentially no discount. Cury's payroll has to pay essentially fully its taxes. And we're now considering that payroll for Cury, the construction company, and not the construction workers on site themselves.
Hi. On the property prices, we always adopt the strategy of trying to increase prices. And we're now seeing a cost pressure on construction. That's what we've seen in the first three months of the year for some types of materials. So we're still looking into that for our operations. But besides that, Cury has also strived to get the best possible prices when purchasing land. But all of that considered, we do not expect to expand our margins.
But that being said, we have been delivering very healthy margins on the 38th, 39th percentile. So if we can slowly but surely increase the prices of our prices, then that's great. But we're seeing high material costs and high land prices, but we expect margins to remain as they are right now.
That was perfect. Thank you so much, Fábio and João. Have a great day.
Our next question comes from Luma Pais] with UBS. Please, Ms. Pais, you may proceed.
Good morning, everyone. We have two questions on our side. First, we'd like to understand the new property launch trends. This quarter was marked by a high number of new property launches. But so that we can understand what your plans for the year are, should we expect a slowdown or anything that's unlike this, considering the expansion of your land bank?
As a second question, we've seen a narrower margin compared to the last quarter, around 90 basis points. If you could give us a little more clarity, we'd like to understand this a little bit more. Is this concerning to you at all, or has this been specific to this quarter as well as what we should expect in terms of margins for the rest of the year? Thank you.
Hi, Luma. This is Fábio again. Well, on new launches, as expected, we've had a very strong first quarter, and demand has been responding still in a very strong way. Our strategy in the last few years has still been this: to have a very robust first quarter. This is still the strategy that we will continue to pursue.
We were also successful in expanding our land bank in the last few quarters, both third and fourth quarter, as well as Q1 of this year. We expect to have a strong year at large, maybe unlike last year even, where we saw a mild slowdown in Q4. It is possible that we will maintain the same pace across all quarters of this year. That's our expectation. We believe we will see a similar magnitude to what we've had in the first quarter throughout the year. That's what we expect. As for our margins, it's essentially seasonal, but I'll let João give you a more technical and detailed answer.
Yeah. On the issue of margins, Luma, we've been delivering what we've always said to the market we would in previous calls, in previous conferences. We ended with a 38% margin, which is very much in line with what we had throughout 2023. We did see an uptick in Q4 of last year, but that's about the mix. It would be weird for us to expect our margins to remain flat. We talked about our prospects for this year, that the margins would be between 38% and 39%.
We ended this quarter with an adjusted margin of 38%. What we expect from now on is essentially maintenance, slightly higher or lower depending on the quarter, but essentially the same. What will have an impact on this is the amount of launches, maybe one launch with margins that push this number a little bit higher, or maybe another launch that will be neutral. What we expect is the continuity of what we've shown so far.
As for net margins, when you compare 2023 to 2022, you already see a significant gain as the company grows. Also because of that growth, we expect to benefit from wider operating margins and maybe also some gains in our net margins over the course of 2024.
That was very clear, everyone. Thank you.
Our next question comes from Pedro Lobato with Bradesco BBI. Mr. Lobato, you may proceed.
Good morning, everyone. I hope you can all hear me now.
Yes, we can hear you, Pedro.
Perfect. Well, thank you so much for taking my questions. My question is more about cash generation. We saw a $1 billion transfer, slightly higher than Q1 last year, but your cash generation seems to have a seasonal effect in Q1. I just wanted to understand a little bit better what's behind that effect.
My second question is about dividends and capital structure as well. I just wanted to understand, what level of capital structure do you expect to operate at? You're already seeing some room for higher dividends. Is this the level we should expect moving forward? Thank you.
Good morning, Pedro. This is Fábio. I'll let João answer this question for you.
Hi, Pedro. As for cash generation, we've seen a substantial increase versus Q1 of last year. In the first quarter of this year, cash generation was a lot more neutral because of a lower development in projects. It's the seasonal period with a slower January and then carnival in February, shorter months, the rainy season. We're always very clear that what generates cash is progress in our projects. That's where it comes from. So with a slowdown in projects, we see lower progress and lower cash generation.
But our prospect for the year is still strong cash generation in keeping with the previous years. As for dividends, we can say essentially the same. Our capital structure has been pretty much steady. Our net cash over P/L has been between 30% and 35%, maybe going up a little bit to about 40% because we have not shared dividends this quarter, only the mandatory share that had already been shared in the 12th month. But as announced, there's another payment that should come in in the second quarter of this year, at the end of the second quarter. So again, this should drive our capital structure, and we should see a lower net cash over equity ratio. We should maintain the same policy or target, if you will, to vest our shares.
But when we understand that there's a more significant cash surplus, we will pay more dividends just as we did last year. But we will not forgo a net cash position because we see a huge benefit in that, especially in an environment as what we see in Brazil with still extremely high interest rates.
That was perfect, João. Thank you so much, everyone. Have a great day.
Our next question comes from Elvis Credendio with BTG Pactual. Mr. Credendio, you may proceed.
Good morning, everyone. We have two questions. The first one touching on the sales side. If you guys could talk a little bit about how your sales are progressing in Q2. We saw a very substantial figure in Q1. Should we expect the same pace considering what we've had so far in Q2?
My second question would pick up on what you said, João, about property launches still at a healthy pace over the course of the year. When we look at Q1, we'd be talking about BRL 6 billion over the course of the year. And we know there's high demand, and it will allow for substantial growth. I just wanted to understand what could be a challenge or a limiting factor on that growth. Would it be the land bank, or would it be the financials? That's essentially it. Thank you.
Good morning, Elvis. Thank you. That was an excellent question. Well, as for the first part of your question, sales, yes. The second quarter is still running at the same pace as what we saw in Q1.
So we're seeing the market as receptive as it was at the start of the year, which encourages us to keep launching new projects. I think that the challenge for us to have the same results we had in Q1 throughout the year is really the legal framework. We need sort of that watch and keep a close eye on that. To have that same volume of new launches and sales, it takes a number of new enterprises. We would need over 40 new projects. So we would need an approval machine nonstop, quarter after quarter, without hesitating, without choking. So it's about accomplishing and missing no window with no setback with any agency, whether that's in São Paulo or Rio. So we're moving forward. This is one challenge. And another challenge would be not having any setbacks with our sales team as well.
So I understand if there's any project that doesn't do as well for any reason whatsoever, we do not have a policy of putting new projects on the market just for the sake of it. What we want is to have problems solved. We will dance to the music. So if approvals continue to come and the market continues to respond as it has in Q1 and Q2, well, we will continue to see results much like what we saw in Q1. But again, it will depend on the legal side and on sales continuing at the pace that they have so far.
That was excellent, Fábio. Thank you so much. Good day.
Our next question comes from João Silva with XP. Mr. Silva, your line is open. You may proceed.
Hello, everyone. This is actually Ygor speaking. We have two questions. First of all, we'd like to understand how you've seen the impact of labor on the cost side, and what has the company done to mitigate that? And in addition to manpower, what's been on your mind on the cost side? And the second question is about growth. You've just mentioned that the company is now stepping into another level. Can we expect an increase in SG&A during this time, or should we expect it to remain unchanged as a ratio of income? How do you guys see that? Thank you.
Good morning, Ygor. This is Fábio speaking. Well, indeed, we are at a time of rising costs. Labor costs are under pressure, especially in terms of compensation. And other costs have also gone up, including equipment, especially copper, is what we've heard from our engineering team. So there has been pressure on the cost side.
You mentioned also SG&A, right? So far, it's been in line with our growth rates. The current SG&A has been growing in tandem with our income. We've seen this increase in Q1. If you compare that with our net revenue, it was actually low. That's what we should expect over the course of the year. Our revenue is growing, and our SG&A, our purpose is to not let it grow as fast as our revenue. We've had a lot of conversations in-house to find ways to grow in a healthy way, and we should see some restructuring within the company as we've had so far. That's what we expect, Ygor.
Perf ect. That was very clear. Thank you.
Our next question comes from Rafael Rehder with Safra. Mr. Rehder, your mic has been released.
I'd like to go back to the FGTS issue now that there's been a full month since the introduction. Has there been any impact on your end, maybe clients who now can acquire your units at a higher price? And then also talk about the Tier 1 now that you've had a few calculations and probably have a better understanding of how far that can be. And as for the land in Tier 1, if you also see any increase in price coming in the near future. That's it. Thank you.
Hello, Rafael. This is Fábio speaking. Well, the company will benefit very little from what's happened. It's good for the industry, but the direct impact for us has been essentially negligible. As for Tier 1, we have benefited from that, but it's, again, a very small benefit. It's best for the industry as well. You talked about the lands and the challenge of acquiring more land. So I'll turn over to [Fábio ] who will give more details.
Well, as for Tier 1, this really is not the focus of the company. We found a much bigger niche in Tier 2 and Tier 3, which is where we're operating, and even in Tier 4. It's a very fierce competition in these tiers, especially because we're talking about the markets in São Paulo and Rio de Janeiro. But Cury has a large and very professional team that's working with us for a very long time. So we know these markets really well, and we are very focused on these two regions. So it is on us to know our land very well. And because we've chosen to go for the largest pieces of land, I think that the competition grows smaller because of it.
So we have some leverage in that sense. But the competition is still there, and we're always on the run for them.
So other players don't really know as much as we do because they're not as involved as we are. So we're always a step ahead. And whenever a good plot comes up, there's always great competition. But this has been the focus for the company, to buy land within the transportation hubs of the city, which involves every district in both São Paulo and Rio, wherever the side of the city. And our main focus would be right now the South side and West side in Rio de Janeiro with Porto Maravilha and Recreio. That's where we're focusing now when it comes to buying new plots of land.
That was perfect, Fábio, Ronaldo, and João. And have a great day.
Our next question comes from Marcelo Motta with JP Morgan. Mr. Motta, you may proceed.
Hi. Good morning, everyone. Thank you. I have two questions as well. First of all, I'd like you to talk a little bit about your new launches in Tier 4. So those that fall outside the My House, My Life program until $400,000, how has that been performing? This is a tier where there's fewer incentives for buyers, but we're still seeing a strong performance from Cury, even though this is smaller in niche. And my second question, I just wanted to understand a little bit better the flow from FGTS in 2024. With the $20 billion supplementation, there's also sanitation and infrastructure that could boost this figure with another $12 billion. But when we look at 2026, we're always starting with $105 billion, $106 billion.
How do you think the government will be able to address this issue in the short to medium -term for the market to continue to grow at the same pace that it has so far? Thank you.
Good morning, Motta. I'll start by addressing the Tier 4 sales. We have only a few properties that are outside the Minha Casa, Minha Vida program. They're essentially in Rio de Janeiro and essentially either in Porto or in Recreio. The Porto Maravilha are the better ones, and we've had great results there. I can tell you that over half of them are being sold via associative credit, which is spectacular for us, and the other half in direct sales where we sell our way. Until 60%, they get the keys. So a very healthy practice, and they're selling really well.
On the Recreio side, sales have been slightly slower, but we have our large enterprise there called Americas. After three months, we've sold 35% of all units. So that's a satisfying result as far as we can see. Sold 50/50 via associative credit and direct sales. So this is still very little when compared to our other launches. That's essentially how we plan to keep things in Tier 4. That's sort of the path and the prospect that we have for Tier 4. We should have maybe one or two other launches, and all the rest will be in Tier 2 and Tier 3 with associative credit for 100% of the units. Let me turn over to Ronaldo, who will talk a little bit about what he knows from FGTS and the prospects for next year.
Well, as for FGTS for 2025 and 2026, what we know is what everyone knows, what's been published so far, and it repeats the $26 billion for 2026 and 2025. What we've heard from the Ministry of Cities is, if need be, they intend to complement that figure. What we also know is that the Labor Ministry has been working to end the anniversary withdrawal, which also contributes to keeping a healthier fund. So it's a good budget from the outset. I mean, $105 billion is a good budget, and the government is committed to adding a complement to that, if need be, and also the expected end to the anniversary withdrawal, which should contribute to the fund's sustainability.
That was perfect. Thank you, Fábio.
Our next question comes from Antonio Castrucci with Santander. Mr. Castrucci, your line is open. You may proceed.
Hello, everyone. Good morning, and thank you for taking my question. Well, I have two things I'd like to address. First of all, on the FGTS discussion in the Supreme Court, what are you expecting? And is there any update from the unions and the federal government? And just following up on the FGTS, looking to the future as well as Tier 1, should we expect you to increase your share in Tier 1 because of the measures that are being implemented?
Hi, Antonio. Well, as for the issue of STF in the Supreme Court, we are keeping a close eye on that via ABRAINC . We are moving toward a potential agreement. It's stalled at the moment. It still hasn't gone to the floor. We're waiting for it to be brought to the agenda.
As for the FGTS and Tier 1, we have a percentage of units, especially in São Paulo, because of the urban zoning that forces us to sell via HIS 1, which clashes with the Faixa 1. So we should benefit, but very little. We should not go dive headfirst into these lower tiers, especially Tier 1, which is where a future FGTS and Faixa 1 have worked.
Perfect. Thank you, Ronaldo.
Our next question comes from André Mazini with Citi. Mr. Mazini, please, you may proceed.
Hi, Fábio, João, Ronaldo. I also have two questions. I hope this hasn't been addressed yet. I joined just a little bit late. First one is Pro-Soluto. We have the sense that your Pro-Soluto is slightly shorter for you than it is for the rest of the industry. And 30% of the Pro-Soluto is before the buyer gets the keys.
But could you give us any color as to the time frame for Pro-Soluto? Is that between 12 and 18 months, with a lot of that being pre-keys? And the second is about the new changes in the program. We also expect the new change to be an update in income brackets. When would you expect that to take place? In which meeting would those new income brackets for each tier be decided, you expect? Thank you.
Good morning, Mazini. This is João speaking. Well, you were right about Pro-Soluto. This is something we always talked about. Our rate for Pro-Soluto is very strong, and that's because of our policy of operating the Pro-Soluto beyond the building time frame. So our Pro-Soluto goes usually up to 36 months.
Of course, something is carried over to the after keys period because of works starting before the expected deadline and maybe contingencies that come up and unexpected issues that come up, so you have to renegotiate. But essentially, our Pro-Soluto is around 20 months, so easy to deal with. And we always strive to, as a policy to charge Pro-Soluto, to be very quick, to act very quickly so as to prevent any delinquency from carrying over to the post-key delivery period or even to the end of the construction time.
Because, as you know, payment installments increase for clients as construction moves forward. So you pay interest on those payments. But regardless of that, those installments increase. So it is our strategy to act very quickly when any delinquency is recorded. But again, our portfolio is still very healthy. Nothing out of the ordinary, really, considering what we've always seen.
As for the changes in the program, this is Ronaldo speaking, Mazini. We are still waiting for some adjustment in the income brackets for the program. Initially, this was expected to take place in Q1, and the Finance Ministry and Ministry of Cities together decided to postpone that to the second quarter. We're also expecting the FGTS because FGTS also expects, or actually is planned for families that enjoy a formal employment contract. There's still no benefit for those who fall outside of that spectrum. This is something the government still has to decide on.
This concludes the question-and-answer session. We are now concluding Cury Construtora's conference. We'd like to thank everyone for joining and wish you all a great day.