Morning. Thank you for waiting. Welcome to Cury Construtora's Q3 earnings call. Mr. Fábio Cury, CEO, Mr. João Carlos Mazzuco, CFO, and Ronaldo Cury, IRO, are here with us today. Participants are in a listen-only mode during the company's presentation. We will then have a Q&A session. Further instructions will be given then. If you need assistance, please press star zero for an operator. This call will be held in Portuguese. English simultaneous translation is also available. This call is being broadcast via webcast. Before we proceed, we would like to state that statements made during this conference call about the company's perspectives, operational and financial goals, are based on the company's premises as well as based on information currently available to the company. Future statements involve risks related to future events that therefore depend on circumstances that may or may not occur. General economic conditions, industry conditions, among other operational factors, may impact companies or the company's future results. They may lead to results that can materially differ from those expressed in those future considerations. I will turn over to Mr. Fábio Cury. You may have the floor now, sir.
Good morning. Thank you for attending Cury's Q3 earnings call. We also have Ronaldo Cury, our investor relations officer, and João Carlos Mazzuco, our CFO. We'll be showing the highlights of the company's operational and financial results for the Q3 of 2022, and then we'll have a question and answer session. In Q3, we have concluded our second year as a public company in the new market of B3. We have had excellent results. They are robust and consistent with our growth history. The changes in the Casa Verde e Amarela program have brought interesting news to our shareholders.
We have noticed this improvement in sales. Demand has remained strong, above 70% despite the price increases. Performances have been outstanding both in São Paulo and Rio. Our land located in central regions have contributed dramatically. In São Paulo, we have introduced Urban Tatuapé with a total PSV in 77 units. 96% has been sold. That's total BRL 186 million. Panamby, we have a partnership with Cyrela, a listed company too, bringing a new concept providing convenience services. In its initial phase, the launch has a total PSV of BRL 174 million, over 60% of all 600 units sold. After 9 months of intense launch activities at BRL 2.8 billion accounting for the total amount of 2021 launches, in the last quarter of the year we'll have fewer launches.
That decision is based on the strategy considering uncertainties. Both the election and the World Cup could get in the way of these launches. However, we still have a launch in Jacarepaguá in the western region of Rio de Janeiro. Over 50% of all 464 units have been sold. Financial results have kept track of our operational activities despite higher inflation rates, which are going down, so that's why we have better margins. We have been paying close attention to the economic developments so that we can deliver even better results in the next quarters. I'll turn over to Ronaldo to show us our financial results. Good morning. On Slide 6, I would like to highlight our financial and operational results of Q3. Total launches amounted to BRL 919 million. Net presales of BRL 885.8 million. Net SOS 40.3%.
Operating cash generation BRL 65 million. Year to date, the total launches amounted to BRL 2.8 billion. Net presales BRL 2.5 billion. Net SOS 65.9%. Cash generation is worth BRL 162 million. Net revenues amounted to BRL 626.7 million. Gross margin of 37.3%. Net income was BRL 94.9 million. Net margin was 15.1%. Year to date, net revenues amounted to BRL 1.7 billion. Gross margin 36.7%. Net income was BRL 251.2 million. Net margin was 15%. In the quarter, we had 6 launches. 5 in São Paulo, rather, 1 in Rio. The highlights were Urban Tatuapé. It was launched in July with a PSV of BRL 196 million, over 96% sold. Square Panamby was launched in September.
In total, a PSV of BRL 174 million, over 60% sold. On to Slide 8 now to talk about the speed of sales. Our SOS in the Q3 was 40.3%, a 1.3% decrease when compared to Q2, and 4.9 percentage points when compared to the Q3 of last year. Year to date, we had 65.9%, a decrease of 4.4 percentage points when compared to the same period of last year. We still detect strong demand for our product. We have been successful in increasing prices. The average launch price was BRL 251.8 in Q3. That was 10.6% above that of the same period of last year.
Our Q3 had BRL 1.3 million of PSV, 98% accounted for launched projects, only 2% of finished projects. On to Slide 9. On the left, you can see that we have been focusing more and more in the higher brackets of this housing project and even beyond that project. On the right, that's the average price per unit sold. In Q3, the average price was BRL 254.7 thousand, a 6.8% increase when compared to Q2, and 16% when compared to Q3 of 2021. Year to date, the average price was BRL 241.3 thousand, up 14.3% when compared to the same period of last year. Price increases have been one of the most important measures to keep margins. On to Slide 10 now.
That's Cury's land bank for the Q3. BRL 10.5 billion in potential PSV, up 42,000 units. 8.7% increase when compared to the previous quarter despite more launches in Q3. Still on Slide 10, that's the cash generation. We have reached BRL 65.1 million, up 0.6% when compared to Q3 of last year. Year to date, generation was BRL 162 million, up 12.4% when compared to the same period of last year. I'll turn over to our CFO, Mr. João Mazzuco. Over to you, João. Good morning, everyone. On to Slide 12 now. Net revenue is going up 37.7% in the quarter and 34.5% year to date. In the quarter, we have reached BRL 626 million, and for the year, BRL 1.7 billion.
On Slide 13, the highlight is gross margin recovery, 1.5% above Q2. We have been adjusting our budgets as our construction sites are impacted by inflation. Our pricing policies to maximize margins have been maintained. The launches that can contribute to the revenue substantially contribute to the quarter margins positively as long as we maintain our SOS levels. 42.1% when compared to 40.5% in the previous quarter. On Slide 14, that's the net income. We have reached BRL 89.9 million in the quarter. A 33.4% increase when compared to BRL 67.4 million in Q3 2021. A 4.2% increase when compared to Q2 of this year. Year to date, that amount reached BRL 1,038.1 million, a 21.5% increase when compared to the same period of last year.
On Slide 15, net consolidated net income of BRL 94 million in Q2 2022. 27.2% increase when compared to 74.6 of Q3 of last year, and a 2.2% increase when compared to Q2. Year to date, net income was BRL 251.2 million, a 23.3% increase when compared to the same period of last year. Slide 16, that's the total gross debt profile that amounted to BRL 456 million, 16.6% above the debt of December 31 of last year. In September, we had debentures issued, giving us the possibility to issue BRL 100 million of CRIs maturity in 2028.
In Q3, net cash was BRL 179 million, below BRL 281 million we had in Q2 because of a BRL 150 million dividend payments that occurred in September. Our ratio was 21%, and the debt profile is extended throughout the period of 6 years. On Slide 17, that's our ROE, return on equity, above the reported amount of Q3 2021. Despite the growth in operations, we have been generating cash that can be translated into distributed dividends. Our own capital, our ROI is above 50%. Turn over to Fábio now. Thank you, João and Ronaldo. Moving on to sustainability. Following the UN diversity principles, we had a partnership with Instituto Mulheres em Construção. We have graduated the first program for women in the DAT. That's one of our initiatives to reduce gender inequality in construction.
We have been training women that are in social vulnerability situations. That training is focused on the post-construction hydraulics, painting, tiles, and it will be expanded to other areas of the company. We remain optimistic about the future, and looking to 2023, our expectations indicate that we're going to have better results than those of 2022. We'll be introducing excellent projects from the very beginning of the year. We remain disciplined to generate cash, to have good performance, to sell more and maintain our margins. Thank you all for attending this call. If you would like to ask any questions, the entire IR team is available to answer any questions you may have. This concludes the presentation. We can now start the Q&A session.
Thank you. We'll now have our question and answer session. Press star one to ask a question. If your question is answered, please press star two to remove your question from the queue. Questions will be answered as they come. Please pick up your headset when you ask your question so that we can ensure a good audio quality to everyone. Please hold while we collect the questions. Igor Otero from XP Investments is the first person to ask a question.
Thank you. Congratulations on the results. I have two questions, actually. What's your take on the new administration, the Lula administration, Minha Casa, Minha Vida program? Are you going to focus more in the lower brackets of that program? What are you thinking about? What would you need actually as far as strategy goes when you look at these lower segments of the program? What would you have to do? The other question is about your margin, 42%, right? Have you been able to capture the updates of the Casa Verde e Amarela program, or is there anything else there?
Good morning, Igor. This is Fabio. Thank you for your question. About Lula's election, of course, we'll be seeing that program coming back, focusing in the lower brackets. It has to do with the company's origins. In the past, we worked very closely in those lower brackets from the PAR program, bracket 1.5, bracket 2. Of course, the strategy there is to start looking for areas. We've been focusing in brackets 3 and SBPE more recently. We're already looking at some areas in Rio, a little bit in São Paulo. We have already started changing or adapting that strategy. We're now looking for land for these lower brackets.
We truly believe that this will be the driving force for this new administration. Not only for this new administration. Employment rates are up, income is up too, and I believe that we'll be improving those lower brackets. Cury will not be changing its strategy. We're going to include these new brackets that can generate more growth to the company. We're going to bring back those brackets, segments we have been working hard previously. As to the margin, I believe there is some growth, but I'll turn over to João to field that question.
Good morning, Igor. Good morning, everyone. I believe that this margin has to be understood taking into account that ever since last year, we've been saying we have a broader scope as far as gross margins we're looking for. We have been launching projects with very strong gross margins above 40%. I believe that the best way to look at this margin as if it were a replenishment project, just like in moving average. The contribution of older launches dwindle, and the contribution of new projects go up. Especially because the speed of sales, if it remains strong, it has remained strong, above 70% in the past 12 months. That, of course, gives us better margins. It's difficult to say that it's been benefiting from the positive changes of the program. The way we look at it is the fact that we have been increasing prices and the sale or the speed of sales was not impacted.
That was very clear. Thank you.
Thank you, gentlemen. Elvis Credendio from BTG Pactual asks the next question. Good morning, Fábio, Ronaldo, and João. My first question about gross margin and construction costs.
You've talked about that it's been difficult, you've been providing better margins. What are costs like, and what are inflation rates being taken into that calculation? Are you considering reviewing inflation and cost numbers down? How would that reflect in the future if you take out projects that have worse margins? Where would the margin go? My question is about launches. If you could elaborate on projects for the Q4 and for next year too. Thank you.
Hi, Elvis. This is João Mazzuco. Let me now talk about inflation. We maintain the same inflation rates in our budget. It's too soon to claim that we have curbed inflation. I think you've seen the calls, the earnings calls of other players. The villain of this year was cement. But I believe that prices have stabilized somewhat. Steel, we have been purchasing steel at lower prices, installation material as well. Labor has been flat. Equipment has also that tendency to remain flat. However, we remain conservative in our projections, taking into account inflation rate projections. It's too soon to say we have won the battle against inflation. Gross margin trends, well, I believe we have to maintain that range of 37%. That margin can contribute thereto, but it all depends on how inflation behaves from now on. I'll turn over to Fábio to answer your question about launches.
Hi, Elvis. We conclude Q3 with BRL 2.8 billion, which is a very robust number. Everything we did last year, that was BRL 2.8 billion. In Q4, we'll be introducing about BRL 400 million. We'll be reaching BRL 3.2 billion in the year. That's our goal. We're now being prepared for a very strong Q1 of 2023. Our expectations are about BRL 1 billion worth of launches. That's our expectation.
Excellent. Thank you.
Rafael Rehder from Safra asks the next question.
Good morning. I have two questions. One, would you elaborate on sales in October? My second question is about price increases. Have you, or do you believe you have captured all the price increase opportunities, or do you believe that you can keep on increasing those prices? Thank you. Congratulations on the results.
Good morning, Rafael. Thank you for your question. We started October with a very strong demand. We had that project launched in Jacarepaguá with very strong sales in Rio. We have sold over 60% of the first phase. There will be 3. 600 units for the first phase. It was launched two weeks ago. We have 60% of those 600 units. A second example for October, we launched it just last week. Well, actually, we'll be signing this week, but we started pre-sales last week. Vila Nordestina, it's a project for lower, between bracket two and three. It's called Nord. Over 700 folders.
We expect very strong sales there. In answering to your question, yes, demand remains strong in Q4 after the elections. Price capture, everything that was in the program, I believe we have reached the limit. We've gone as far as we could go, especially during this period of higher inflation rates. I still believe there's some opportunities in projects that were above the program. For example, Porto Maravilha, some product mixes here in São Paulo, part of it is outside the program. That's SBT Park. We have more price freedom. Two-bedroom apartment, so we can capture better prices there. Those that remain in the program, I think we have explored as much as we could.
That was very clear. Congratulations on the results again.
Raul Grego from Eleven Financial asks the next question.
Good morning. I have two questions. One is about next year's launches. You've said that it's about BRL 1 billion for Q1, right? Could you give us some more detail on is it going to be more SBP or more focused on the Casa Verde Amarela program, brackets two or three, capturing the new or the latest changes in the program, or is it going to be a different mix? My second question is about buying land. Despite the higher number of launches, we have managed to improve your land bank. What's that activity like for purchasing new land? What is the price level there? What is that ratio of the PSV there for those plots of land? Thank you,
Raul. Good morning. This is Ronaldo Cury speaking. We're ready to have a better year next year than 2022. That's not guidance per se, but we are capable of delivering better results in 2023. We're prepared to do so. We have good land bank in our hands. We're not considering the possible effects of changes in that housing program. We're just considering the current situations. In those circumstances, we believe a very similar product mix, very similar to what we've had in 2022. We'll have between 30% and 40% outside of the program, what we call bracket four or low SBPE. Between 65% and 70% within the program, in higher brackets of the program. That's our take for next year. As far as purchasing land, this remains very challenging. However, we keep looking for new opportunities, adopting the same criteria, looking for, number one, quality. We believe in the quality of the land we purchase for our land bank. We have found good opportunities both in São Paulo and in Rio.
Excellent. Thank you. Have a good day.
Hugo Grassi from Citibank asks the following question.
Good morning, gentlemen. Congratulations on the results once again. Thank you for taking my question. Actually, I have two questions, both focused on your performance in different income brackets, and based on the Abrainc results for Q3, showing how the operation has evolved in different income brackets. The relative performance of group three for the Casa Verde e Amarela program has had more traction, more volumes when compared to those above 5,000 BRL are over 100% of that of 2021.
The top group two bracket is lagging behind. My question is, what's your take on that data? Is that because of affordability problems or the lack of opportunities because there's no competition in those brackets? That's my first question. Question two, looking at the limit above, even beyond the ceiling of Casa Verde e Amarela, is that for the pro-quota, the origination volume or the quota owners, these volumes remain low. Those programs that are funded by the savings account, do you believe that it's on the upward trend? Do you believe that the quota owners can be the support of the bracket four sales?
Thank you for your questions. The answer is yes. We still believe that SBPE can be replaced by the pro-quota. Those brackets were diminished, which is relevant. If there are price increases in those SBPE rates, the quota owners, the pro-quota owners can become some sort of hedging. In Q3 effects of quota owners, these effects are not relevant, but they can become relevant in Q4 and also next year. As to the higher brackets of the program, it's difficult to work in the lower brackets to make these products available. It has been very difficult because of inflation and costs on the rise, and I believe that that is why we've had more volumes in group three. That's why those volumes are higher. I don't see any problems in terms of shortage. I believe that there is extra funds and that can be shifted somewhat. I don't believe that there shouldn't be any bottleneck in the funding for group three projects.
Excellent. Thank you.
Press star one to ask a question. We have a question from Alexandre Godoy from Fábula from webcast.
Could you explain the reasons behind the increase in G&A, SG&A?
It's very simple. Usually in Q3, when we pay variable pay based on profits of the previous year, if I take off that variable pay, will remain along the lines of what we've had in previous quarters. The ratio between our SG&A and net income has been between 5% and 5.5%. That's up in the quarter. Yes, that's a fact, but basically because of that variable pay. Just like last year, it also occurred in Q3.
Thank you.
André Dibe from Itaú BBA asks the next question.
Good morning. Thank you for taking my question. My question is a follow-up of the first question, as to adding the lower brackets to the program. Do you believe that by including these lower brackets, is it going to be a PSV that will be re-channeled to these brackets, or is it additional PSV that would be included in your pipeline? If that's the case, what's your take on the company's execution capacity, maintaining efficiency and cost control? What would it look like if you have higher PSV? Thank you.
Good morning, André Dibe. Thank you for your question. We believe it's an opportunity. We believe it's additional PSV. As far as capacity goes, when you head into 2011, 2014 with bracket one, we had over 30,000 units being produced simultaneously. We are at 22,000 now, so we have capacity to increase that. I don't believe it's going to be immediate next year. It's a new administration. They'll take some time to come up with the changes in the program. I believe they will be focusing on bracket 2 in the second half of next year and early 2024. This is a time to look for land. We believe that there will be opportunities to gain scale in the second half of next year, early 2024, taking into account this new program of this new administration .
Th ank you.
Antonio Castro from Santander asks the next question.
Good morning. I would like to better understand the operation in Campinas with better affordability and more improvement in the program after Lula takes office. Well, my question is about bracket 2 in Campinas.
Good morning, Antonio. Yes. It has a lot to do with the uptake of lower brackets. We have now that operation in Campinas, I think it was back in 2016, to expand our activities in that bracket 2. It's a metropolitan area, very prone to that bracket with many cities around Campinas for program two or bracket two projects. Our strategy focused in urban areas in São Paulo and Rio. We're going back to look at the outskirts of cities. Again, your question has everything to do with going back to our regional office in Campinas that is very adept at bracket two programs in which we have a lot of expertise. We're going to revisit projects in that region. You're right in your assumption.
Thank you. Thank you so much for your answer.
There are no more questions, so we conclude Cury Construtora's earnings call. Thank you all for attending, and have all a good day.