Good morning, everyone, and thank you for waiting. Welcome to Cury Construtora's Q1 2022 earnings conference. With us today are the company's CEO, Mr. Fábio Cury, its CFO, Mr. João Mazzuco, and its IRO, Mr. Ronaldo Cury. We would like to inform you that during the company's presentation, all participants will be in listen-only mode. Following that, we'll have a Q&A session when further instructions will be provided. If you need any assistance during the call, please press star zero to reach the operator. We'd also like to inform you that this conference will be conducted in Portuguese by the company's management and simultaneously translated into English. It is also being streamed online via webcast. Before we proceed, we would like to mention that all forward-looking statements made during this call are based on management's beliefs and assumptions, as well as information currently available to the company.
They involve risks and uncertainties, seeing as they relate to future events and therefore rely on circumstances that may or may not materialize. Investors and analysts must understand that macroeconomic conditions, the state of the industry, and other factors may lead to materially different results than those expressed in said forward-looking statements. I will now turn the conference over to the CEO, Mr. Fábio Cury. Please, Mr. Cury, you may proceed.
Good morning, everyone, and thank you for joining Cury's Q1 2022 earnings conference. Representing Cury, in addition to myself, today we have Ronaldo Cury, our investor relations director, and João Mazzuco, our CFO. Over the course of this conference, we'll be showing you the main highlights of Cury's operating and financial performance in this first quarter of 2022, at the end of which we'll open the floor for questions.
After seeing strong performance in 2021, we began 2022 with renewed motivation and ready to continue to fulfill our clients' home ownership dreams, all the while generating value for our stakeholders. In May of 2022, we'll be celebrating 59 years of operations. With such vast experience, we have seen very different scenarios in economic terms, including crises and challenges. That has prepared us to seek simpler but effective solutions in spending control. Challenges remain the same this year, especially in terms of cost pressure. We've taken steps to mitigate that, such as being more conservative in establishing the feasibility of new enterprises, making material purchases earlier, and seeking for a more efficient operation in our construction sites. The most important step has been to adjust the prices of our units.
These initiatives have helped to minimize the impact leading to the preservation of our margins with our enterprises. Our demand remained resilient, and we recorded very strong sales this quarter, once again exceeding our historical record. This process has started with our being selective in acquiring new plots. We work with a very qualitative bank, and also because of the distinguished nature of our projects, which are strategically located in the metropolitan areas of São Paulo and Rio de Janeiro. One example of how this being selective in choosing our plots is translated into great opportunities is one property we're launching in the second quarter, Residencial Vargas 1140. For the first time in 77 years, the iconic Presidente Vargas Avenue in downtown Rio de Janeiro will receive a new residential development.
The project is part of the city's program, Reviver Centro, which is designed to give the area new meaning. It will include 360 units complete with amenities and priced, each unit priced at BRL 360,000 on average. Even working in the higher brackets and even outside the government program, Casa Verde e Amarela, we continue to resort to the pre-launch credit, which allows us to pass along prices in the plan, which is critical to generate cash. With that, our launches are still successful in terms of sales and helping us to have a very strong sales to active ratio. Now let me turn the floor over to Ronaldo, who will give us details about our operating and financial results.
Good morning, everyone. In slide six, let's talk about the highlights of our operating and financial performance in Q1 2022. We've recorded BRL 781.2 million in overall launches. BRL 753.4 million in net sales. A net sales to active ratio of 41.4%. Cash generation of BRL 17.6 million. Net revenue of BRL 447.4 million. Gross margin of 37.1%. Net revenue of BRL 63.3 million and net margin of 14.2%. This quarter, we've launched five new developments, three of which are located in São Paulo and two of them in Rio de Janeiro. First of all, Cury Jardim in the city of Santo André, which has sold 100% of its units.
Rio Energy in downtown Rio de Janeiro, another important area of Porto Maravilha with 90% of units being sold. Via Palermo, located in the Mooca district in the east side of the city of São Paulo, has sold all of its units, which shows the success of another stage of this major enterprise. My Miguel Yunes launched at the end of the quarter, located in the south side of São Paulo that has sold over half of its 720 units. Lastly, Único Bonsucesso in the north side of Rio de Janeiro, also launched at the end of the quarter, has sold over 30% of its 499 units. Now moving on to slide eight, let's look at the speed of our sales during the quarter.
This was still a strong quarter, even with the adjustments in the prices of our units. We offer high quality products in central areas of large cities with attractive rates in what we call crédito associativo category, which is financing for pre-launch properties. The strategy is still critical to maintain our operating financial performance. Our VSO in the last twelve months was 71.9%, and in Q1 2022 alone, it was 41.4%, up 3.4 percentage points over Q4 2021. We ended the quarter with BRL 1.1 billion in estimated sales value of its properties. 98% of which is represented or accounts for units launched and also properties that have not been initiated or are underway and only 2% in completed units.
Moving on to slide nine, more details about the selling price of our units. In Q1 2022, 16% of our sales were of units of up to BRL 180,000, versus 19% in Q4 2021 and 32% in Q1 2022. The share of sales in the price bracket between BRL 180,000-BRL 264,000 was 53% in Q1 2022, whereas in Q4 2021, we had 46%, and in Q1 2021, 53%. In the price bracket of over BRL 264,000, 31% of units were sold in Q1 2022 versus 35% in Q4 2021 and 15% in Q1 2021. The charts on the right show how the average price per unit sold in every quarter has performed.
In Q1 2022, the average price was BRL 230.2 thousand, up 0.8% versus Q4 2021, and 12.5% versus Q1 2021. Our performance in the higher brackets of the program has proven to be one of the main steps to maintain and preserve our margins. In slide 10, we show you land bank. In Q1 2022, we ended the period with BRL 9.9 billion in estimated sales value, a total of over 44,000 units, up 1.6% versus the previous quarter because of the properties we launched in the first quarter, as well as acquisitions and canceled contracts during the period.
In slide 10, we have our operating cash generation, which came to BRL 17.6 million during this quarter, down 81% versus Q4 2021 and up 111.5% versus Q1 2021. With that, I'll turn the conference over to our CEO, João, who will give us more details about our financial results. Please, João, you may proceed. Good morning, everyone. Moving on to slide 12. Our net revenue came to BRL 447.4 million in Q1, which represents growth of 31.9% versus the first period in 2021. Our gross profit in Q1 was BRL 165.9 million, up 38% versus the same period in 2021. We continue to follow our strategy to increase prices to maintain our gross margin, which came to 37.1% in Q1.
We acknowledge we still have a challenging inflationary scenario ahead of us, and therefore, we must think hard about any change in cost trends when budgeting, so that our results really reflect our operations. Likewise, our REF margin has also benefited from the strategy of jack up the prices of our products. We ended up Q1 2022 with a margin of 39.7%, which is slightly over the reported value at the end of 2021. In slide 13, we see our net profit, which, with regard to the controllership, came to BRL 61.9 million in the first quarter of 2022, up 23.8% versus the BRL 50 million profit recorded in Q1 2021.
Our net margins on Cury's part were lower, going from 14.7% in Q1 2021 to 13.9% in Q1 2022. The first quarter is traditionally a period where constructions slow the pace because of elements such as the vacations of early January and the negative effect of the wet period, as well as a reduced number of days in the month of February and also the carnival holiday. All of which translate into reduced revenue appropriation versus the previous quarter. In slide 14, we talk about our gross debt. The period ended with an overall gross debt of BRL 390.9 million, essentially the same position as the one we held on December 31, 2021. We did not make any moves with our corporate debt during this quarter.
Our financial leverage has proven quite consistent over the last few quarters. We ended Q1 with a net cash of BRL 212 million, minus 27% of our net worth. In 2022, we have an amount of only BRL 37 million in corporate debt amortization. The full period for maturity of which will extend for the next four years. In slide 14, we look at our return on net revenue or net assets. As mentioned before, we continue to generate cash quarter after quarter, no exception. Which is to say our growth hasn't changed or hasn't changed the principles of our strategy, which has allowed us to run a operation with little use of our own assets and essentially create value for our stakeholders.
In the last general assembly that was held in April, we approved payment of over BRL 150 million in dividends, adding to the BRL 50 million we paid as an advance in December of last year. Now I turn the floor back to Fábio.
Thank you, João, and thank you, Ronaldo. Our results so far motivate us to continue working hard, seeking innovation, efficiency, and opportunities to continue to provide outstanding products which are affordable and profitable for the company. We continue to monitor macro and microeconomic factors that challenge the industry, especially in the second half of the year. Sure and confident we will gather people and strategies that are right to continue to deliver value to society. With that, we conclude our presentation, and I'd like to ask the operator to begin the question-and-answer session. Good morning, everyone. Thank you.
We will now begin the Q&A session. If you have a question, please press star one on your phone at this time or any time. If at any time your question is answered, you may remove yourself from the queue by pressing the pound key. Questions will be taken as they are received. We do ask that when you ask your question, pick up your headset to provide optimum sound quality. Please hold while we poll for questions. Our first question comes from Mr. Finochiaro from XP.
Good morning, guys. Thank you for the presentation, and congratulations on your results. I have two questions. The first of them has to do with your property launches. If you could give us more color about launches in the second quarter, and what are the results you guys expect for the rest of the year?
Do you expect the same pace as you guys had in the first quarter in the second quarter, or do you expect some sort of acceleration? And the second is about the portability, especially from brackets three to four. Do you believe you will be able to pass along more of your price increases in those two brackets? And do you guys see any help coming in that sense? Those are the questions, essentially. Thank you.
Good afternoon, Igor. Thank you for your question. This is Fábio speaking. Well, first of all, with regard to our property launches, in this second quarter, which has already started, is the one we expect to see the highest results this year, even more so than Q1.
We expect to reach close to BRL 1 billion, perhaps even more than that, because we believe that in Q3, we should probably slow down a little bit because of the elections. We're really moving ahead full steam this quarter with a number of launches in April and May, and we also expect a strong month in terms of launches this June because demand is still very strong. We started Q1 in a very strong way. We expect to have an even stronger Q2, and we should hold back a little in Q3 because of the elections. That's our strategy in terms of property launches this year. Now, in terms of affordability, yes, brackets three and four are the ones where we see the greatest capacity for price changes.
The price bracket number four especially, but that's where Cury has focused the most on its products, especially because that's where we are able to pass along most of the prices. Accounts for a large share of our products. We believe that brackets three and four are the ones where we can pass along most of those cost increases. Now, the new financing government-sponsored financing category has still not been launched, and Fábio can talk a little bit more about that.
Yeah, it still hasn't been released to the public, but we do believe that could help us in that sense. That was great.
Thank you, Fábio and Ronaldo. Our next question comes from Mr. Elvis Credendio from BTG Pactual.
Good afternoon, Fábio, Ronaldo, and João. We have two questions. The first of them is about price.
We have seen that property prices at launch continue to grow and are at a very healthy level right now, but that is contrary to what we've seen in the market. Do you guys see that you have a clear distinguishing factor that allowed you guys to have those results? And my second question is about the Cury portfolio, most importantly, the absolute sales value. I would like to understand how you guys are thinking about that, and if you guys give us more information about how your delinquency rates are doing, that would be great as well. Thank you. Good afternoon, Elvis Credendio. Thank you for your questions. Well, with regard to the sales to active ratio, we've been managing to keep it high because of the areas where we operate.
We are working in downtown Rio de Janeiro and São Paulo. As you said, prices continue to go up. In Q3, there might be a slight dip in our SAR, but our sales are expected to continue at a healthy level. Now, with regard to our portfolio, I'll let João answer you because I think this falls more within his purview. Good morning, Elvis. Good morning, everyone. Well, with regard to our portfolio, let's remember that in 2021, sales nearly doubled versus one year earlier. Over the last twelve months, we saw an increase of 57% within our portfolio, much because of that rise in sales and especially the number of property launches also in 2021. The share of what we call pro soluto, especially for properties under construction, have increased.
We mentioned that complete models have a smaller share in sales right now, and we expect that to decrease even more from 37% to 28% versus Q1 2021. That adds to what I'm saying, which is this is a portfolio that grew substantially versus last year, and it's one we may even call a new portfolio. Our strategy hasn't changed. It's still the same. We are seeking to not carry over or carry over as little of the pro soluto as possible. We have also insisted that even because we're operating mostly in brackets three and four, in terms of the share of sales, that brings in healthier customers, financially speaking. If you look at many indicators, levels remain at the same healthy levels we've seen for quite a while.
What's coming in every month with regard to as a share of my portfolio is still in the same levels, and also delinquency levels remain at very healthy levels in percentage terms. We remain very confident about our portfolio performance. We obviously need to be very assertive in terms of charging those in arrears, especially with those in the portfolio for properties under construction. We expect to have their debt settled by the time the property is delivered. We're trying as best as we can to not carry over those rates to the pro soluto.
That was perfect. Thank you.
Our next question comes from Ms. Fanny Oreng from Santander.
Good morning, everyone. Fábio, Ronaldo. Well, I have a few questions.
First of all, with regard to your customer's profile, do you feel like that profile involves higher income than it did before? Could you guys maybe break it down for us? Which type of customers are part of your bracket number four? I've heard from a few companies that if May were not a healthy month, the government could maybe raise interest rates again, and that would affect government subsidies. I wanted to hear your take on that. Do you believe that review will take place? And if it does, do you expect to maybe increase your share in the bracket number two, for example? That was it. Thank you.
Good afternoon, Fani. Thank you for your questions. Well, with regard to the customer profile, you're absolutely right.
For customers to purchase the same type of property, our customers need higher income. Today, to buy the same BRL 210 thousand property, we need a customer with higher income. We see that constantly in our sales booths. Whereas we had customers earning BRL 4 thousand a month, today, we need customers earning as little as BRL 6 thousand a month so they can have their home loan requests approved at the bank. In brackets three and four, our customers come with BRL 7-8 thousand as an income per month. In bracket four, we're working mostly with customers with a household income of BRL 10 thousand, even more, even BRL 11 thousand, BRL 12 thousand a month. We're seeing customers with higher household income buy smaller apartments.
I think that because of where we're located, which we're working with very desirable locations, so we see great income potential. Customers, even with higher salaries at large companies, buying smaller apartments than they used to buy. That's what we're seeing in the market. Now, with regard to the government program, I'll let Ronaldo, who's at the front lines, answer that for you. Well, Fanny, you're right when you say the government is looking into a so-called line three, which may be announced in the second quarter. One sign of that is we saw in the first four months of the year, the worst performance of the FGTS, the employee severance fund, and the government reacted positively saying they're studying that new line of financing, but there's a great chance that will move forward.
In addition to that, we have been asking our quota holders to really look into that. These are resources that are available but have not been used up by our customers. That's one possibility.
Okay. That was very clear. Thank you. Now, if I could only follow up, what do you mean, jack up the quota holders funds? Well, let's say there's BRL 1.5 billion that has not been used up to this point. So if we could lower the rate of the quota holder, that those funds could be used. So there could be a decline by BRL 50 billion. We do not know if that's going to be approved, but we know there's a lobby for it. Now, could you just remind me of what the rate for a quota holder is today?
It's 8:30. Okay. So it would be more competitive that way, right? Yeah. These are properties of up to BRL 500,000. So that would really help. It would represent a hedge, and the increase in the CPF is not on their radar, but it would be a way to hedge it.
Okay. That was great. Thank you very much, guys.
Our next question comes from Mr. Carlos Herrera from Condo Insider, who asks online: With the new price level, are you guys seeing a decrease in the speed of sales? Do you see any decrease in demand because of the rise in inflation and reduced purchasing power of families?
Well, I think we've addressed this issue in a previous question, but yes, with the rise in prices that we've had so far, we've seen no decline in sales in Q1.
As we've demonstrated, we raised prices by over 20% between 2021 and 2022, and our sales to active ratio remained steady and even increased. We believe that perhaps there might be a slight drop in our SAR, but nothing substantial. We believe there might be a dip, but nothing substantial, much because of the quality of our products and the locations we work with. Answering the second part of your question, demand remains very strong, and as we've said before, it has slightly changed. What we're seeing are people with higher family income buying a lesser product, much because of the inflation problem. That's what we're seeing right now with our products.
Our next question comes from Mr. Victor Blazquez from Firmo Capital.
Good afternoon, everyone. Thank you for your call, and congratulations on your results.
Could you guys give us a little more color about the operating expenses and your PDD as a ratio of revenue? You mentioned that you had only 30% sold. What about the PDD toward higher, legal expenses? How did that work?
Thank you for your question, Victor. With regard to our commercial expenses or sales expenses, I'd say they're very much in line with the previous quarter. There was even a slight decrease in commercial or sales expenses. If we compare year-over-year, we see the rise in sales and rise in new launches. There was a slight increase. For example, in Q1, which as we've highlighted in our presentation, is a quarter where because of seasonal aspects, we see better improvement in our constructions. We have reduced spending in terms of sales quotas.
That is why versus Q4, there's been a slight decrease. But even when we look at our commercial expenses as a ratio of our net revenue, which is an indicator we include in every report we put out, we still see a lot of stability. There's not much to point out in this case. Now, with regard to our provisioning, I mentioned a little bit of that when I talked about our portfolio. What we're doing here in terms of provisioning for PDD, I'll allow myself to say that we're playing catch up with the growth in our portfolio as a result of the rise in sales we've had. We actually saw an increase in our PDD over this quarter. But that's not because of any deterioration in our portfolio, as I made clear when I answered the previous question. Provisions for legal expenses.
Well, if you look at our balance, our level of provisions is still steady versus previous quarters, even slightly smaller when compared to the first quarter of 2021. Now, what we had in Q1 2022, was we adopted a policy of settling more often, much because of our record with lawsuits. We know that the sooner we settle, the higher our benefit. The cost of moving forward with a lawsuit is smaller the sooner we're able to settle it. We try to settle in court closer to the judge's final decision. With that, we had a higher number of settled lawsuits. Looking ahead, our lawsuits are very much under control. As you can see, with the level that we've maintained in terms of legal provisions.
Our next question comes from Mr. Raphael from Banco Safra.
Good afternoon, everyone. Could you give us more details about direct home loans? What's the ideal rate and ideal size of the portfolio in your opinion? Could you also tell us what the profile of the customers we're turning to that is, and how are you guys dealing with that?
Good afternoon, Raphael, and thank you for your question. With regard to our direct financing, that's offered mostly to customers. It's not those customers that do not have access to bank financing, but maybe they have some money saved up, and they prefer to pay in a shorter period of time than to carry on mortgage payments for 30, 40 years. In our policy, 60% will be paid during construction.
We have a strong down payment, and they will receive the keys with only 40% of the property value to settle. We have many customers who settle during the course of construction, and those who carry that debt through the end of construction. We adopt the same policy we've had for quite some time, which is to index to the general market price index plus 15% a year. Clients try to pay up as much as possible. We even have the policy of making those advances easier so that we can prevent delinquency down the line. We feel very confident and are very comfortable with those direct-to-customer financing options. Now, with regard to the ideal volume and share, I believe we are working with the right numbers.
We do not have any interest in increasing our share of direct-to-customer financing contracts. That's because of the level we have of canceled contracts during construction. The benefit of that associative credit we mentioned is lost. On the other hand, we also have a profile of debt settling that's longer. Even if I receive my payment a little bit later, this is money that is yielding good returns and is well invested because as I said, returns are high, and we have the property itself as collateral. Within the policy we work with, and we always point that out, we work a lot with that associative credit, and that is really helpful to our strategy of low capital gains. We believe that the level we currently have of direct-to-customer financing is very, very appropriate.
Our next question comes from Mr. Vinícius Albuquerque.
Good afternoon, and thank you for the call. Does the company have a strategy to have better results with its direct-to-customer sales? What kind of benefit does that bring the company?
I believe I've already answered this question, Vinícius, when I answered Raphael's question. As I said, we understand we're working with the appropriate level of direct-to-customer sales. I've also mentioned the idea of maybe receiving a little bit later because of the associative credit rules. All of that has been covered.
Thank you. This concludes Cury Construtora e Incorporadora's conference call. I would like to turn the conference over to Mr. Fábio for his final remarks. Please, Mr. Cury, you may proceed.
I'd like to thank everyone for joining our conference call, and I'll wait for all of you in our next event to release the earnings results of Q2. Have a great evening.
This concludes Cury Construtora e Incorporadora's conference call. Thank you very much for joining us. You may now disconnect. Have a great day.