Good morning, everyone, and thank you for waiting. Welcome to Cury Construtora's second quarter of 2021 earnings conference call. With us here today, we have Mr. João Mazzuco, CFO, Mr. Ronaldo Cury, IRO, and Fábio Cury, CEO. We would like to inform you that during the company's presentation, all participants will only be able to listen to the call. We will then begin the Q&A session when further instructions will be given. In case you need any assistance during the conference, please request the operator's help by pressing star zero. We would also like to inform you that the conference call in Portuguese will be presented by the company's management, and for the English conference, there will be simultaneous translation. This event is also being broadcast simultaneously on the Internet via webcast.
Before proceeding, we would like to mention that forward-looking statements are based on the beliefs and assumptions of the company's management and on information currently available to the company. These statements involve risks and uncertainties because they relate to future events and therefore depend on circumstances that may or may not occur. Investors and analysts should understand that conditions related to macroeconomic conditions, industry conditions, and other factors could also cause results to differ materially from those expressed in such forward-looking statements. I will now turn the conference over to Mr. Fábio. Please, Mr. Fábio, you may proceed.
Good morning, everyone, and thank you for joining us to our second quarter 2021 earnings conference call. Today with us, we have Ronaldo Cury, IRO, and João Mazzuco, our CFO, in addition to me.
Throughout the call, we will share Cury's main highlights in terms of the operational and financial performance for the second quarter 2021, and at the end, we will open for questions. The year of 2021 continues to be yet another historic year for Cury. We have achieved records in our operational and financial results, and we are confident that the second half of the year will be even better and we will be able to deliver a year of great accomplishments. Starting with operational data, we had a strong performance in the quarter with all-time records of BRL 686 million in launches and BRL 683 million in sales, with an SoS of 46.8%. In the last 12 months, we had an SoS of 73% in launches that amounted to a PSV of BRL 2.3 billion. Our quarterly financial results have kept up with the great operational performance.
We have also achieved records in net revenue, achieving BRL 451 million, and net income for Cury shared totaled BRL 79 million. Adjusted gross margin was 36.1%, and net margins achieved 17.4%. We would like to highlight our cash generation that amounted to BRL 72 million. We launched seven projects during this quarter with a highlight for Rio Wonder, located in the historic port district in the city of Rio de Janeiro. This beautiful residential project makes us really proud. The development of this district is a dream that was put on hold for a while and is now once again becoming a reality. Cury has the honor of being the pioneering company of launching a residential project with 1,224 units.
The 470 units of the first phase were completely sold out, and we have great expectations for the launch of the second phase, scheduled for next weekend, with another 377 units. A major milestone for a district that has a great growth potential. Now with the redevelopment of this port district in Rio de Janeiro that has been receiving great investments like the Museu do Amanhã, Rio Star, and AquaRio.
In addition to other infrastructure work, making this new residential option close to the downtown area, one of the most privileged areas in town. It is worth mentioning that we are now investing in projects outside the CVA program ranges, bringing this type of product once again to our company, which allows us to make the most of the opportunities offered by this segment. Thus, we were able to adjust the unit prices and to accommodate the increase in construction costs. Now I would like to turn the floor over to Ronaldo, who will share the operating results.
Good morning, everyone. Let's move on to slide number five. I will explore the highlights of our operational performance this quarter. In the second quarter 2021, we achieved BRL 686 million in launches, up 120% vis-à-vis the second quarter 2020. In total, seven projects were launched this quarter, five in São Paulo and two in Rio de Janeiro. They were Flow Barra Funda 1 and 2, Urban Downtown, Blue Lyne Pirituba, Único Jacu Pêssego, Urban Parque das Bandeiras in Campinas, and Rio Wonder Praia Formosa, a highlight of the quarter. As Fábio mentioned, this accounts to BRL 2.3 billion in launches when we look at the last 12 months numbers. Moving on to slide number six, let's look at the sales performance this quarter.
Boosted by strong demand, but also supported by well-designed products in good locations and our competent sales force, we have achieved 134% growth in net sales, totaling BRL 683 million in the quarter, the best quarter in sales in Cury's history. The demand continues strong both for launches and the sales of inventory. This inventory remains at sound levels with BRL 23 million in PSV in ready inventory, which accounts for only 3%. It is also worth noting that this amazing performance in launches and sales has not been achieved by reducing sales speed, which is crucial for Cury's philosophy. On the contrary, we kept a high SoS, achieving 46.8% in the quarter and 73% in the last 12 months. Moving on to slide number seven, let's talk about Cury's land bank.
In the second quarter 2021, we closed with a total of BRL 10.4 billion, an increase of 4.7% vis-à-vis the first quarter 2021. Even considering record levels of PSV launched in the quarter. Still on slide number 7, let's start talking about the financial highlights. You can see here our operating cash generation, which was exceptional. We achieved BRL 71.6 million in the quarter. Now, I turn the floor over to our CFO, João, who will give you further details about our financial results. João, you have the floor.
Good morning, everyone. Moving on to slide number nine, our net revenue achieved BRL 451 million in the second quarter, which represents an 83% growth year-over-year. In the first six months of 2021, we grew 67% compared to the same period of 2020, achieving a revenue of BRL 790 million.
Our gross profit in the second quarter was BRL 163 million, up 87% compared to 2020. Considering the first six months, we achieved gross profit of BRL 283 million, a 71.5% growth year-over-year. In spite of the adverse conditions with inflation and construction costs, we've kept our gross margins at around 36%, both in the second quarter and year to date. It's important to clarify that these margins have already incorporated inflation adjustments in the budget of our works. If it weren't for these adjustments, our margins would have been even higher. The maintenance of our gross margins has been possible thanks to a combination of factors, among which we should highlight the adjustment of prices of our units accommodating part of the increases in construction costs.
We are watching out for the possibility of this inflation cycle to continue for a longer period of time, and we've been adopting premises that we consider conservative in our feasibility analysis for future projects. On slide 10, you can see our net profit, which with regards to the parent company, has achieved BRL 79 million in the second quarter 2021, a 113% increase compared to the profit of BRL 37 million in the second quarter of 2020. Year to date, the net income attributed to the parent company achieved BRL 129 million, a 196% increase vis-à-vis 2020. That is an almost threefold increase. As we highlighted, the parent company net income share is going through a constant growth trajectory, representing almost all the profit in the first six months. Net margins also improved compared to 2020.
We closed the quarter at 17.4%, and year to date, we closed at 16.3%. On slide 11, we highlight our gross debt, which had little movement in 2021. We closed the quarter with a total debt of BRL 270 million against BRL 277 million on December 31, 2020. This variation is due to the amortization of part of our corporate debt at the parent company and a positive net associative credit raising. Our amortization schedule continues to be mostly long-term, as you can see in the charts. It's worth highlighting that in July, as you can see in a subsequent event in our financial statements, Cury concluded the first public issuance of debentures, raising BRL 200 million with a maturity of 60 months. This issuance was rated A A+ by S&P, the same rating of our company.
With these proceeds, we have also settled early a balance of BRL 47 million of a CCB issued for Banco Itaú in 2020 that would only mature in 2021. On slide 12, as usual, we highlight our annualized return on equity. We continue with a strategy of low deployment of our own capital, which has been translated as a maintenance of high ROEs as we continue growing, accompanied by cash generation with effective transfer to our shareholders through the payout of dividends.
The shareholders meeting approved in the second quarter the payout of dividends above what is defined in the bylaws of BRL 115 million for the results of 2020, which represents a payout ratio of 72%. Our cash generation in the first six months of 2020 was of BRL 80 million, BRL 72 million in the second quarter alone. Now I turn the floor over to Fábio once again.
Thank you, João. Thank you, Ronaldo. Delivering consistent results and counting on a resilient demand, we pursue our growth strategy built on solid and sustainable foundations that still pervades our decisions and makes us stick to our golden rules, from the strategic purchasing of land to the right choice of products, ensuring customer satisfaction and return to our shareholders. I would like to thank our team, suppliers, partners, and customers profusely for making it possible for us to tell this success story in 2021. Now we close our presentation, and I'd like to ask the operator to start the Q&A session.
Thank you. We'll now start the question- and- answer session. If you have a question, please press star one on your touch phone. If at any point your question is answered, you may remove yourself from the queue by pressing star two. Questions will be taken in the order they are received. We do ask you that when you pose your question, please pick up your handset to provide optimum sound quality. The first question is from Alex Ferraz from Itaú BBA.
Good morning, Fábio, Ronaldo, and João. Thank you for your presentation. I have two questions. The first one is about margins. Your company's margin continues to be very strong. If we consider all the adverse conditions of increasing costs, which you said is linked to your ability to navigate and offer differentiated products and also products outside the CVA program ranges. Can you tell us a bit more about prices? Is there space to continue with your old price dynamics, considering that the demand continues to be very strong? You might try to increase prices because of that demand. What do you think about that?
What's your take on that? My second question is a bit more open. When we look at the company's growth with the operational platform, this growth has been even stronger than expected. Of course, we expected good growth, but I'd say this has been higher than expected. What do you attribute this growth to, especially this year? We're talking about competitive markets such as São Paulo and Rio de Janeiro. Is that due to the competition, the competition is not that strong, or is it because we've seen a surprising demand in the segment outside the Casa Verde e Amarela ranges? Do you think that you can keep this strong growth in the coming months?
Good morning, Alex. This is Fábio Cury speaking.
About your first question about the increases in margins, I think that we've been able to do something great, which was to keep our margins, considering all the pressure caused by inflation rates in recent months. About your second question, we have differentiated products and differentiated land. This has enabled us to keep high margins, and that also helped us to achieve this growth because of the good plots of land that we have. As an example, we have Porto Maravilha in Rio de Janeiro with a high SoS and an ability to grow quickly with different launches at the same time, keeping high margins and being able to perform several launches at the same time. I think that's our secret to keep on growing and to keep our margins.
If we hadn't had this high inflation rate and these increasing costs, I can say that our margins and end results would have been even better. But considering all the inflation, we've been able to keep the margins that we were presenting before all of these adverse conditions started, but our investments in new projects and new launches has enabled us to grow. Our land bank has been special in these regions of São Paulo and Rio de Janeiro, and the demand continues to be very strong in these regions.
Okay, Fábio. Thank you.
Our next question is from Elvis Credendio from BTG Pactual.
Good morning, Fábio, Ronaldo, and João. I have two questions on my side. The first one about Porto Maravilha. You commented that you are planning the launch of the second phase of the project in the port district of Rio de Janeiro.
Are you planning to buy new land in the region? And what are the main challenges for you to acquire land and get approval in the region? My second question is about construction costs. I know it's really hard to be sure of that, of how this is going to play out in the future, but I'd like to hear your expectations about the prices of inputs for the second half of the year. In your conversation with suppliers, do you think that the prices are going to be forwarded to you, especially when it comes to steel? Do you expect any price increases for the coming quarter?
Thank you so much for your question. Talking a bit about Porto Maravilha, the port district in Rio de Janeiro.
This was a work that we performed for three years until we were able to convince the authorities to give us approval, especially Caixa Econômica. This dream started in 2013 when they planned to create a commercial center there, but that didn't happen. In 2017, we resumed working on that district because we understood it was the right time to attract the middle income class to the region. I think that since then, we were able to have Caixa understand that the land prices should go down because you have there the cost of the land and the construction costs that would have to make it feasible for you to launch a project there. But differently from other projects we're used to, the price of land there must be paid cash.
It isn't a long flow of payment as we're usually used to when we buy land. So that's the main difference when it comes to the port district in Rio de Janeiro. On the other hand, what we saw in the region is that since we are the only player in the region, there is a very strong demand, and we're selling really fast. So that is offsetting our initial difficulties. The first phase sold out really quickly. We expect the second phase to sell really quickly as well. We have two other plots of land that have already been acquired. So we think there is a lot to do there in that district. I think that the whole residential, I mean, the population that lives in the north of Rio would love to live there.
It's close to the subway and to other transportation means, and we think that this district is going to thrive. Although there is a difficulty when buying plots, we think there is a great potential there for the region of the port district. Now, about the cost pressure for the second half of the year, we are watching out for that. Our feasibility analysis always take that into account, and we are in constant conversation with our suppliers and our partners to make sure we have knowledge about the costs beforehand so that we can plan ahead. If it is about material or labor costs, so that we can plan ahead and maybe transfer these costs to our customers. We are not sure what's going to happen.
We know about one or two things that are happening in the short term, but in the medium term, we don't know for sure yet. No one knows.
Great, Fábio. That's very clear. Thank you very much.
Our next question is from Aline Caldeira from Bank of America.
Good morning, everyone. Good morning, Fábio, Ronaldo, and João. Congratulations on your results and thanks for taking my question. You've been increasing your exposure to ranges for and to middle income populations. What can we expect from this strategy from now on?
Good morning, Aline. Thank you for your question. Yes. I think that's a question that is aligned with our strategy and the core of our company. We're a very versatile company. In the past, we worked with lower tiers of the program with low income populations, but now we think that the opportunities lies in higher tiers.
Just so you know, last year we were 90% within the program and 10% outside the program. But today, in the first half of 2021, we sold 75% of our units in the program and 25% of the units above BRL 240,000 . That is outside the ranges of this program. We expect to reach 27%-30% outside the program ranges by the end of the year. Our strategy is to grow in that number, but that will depend on the approvals and the land that we get during the year. But we do expect to go up one step there. That will depend, of course, on the credit and the land that we are able to get. But of course, we'll always look for the opportunities.
If the interest rates are better here, or if the government that takes over gives us benefits for lower ranges, then we will definitely focus on the lower ranges. But if we think that the best opportunities are in higher ranges, we are very versatile, and we can focus on the higher ranges very quickly. As I said, we are a versatile company and we are geographically located in these regions of São Paulo, Rio de Janeiro, and Campinas.
Thank you very much. That was very clear.
Ladies and gentlemen, if you would like to pose a question, please dial star one. Our next question is from Lucas Hoon from XP.
Good morning, everyone. Congratulations on your results. I have a question about your strong cash generation in the quarter.
Other companies have reported a use of cash because of the rules of Caixa and the advanced acquisition of raw materials. Do you see any impacts coming from these regulations by Caixa? Is this impacting your cash generation? What about the inflation cost of materials? Have you been purchasing material in advance in order to deal with that?
Hello, Lucas. This is Ronaldo speaking. Good morning. When it comes to cash generation versus the changes we saw at Caixa, our operations have not been affected by that yet. We continue working without any problems, and we know that other companies have been affected by that, but we have not been affected by the changes of Caixa Econômica.
When it comes to the purchase of materials, yes, whenever possible, we've been purchasing materials in advance, especially steel, cement, and some other inputs, in order to try and protect ourselves from price increases throughout our construction. But this has not been affecting our cash. As you saw, our cash generation was very positive in the quarter and in the first six months of the year, as you saw.
Okay. Thank you very much for that.
Ladies and gentlemen, please wait while we pull for questions. The next question comes from the webcast. A question from [Victor Blosts]. First of all, I would like to congratulate you on your excellent results. I would like to have your take on the perspectives of cash generation from now on. Cury was the only company that focuses on the low income population that was not impacted by the SEF price transfers. Is that because of the launches you're making outside the program? Do you expect any impact from that for the coming quarters?
Thank you for your question, [Victor]. This is João speaking. When it comes to cash generation, we always highlight this as a main point in our strategy. We grow by generating cash, and we demonstrated that once again this quarter. You can see that on our SoS as well. We sell fast, we transfer fast, and we start our construction with higher cash generation already. We expect this to continue and to accompany Cury's growth. About the impact of Caixa's new policies, I think Ronaldo has already answered this question. We have not been impacted, and that's because we usually start the construction work with a few months of delay after the launch.
When we already have contracts celebrated, we typically only launch after the contract has already been signed. The contract is already registered when we start construction. That's why Caixa's new policies have not impacted us.
Ladies and gentlemen, as a reminder, if you would like to ask a question, please dial star one. Now I would like to turn the floor back to Mr. Fábio for his final remarks. Mr. Fábio, you have the floor.
Thank you all for joining us today for our earnings conference call. We hope to see you again in the call to discuss the results of the third quarter of 2021. May you all have a great day.
This concludes Cury Construtora's earnings conference call. Thank you all for joining, and have a great day. You may disconnect your lines now. Thank you