Good morning, and thank you for waiting. Welcome to Cury Construtora's conference call to discuss the fourth quarter of 2020 results. With us here today, we have Mr. João Mazzuco, CFO, Mr. Ronaldo Cury, IRO, and Fabio Cury, CEO. We would like to inform that during the company's presentation, all participants will be in a listen-only mode. We will then begin the Q&A session when further instructions will be given. If you need any assistance during the conference, please request the operator's help by pressing star zero. We would also like to inform that the conference call will be presented in Portuguese 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 clarify that any statements that may be made during this conference call regarding the company's business prospects, projections, and operating and financial targets constitute the beliefs and assumption of the company's management as well as information currently available to the company. Forward-looking statements are no guarantee of performance and involve risks, uncertainties, and assumptions. They refer to future events and therefore depend on circumstances that may or may not occur. Investors should understand that general economic conditions, industry conditions, and other operating factors may affect the company's future results and could lead to results that differ materially from those expressed in such forward-looking statements. I will now turn over the conference to Mr. Fabio Cury, who will start the presentation. You may proceed, sir.
Good morning, and thank you for following up the results of the fourth quarter and the year of 2020. Representing Cury today, in addition to myself, we have Ronaldo Cury, our institutional relations officer, and also Real Estate Credit, and João Mazzuco, our CFO. We will briefly explore the main highlights of operational and financial performance of Cury in the fourth quarter and in 2020. We will then open for questions.
We completed the year of 2020 with a series of reasons to celebrate, despite the challenges we had. Once again, resilience and commitment from Cury's team were demonstrated in an environment surrounded by uncertainties and difficulties never faced before. In 2020, we completed Cury's IPO, and we built yet another page in the history of growth of the company. We were successful in our IPO, and we were able to share with our new partners our successful trajectory. We are very pleased to announce the results we achieved this year.
We achieved our ambitious internal target of overcoming BRL 1.5 billion in launches. That accounts for a growth of 34.2% vis-à-vis 2019. Even more important, we reached those figures preserving our margins, returns, and speed of sales that are essential for the maintenance of profitability and value generation. As a byproduct of the COVID-19 crisis, we observed increase in prices in some essential inputs for civil construction, especially steel and cement. However, we were able to accommodate those increases without a direct and immediate impact on our gross margin because of two measures that we implemented quite some time to improve our results. One, migrating land bank to central areas, exploring special zoning in São Paulo and Rio, and the higher tiers of Casa Verde e Amarela housing program that allows us to increase prices in our products. Secondly, we reduced the deadlines and consequently the cost of our enterprises.
The maintenance of the strong performance in essential indicators together with increase in volume allowed us to achieve solid results. Our net revenue total BRL 1.1 billion, 12.3% higher than 2019. In the year, gross profit reached BRL 428.2 million, a gross margin of 37.4%, a growth of 20.4%, increase of 2.5 percentage points respectively. The net profit and net income of Cury in 2020 was BRL 160 million.
We also prepared the new growth cycle by increasing our land bank. We reached BRL 10.5 billion in potential PSV, a growth superior to 80% vis-à-vis 2019. A very challenging year, but with great results, proving Cury's ability to execute and its resilience to provide low-income housing. In 2021 and the years to follow, we will remain on the same path. We will be faithful to our strategic concepts, conserving margins and returns in levels above the average in our segment while we deliver robust growth in the volume of launches. Now I turn over to Ronaldo Cury, who will comment on some operational highlights.
Thank you, Fabio. Good morning, everyone. Moving to slide five, I will quickly explore some operating highlights in this quarter. In 2020, as Fabio mentioned, we reached our internal target of launching BRL 1.5 billion. In total, there were 17 developments that were launched this year, and in the fourth quarter, six. There is Tatuapé, there is Bonsucesso, there is Dez Ipiranga 2, Urban Barra Funda 2, there is Canindé, and Vivaz Estação Itaquera 2 from Vivaz. In total, these developments reached BRL 675 million in PSV. These are significant and historical figures for a quarter in Cury.
Despite the brief deacceleration at the beginning of the COVID-19 crisis, we fully recovered our pace of launches and reached our annual target. The demand behaved very positively, and we observed good absorption of the projects we launched, as well as sale of stock. This inventory remains in very healthy levels, as you can see that we have only BRL 60 million in PSV in completed inventory. That represents just a few days in our sales. Now, please move to slide six. Here, we talk about our historical performance in sales. Supported by the strong demand I mentioned, but also with well-located, well-planned products and with our exceptional sales force, we reached a growth of 37% in our net sales with a total of BRL 1.35 billion in a year.
This figure represents a historical record in the activities of real estate development and the best year in sales for Cury's history. In the quarter, the growth was 22.8%, totaling BRL 404.6 million in net sales in the fourth quarter of 2020. It is also important to highlight that this strong performance in launches and sales was not reached in detriment to the levels of VSO, the sales and supply ratio, which is crucial for Cury. We kept our VSO levels above 64%, aligned with historical levels and supported by our strategy of differentiated sales in the low-income segment. Now moving to slide seven to wrap up operating highlights. It is important to highlight the growth of our land bank. As Fabio mentioned in the beginning, it was more than 80% superior to 2019.
That shows our commitment to a solid platform for the company growth, even though we have high competitiveness in the regions where we operate. On the right-hand side of the slide, you can see cash generation opening the way so that João, our CFO, can comment on Cury's financial performance. We maintain a solid performance in operating cash generation, excluding the effects of primary offer and also dividend payout in 2020. Regarding the results of 2019, we had BRL 170 million in operating cash generation in 2020. João, our CFO, will continue.
Thank you, Ronaldo. Good morning. It's a pleasure to be with you again. Now let's move to slide nine, where we show our net revenue. I would like to highlight the growth vis-à-vis 2019, 4.5% comparing quarters, and 12.3% year to date, reaching BRL 1.14 billion in 2020. Both our gross profit and our gross margin keep growing every quarter. A gross profit of BRL 139.8 million in the fourth quarter and BRL 428.4 million in 2020. The margins in the quarter and year to date were respectively 4.5% and 37.4%.
Next slide. Net income has also followed up the growth of our operation. We reached a net income of BRL 74.4 million in the fourth quarter of 2020 with a net margin of 21.5%. This means a growth compared to the previous quarter and vis-à-vis the same period of 2019. In the year, the net income is BRL 190 million with a margin of 16.6%. Talking about the Cury share, the result in the fourth quarter was BRL 68 million with a margin of 19.7%, and accumulated in the year, we had BRL 160.8 million with a margin of 14%, practically maintaining the same results of 2019.
What is not highlighted in the chart is that we also maintained a trend we observed in our latest conference call, which is the proportion of the profit that is assignable to Cury because of an increase in our proportion both in sales and in launches in 2020. In 2020, Cury's share in net income accounted for 84.6% vis-à-vis 78.5% in 2019. Comparing quarter against quarter, our participation became even more expressive, 91.4% in the fourth quarter of 2020 compared to 75.7% in the same quarter of 2019. Now moving to slide 11. Our gross debt showed a slight drop along 2020, and we closed the year with BRL 276.7 million vis-à-vis BRL 287 million at the end of 2019. This is practically of corporate nature.
Only BRL 8.8 million are related to funding to production, because along 2020, we amortized pretty much everything we had taken from a resource that became expensive. From the debt presented, only one third will be amortized in 2021, and the rest needs to be sold by 2024. We continue with our policy of having a sound liquidity that translates in a net cash of BRL 152 million, leveraging of -31.5%, measured by the ratio between net debt and net worth. Now on slide 12, our return on average equity reached 45.7%, impacted by the capital increase of BRL 170 million in our IPO. We maintained our focus of obtaining differentiated returns to our shareholders, and we expect to maintain the levels in terms of dividend payout. That is a result of an operation with low level of capital and strong cash generation. Now I turn back to Fabio.
Thank you, João, and thank you, Ronaldo. I am very glad to share with you in this first month of our operations open to the market that we reached our targets. We also had records in launches and sales, a very robust land bank. We grew, and our gross margin was very healthy. For the next quarter, despite the potential scenario of increase in interest rate, the levels of real estate credit should remain beneficial to the sector and favorable to generate demand for low-income housing. We see 2020 as a very promising year for our industry, and especially to Cury. That is the direction we expect to lead in the first month of the year. We conclude our initial highlights. I would like to request the operator to start the Q&A session.
Thank you. We will now start the Q&A session. If you have any questions, 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 to pick up your handset when you ask your question to provide optimum sound quality. Please hold while we connect questions. Our first question is from Gustavo Cambauva from BTG Pactual. You may proceed, sir.
Good morning. I have a question. Despite increasing costs, we have seen improvements, which is different from the trend we saw in other companies. In your earnings release, you talk about two points related to gross margins that I would like to understand. You talk about efficiency in terms of engineering. I would like you to comment what exactly is being done at the work site to try to offset the increase in material costs. Also related to price increases, you said that you were able to increase prices a little bit. I would like to know specifically if there is any specific product or a specific location where this cost increase has allowed you to increase the margin as well. Thank you.
Good morning. This is Fabio Cury. In terms of our work sites, we have improved our plans. We have made them shorter in our timeline. We are working with suppliers, not only to reduce the timeline to deliver our developments, but also in terms of prices of construction material. In this last quarter, we made launches in very good sites, and our sales value was higher than the one we usually do, such as in Barra Funda or in Rio, very good locations. These levels of sale protected us against this increase of INCC that took place as of the second half of last year. Those are the main points that allowed us to defend ourselves from this increase in the INCC rates. João, would you like to add something to it?
Hello, Cambauva. Let me remind you that in the fourth quarter, when there is a launch of a project, sometimes it sells very well in the launch, such as the case of Urban Barra Funda, that sold 88% in the same month that it was launched, also in the case of Ipiranga. This brings a very strong contribution to the results of the quarter. When you have development projects that are good like that, with a lot of sales and superior margins, the initial POC of the land brings very important weight to it. This is why our gross margin were positively impacted.
I would like to ask a follow-up question related to funding. You talked about purchasing land bank in more central areas. Indeed, the most recent launches and maybe considering this larger land banks that you now have, somehow brings a higher margin for these projects that have been just purchased, that have just been added to your land bank in more central areas and with higher prices. Do you believe that this trend will continue and we'll keep seeing higher margins in 2021?
We purchased these lands to increase the prices. We are still concerned with the acceleration in construction material costs. We are trying to defend ourselves from this increase. Of course, there's a limit to it. It limits our sales price, too. We want to keep high margins, of course. It's important to look at the average margin. I think that the fourth quarter margin is unusual. I think you should look into the average of 2020, 37. I think that's a more feasible level that we could expect to maintain in 2021.
Thank you very much and have a good day.
Our next question is from Nicole Inui from Bank of America. You may proceed.
Thank you and good morning, Fabio Cury, Ronaldo Cury, and João Mazzuco. Congratulations on your results. Thank you for sharing this information in this call. I would like you to talk about the lockdown that we have in São Paulo and its impact on your business. We see that some real estate developers are going to delay their launches. Were you able to launch everything you wanted before this lockdown? How will that impact future launches and also the pace of the construction process and projects, and again, the possibility to sell those projects?
Hello, Nicole. Good morning, and thank you for your question. In this quarter, we've already had some launches. But differently from last year, I think there are two different points that are different. First, the team got used to selling in the digital world. They know how to operate, how to take those customers, and our customers also got used with the digital world. It is not the same working like that, of course. Face-to-face contact is also always very important. But we have a drive-through system for documents so that people do not even leave the car.
Of course, it's not as easy, but we've been through that. Life goes on, and we will now continue our sales system, and it's not going to be impacted by the lockdown. Last year, nobody knew how to operate that, but today, this operation runs smoothly, both from the purchaser's side and also the seller side.
What about on the construction aspect? Has it any impact?
No. Construction projects continue. We don't have, at least in São Paulo, where Cury operates São Paulo, Rio de Janeiro, and Campinas, the construction sites are operating.
Thank you.
Our next question is from Vitor Lima from Promot Capital. You may proceed.
Hello, and thank you for taking my question. Congratulations on your results. I would like to understand the VSO level that you produce. It's a very healthy levels in the year, but in the quarter, the VSO dropped. I think that maybe there was an impact in terms of supply. Now that you have the strategy of using more premium lands at better locations to keep the 37% gross margin that you believe is more representative, maybe do you expect to have a lower VSO? What would be the ideal VSO level in your opinion?
Good morning, Vitor, and thank you for your question. Yes, this drop in the fourth quarter reflects the number of launches we had in the last month of the year. Our VSO to us is one of the main strategies for the company. It is part of the whole mechanism, something that determines our success. We need speed of sales. We need to keep this yearly VSO level above 60%. Our expectation and our target is to keep these levels at 65%, 60%. It tends to grow over the year and it grew in the last quarter because of the high number of launches we had in the second half of the year, especially in the last months of the year. That is going to be recovered along 2021.
Okay, thank you.
We'd like to remind you that to ask a question, you can press star one. Our next question is from Alex Ferraz from Itaú. You may proceed.
Good morning, Fabio, Ronaldo, and João, and thank you for your presentation. I was briefly disconnected from the call, so I apologize if my question is repetitive. My question has to do with the mix of launches you expect to make this year. One of the advantages of the company is that you can navigate very well between the Casa Verde e Amarela low-income housing program, as well as other segments. How do you see this mix in 2021? Because on one side, there is pressure in cost. Maybe it makes sense to sell units at higher prices, but there is also pressure on the interest rate side. Maybe banks will also change their behavior, and maybe you might face problems in affordability. How do you see all these aspects, and how do you foresee the mix of launches for 2021?
Good morning, Alex, and thank you for your question. In the past years, we have escalated in the stairs of prices. We first worked strongly on the range 1 and 1.5, then 2 of the previous Casa Verde e Amarela housing program.
Now we are going to higher ranges, 2 and 3, and now we are focusing more on ranges 3 and 4, and that's where we expect to maintain our operations in 2021. Almost all our projects in 2021 are there. So with an average price that varies from BRL 180,000 to BRL 240,000, and from 10%-15% above the program. That's the new step. We are going to have some launches that are not part of the Casa Verde e Amarela housing program. We will start a new stage in the company with new products. We will strongly invest in those ranges 3 and 4, as we did in 2020, and we're also going to operate at the range above that as SBPE.
Thank you, Fabio. That was very clear.
Let me remind you once again that to ask questions, you can press star one. Now, this concludes the Q&A session. I would like to turn the floor over to Mr. Fabio for his final remarks. Please proceed, sir.
I would like to thank everyone for attending this call, and I hope to meet you once again in our next meeting, and I wish you a good day.