Good morning, ladies and gentlemen. Thank you for standing by, and welcome to Sirella's conference call to discuss the Q1 of 2021 results. Today with us, we have Rafael Aberhorn, Chief Executive Officer and Miguel Mikkelberg, Chief Financial and Investor Relations Officer. We would like to inform that during the company's presentation, all participants will only be able to listen to the call. We will then begin the Q and A session when further instructions will be given.
We'd also like to inform 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. This conference call contains forward looking statements that are subject to known and unknown risks and uncertainties that could cause the company's actual results to differ materially from those in the forward looking statements. Such statements speak only as of the date they are made and the company's datum in light of new information or future developments.
I will now turn the conference over to Mr. Raphael Korn. Please you may proceed. [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] Good morning, everyone. This second this first half was marked by the acceleration of pandemic in Brazil.
With the stand closed sales stands closed as of the March, We chose to accelerate some quarters of the on the other hand, The quality of our products contributed to have a good sales performance, which totaled approximately BRL1 1,000,000,000 and 22% higher than the Q1 of 2020, even with launch volume 60% lower despite the operating results on the the operating results the last quarter had a positive effect. Presales reached BRL130 1,000,000 with an up 22%, even that with the high growth when regarding the last quarter, we had a positive cash generation of BRL70 1,000,000. Despite this challenging scenario, the prospects for reopening the economy in the next quarter Allow us comfortable margins and the company remains optimistic for the next years. We'll maintain our commitment to search the best results for stakeholders. Now let's talk about operational results.
Thank you, Rafa. Good morning, everyone. On Slide 5, we have launches of Siedela, in the Q1, we launched 6 new products with a PSV that was 60% lower than the when considering everything, it was 60% lower. The company share in the launched volume was 90%. On Slide 6, we'll talk about the Presales performance.
In the Q1, contracted sales reached BRL1 1,000,000 at 22% when compared to the first quarter of 2020. Excluding swaps, sales reached 8 20, 24% SEDELA share and that is higher and Sao Paulo accounted for 46% of our sales. On Slide 7, let's talk about sales speed. The SOS of the company was 52.8% When in terms of launches and quarters, this quarter's 41% sold. On Slide 8, let's talk about the total inventory of Sorela.
At the end of the inventory, market value inventory reached BRL 4,800,000, 11% lower than the previous quarter. Change in inventory can be seen in the chart on the left. On Slide 9, we talk about finished units. In this quarters, we sold 19% of the finished units in the period, which dropped 17% when compared to the Q4 'twenty. Slide 10, we talk about delivered units.
In this quarter's SEDELA delivered 3 projects totaling 408 units and a launch of BRL400 1,000,000. Slide 11, financial results. The net revenues of the company reached BRL1 1,000,000, which is 90% higher than the same quarter last year, the gross profit amounted to BRL347 1,000,000, 3% higher than last quarter and 100% higher than the Q1 of 'twenty. We have a net income of BRL192,000,000 compared to BRL 261,000,000 of previous quarter and a profit of BRL28 1,000,000 in the Q1 of 'twenty. Slide 13 talks about our profitability.
In the Q1 'twenty one, our return on no equity amounted to 36.7% in the last 12 months. On Slide 14, we talk about debt. The gross debt at the end of the quarter added BRL2.7 million. With a 2.4 cash position, the net debt amounts to BRL 227 1,000,000. If the total gross debt, 78% is long term.
Our net debt over total equity reached 3.8%, 1.3% lower than last quarter. This low debt level rectify this financial solidity of Sirela and puts us on the right path to maximize return. On Slide 15, let's talk about cash generation. Q1 2021, we had BRL70 1,000,000 cash generation compared to BRL479 1,000,000 or BRL439 1,000,000 in the previous quarter. Now, Raf and I will go for the Q and A session.
Thank you. Thank you. We'll now start the Q and A session. Questions will be answered in the order they are received. Please hold while we collect the questions.
The first question comes from Alex Fajas from Itau BBA. Good morning, Rafael and Miguel. Thank you for the presentation. I have a question about gross Margin is a strong margin and improving when compared to the previous quarter. And the question is more Related to this cost scenario, because in the high and middle income projects, there's some room for maneuver, pricing gains.
But when we look at low income, you will see that's being more affected than when we look at the results of your Piyush, so in terms of Ivaas and the other projects that were important last quarter, Has have they undergone any budget review? And even so, the margin remains high? Or do you believe there may be some adjustment in margins in the future, especially when compared to low income segments of the company. Good morning, Alex. This is Miguel speaking.
Actually, the Scenario is quite challenging and it's harder than navigating it with us rather than in high income where we have some more purchasing power and we can have better Prices, we worked with a provision for future inflation in our costs. So this is why the impact for us in this Q1 was milder, but the impact of the future would depend on the performance of INPC inflation index, we have budgets there very well planned, So we don't see any need for adjustments. We have INPC for the future of 7.5% per year And our construction costs remains at this level, we won't need any review. Okay, Miguel. Thank you.
The next question comes from Gustavo Cammauba, BTG Pactual. Good morning. First, Talking about gross margin again, Miguel mentioned the impact of ANCC in the high and middle income projects. How do you see the high INCC that can cause contract cancellations in the future. Is there any risk of the debt balance growing?
And also in the future at delivery time maybe having a high interest higher interest rates in Financing, are you doing anything to mitigate that or maybe being selecting more the customers in the beginning of the process? Or are you going to wait until later to see what you're going to do? And the second question is about your expectation for launches this year. You mentioned in the release that this quarter was lower in sales because of lockdown. So I would like to understand your pipeline of launches.
Do you expect any growth or will it be organic as compared to last year? Thank you. Good morning. This is Miguel speaking. I'll answer your first question.
As for the risk of cancellations because of high interest rates. We are well protected against that. First, we work with a very conservative Price list, so at the moment of delivery, Our customers usually pay 30% to 35% up to delivery time and whereas banks have Remaining amounts of 80% to 85% and the prices are higher than INCC. So The amount to be paid is even lower. So it depends on the assessment that banks make of properties.
But we have some room for maneuver when compared to banks. In terms of interest rates, Today, we make a credit analysis supposing that customer will finance in the future at an interest rate of 8 point 2%, which is 50 basis points above the best rate we have for our customers. So we do project for Higher interest rates and we have some room for maneuver. It's not that we believe that interest will go up so much, But we are conservative, so we always work in credit analysis with the higher interest rates than that in force at the moment. Jafar will answer your second question.
How are you, Camva? Well, adding to what Miguel just said, The cancellation of contracts in our minds in addition to everything he said, I mean, The cancellation laws in force, so we know that a lot of VIVAS that we sold It was due to law, is not a matter of price or interest at the end. It's more of a related to the law. That makes us feel very comfortable. Usually the correlation between the cancellation Monster or Manas and the cancellation itself is different.
We don't see these haunting cancellation figure coming back. I think that this is something of the past. It won't be back so soon. I think in lower income segments, it's a bit more important, but even so. About Launchesk, The figures that Miguel and Yuri convey to you about 2021 are maintained.
So we hold up a bit in the end of the first quarter, but The population is being taking the vaccine, so we believe we won't have much more many more surprises. Otherwise, the figures are maintained for the year according to forecast. The next question is from Daniel Gasparetti from Credit Suisse. Good morning. Thank you for the call.
I have two questions. First, relating to the Sales oversupply, do you feel any acceleration now with new launches? And the second question It's about rise in costs in terms of labor costs and construction. How do you see this and other services in the chain, in the supply chain. This is Rafael.
Your sound was not very clear. I couldn't quite understand your questions. I am sorry. Can you hear me better now? I don't know if it's the connection.
I can't quite hear you. Is it better now? Yes, I think so. Okay. Two questions.
The First, regarding acceleration in sales oversupply. Are you feeling anything at the end? Some people saying that the prices of properties are affecting the demand somehow And the cost of services, the second question is about labor costs. I would like to understand what do you see in that area? Okay.
I think I got it. Well, about INCC at the end having an effect, well, it's not good, but I wouldn't say that it would impact the macroeconomic fundamentals. We have low interest rates after many years of a crisis in construction. So this is stronger than the INCC, a bit higher. So one a few customers can feel it, but Overall, I think the moment is good and will continue good and we're quite excited about it actually.
Prices have gone down For many years, so some price variance makes sense. I think the customer realizes that The low interest rate is low. I think this the current trend should prevail. As for services, the second question. In terms of service inflation, Well, INCC is under pressure as a whole much more about materials.
We don't believe that labor costs will be much of an issue. We believe that the main villain is material, But of course, there will be some transfer of prices in some services, but overall, this won't be the villain. If there is a villain, it would be the cost of materials, construction materials. I think that labor cost is something we can get by with. It won't probably won't change much from what we consider normal.
That's it. Thank you. Can I ask a follow-up question? What is the cash operation this year? There is a very positive view of Portfolio origins since for 2021, has that increased or not?
What do you expect from that? Well, everything is going fine. We remain at the same remain steady at the same rhythm we had before. It's a small Operation Ed, it's doing fine. Okay.
Thank you, Rafa. Good. Have a good weekend. Thank you for the answers. The next question comes from Andre Massini, Citibank.
Good morning, Rafael and Miguel. My question is about contingencies of 29,000,000. Could you give us some color on what were they about exactly? And if they are related to the time when you were more spread out geographically like in the Northeast and so. And back then, you used to have many more third party contractors in taking care of construction sites rather than now.
So everything now is more in house and well controlled. So today's operation of the company with fewer geography locations and should generate a much lower contingency level than we see today or 29, 2024 is something that should remain Stable considering that this is a business that has some contingencies now and then. Thank you. Good morning, Andrea. This is Miguel speaking.
The BRL29 1,000,000 in contingency, 90 Percent have to do with construction sites that are at the end of their guarantee or that whose guarantee have ended recently. So these are construction sites of 2016. So it accounts for those periods in which Sorelau used to be much more diversified geographically and other many constructions that were carried out by 3rd parties. And the contingency level is above what we expect for our currency operations for our current operations, But it's in the middle term, we don't expect it to be so high. We expect it to be lower than we have currently.
Okay. Thank you very much. Have a good day. Please hold while we collect the questions. The next question comes from Marcelo Mora from JPMorgan.
Good morning. I have two questions. Could you comment on the increase in the sales price? Have you been able to transfer that To clients, can we keep it closer to inflation to protect your margins? And also the line that had this line that was so strong this quarter.
Could you Comment on that? Good morning, Motto. This is Miguel speaking. Well, We are able to transfer INCC to all the current projects, especially in middle and high income projects. Whenever I have a chance, we are trying to raise increased prices above INCC whenever there is room for it and whenever the sales of a supply is high.
It's a case by case analysis, but we're trying to do that, yes. As for the line, you mentioned this quarter was very strong In with the main aspects are the results of 2 projects that we have in partnership with Heinz, EBITDA Pueira for you And the other one that had important results for the quarter. So Together with these SPEs, that accounts for the mostly most of the results of that line. Thank you. This concludes the Q and A session, and I would like to turn the floor over to Mr.
Rafael for his final remarks. Thank you all for attending the call. We hope to We have vaccination increasing rapidly so that the entire population of Brazil can be healthier. Thank you all and have a good day. Thank you.
This concludes Sirela's conference call. You may now disconnect and have a good day.