Good evening, everybody. Welcome to the call of the first Q 2025, Direcional Engenharia. I am André Damião, Investor Relations. We have Ricardo Gontijo, CEO of the company, and Paulo Sousa. We are going to show you the main highlights of the first quarter 2025, and then we're going to have the Q&A session. If you are an analyst or director and would like to pose a question, use the raise a hand icon in the Zoom, and we can moderate all the questions according to the order of the questions. We are also transmitting live our event via the YouTube. We're recording the presentation so that we can give it to you afterwards. We also have here the first highlights, and Ricardo, you have the floor.
Good morning. I would like to begin by thanking you for your participation. I'm going to begin with page three, showing you the main highlights of the first Q 2025. It was a quarter where, in our point of view, we continue delivering increasingly solid results, more consistent. The first highlight I would like to share with you is the fact that we entered the Ibovespa index in the beginning of the month. This is huge reason for pride for us. This is to stress the work we've been doing. Now, with regards to operational and financial data of the company, I would like to say that we are very satisfied for having delivered the greatest growth margin in the history of Direcional this first quarter. It was a very relevant growth when compared to the fourth Q last year, and even when compared to the first Q of 2024.
A gross margin, when adjusted by financing rates, interest rates reached 41.5%, an extremely solid level. Also we had a growth of approximately 200 basis points when compared to the previous quarter, and more than 4 percentage points when compared to the first quarter last year. Huge relevant growth showing the efficiency of our production, pricing, execution of our works, construction works, way of negotiating with suppliers. It was a series of situations, and when they are summed up together, gives us this margin, which is huge reason for us to be proud. When we look at the first Q 2025 and compare to the first one last year, we delivered a net revenue of 45%, net profit 55%. When we analyzed the operational net profit, 64%.
As we have grown, we have been able to capture all synergies, all efficiencies from an increment in our operational leverage. Our growth format, we're growing in the same areas where we are in. We have had been able to have gains in scale that has materialized, resulted in our numbers here. When we look the operational net profit, it was the greatest level for a first quarter in the history of the company. It grew 32% when compared to last year. This net profit level, when we analyzed it, we delivered an ROE of 30% growing quarter after quarter and will continue in the following quarters. Page four, to continue with the main highlights of our operations. In general, we compared quarter with the previous quarter or the quarter compared to the same quarter of the previous year.
Here we are doing an analysis of what we were able to deliver in the last five years. It is a long cycle, and it is very important for us to analyze a longer period so that we can see clearly what is being done in the company. When we analyze the last 12 months closed in the first quarters of each one of the five years we look at, you can see our launches have grown 3.4 x, sales 5.2 x, net profit 6.8 x in five years. The gross margin grew 4.2 percentage points from 35.1% to 39.3%, and we analyzed only this quarter, 41.5%. The operational gross margin, net margin tripled this year from 6.4% five years ago to 17.2% in the last 12 months, closed in March. This is a journey that makes us most satisfied. We can see what we have done.
We are being able to deliver, and the whole Direcional team is very happy to share this with our shareholders and all of you that are here in the call. Now, going to operational data highlights. The number of launches in the first quarter of 2025 was in keeping with the first quarter 2024, BRL 901 million. BRL 230 million Riva, BRL 671 million in Direcional. What is important in this slide is that Direcional shares in projects launched have grown, and this has been a growth for a company that does not pressure our team, our capacity to execute. It is a healthy growth. When we look at the Direcional share of launches, the growth was 23%. This is very relevant. When we look at the last 12 months, launches reached BRL 5.7 billion, growing 12% in relation to the last 12 months closed in 2024.
When we look at the current perspectives of our business from the point of view of demand, funding availability, and also level four of Minha Casa, Minha Vida, which is very relevant and impactful and reaches a huge amount of Riva's products, it is possible that we will see the volume of launches continue with this growth trend that we have had in the last quarters. Page seven. When we look at our net sales in this first quarter, we had more than BRL 1.3 b illion in net sales, 1% growth compared to 2024, the first quarter. This is where we not only analyze the Direcional share, but partners of shares that we have in some products. When we look at Direcional, only the share, you can see that the growth is greater. Net sales of 10% our share.
When we consider only our share, we reach BRL 1.1 billion net sales. The last 12 months closed in March, net sales reached BRL 6.3 billion, meaning a growth of 40% when compared to the last 12 months closed March 2024. In spite of having had sales volume which is similar, it is important to stress that the volume of units available in this first quarter of 2025 was inferior to the inventory level we had in the beginning of 2024. So our net sales speed grew in this first quarter. It was the greatest VSO level for a first quarter in Direcional. In this first quarter 2025, we reached 23.3% net sales speed.
In this moment in the country where capital is expensive, where we've been able to have a very high control of production costs in the company, our priority continues being the growth of the net sales speed to minimize the need for capital in this moment that we're going through, so that we can continue growing, returning capital for our shareholders. It's important to stress this priority from here on. The maintenance of this growth, this growth journey, and also the net sales speed. Now I'd like to give the floor to Paulo so that he can share with you the main financial highlights of our operation.
Good morning, everybody. Thank you, Ricardo, for the initial presentation and to continue with our financial numbers. Net revenue. To the left, we show you the net revenue consolidated in our statement of accounts.
These are things that we control, and in here, we have been able to deliver a 45% growth in the 12-month vision. Quarterly, the expressive growth of 34%, and this is a continuity of the operations during 2024. As Ricardo showed us, sales grew hugely, and now we are beginning with our works and the revenue goes through results. Also, our business continues. We buy the land, we launch, we sell, and revenue comes with constructions when things begin to be sold. To the right, we have some Special Purpose Entities, some projects which are in partnerships that are non-controlled or we have a joint control. In this case, the results in our statement of accounts will come through equity income.
In the consolidated vision, the revenue grew 22% in the first quarter, and we see a reduction of the revenue coming from partners when you compare quarter-over-quarter. Also when you compare year-over-year, 2024 versus 2025. When we look at the accumulated 12 months, we are a BRL 4.7 billion company in terms of deferred revenue. Following this, we start with constructions and then begin with growth. The next slide here we have the evolution of the gross margin. This is the reflex of the good work we did with price management, cost management, and the evolution of our projects. We reached 41% gross margin this first quarter. Very relevant growth compared to the previous quarters. When we look at the 12 months, 39.3%.
A quarter of 41.5%, we can see here that our gross margin indicates a level that is superior when compared to the previous years. To the right, we have the rev margin. These are sold projects, but not constructed yet. This goes through our statements of accounts, and we can see there was a margin growth of products that have sold but not constructed, showing a trend of where we maintain the gross margin because of the stability of this margin. Here in this quarter, the volume was BRL 3 billion in deferred revenue. Here, these are the companies that we consolidate. BRL 3 billion talks to the previous slide of the BRL 3.5 billion deferred in the last 12 months. We have almost one year of revenue in terms of sold units. All we have to do now is to construct expenses. This is the continuity of the work.
When I look at the general administrative expenses, we have been able to capture efficiency gains here. When we look at the beige line, we can see that expenses over net revenue was 5.4%. Nominally, it dropped a bit. There is nothing very specific here. It is a quarterly volatility, which is normal. To the right, the 12 months, we see an important direction here compared to the first 12 months close last year. We went from 6.6% to 5.3%. The red line are expenses over the total gross revenue when we consider the non-consolidated SPEs. This is efficiency, right? You see, we operate in all SPE sales and constructions. Here, the consolidated compared to total revenue is 4.2% of the revenue in the last 12 months. Trade expenses or commercial expenses, the discipline of the company here, right?
We are at 8%. We have been for several quarters in this level, right? A slight volatility here from quarter to quarter, but recurrently, we can see the annual visions, right? 8% and 8%, so 8.18%. This is very close to the numbers we had here for each project when we look at the average, and this shows the company's kind of clock. We continue delivering growth in terms of net sales speed. You can see just how much it changed parting from last year, and remains very high this year with the same level of commercial expenses. We are a stock. We are going to sell more the right way, selling margin and not increasing expenses. Equating processes and delivering assertive products in the market. Now to the results of our net profit. We have the two visions.
The net profit to the left here, reported in our results. We closed the first quarter, BRL 165 million in results, 12 months, BRL 653 million. This is the result of our business as a whole, an eventual non-recurring event. To the right, we have the operational net profit, where we purge non-recurring results. For example, last year, we had good results, eventual sales of share assets that impact results. When we remove all these non-recurrent events, in the 12 months, it was BRL 614 million. Net margin BRL 375 million. Net profit 17.7%. At 15.2% to 17.7%, so we are in the right path. The first quarter, we can see the results lines. It is usually a quarter that seasonally has less growth when I compare it to the fourth Q, right?
Normally, the sales begin in the end of the first quarter, and the second and third quarters is where we have the acceleration of the construction works, and this is where we have important results. Now lastly, capital structure. Here, everybody that knows us knows that our discussions begin here always. The lever charge, which is the net debt divided by net equity, we closed at 10.9%. We didn't burn cash in the quarter. We had relevant payments of dividends in the beginning of the year, in January, BRL 377, BRL 300 million. Almost all of this net debt variation was the effect of this payment of dividends. We closed with a net debt of BRL 257 million. Which is a leverage level, which makes us very comfortable to operate in this market we have here.
And also, when I look at the chart to the right, showing our net agenda, which is very elongated. I believe it's one of the most elongated in the sector. Extended debt of up to 10 years, which gives us a lot of comfort for us to be able to do our business without concerning ourselves with leverage.
So here in the middle chart, you can see here we grow almost 40% here. And this, when I compare to the net schedule, when we begin the second quarter 2025 with BRL 1.6 billion cash and only BRL 200 million in debt to pay in 12 months is very good. And only BRL 257 million. So we feel comfortable that we will be able to capture any opportunity that emerges and good business that might emerge here too. We are prepared and very ready to execute our strategy. Well, this is it. I would like now to begin with our Q&A session. André, you have the floor to begin our Q&A.
Now let's continue. We will begin with our Q&A. First question, Bradesco, Pedro Lobato, you have the floor.
Good morning, Ricardo, Paulo. Two questions here from our side. I'd like to understand the dynamics of cash generation for the year. There was an impact of BRL 27 million from the amortizations of the portfolios. So I would like to understand how you see cash generation for the year, considering generation of core business, amortization of portfolio, eventual sale of portfolio. So how do you see this composition? Second, with regards to level four, we have already seen Caixa disclosing preliminary dates with simulations already done this first week, almost 1,000 proposals ongoing. So I would like to understand how you see this very initial demand, right?
But how do you see it? And Ricardo also talked about the continuity of growth in launches. So I would like to understand if this can somehow impact the level of launches you imagine for this year or only next year.
Ricardo, I will start with answering the question, and then I will give you the floor to talk about level four. And if you would like to talk about cash generation. Well, Pedro, the way you like to understand the results of operations of cash generation versus non-reoccurring, we had BRL 5 million in portfolio this first quarter. And when I look at-- During the year, this level grows, right? Because of what we incremented compared to last year. And also when we look with regards to the future, well, we don't have a formal guidance for cash generation. We don't have a formal guidance here.
What I can say is to give you an idea of our business. Generally, you grow with putting capital in the operation, and when you stabilize and in our business, Minha Casa, Minha Vida Operacional, when it sees the need for working capital, it's lower when compared to the normal business of development, right? Where developers do it without transfer to the plant. And then we see there. For example, at the end, an investment in working capital and beginning generating cash. And when we look, Ricardo showed you the launches slide. We can see that last year we grew less in launches compared to previous years. And this year we have began a first quarter in keeping with the previous year. I'm not going to say we're not going to grow, but when we decelerate, it is possible the operational cash generation comes, and this is what we see.
Operational cash generation is beginning to emerge, and this is the trend, I believe. The second part of your question, going back to portfolios, we continue seeing demand for portfolio. It is a very good asset. Liquidity in the market, it has, and it is an asset that we generate naturally. I don't make any effort to generate this. It's part of our business, selling, financing the customer. It is probable that when we originate this asset and we have a demand in the market, it is probable that we make new sales. Well, I summarized things here, Ricardo, but tell me if you think it's necessary.
As a summary, this is the trend, I believe. Pedro, it's what Paulo said with regards to cash generation. In this moment, we continue seeing a huge demand for assets that are a backup. We want to continue monetizing these portfolios. We don't want to carry this in our balance sheets, right? We believe that to have this cash in the company generates value. We should continue working the same way we worked in the last years, as long as we have these discount rates we've seen currently in the market.
Level four. Level four is transformational, Pedro. The purchasing capacity gain of families that are eligible for access for this funding source of level four is just huge. Not only because of the reduction of interest percent that nominally is 10% today, but also the different amortization system we have when we're withdrawing from the savings account and do this in Minha Casa, Minha Vida. Pricing out of the program is 34% more than within the program. This is a huge, relevant purchasing capacity.
A number of families that begin being included in the market, and it's relevant number. Level four is a priority for us. Trying to give you some color here. Direcional now is within Minha Casa, Minha Vida, and when the previous cap was BRL 350,000 , Riva, at BRL 350,000 cap in the closing of the quarter, right? We had the inventory of last year's closing, and now the first quarter, 34% of products available from Riva went to level four, and it grew 70% in the end of March. The products we have today in approval process, most will be eligible to Minha Casa, Minha Vida, right? As long as the buying family's company is inferior to BRL 12,000 a month. We have a huge volume of customers that are being approved and will sign contracts for level four.
We are very positive here, where we have a relevant number of products which will fit into this level. Also, units will be eligible for this program. Here, in case there is a demand of increment because of this scenario I showed you, most probably we will have the conditions to increase the number of launches to meet this demand, specifically in the second quarter. For this, it is very positive and works will begin probably from the beginning of 2026. Contracting people, training people for operations in our construction process with our standards, it's feasible. We will see, monitor what's going to happen with supply and demand, but we are very positive with regards to the affordability of level four in our market.
Thank you, Pedro. Next question, BTG Pactual. Cambauva, you have the floor.
Good morning. I would like to ask you two questions here, too. Tell us a little bit about. You announced this payment of the sale of a stake in Riva, and I would like to understand this perspective in terms of dividends. I had believed that these proceeds received from the Riva sale would be transformed into dividends. I want to see how you're considering this now. Should this happen now or at the end of the year? And also, here, your expectation with regards to selling an additional stake by October. This in fact was BRL 100 million. Riva was in this roadshow process attracting investors. And with this change of level four, the business improves a lot. I believe that the attractiveness for acquisition of a stake in the company is even better.
I would like to see how you see the possibility of raising the sale percentage. My other question has to do with the results in the gross margin. You had said that this gross margin increment became of new harvest. I would like to know if this is completely recurrent, this new gross margin level. I know in the long term, you always say that the gross margin should be smaller, but considering the short term, the next 6- 12 months, do you believe that it will remain in this level? Or was there a non-recurrent effect, one or two specific projects with margin well over the average, or some stronger cost reversion, right? I'd like to understand how you see this gross margin. Thank you.
Camba, I'm going to answer the first two questions, and then with regards to the gross margins, Paulo can talk about this with you. Yes, we announced a material fact this morning with the conclusion and liquidation of the first tranche of permits regarding the acquisition of 7.55 % of Riva by a fund managed by Riza. Careful with the names. This is exactly what had been foreseen originally in the operations we had designed with them in the beginning of December. With regards to this material fact, somehow this has shown us our operations with them. And there we say we should have a next liquidation and settlement in the beginning of this quarter. Well, Camba, I can't say just how much it's going to be. I can't really say much with regards to this. This is a process that is ongoing by Riza.
The first settlement today, and most probably it was stressed in the material fact, will be in the next quarter, right? We'll see how Riza, if it's going to exert its option to deal with the stake it is acquiring, and we will inform the market once this happens, right? If this happens. With regards to the use of the proceeds, we have operated with a leverage level that is low in Direcional. We closed. We had a huge payment of dividends in January. We closed the quarter with a 10% net debt, which is a very comfortable level. Because of the duration of the amortization program of our debt, it's slightly lower than the levels we believe are optimum levels in terms of capital structure. And here, obviously, this is a decision of the board.
The board is going to make the decision with regards to what to do with these proceeds. Perhaps in the last five years, you've seen proceeds. You haven't seen it remaining in the cash of the company without use. We have returned these proceeds where we haven't felt the need of the use for operations. We return it to the shareholder, and this is recurrent. The board will see how things are to take this decision. Certainly, we are not going to keep the proceed and have it just in our cash. We're going to wait for the meeting of the board so that we can decide what is the best use for these proceeds we're receiving. Paulo, can you share with us with regards to gross margin, anticipating that it didn't have a non-recurrent effect this quarter. It's important to anticipate this to you.
Thank you, Cambauva, for your question, Ricardo, for this first part. Well, this is what Ricardo said, Camba. The gross margin is our business. There was non-recurrent effect. It was the mix of the products that's ongoing. That's the gross margin. Marginally, we had a very good product mix in the quarter, and we can't project gross margins in this level, right? We have always said we launch a product. Our business manages to deal with lower gross margins than we have to now, and we can't perpetuate always a gross margin. In the short term, I don't think it will oscillate too much. We can see it via our rev margin, which grew a little bit, deferred revenue, right?
When we look at the different revenue, the different quarters, right, we can see it has been growing in the last quarters, right? It went from 40%, seven, eight quarters to 44% now, and the gross margin has been catching up. Also, I believe there's a huge oscillation for the next quarters. This level, once again, our business. It is rare to have very disruptive movements or huge volatility. Generally, you go slowly with low volatility. I don't know if I was able to be very clear here because it depends a lot on my product mix. But I don't believe that our margin will change too much in the short term, which is your question.
Great. Thank you, and have a very good day.
Thank you. Now, next question, UBS. Ana Julia, you have the floor.
Can you hear us?
Because your volume is way too low. We can't hear you.
Can you hear us better?
We'll be able, but it's way too low.
Yes. First question with regards to net sales speed. Can you clarify things more here? If you can link the increase of the net sales speed to the growth of volume. Is this idea correct? Second question, a follow-up. The transfer in areas like São Paulo, you talked about cash generation this year. [audio distortion] Thank you, everybody, and also with regards to the cash.
Well, Ana, I will try to answer the first question, follow the second, right? Because your volume was way too low, very difficult to understand. A priority for us is the increase of net sales speed in this moment. We have a very elevated capital cost in the country. On the other hand, our works are under control with regards to costs.
The main point of attention is availability of labor in São Paulo and Belo Horizonte. The other areas, states in Brazil, we haven't had more serious problems with regards to labor availability. These are two states which are important. But when we analyze the company as a whole, they are located in regions that represent 40% of our operations and 60% of the company's operations. This challenge is not so bad in terms of availability of labor. When we look at inputs, we have seen important reductions in terms of costs of certain inputs or products in our business, right? Here, vis-a-vis the scenario with controlled costs and expensive capital, we prioritize net sales speed so that we allocate less capital in our projects and can operate with greater levels so as to have a maximization of our ROE.
With regards to net sales speed, we haven't made too many great adjustments in terms of policies in the company. No, this hasn't been done. Our prioritization is the training of the team, hiring new professionals to increment the team more than any other type of flexibilization, much to the contrary. When we look at Minha Casa, Minha Vida, which is already operating in some states we're working in, we've had an important reduction of our Pró-soluto.
Most possibly what we should see is an increment in VSO that we're working with reduction of Pró-soluto, of provisions for losses with regards to new sales done in Minha Casa, Minha Vida Cidades. We should have a gain of a shift in here a year where we have less defaults. This should be happening without any kind of change in our history of operation with regards to margins, provisions, anything here.
Paulo, I understood that Ana Julia was talking about Minha Casa, Minha Vida in the Manaus transfer to Fortaleza, Federal District, Pernambuco. I think that was the key point of her question. Ana Julia, with regards to cash generation, I talked a little bit about operational cash generation and eventual sales of assets. Here there is a point where we've had some information with regards to the effect of implementations of Cidades. Since this is a process that involves one more process in the transfer to customers, we've seen here in the states where there is Minha Casa, Minha Vida Cidades are stretching and an elongation of the term for transfers. Generally, we transfer in 20, 30 days between sale and the signature of a contract.
In some states, this has elongated. This happened during last year and in the beginning of the first quarter. But I think we're going towards a stability in most of states. I think in the second quarter, we will begin seeing a volume of transfers equivalent to the volume of sales. The backlog of non-transferred units stopped growing in the first quarter, and now we start really cruising. I think that in some areas, we will recover part of this backlog and even transfer more than we sell during this quarter, next one, because we've seen huge effort of those The agent from Cidades, being more efficient, more effective because the person that is most jeopardized is the beneficiary, the client that takes too long to have his interest to solve the issue.
I believe that here we've had one or another state where this scenario has changed. Today, in 2025, it operates a program that is much better than 2024, and I think this is the trend. We've seen a lot of will from all parties involved to accelerate the process. In the first quarter, we haven't seen results yet, but I think that this quarter, next quarter, most probably we will see this change in scenario. Also another point with regards to level four, the end of your question, I believe. We have the first minutes already being issued, and I think this next week we'll have the first transfers of level four, the program already in our structure. Today, the sales team sells normally, right? If you enter the site of Caixa, you can simulate a financing.
You can do all the value of the share financing, interest rates, price table, withdrawal table, everything is working. What is still missing is the signature of one or another contract. Very quickly, we're going to have this working normally without any type of big surprise. I don't know if I've shown you everything, Ana, if I was able to answer.
Thank you. Yes, you did.
Thank you, Ana. Next question. Maria Angela Castro.
Good morning. Thank you for your presentation. First, with regards to margin, I want to understand how you see level four project margin, because the company didn't recognize this before, it didn't exist. So how do you see the gross margin? Will they have the same profitability we saw this quarter, or can we believe an even greater margin for this project because you can have stronger price gains?
Secondly, the sale of Riva, which will be recognized this second quarter. How do you believe this will close the minority interest in here? Should we have a change here in this quarter and the next ones? Are we going to have a change here? How do you see this operation? Thank you.
With regards to level four, we delivered a quarter with very solid and positive margins, and we see level four working with margins similar to what we have in level three and the SBPE, which are very solid margins. I think it is prudent not to consider margin expansions in your models because prioritization is net sales speed. So level four allow us to work with margins equivalent or margins we have operated in. Our gross margin will be corrected to lower margins than we delivered this quarter.
This is the greatest gross margin that we delivered this quarter, right? But level four certainly is not going to have margins below the ones we have reported. Most possibly, they're not going to be superior here or over, because the priority is seeing to those companies that couldn't buy their own house with the SBPE conditions. Now we want to meet the demand of these families. These are new families entering our market, and effectively will bring us this increment in net sales speed. This is what we prioritize here. Paulo, with regard to the impact of the Riva's stake and minority interest.
Maria, good morning. Thank you very much for your questions. The minority interest line tends to increment in proportion to Riva's participation or share in relation to Riva's results. A very simple calculation here. Riva is more or less 40% of our business. The material fact we released today, Riza bought 7.55% of the company. If it remains this, a quick calculation is 17.25% of 40%, right? Try to project the results of Riva. We kind of can see this moment. Parting from now, 7.55% of Riva's results will leave the minority interest line in our statements of accounts in favor of the vehicle used to buy the stake of Riva. Could you understand?
Yes, Paulo. Thank you very much. Now, very quickly with regards to margin, did you observe a gain in the feasibility when already the land you already had now being new, better conditions with regards to level four?
There was no expressive gain in this sense. Maria Angela, we are going to have an increment of the constructed area increasing the PSV of that project, potential sales value. In general, we substitute a product of two rooms and a bathroom with two rooms with a suite and a social bathroom or a three-room apartment. So where the law allows, the total amount of sales will grow, which is positive. This gives us an indirect dilution of costs of the works and also dilution of the common areas, a dilution of the costs.
When you change a two-room apartment to a three-room apartment, right? So here, there is a lot of positive points already being captured by our projects being approved. Once they are launched, we are going to define the pricing, based on more net sales speed or not. But certainly, the potential sales value of our land will grow with the level four. This is the main message we can send to you.
I think there will be other synergies too, because we'll have greater projects in terms of private areas. Most probably, this will be reverted to a more competitive price so that we can deliver a higher growth of sales equivalent to what the margins we've had in the last quarters.
Okay. It was very clear. Thank you very much, everybody.
Thank you, Mari, for your questions. Next one, Jorel, Goldman Sachs.
Two questions here. [audio distortion] To be launched now so that we can use the increment of demand in Minha Casa, Minha Vida. This that is ready to be launched. Is there a focus in terms of region and product? My second question, I'm sorry if you've already said this, but you talked about the target for 2025, which was to increment VSO, the net sales speed. Is there a fixed number, a range, an internal goal that you want to reach here?
Internal target. Jorel, this would be the first year where we would have a number of projects approved, considered the number of land banks that we had and the perspective that we have in terms of term for approval of products, environmental management, so that we can have something ready to be commercialized. We believe that 2025, this year, is going to be the first year we're going to have more projects approved than launches that we are considering in our pipeline, our engineering team that executes our product. If we have an increment in net sales speed, we will be prepared to supply the market with new products. Regions.
If I prefer not to open too many regions, we have prioritized here. I can say where the net sales speed grows more, we will launch more. We have a reasonable amount of land, of land lots in all regions we work in, and we're going to launch where our inventory level is lower than the number of absorption of projects by part of the product. Paulo, tell us a little bit about net sales speed with Jorel.
Thank you. We have an internal target, which is to deliver VSO more than we did last year, right? I think here in our vision, we do it based on projects that reach our consolidated. In the consolidated vision, we're going to try to deliver a net sales speed that is better than we delivered last year. Very conservatively, I would project delivering the same.
It is comfortable to say that we will continue what we did last year. I think you can feel easy about this. Our focus is to increase working capital to deliver better and greater results from the working capital, which comes from the net sales speed. This I can answer your question.
Thank you.
Thank you, Jorel. Next question, Ygor Altero, XP. XP.
Good morning, everybody. Thank you for your question. I would like to go back to level four, understand just how much you have mapped in terms of direct portfolio being transferred to cash or with better conditions. I would like to understand if this transfer is going to be in the short term and would be translated into more dividends. Secondly, with regards to the engineering team, this is a team that you mentioned as a point of attention with regards to the launch pace. I would like to understand about the engineering evolution with regards to the new pace of launches.
Ricardo, if I can answer the first question. Ygor, yes. There is part of a portfolio that I believe is a level four target, but I would like to remind you about the logic of level four here. In order to buy a property that is above BRL 350,000 all the way to BRL 500,000, a family normally, immediately after BRL 350,000, a family that has BRL 12,000 a month buys this property. But because of market and credit issues, to buy this property, the family had to have more than BRL 12,000 a month. When we sold in this range, between BRL 400,000 and BRL 500,000, are with families with income that do not fit into the program. This is the good news of the program.
Now we're going to access a customer that we couldn't access before. The huge impact of level four is the net sales speed. Is to reach that customer that didn't buy our property. Now he can buy this BRL 350,000 -BRL 500,000 property, and he can also buy a BRL 350,000-BRL 300,000 property because a family with BRL 8,100, he couldn't even do that because his income was very small to buy BRL 300,000 and big to enter Minha Casa, Minha Vida. Now with this change, he fits into Minha Casa, Minha Vida.
He buys in level four conditions, but a BRL 300,000 property works. We have these two paths and the impact of level four is new sales. Marginally, we have one or other customer where his conditions was good enough where he can opt for a transfer and leaving the direct portfolio using. But I don't think this is going to be transformational, considering when you consider gains in net sales speed.
Well, with regards to engineering and execution, the entry of new families in the market that we can address and the fact that most probably we have an increment in the demand, a greater volume of launches concentrated in the second quarter, it is positive because as we have always said to the market, we don't begin works in the rainy season. So it's natural that the first quarter we're not going to have a growth of revenue because we have things being delivered, very few being initiated because of the first quarter being a rainy season. So analysts put in something that is not very linear because we have to consider the seasonality of our business.
If the revenue is always low in the first quarter, and if it had been high, it would be wrong and it wouldn't reflect a very assertive budget. So oftentimes our business is not very linear. It's not exactly what you have in a spreadsheet. And the fact that these works launched in the second quarter began and this gives us more comfort in terms of execution capacity, having a trained team working with the level of margin and profitability we're delivering to the market. This is positive and we're comfortable with all of the works that have their start our plan for 2025. We have nothing concentrated in any one of the states. We have a greater labor challenge in Minas Gerais and São Paulo. And in Brazil, the rest of Brazil, we are more comfortable with regards to labor availability.
So it is positive, this geographic diversification we have. The standardization of our construction process also gives us comfortable because the productivity of our labor force is much greater with this process than another type of process. So we are in a scenario where in 2026 we have greater comfort with regards to our capacity to increment our works execution. So let's see what happens to demand so that we can see what we're going to offer the market. Specifically parting from the assumption that these works will begin next year and will give us greater tranquility in terms of us having a trained and qualified labor with experience in the construction process we adopt in our standards and metrics here. So I think this is going to be a very important second semester here.
And depending on what's going to happen, certainly we are going to have the capacity to meet this surplus demand that we see in the areas we work in. And the opening of starting in new states, we don't have this. We're going to try to prioritize a gain in share and in operations in areas we already have this. The synergies we have seen has been the fruit of places where we, in area where we have experience, we have production capacity, we have suppliers, we are known and this is what we want to continue doing.
Very clear. Thank you very much, Ricardinho, Paulo.
Thank you, Ygor. Our next question, André Mazini. Mazini, you have the floor.
Ricardinho, Paulo. First, the land bank land lot purchase. An investor said he is going to prioritize swap as an acquisition goal, right? And he's a huge player. How does this happen to you? How do you see this, right? The second one, a follow-up with regards to what Ricardinho has been saying, inflation index is growing to 7.5% because of labor. Exchange is happening with material. How is internal inflation for you here? Is it above or below the INCC? I think other companies have said it is above, but I would like to hear this from you.
Mazini. With regards to land acquisition, we have maintained the way we work, prioritizing swaps. We are in a very volatile country. The world is very volatile. It is very difficult to know all the scenarios that can materialize in this period between the purchase of land and delivery of product is four or five years.
For us, this ends up the swap is the most adequate way to acquire land, because he is participating with you with regards to revenue. If something is faster or slower, higher up in price or lower up in price, this risk mitigation for us is very positive vis-a-vis all these scenarios. Since it is an important cost in our business to remove this risk of this capture exposure of the land and the return equation that we have in our project, in our view, this is the healthiest way to work with. I think it is positive to have other companies working with the same format, specifically because we see companies that have a huge track record. They know our business. They know our challenges. We haven't noticed any kind of madness.
Nobody trying to enter the market without ever having done anything, eventually having certain variables that are not being very considered in the project viability. I think here it is even below, slightly below what it was last year. This gives us in the pandemic, right? So we're working with very healthy gross margins because we are acquiring land lots in healthy conditions. Inflation. The constructive process we have adopted, which is industrialized and standardized, we have an investment in CapEx. But our labor's productivity is much better than other types of construction works. So when you have material around 6% and labor around 9%, since we have men and women working in our construction works, doing services, electrical, hydraulic installations. So women has gained a lot of importance here, too, in our team.
But when we consider labor having greater productivity, the weight of the labor as a total cost is slightly lower than the INCC, which is a process which demands more labor. When INCC grows and labor grows above the index, we're certainly gaining competitiveness. Our construction process is more competitive than other construction processes, right? More crafty type of construction processes. So, where we have seen, generally, our costs are growing lower than the INCC. This is important. In general, we gain in competitiveness in relation to those players that adopt less industrialized construction processes.
Perfect, Ricardinho.
Thank you, André. Next question, Santander, Antonio Castrucci.
Good morning, Ricardinho, Paulo. Two questions here. The first one, I want to understand the backlog of works econ savings you closed this quarter and compared to last year. Secondly, credit granting policies. You've seen a reduction, specifically with regards to direct portfolio, but is there room for more accelerated reductions during the year because of the recent changes in the program?
Antonio, we have the budgets of our works. In general, we try to be as assertive as possible in our budget. Of course, during the execution period of the works, 18- 24 months, 16- 24 months, depending if it's a Direcional or Riva product, we always try to have the best estimate possible based on the data we have available in the moment these budgets are done. We estimate inflation expectation because of the fact that parting for the moment our clients is financed by the bank, our revenue becomes fixed. We can only increment prices of our inventory. So we believe the expectations of inflation we should have during the execution of the works.
In case the inflation does not materialize, parting from a stage of advance of works that gives us the comfort that our costs are guaranteed, we revert this provision for this future perspective so that our budget is as assertive as possible. At this moment, we haven't had any reversion of works costs. We do this reversion when our work's in a more advanced stage. This assertiveness is big, in general, when works are more than 70% advanced. An eventual reversion of budget, this doesn't happen because we have to wait for what's going to happen until our works to get to 70% or 75% advanced. So when we consider 2024 and 2025, what we have noticed in terms of costs increment is certainly below what we had estimated during the moment we launched the project. But it's important to see how things will unfurl this year.
Certainly we should have works, during 2023 and 2024 reaching and parting from the second semester this year. We will see the scenario. We will see if there was a budget reversion or not and how this happened and works cost perspective materialize. It's important to consider the margins we worked with always in the long term, right? It's important to be a little bit more conservative with regards to our gross margin of our business.
Castrucci, about direct sales. Well, even last year we talked about this. Because of the scenario, we began the scenario 2024 with greater inflation risk. We liberated some incentives that we have for our team in our transfer to the plant strategy. We use the direct table, which is the customer uses 100% of financing to buy property with us here in Direcional. This financing is corrected according to inflation.
So it's a way of us protecting ourselves against inflation. Last year in 2024, we reduced these incentives that we use for transfer to the plant. Continuing with 2024 and beginning of 2025, we are more comfortable with the inflation. You can see this from our gross margin. In a scenario where we have less inflation risk, we begin encouraging transfer to the plant where our sales team are better paid and our customer has better benefits to do this from day zero. So vis-a-vis the scenario, we end up being able to accelerate the share of plant transfer in our results. Added to this, I had mentioned this with level four, the benefit of level four, Minha Casa, Minha Vida. There's BRL 350,000-BRL 500,000 properties sold in Minha Casa, Minha Vida with transfer to the plant. So this is another positive point for transfer to the plant.
When we do this, we do not sell this with the direct table. I think this is why the direct table should be directed as a proportion of our sales from here on. When we look to the future through summarizing all of this, it is probable that in 2025, we have a greater share of our sales with transfer to the plant and a lower share in direct table. It is worth noting that it is part of our business to sell directly. It is part of our sales that we want to maintain. We do not want to stop direct sales. We are not going to do this. We will always have a little bit here too with regards to this. Ricardo, would you like to add to this?
I think direct sale is part here. Here in this Riva project where the work cycle is longer, this hedge against inflation that we have, because we have part of these, the receivables come from direct sales and corrected also. This gives us more comfort, right? I think it is part of our strategy. It is healthy. I think we should have an increment of the share of transfer to the plant, but we do not want to eliminate this sale through direct tables in a moment where volatility has been high.
With regards to the sale of portfolio, would it make sense to you, going back to consider true sales? Or is this not considered in the company?
Castrucci. The way we structure our operations is healthy. We certainly have trust even in terms of our results, of our balance sheet. The volume that this takes up in our business will not be so relevant to the point that it is something that will bring our business any risk, mean any risk for our business. I do not think initially [audio distortion] when it is not the idea. It is not in our strategy to do this kind of sale. I think after you deliver projects, we have room to. We will have room to have these discussions to make true sales, right?
It is not something for now. I think projects are ongoing, and next year we will deliver most of them, the ones that have been sold, and then we can talk about whether it will be a true sale or not, because we will leave the performance risks of these projects.
Perfect. Very clear. Thank you.
Thank you Antonio. Marcelo Motta, JP Morgan.
The first, with regards to the sale of SPE. Where was this done? In which region? BRL 40 million sales that generated the BRL 7 in gains and also regional programs. How do you see the outlook for the rest of this year, next year? Those programs that complement Minha Casa, Minha Vida, if level four affects this program, if you can comment upon this.
This sale is just like the ones we did in the last quarters. Normally, our strategies are SPEs where we have a huge amount of capital, and it is already in execution. The project is approved, selling, and being constructed, or where we reduced or managed to eliminate all duration risks. Because when we buy a land lot, we do not know what kind of risks we are going to have. Local governments, everything. When we eliminate these risks, we reduce the business risk in general, and we improve the valuation of this business.
The idea is to sell SPE, have cash, and then invest in a new and better asset with low risk. It goes to an investor with low capital cost. We continue our business running the risks we are used to. This was small, a little more than BRL 30 million . It didn't generate. It's almost recurrent, just like the ones we did before. Ricardo.
With regards to the sale of the project, this is it. A marginal share, right? Very low impact in this first quarter. Level four, Minha Casa, Minha Vida Cidades, and eventual impacts. With regards to Minha Casa, Minha Vida Cidades, I had some conversations with some analysts and shareholders, and a main image emerged, which in my point of view is not the correct image of level four because it's just sensational.
It is natural that there is in this process, when you have one more entity, for example, a secretariat of state habitation, which has to validate the payment of this surplus subsidy with regards to the ones that come from FGTS. It is natural and normal for there to be an increment in this term, in this deadline, right? You have one more entity approving the client because that secretariat in that area is entering with extra subsidy, and things have to be validated here for the granting of these benefits for these lower-income companies. It's normal. We didn't even disclose this in terms of our fourth or third quarter because it's normal. The amount, the value generated from a social point of view, including innumerous family with one minimum wage buying a product is just huge.
The gain in net sales speed is also very relevant, and the mitigation of the risk of loss because of a possible loss is very relevant and increases attractiveness here so that we can continue seeing to these families or serving these family that are much weaker in terms compared to those greater income companies, right? It's transformational. This is my message here. There is nothing abnormal. Everything is correct here. When the Minha Casa, Minha Vida Cidades entering into effect allowed us to continue to see these lower income families. Having said this, I think level four are including families from BRL 350,000 to BRL 500 ,000 . Minha Casa, Minha Vida sees to those families of level one with income of less than BRL 2,800 , and we've served families below this amount.
I think these are two extremes of the program that operate in completely different ways. I think attractiveness doesn't change here. The perspective is that for both programs to coexist, and these are programs that, in my point of view, are very relevant and transformational, and certainly will increase the relevance of Minha Casa, Minha Vida and the funding of the FGTS. In the case of level four, funding from the resources, but it will increase the relevance of Minha Casa, Minha Vida in terms of financed units in Brazil. There's no competition between level four and Minha Casa, Minha Vida Cidades. These are completely different products, and I think they would just sum up as a whole.
Thank you.
Rafael Rehder, Safra.
Thank you all . I think most of my questions have been answered. Just one point, which is to understand the competition dynamics now in the low income. We are seeing programs that are very favorable. In the past, I think most the larger companies will help, but with a lower competitive environment, capital cost was higher. I believe now you are going to have smaller buyers. Do you see this in some states? I would like to understand things better here.
Minha Casa, Minha Vida is a program where we have a huge amount of companies working. Because it operates in associative model, you have lesser need for capital than the mid to high standard segments. I would say we haven't seen new entrants or nothing too different here than what the program has always been. These are companies that have experience, have been in the sector for a long time. They know the business.
The competition is very healthy, I would say. We haven't seen any kind of company or group of professionals joining and through a recently formed company, entering a business without too much benchmark, without really knowing what they are going to confront, in terms of payments to be paid and the pricing of products itself. I see it is a very competitive market because these are several companies working, but it is a very healthy market, very healthy competition where people operate with the same bar, same references based on those companies that have worked in the program without too many changes from the point of view of new entrants with very little track record. Our market is healthy. Supply and demand is healthy. We've had a supplier product, which is very big. Last year, the program did more than 600,000 units.
Three years ago was around 400,000. You have more units being offered. Demand is healthy because of all the adjustments done and increased affordability, bringing back the purchasing capacity for many families that during the pandemic had been excluded from the program. I think things are healthy. Nothing has changed. I wouldn't say anything has changed very relevantly in the last years. I think the market is very healthy from the two points, supply and demand, but without two great problems with regards to land acquisition and pricing of our products.
Very clear. Thank you very much, everybody.
No more questions here. Now I will give the floor to Ricardo for his final comment.
I would like to thank you for your participation in this Q&A session. We hope to have been able to answer and contribute with the main questions you might have. We continue working and believing in our business model, those premises that we established in order to deliver the results we have been able to deliver.
We have been very satisfied with the level of return that we have been able to deliver to our shareholders that believe our work, the value we deliver to our customer, products, quality, families we have been able to see to. We have generated value to our country, our people, shareholders, and our team that have done a very differentiated work, something that deserves a hand of applause. We have been able to deliver increasingly better results and this is what we work for every day. Thank you very much and have a very good day, everybody.