Good afternoon, everybody. Thank you very much for your participation here in this video conference of the results of the fourth Q. Firstly, as in every year, every quarter, we will go through the presentation of the results, beginning with Ricardo, and then Paim goes to the financial. Afterwards we go through questions and answers, where we will have to zoom, the raise of hands, and we will do the moderations according to the order of questions. This event, this is exclusively destined for investors. Our channel is open for journalists. I would like to give the floor to Ricardo, who will begin the presentation of the results.
Good afternoon, everybody.
It is a huge pleasure to, once again, begin one or more earnings release with regards to the results, where we will address the main points and highlights relative to our year of 2023 and the fourth Q last year. Well, we closed one more year where we believe we have been able to continue with our operations within what we had traced as goals, following our internal guidelines defined for our teams. We believe our results have been even clearer for the market. Very consistent, very resilient results. This has been a work of which we all in the company are very, very proud of. Obviously, we have the merit of our team, and I would like to use the moment to thank them and say we continue with this journey.
The fourth Q last year, the closing of 2023, was just one more chapter in this journey that we have been through and of which results have materialized and are still to materialize. This is what I would like to share with you here in my initial presentation. Now, beginning with the main highlights, which is where I would like to give my contribution in this call, and obviously I will be at your disposal during the questions and answer sessions, questions that remain here. I would like to show you some very relevant points and are very, very important, and it is very important for this to be clear. We closed 2023, specifically here, where you can see in this top right corner, with a total launch of BRL 4.9 billion, net sales of BRL 4 billion and total net revenue.
This is the revenue that was recognized in our balances, in our bank statement, in our financial statements, and the ones with the partnership with other companies that we do not consolidate in our statements, but they enter as equity equivalents. So when we consider these revenues that we do not consolidate, we reached a total amount of net revenue of BRL 3.200 billion. They have entered via equity equivalents. So when we consider the last three years, we doubled 2.75x . This is very expressive growth. When we analyzed last year isolatedly, launches was 52% more than our revenue. So there is a perspective of continuity of growth of our revenue, which is very strong in the following quarters because of this 52% gap between what we have launched and what we received in revenue last year. We recognize revenue once our works advance, right?
That's why we have this gap between launch, sales, and posterior recognition of revenue. Another thing that is very important to stress here, to highlight here, was the expressive growth that we had in our future backlog margin, the deferred revenue. In December 2023, when compared to December 2022, there was a growth of 60%. It went from BRL 1. 71 billion at the end of 2022, and our deferred revenue got to BRL 1. 78 billion at the end of 2023. This information with regards to our margin, our backlog margin, is here in the slide. This, once again, demonstrates the perspective of a growth once our works continue. But even more important than the growth of the absolute revenue here is the expressive growth that we delivered in our deferred revenue, our backlog margin.
The fourth Q 2022, our margin, our backlog margin was 39.7%, and at the closing of 2023, our backlog margin was 42.5%. We had an increment of 2.8 percentage points in our deferred revenue based on a stock of revenue that was BRL 1. 700 billion. This is very significant. It's a clear indicator that there is still a perspective to develop growth margins that are extremely solid in the following quarters. With regards to our growth margin, which is one of the highlights of our operations, during 2023, we had an important growth in our growth margin, 1.1 percentage point, 35.6% in 2022, closing 2023 with 36.7%. We analyzed our fourth quarter. When we analyzed it was 37.1%. This is a very healthy growth margin and a very positive perspective, because we are delivering projects and works that are at the end, the last stage.
They were launched in 2021 and 2022, where we had a high inflation and new projects launched at the end of 2022 and beginning of 2023 were those projects that allowed us to deliver this growth of our backlog margin. These are the projects that are going to go through our statement of accounts once we continue with the works. We are very optimistic here with regards to revenue and healthy margins. Another very important item to highlight here is all the results that we are having with regards to our operational leverage when we have this expressive growth of our operations. When we look at 2023 and compare it to 2022, and considering our total gross revenue, we had a G&A emission of 0.34 percentage point. Trade expenses or commercial expenses, which is a highlight of our work.
As a proportion of the net revenue, we had a reduction of 0.7 percentage points in commercial revenue. When we analyzed net sales, our commercial had a reduction of 1.27 percentage points. When we look at last year, if you analyze this, and we'll go see this further on, we had exactly the same amount in absolute value of commercial expenses. BRL 203 million in 2022. Last year, BRL 202. Exactly the same amount. We sold 33% more in 2023, which clearly demonstrates the results that we have been having because we've had more products available for commercializations in the areas we work, in areas where we have had been able to gain market share. This is a clear example that the scale of our business is regionally concentrated. It is city by city.
The growth that we've had in these more recent areas that we've been working on have allowed us to gain synergy gains that have materialized with this expressive reduction we've had in our commercial expenses, as a proportion of our revenue and sales. We believe, from what I said in the beginning, that this 52% gap between launch and sales, it is most probably we will continue capturing the benefits of this gain in scale with continuity of synergy gains and dilution of our expenses allow us to continue delivering net margins, which are increased more and more. EBITDA margin. That 1.1 percentage point of growth margin gain, plus synergies and dilution of our expenses allowed us to deliver an EBITDA that was 3 percentage points in 2023, more than in 2022. So our EBITDA margin went from 20.2% in 2022 and reached 23.2% in 2023.
In the last line, our net margin, the gain was even more than that, 5.1 percentage point. In 2022, we had a net margin of 8.7%, and in 2023, we delivered 13.8% net margin. Our net margin grew 58% year-after-year. So when we analyzed the fourth Q last year, isolated, our net margin was more than 15%, 15.7 percentage point, which clearly shows that in the fourth Q, we had a net margin much, much more superior than the consolidated year, which shows the continuity of gains in synergies, efficiency, where this gain translates into a much more superior gain in our net margin, and we presented a net revenue of more than BRL 100 million. Having said all of this, now I would like to talk about the beginning of the year, we can still see a very expressive demand for our products.
We had January and February, where we concentrated on the commercialization of projects launched in the third and fourth Q last year, where we had launch volumes which were very expressive. Launches in the second Q last year, more than BRL 2.9 billion. We began 2024 to commercialize these projects, which were rendered available for sales at the end of last year. So we saw January and February with solid demand. At this moment, during this moment where we have controlled inflation, the costs of our products are controlled. We've had comfort here. With regards to this perspective of a non-increase of costs. So within this context, we're concentrating all our efforts in net sales speed so that we can deliver this growth of our operations with the least demand in terms of working capital.
One of the main levers we have in order to maintain this growth, demanding a minimum working capital, is net sales speed. So we have been working very strongly. All our teams are really dedicated to increment our sales speed. This is going to be the main lever to generate value to our shareholders in 2024. This is our greatest priority. With this growth of net sales, a reduction of cash consumption in the delivery of this growth in 2024, the objective is to continue returning capital to the shareholders, always keeping our capital structure in a conservative way, everything under control. But this cash generation that comes from the increment in net sales is the capital we are going to try to return to our shareholders so as to increase even more our return. So these are the main highlights.
I tried to talk about the priorities for 2024. Now I will give the floor to Paulo, who will address the operating highlights of last year. Afterwards, Paim will address the main financial highlights.
Good afternoon, everybody. Once again, going over the operating launches. 2023 was a year of much growth. We would like to remind you, we began the year with changes in Programa Minha Casa, Minha Vida, where the two main businesses of the company, Riva and Direcional, were impacted. Riva had an increase of the cap of the program, and we discussed this a lot during the year. More than 70% of the Riva inventory in the program, a relative part of the land bank, showing the products. At the end of the year, we concluded the year with BRL 4.8 billion in launches, almost 900. 34% growth.
It is important to see the growth of both businesses. They grew approximately 26%, 27%, Riva and Direcional. At the end of the year, we were still able to conclude the year by contracting another BRL 200 million in terms of PSV in the Pode Entrar program of the São Paulo local government that showed us all that happened in the year. Here we tell our story. Those of you that have been tracking us for some years, we have had a lot of growth. We grew. Our accumulated average growth from 2016 to today is 29% a year. It is interesting to compare with the year. We grew 34%, and after growing all of this in the previous years, now we are growing another 34%, almost. Here we have 2018, 2017, and all full of new growth. When we see sales, the same thing.
It grew 33%, aligned with the launches. Ricardo said something important. When we look at the net sales speed, where we always go after an increase. During the year, sales and launches accompanied. The launch grew 34% and sales 33%. In the quarter, we closed the year as the best quarter in our story, BRL 1.2 billion, BRL 216 million for Pode Entrar, and it still was the best quarter. Once again, in the last years since 2016, we had 35% average growth, which shows our capacity to operate our strategy, growth, and get to a level of the company that allows to have a relevant operating leverage. Lastly, the net sales speed, which is our challenge now because we are focusing on an increase in net sales speed. Our consolidated net sales per quarter was 19, considering Pode Entrar. Without Pode Entrar, 17.
In the last quarter, the net sales impact was impacted by the Riva segment that had an increase of launches. December is a month with a lot of cancellations, so Riva suffered a bit in the fourth Q. Direcional, because of the products replaced, we offered, and the improvement of the program and the effort of our team, we closed the quarter at 17.2%. It is one of the best of the years. This is a summary of the operating highlights. Now Paim will tell us about the financial results.
Thank you very much, Ricardo, Paulo. Good afternoon, everybody. Thank you for your participation in our earnings release with regards to the fourth Q 2023. Now let us see some more granularity here, the financial highlights for you. As Paulo showed us from an operating point of view, the launches is followed by sales.
Works advance, then we acknowledge the revenue. We have been explaining this to all of you during all of these quarters, and this revenue is coming now. We did an exercise to present the revenue we consolidated in our balance sheet, which goes to BRL 2.55 billion in 2023. The ones that are not consolidated, we have almost BRL 3.2 billion, a growth of 26%. When we consider that the projects that we do not consolidate in the balance sheet, we do this in works, in back office. We do all this work, right? Since we sold launches and sales, I think it is fair to show you the revenue that is consolidated considering the SPEs that we do not show in the balance sheet. To the right, we can clearly see the deferred revenue growing substantially. This means that there is growth.
This revenue will appear in the statements very soon with advance of the works. We have a backlog margin for future exercise. We can see that there is a growth tendency here in this margin, reflecting a very promising scenario from the point of view of input negotiations with our main suppliers and with the continuity of a transfer of prices for some products. So in fact, we have been able to show a backlog margin, which is very interesting and strong during all of these quarters, and the trend here is of growth. Next slide. We show you the gross profit that we have managed to reach with a quarterly gross margin in the fourth Q, reach 37.1%, compared to 37% in the year. Once again, this reinforces this comment with regards to this positive trend with regards to margins.
With the normal conditions, right, in terms of temperature and pressure. We know that the world is very volatile, right? We do not know what might happen in the near future, but the perspective is positive with regards to the maintenance of this trend. Also, we reach in 2023, BRL 856 million in terms of adjusted gross profit, showing the positive vital signs of our business. To the right here, we see just how our business has a stable margin, right? It looks like a Swiss clock. Very stable margins. We are being able to manage everything. We are acknowledged as a company in terms of operational execution, engineering, with a very positive record, and this is clearly shown in the gross margins and the operating results of our business. Here in this slide, I would like to begin with the right, highlighting sales expenses.
We have been able to do a fantastic work in terms of growth of our operations and sales. We reached the greatest volume of sales, BRL 4 billion. Even so, we have kept the commercial, the expenses flat. Here, we have been able to have sales expenses under control without losing our sales pace. 2024 is our main strategic driver. Our sales, hashtag 24, the year of the sale. This is what we discussed in our convention, and we are going to be looking at this point here, obviously, with the results of the management of sales expenses. Here to the left, the result of operating leverage, a reduction, a dilution of G&A. Much embarked technology here. We are almost getting to 200 RPAs in our back office operations. We can see the results here of this digital transformation that goes to Direcional.
Today, we have the G&A lines of dilution here. Once the top line is growing, as we mentioned in the other slides, the SG&A is under control and we then will potentially be able to see a bottom line that is growing in the next quarters. EBITDA margin. Also a growth trend. We are delivering 2023, BRL 547 million in nominal EBITDA. This is an important growth relative to 2022, 3 percentage growth of EBITDA margin reaching 24% in the fourth Q. When you look at a longer retrospective, we can see our capacity of generating operating results, which is very positive every single quarter. To the left here, we present to you the results of the equity equivalents. Those SPEs that we do not consolidate and where we don't see the revenue, we recognize this equity income, the results through the equity income.
This result is happening in an important way. We grew 147% year. Lucio, which is our partner in São Paulo with the Do It products. They are very important here in this result, among others, and among other SPOs that we do not consolidate in our balance sheets. To the right, we have been talking to you during all these quarters about our strategy to reduce minority interest stake in projects. This was very important for us. In the past, to have the minority interest when we were going tackling new areas. Today we have new areas, and we don't want to go into new areas. We have an important brand here and also stakeholders with regards to Riva and Direcional in the areas we're in, and we don't need to. This means that our operations can grow without the intensive stake of minority interest.
The results remain, or a large part of the results goes to the Direcional shareholders. After all of this, having said all of this, translating all the previous slides, we have reached the fourth Q, 15.4% net margin. In the year, almost 14% net margin. Net profit, 76% higher. In spite of the numbers that Paulo showed, that was similar to the growth of a startup in around 30% launches, 30% sales. This is a startup that generates important results. It is incumbent, generating important net profit. This joins this growth with an increasing result, very solid result, and we are very proud to present this to you.
To the right here, we also present to you in a longer retrospective, our ROE, how it has been going, reaching 20%, and the net margin quarter after quarter, and our perspective is that this number will continue with this growth trend. Lastly, but as important as our capital structure. We've ended 2023 with the best credit situation in the history of the company, BRL 1. 327 billion in cash, enough to pay up all the indebtedness of the company, and still we have BRL 72 million. This means that in 2022, we had 3%, and now we have less than 3.4%. For obvious reasons, this is not the most efficient capital structure. We hope to have around 20% here. We did a follow-on. In fact, here, without debt, the trend here with the growth of the operation, we go back to between 15%-20% here of our PE.
This is ratified, confirmed by our quality. We are one of the few companies in Brazil that are AAA now, rated by S&P Global Ratings as AAA.
Thank you very much. Now we go to questions and answers. Thank you very much, Paim. We will begin with our questions and answer session. I will moderate this from order of arrival. The first question, Maria Angela, Itaú BBA. You have the floor, Maria Angela.
Good afternoon, everybody. Thank you for the presentation and for the questions. I have two questions. I would like to talk about, for 2024, the revenue. You showed a mismatch between net revenue and launches done until now, and the number here slightly below what we believed. How do you expect the revenue should reach the expectation for 2024? Also, I would like to ask about the speed of sales, that was considered the main priority for the year.
I would like to understand the value that you in fact imagine, and how do you believe that this is going to be reported to investors?
Maria Angela, with regards to revenue, I will talk about VSO. We do not begin a work during the rainy period. Construction works. We have excessive costs in the part of the movement of land containments. It does not really make sense for us to begin works in the rainy period. It is natural that the fourth and first quarter do not have the beginning of construction works. Revenue recognition suffers an impact here. Works are delivered in this period, but they do not begin. Most of our works is beginning now. Works that were launched September last year. The perspective of an increase in revenue recognition occurs from the second quarter on, when we begin construction works.
When I say that January and February is a year where we concentrated our sales efforts in those units that had been launched and were available for sales, the average POC of sales in January and February tends to be higher than the average POC happen in the third and fourth Q. When we think of a first Q, where works do not begin, but the average POC is over, is where we have a concentration of those products that begin works. This greatest volume can compensate for this fact that we do not have all the revenue this period, but there must be a positive impact, this higher volume of sales. The POC that comes from the beginning of the construction works, the second and third quarter is where we have a greater increment of square meters built. We should have a growth of revenue.
Then we see how sales perform in this period. One thing can be added to the other. When we talk about revenue, this is what I have to contribute. With regards to net sales speed, in our vision here, we should be going after a net sales close to 20%. It is difficult to say if this is going to be reached or not. But we have made efforts in this sense. When we make an analysis of the volume of inventory we have, we have an increment of net sales percent of 3%, would have an important impact on cash generation for us in this year. We have searched for this. We have aimed for this.
We're going to have this growth in net sales during the year because we've been trying to do this correctly, which is to invest in our sales team, qualifying them, having the best professionals here, strongly investing on online sales apps. This is an effort of which results materialize gradually. At this moment, we have not seen the need, no need whatsoever for any kind of adjustment in the price of the product because this would be the wrong way to do this, to increment VSO net sales. But efforts, investments in online sales and all the rest, I'm very optimistic. I'm very enthusiastic with the results we've seen from last year- to- date. I believe that the work we've done will demonstrate results. It is difficult exactly to say how much the net sales speed is going to be, but I would say 20% clear.
Because of this adjustment in pricing is not being done, can we understand the backlog margin of 40% is what you're beginning to do with more recent launches and new projects?
It's important to highlight. We had two Pode Entrar contracts here. Since the units are 100% sold, there is no default in the pro soluto. We don't have provisions for this kind of loss. We have a G&A which is much lower to operationalize the Pode Entrar product. There is no transfer here. Here, the gross margin is inferior to a project that is traditional. What I want to stress here is that this reduction of 0.2 percentage point in our backlog margin occurred in a context where BRL 200 million was signed of the Pode Entrar and gross margin expected are inferior to this.
This is signed that our backlog margin would have grown in the fourth Q if it weren't for the Pode Entrar program.
Okay. Thank you very much.
Thank you, Maria Angela. Now we have Bruno Mendonça, Bradesco.
Hello, everybody. Thank you very much for your questions. Ricardo, I was going to ask you about the backlog margin and Pode Entrar. If it was within this accounting, in this calculation. You said yes. This is a very specific issue. It is defined that the accounting recognition of this Pode Entrar will be in the reported gross margin, not a separate line. The lower gross margin of Pode Entrar might impact your reported margin. This is my first question.
Bruno. Maybe Paulo or Paim can add to this in case they have a point to add to this.
We have, yes, Pode Entrar will enter with our sold product. It would impact the gross margin. But like we did this quarter, the idea is it's the gross margin ex Pode Entrar, right? This is a business that has a time limitation or deadline. It is not something that's going to be recurrent. It's important to show the market what our gross margin ex Pode Entrar would be, right? So that the analysis of our long-term analysis can be asserted. Yes, it goes through the gross margin, but we will always report this adjusted gross margin to you.
My second question here, can you give us a little color on distortions between the different geographies, areas you're operating in, right? If there continues a relevant difference in the areas we have great leaderships and other more competitive areas like São Paulo, and how have you imagined its evolution? What kind of adjustment do you see in this geographic mix, and what kind of impact can we expect from the results coming from this adjustment in the mix?
Bruno. Yes. Areas where we have more mature operations and greater market share, we have had benefits in two fronts. One, we have been able to deliver a higher gross margin because we better negotiate with our suppliers. We negotiate the price of the service rendered when we have more scale in that area, and when we have a greater share, we can better price our product. I think these two points allows us to deliver a higher gross margin. Also we have the sales expenses. Since we have a greater array of products being offered, we end up converting to, and having a conversion of greater sales.
In those areas, we have less possibilities of products to offer to that potential buyer. We have lower sales expenses, while we have a greater conversion of a client in a sale. But when you have more products being offered, the probability of one of them fitting into what that is demanded by the customer is much greater. I think we have been able to. Once we have greater maturity here, we have been able to have a gain in gross margin and a reductions of sales expenses. Part of what we have been able to do in 2023, in those areas where we had lower relevance, we end up gaining relevance and gaining the benefits in this gain in energy. In our statements, this will reduce a reduction of sales expenses. Gross margin is not so easy to see, but this has occurred for these two reasons.
An interesting point, this sometimes is not clear here, but when we analyze the results last year, no matter how much more we had a sales volume, a quarterly sales amount growing every quarter, ever since the beginning of the year, we had sales goals from area to area. Oftentimes we had discrepancies between goal and volume sold. There was the standard deviation between what was established and what was done in the different areas was much greater, no matter how much the consolidated became very close to what we had in terms of internal goals for the year. When we consider February 2024, the standard deviation has really reduced. In areas where we sold well below the goal are very close to the goal now.
Those areas where we had sales that were well over the goal, we have a goal that is closer to what we were able to deliver the year. We raised the bar all the time. I am very excited with what I have seen. All the areas I have worked in, we have worked in this year, has presented a huge performance improvement and dispersion with regards to the goal established, which is very small. I would not say that there is an area we are doing very well, and the other where we have to improve the performance. No, this gives us the comfort. We know that our operations, profitability over the capital that we are allocating in each one of these projects, in each one of these areas. We have been able to see the results of the work we have developed here.
I am very excited with what I have seen. There is no new area at this moment that we have tried to analyze for the expansion of our operations. The focus is to consolidate more recent operations here, and the more recent one is four years old, right? All the other areas we have delivered project. The share here can bring us very important synergies and a return over the capital that we have allocated in each of the areas growing once these operations mature.
Very clear. Thank you very much.
Thank you, Bruno Mendonça. Next question, Rafael from Banco Safra.
I have two questions here. The first, I would like to touch upon the funding for the year. The financing continues very high, over 30%, and I would like to better see if you believe that there is risk of funding finishing, and this could change the mix of the next launches, right? So as not to have this risk of it finishing in the fourth Q. Then Pode Entrar. Now that things are more stabilized, I would like to understand if the margin in the program is what you imagined in the beginning, and if new units not contracted, are you still interested in continuing in the Pode Entrar program, or what do you think here?
Okay, Rafael. Minha Casa, Minha Vida. We are in the beginning of March, so it is still very early to have any kind of conclusion here with regards to this. I think that we have a very qualified team in the cities, in Caixa Econômica Federal, and we have complete conditions to do necessary adjustments in case budget consumption is over or can impact the operations of the program at the end of the year. For the moment, this is not something that has concerned us. Obviously, because of this first and second month of the year, they are strong, right?
Adjustments will have to be done, but with no kind of impact on a new product, which is a market where we concentrate ourselves now. I think it is very early to have any kind of concern here with regards to Pode Entrar. The margins, although effective contracting took some time. Ever since the invitation to build was announced, we have been able to control here.
We have been able to deal with Pode Entrar with the margins that we foreseen, with a return that justifies our operations within the program. With regards to new projects to be contracted, we have one more project that was approved during that first initial part of the project, and this might be contracted in the next months. In case there is a contracting here, we will develop it normally. Still, we have a new invitation to bid, and it is not good to talk about the attractiveness of a new phase of the program. So the first phase was a phase where projects were contracted, part of it last year, and the other ones falling under this invitation to be. We will wait to see when this will happen, and it is falling under the program.
Okay, perfect. Very clear. One last point. The contribution margin of these units, do you think they are similar to a normal development project?
Well, Pode Entrar is a project that demands less capital than conventional operations because we exceeded 100% of the value during the time of the works. We do not have the sale. It is 100% sold in the beginning. So it demands less projects, right, with lower margins. Here we can deliver returns that will justify our operations in the program. I would say that the margin is lower than a traditional development program, which is natural because of the competition we had in this first phase of the program. But these are margins that allow us to deliver returns that justify having projects in the program. This is why we presented some projects, of which three were selected to be executive within the Pode Entrar.
Okay, clear. Thank you very much, Ricardo.
Thank you, Rafael.
Elvis, BTG.
Good afternoon, Ricardo, Paulo. Two questions here from our side. First, approval of Minha Casa, Minha Vida. I want to know how do you see this implementation of Minha Casa, Minha Vida can influence the mix of products for you from here on. For example, profitability becomes more attractive. So how do you see this? Have you made any calculations here? Also, how much could you launch in this segment from here on? Second question, understanding this 3 percentage points gap that mentioned, I want to understand if the first months of the year, if you will have closed this gap. Also, maybe this could impact the cash flow. So I do not know if you could share something with us here, if you reach this goal of 20% net sales, how this could improve the cash flow.
Well, I am going to talk a little bit, and then Paim and Paulo can add to this. Faixa 1, no doubt whatsoever, its attractiveness, the operation in products where buyers have an income of less than BRL 2,640 to mid BRL 2,640. We have had a lot of competitiveness in terms of costs of the execution of our products. We have a lot of lands that fits into this kind of product. So certainly makes sense to have products of this type. With regards to what Faixa 1 can present in our mix, at a first moment, it should be around 10%-15% of what we launch, in spite of the fact that operations of Minha Casa, Minha Vida in cities where there are several states that adhere to the program, giving purchasing capacity to lower income families, with minimum wage, and this help us increment this percentage.
We have a practical case in Pernambuco where some products we were not directing to this profile of customer. But with the state program, we acquired some land lots destined to this income range and Faixa 1 to allow for this project. So I think we might have an increment in case Minha Casa, Minha Vida is disseminated across the country, allowing us to operate in this segment with a pro soluto that is lower because of the gain in purchasing capacity and also reducing the need for a grantee of pro soluto in our part. So this will allow us to increase this volume depending on how much we perceive that states and municipalities accept Minha Casa, Minha Vida. Well, with the second question, it is difficult to see the immediate capital and cash generation. We began the year with BRL 5 billion of products available for sales.
I would prefer you to do this calculation here and the impact here. It is difficult to say whether it is going to be more advanced works or less advanced works, but the impact can be relevant. Just as caveat, we can have this as an ideal net sales speed in this first moment because of the efforts done. However, this net sales speed increment will happen in time, and all the efforts that we have done in our sales, specifically in the online automation of our processes, simplification, availability of information faster to the sales team will impact the increase in net sales speed. This is going to happen in time. It is difficult to say when it is going to happen. It is a goal. The impact is very relevant, 3% per quarter over BRL 5 billion.
I think it is too early to give you a time as to when we will reach this net sales speed level.
Thank you.
Thank you, Elvis.
Next question, Victor Tapia.
Hello, everybody. I would still like to do a follow-up with regards to the sales point, Ricardo, because I think that this is very important for Direcional. Just to see if I understood, you said that 2023 was a year with a lot of dispersion and with regards to the goals. In this beginning of 2024, the ones that had a lower dispersion, you were able to close this gap, and the ones that were over, you increased the bar. Naturally and gradually, we should have this net sales speed catching up during the year. It should not be from one quarter to the other. Exactly what is it that you are doing that is different?
You mentioned training of the sales team. In fact, what are you doing here that in fact is going to enhance this sales speed? Is there a change in compensation of the intermediator, the broker, the real. Not the global amount, but the one that is there selling, or if he is going to have a greater incentive or the person that sells so many units will receive an award. Give us more details here. What is being done here?
These are a series of actions being done. I do not think it makes sense to share this at this moment because there is a lot of strategic aspects here. There are alterations in the payment of our team, but any payment increment will only occur if there is an increase in gross margin of that product. It is not within the actions we are taking.
Increase of sales expenses without an increment that is over. There is sales expenses in the gross margin. We have tried to have a series of things here. Because in my point of view, sales should not be compensated with the revenue. Yes, the gross margin. Unfortunately, there is a way, it is a more usual way of working the market, and we have always tried with our incentives to have some kind of correspondence in an increase of margin for the company. I think there are many good things that are happening. I think it makes sense for you to go to our stands to understand what is being done. What is relevant is that we are going after gains in net sales without increasing sales expenses, without increasing discounts.
And in case there is an increase in sales expenses, there should be an increase in gross margin, which more than compensates this. You will not notice this in our balance sheets, but you will certainly see the impact that we went after.
Yes, very clear. This was the point. Thank you.
Thank you. Now we have Ygor from XP. You have the floor, Ygor.
Hello, everybody. I would like to understand about the program improvements, the representativeness that you see of the future FGTS, its potential impact with the results of this measure, and with regards to an increase of the income. Not for now, for March. But if you can tell us in the next meeting, if you see room for this, and what is the size that you see here. Thank you very much.
Ygor, the future FGTS, it is important once it is approved, and I believe it will be soon, it is important to understand exactly how it is going to be implemented by financial agents. And in case it is in the format that we have seen or heard, I think the impact of the product sold below BRL 200,000, BRL 220,000, is very expressive. So I think it is very important to have clarity as to how this is going to be implemented. So it is good to hear Caixa with regards to the implementation of this future FGTS once it is approved. But if it is something, for example, where you had the conditioning of the income of the customer or the installment, 20% of the customer and the FGTS representing 8%, can you imagine the impact for the customer's purchasing capacity?
So with several of our products, the impact in my vision might be really significant. And the conditioning percentage is very high in products sold below BRL 20,000. This profile of customer that has a lower income. However, I think it is interesting to see and to convey before doing this, hear from Caixa to see if there is going to be an eventual larger problem here to minimize to the level of default here. But if it is an increment limited to 30% of his commitment of his income with the installment or from 20%- 28%, I think the impact is just huge. And I am animated here. The increment of the income ranges of the program, there is a strong perspective for there to be an adjustment here because since these last income ranges were defined, it has been taking some time now.
So I think it is difficult not to create expectations because it is not in our hands. We just react to eventual adjustment, and it is important for us to know the adjustment before we have any kind of measurement of its impact and the profile of customers that buy our products. There is an expectation that this will happen. But let us wait for the moment and see the degree of increment here in this income ranges so that we can see what is going to happen specifically with regards to the profile of our customers. But I do believe there is going to be an adjustment here.
Thank you very much, Ricardo. Paim, Paulo. Thank you very much.
Next question, Hugo from Citi.
Congratulations for your results and thank you very much to allow me to ask. I would like to ask about the São Paulo market. I remember that in the beginning of 2023, you were kind of fearful here with regards to the competition. But during the year, you were positively surprised, specifically via Riva breaking sales records. I would like to know, looking at now and the future where you have an average reconvergence if São Paulo continues performing specifically vis-à-vis the new rules that have brought a series of incentives for HIS e HMP, within the axis and out of the axis for the income ranges you work in, to income levels you work in, right? Does São Paulo gain space here compared to the regions you are in? If yes, is it only Riva or could we think of other fronts too?
Hugo, I think São Paulo has been doing very well in terms of demand and speed of sales of products that we have rendered available for sale. Our operations in São Paulo had gains month after month after last year. It has performed very well. In the beginning of this year, we launched a product in São Paulo recently, which is just exceptional performance. From the point of view of demand, although this is a market where you have more structured companies with strong conditions to offer products, we still notice a strong demand in São Paulo because the point of attention is not demand, but availability of labor, how the cost of labor is going to behave, equipment.
It has much more to do with execution than demand. But now, yes, it is a market. When we analyze the market share we have in São Paulo, no matter how much in terms of sales volume, it is between first and second in the market with the greatest amount of sales last year.
São Paulo is very close to Belo Horizonte, right? March as well, in front of Belo Horizonte, and the previous months they were the same. Here allows us to have a relevant market share in Belo Horizonte and a small market share in São Paulo. In our growth process, to grow in São Paulo is easier than to grow in Belo Horizonte because our share is small. I think the growth perspective in São Paulo exists. Before we think of going to any other market, it makes more sense to try to grow the markets we are in, and São Paulo is a priority. Caveat. Although, given that we work in eight metropolitan regions of Brazilian capitals and cities, surrounding cities, and plus another three cities around the city of São Paulo, we have the option of allocation capital in different markets.
The analysis as to when to grow and the growth pace in São Paulo is given because of demand, because it is healthy. Execution, which is a point we are closely monitoring, right? Labor, some equipment, this is a point of attention. Also the need for capital in order to render feasible a project in São Paulo versus the capital need to do the same project in other markets. The return we are delivering of this capital that we are opting in allocating in São Paulo. When we do this analysis, this is when we define the speed we are going to choose to grow in São Paulo, depending on engineering and the need for capital in order to do business in São Paulo versus capital need to do business in other markets. Because here, things are limited.
We have been very selective with the acquisition of areas in São Paulo, very disciplined in the amount of capital allocated in the projects that we have decided to continue with in São Paulo, because it might make sense to develop projects in other markets in moments where São Paulo can eventually demand capital that is greater than a level that we believe is reasonable because of the competition we have in São Paulo. It is natural. We have room for growth. This makes sense, but we are not in a hurry because sometimes we might want to allocate capital in a more efficient way in other markets. São Paulo is always a priority for us.
Very clear. If I can just ask one more question with regards to cost pressure and in labor, right? We heard cooling, they also mentioned this concern, right?
Wage pressure, availability of qualified labor. I would like to hear from you as to how much this is an issue, right? If in fact, for example, this is circumscribed here in São Paulo, looking at a domestic sphere, is this not a concern in this cycle?
Well, I would say the same. There are greater difficulties to have certain professionals in São Paulo. When you look on the street, all the volume of work is being done simultaneously, being constructed. We have an important number of projects falling under the Pode Entrar program, which have began and are beginning simultaneously, demanding the same professionals at the same time. This reality is more concentrated in São Paulo. There are no labor challenges like we have in São Paulo.
But I would say that this is not such a challenging scenario as already has been in 2009, 2010, 2011, when the sector performed really well. The fact that we altered our construction process to a much more industrialized process. This results in a representativeness of labor as a total proportion of the costs of the works, which is much lower. So an eventual increment of cost and availability of labor in São Paulo is positive because most possibly we will have an increment that is lower than more crafty processes. This is something we are monitoring. We have performed very well in São Paulo. We always try to anticipate eventual scarcity scenarios greater than we have today. We have monitored this with much attention. Yes, it is something we have tried to anticipate. The hiring of professionals to deal with area that has more demand for professionals.
The industrialization of our construction process, we have to increase the productivity of our man, of our employee. We have been able to do this since 2009, which is very different than the three we used before, where man produced much more, and naturally, this was a mitigator for a scenario where we had a certain scarcity, less availability of certain professionals in the city of São Paulo. Thank you very much. Congratulations once again.
Okay, thank you very much.
Next question, Antonio Santander. You have the floor.
Hello, Paulo, Ricardo, Paim. I want to better understand, if you can explain, what has caused this growth between gap, between sale transfer of 2023 and how this is for 2024. Because Riva, greater Riva percentage, I would like to understand this.
Paulo, will you answer this or Paim?
Hugo. In the end of year, when we compare transfer for sales, I think you're talking about PSV here. There was nothing very different here. We continue doing operations normally. The contracting companies continues the same. I believe there might be some growth in our direct tables where we've financed the customer, but nothing very relevant. I believe that in the first or second quarter, we will increase the number of transfers, of planned transfers, and close this gap that happened during the fourth Q.
I also, the end of the year, December is a month where things are more complex. The transfer process is more bureaucratic. Historically, you always have this gap in the fourth Q. In the first and second Q, there's always a closing of this gap. Not only here in Direcional, but even in the market. Even Minha Casa, Minha Vida numbers in January, they were very strong. December was less than the January. I think it's a market issue, and we see nothing out of the curve.
Okay. Thank you very much for your answer.
Perfect. Now, Jonathan from GT. Jonathan, you have the floor.
Good afternoon. Thank you. My question has to do with minority interest, the reduction and going from three to four. I would like to understand how much more this can reduce the potential of revision here for Direcional. Thank you.
Shall I answer this, Ricardo, you can add to this. As Paim said in the presentation, Jonathan, the minority interest was nominally reduced during the year. From here on, most of the gain with regards to this line is based on dilution. I would not project a nominal reduction. When we look at the launches, we are going to have around 10% stake of minority interest in our results, which is very close to what it would be nominally between this year and the previous year. The benefit here is dilution.
Revenue grows as our operational results show is a trend, and this dilutes the minority interest line in the next quarters. If you have anything else to say here, Ricardo or Paim?
Okay, perfect. Thank you very much.
Thank you, Jonathan.
We have no other questions. I would like to give the floor back to Ricardo for his final comments and closing remarks.
The wrap up of our presentation. Once again, I would like to thank you all for your participation. A huge amount of questions focused on very relevant themes for our operations. We are beginning the year in a very optimistic way. Perspectives are very positive. The program has done very well, performed well. Conditions are favorable. From the cost point of view, costs are under control. We talked about the São Paulo market. With regards to labor, they might have a reality that is different in Brazil, but even so, this brings a strong comfort, resilience in terms of our numbers, because we are in no market that represents more than 20% of our business. Our strategy mitigates eventual realities that might be specific with regards to a metropolitan region in itself or a market.
We are very optimistic in this beginning of the year, focused on operations, concentrated on the delivery with the same size of profitability that we have been able to see in the last quarters. This is the challenge we've had. Much more than increasing launches, is to do this catch up in revenue, right? With this level of profitability we've delivered, margins we have been able to operate with, we're very optimistic. We believe this is possible. Our product is standardized. It's the same all over the country. So we can control of the work sites and its performance. We've seen a performance that has made us very comfortable in this moment of our operations. So I really do believe this is a year where we all have challenges and improvement opportunities, but we will try to do better than what we did in the last years.
Thank you very much once again. We are always at your disposal for any eventual questions and clarifications. IR team are always at your disposal for questions. All you have to do is contact. Have a very good afternoon.