Good morning, everybody. It is a pleasure to have you here in our earnings release event for Q4 2022 and the whole year. For those of you that do not know me, my name is Paulo. I am IR at Direcional. Together with me is Ricardo Ribeiro, our CEO, and Henrique Paim, CFO. Just to remind you, this event is exclusive for analysts and investors. It is being recorded. Participants will be in listen-only mode during the presentation of the company. Afterwards, we go to questions and answers, and we will use the raise your hand tool. Please use your raise your hand tool, and we will moderate the questions. Lastly, this event is being transmitted via YouTube and in IR site. Anybody that wants to see it through the YouTube, please feel free to do so. Now let us begin and give the floor to Ricardo.
Good morning, everybody. It is a huge pleasure to be with you this morning, where we are going to show you and talk about our results in the 4Q last year and also the year of 2022, the consolidated year. Let us begin with page 3, where we have our main highlights of the year. I think that when we look at the sequence of launches, net sales and revenue, there are some very important messages to be transmitted to you. Last year, we delivered a total amount of launches, considering our minority interest, BRL 3.6 billion. This meant a 16% growth relative to 2021. When we look at the last five years, this represented annual growth of 27%.
When we look at the middle chart, our net sales, last year, we reached BRL 3 billion in net sales, growth of 23% compared to 2021, annual growth identical to our launches, 27%. Here to the right, when we look at our net revenue, we delivered in 2022, BRL 2.160 billion in revenue, a 22% growth compared to 2021, an annual growth of the last five years, 24%. I think the most important message to be transmitted here in this slide, we have a BRL 3.6 billion launch volume, a revenue volume, BRL 2.160 billion. Launches that are over 50% are revenue. Since we have a gap of launches, sales and revenue, generally, the revenue goes together with launches, but the gap is 18 to 24 months because of the POC percentage.
It is natural when we analyze this data, we have a contracted revenue growth that is very expressive with regards to the next 24 months. We should continue delivering margins gains because of the operational leverage, which is a little bit of what happened in the last years, which in our view, explains the value that we generated to our shareholders. With regards to this expected growth for the next years, I would say that the focus here in Direcional is the execution. We had a very relevant growth of launches and sales. Sales are around BRL 600 million below the launches, but the value that we have to generate for our shareholders is the continuity of this execution with the greatest level of excellence possible. Delivering a growth in revenue, maintaining margins levels that we have been able to deliver is something that is good.
Growth at this moment, because of the level we reached in terms of launches growth, it's not the main value generation, but it shows the level of efficiency we have been able to deliver in the last years in the company. Page 4. Now to address the efficiency and resiliency of our operations. It is clear here where we address our gross margins, we have been able to deliver even an extremely challenging period with huge challenges relative to costs of products, our raw material, very consistent gross margins. Here we have a very relevant data. In the 4Q last year, we had an inflection of this. We've had tipping point of this gross margin when we compare to the gross margin that we delivered in the 3Q 2022.
This tipping point is a sign in the market that our product costs are very well controlled. I would say several of these products, we have had a price reduction in the last years and also in the year of 2023. Also, we have been able to pricify our products in a very adequate manner. With regard to the 4Q , I would say that we had a relevant increment of the gross margin, one point in the last three months. This growth was due to the product mix sold. I would say that when we analyze Direcional's operations today and the macro scenario we're in, we have capital costs that are very high currently in the country, and on the other side, we have a controlled inflation, very solid margins.
Our priority during 2023 will be growth of net sales speed, focus on capital generations less. One of the priorities that is going to be the greatest relevance will be a net sales over the ones we have been working in the last year, where capital costs were lower and inflation was higher. This scenario has been inverted, and we're trying to adapt everything to this new reality. Also, with regards to this speed of sales, I would say that in the last quarter, last year, the 4Q , we had a reduction of net sales compared to the 3Q 2022. This impacted our recognition of revenue in the 4Q .
But in our view, this lower sales impact in the 4Q compared to the third had a relevant effect because of the elections and also the World Cup at the end of the quarter. When we consider the first quarter, January and February, we know we see a very relevant growth in the demand of our product. We noticed a growth in our speed of sales, huge volume of visits in our sales booths. Those sales that didn't happen in the 4 Q perhaps has happened in this 1 Q. From what I remember, we will have sales in the first quarter that will be superior to the sales of the 4 Q of the previous year. Obviously, lower sales impact the recognition here of the revenue. But this third scenario, we believe that it will come back to normal.
Going to page 5, I would like to highlight what we have tried to do in the company in the last years. Many times, in these earnings release calls, we de-analyze a specific year or a quarter, but here I want to show you what we have been doing in the company in the last years, the last six years. Here I would say that 2017 to 2022, you can see relevant dilution of our general and administrative expenses. It went from 13.5% in 2017 and going down to 6.7% in 2022. We are very close to our recurring level. Here to the right, we also address sales expenses that went from 11% in 2017 and down to 9.2% in 2022.
No doubt this recurring gain of the operational leverage and a strict control of SG&A has allowed us to deliver increasing net margins, even in a scenario where our gross margins remained constant. In page 6, trying to show you the effect of this control and the relevance that we have had in our recurring results because of this increase of operational leverage, you will notice here the lower line, you will notice a relevant growth in our net margin before minority interest. We consolidated the revenue of this minority interest in. Here, when we look at our efficiency levels, we also have to consider in this analysis net profit before minority interest. You see a net margin going from 10.4% in the first quarter 2021. Two years later, we are delivering a net margin of 12.6% 4 Q last year.
When you consider this gain, more than 2 percentage points, this is very relevant, this impact in our net profit. When we now analyze only Direcional's share in our net profit in the last two years, we can see that the net profit went from BRL 130 million in the last 12 years closed in 2021, getting to BRL 206 million in the last 12 months closed fourth quarter 2022. This growth means practically 60% of growth in the net profit. This is in effect because of the growth of revenue and net margin. From here on, the greatest impact on our lines that are below the net profit should be the minority interest. We have been growing our share in projects launched and also grown our share in sales that took place.
Now you see through the statement of account, you will see an increasingly lower representativity, representing as for us being able to continue delivering this growth in net margins. As a consequence of this revenue growth aligned to net margin, in the upper line, you can see the growth of ROE that we have been able to deliver. In our vision, this has been the main lever of value generation in the last two years. This has occurred because of growth in margin and also increase of our working capital. We have had a very low conservative leverage that, in terms of net debt over the equity, below 3%. This ROE has happened because of the two more healthy, solid leverages that we had, our debt growing in a relevant way in the country.
We have not been used this to. I would say that this puts us in a very differentiated position in terms of capital structure, to use the opportunities that have emerged in the country, more specifically within Minha Casa, Minha Vida program. Page 7. It is important to stress that we have been able to deliver this relevant growth because of the growth of revenue. This should demand more working capital, but even with growth in revenue, we have had returned capital to our shareholders in a recurring way via payment of dividends and also buyback of shares. in 2022, when we analyzed dividends, not considering the buyback of shares, it was BRL 6 million in buyback. But last year we paid BRL 174 million in dividends. It was the greatest level of dividends in the last two years, since 2014. You can see here to the right.
When we consider the price of our share, the market cap of the company at the end of 2021, this represented a yield of more or less 10%, which is very dividend yield that is very expressive, vis-a-vis the scenario of growth in the company and very solid and low leverage. Here I tried to cover what we have done in the last two years, how this has reflected our results, and one of the basic premises that we have tried to implement here in the company, which is the continuity of return of capital to our shareholders, trying to align our business, which is capital intensive in nature, will transform itself into a services business which demands less capital. This has been our policy, our way of working.
We have the greatest amount of units sold, and this is what we are going to go after, with our projects that are under construction. We do believe we will continue generating value to our shareholder. Now, I would like to give the floor to Paim, who will go through the main financial points of our results, and I will be here at your disposal during our Q&A session after Paim's presentation.
Thank you, Ricardo. Good morning, everybody. Thank you for your participation in our earnings release relative to the 4Q 2022. Before we go into the presentation, I would like to stress the consistency with which Direcional Group has been delivering in the last two years. Here we are the walk the talk.
We have been talking with you, we have been disclosing all the numbers of the operations, and have been delivering exactly what we have shown, our strategic directions. This has been reflected very clear based on the results we have had. Also focused on the very well-done work without distractions, doing the engineering, operational efficiency. This is the differential of the company. There is an owner with engineering in our DNA. We are very close to the business, and we really are very proud to show you in 2022, in a year that was so challenging to the sector, such solid and consistent numbers. Please, next slide. Now we will look at the slides. Financial aspects here. I would like to show you the evolution of our net revenue. When we compare 2021, 2022, 22% growth, reaching BRL 2.163 billion.
Our cycle is launch, sale, and revenue, and this has happened 2023. We will see this revenue growth happening because works continue to be advancing very quickly, our construction birth process with concrete walls and aluminum molds. We believe we are going to have substantial growth in our revenue because of what has been done and the advance of the works. This revenue will happen and the operational leverage will be even more stressed in our results with an increasingly greater dilution of fixed costs in the operations. Here, a longer retrospective to the right from 2017, a company that has been able to overcome many of the challenges during this year, going from BRL 752 million in net revenue to BRL 2.160 billion, an average annual growth of 24%. It's a pure highlight. It generates cash, pays dividends.
We are very proud to work and deliver these results to our stakeholders and shareholders in general. Next slide, please. To the left here, we can see our EBITDA margin. There was a slight tipping point going to 21% in the 4 Q, getting to BRL 111 million in EBITDA, when we add this to capitalized interest at BRL 14 million. In 2022, we closed with EBITDA margins close to our historical series, around 20%, 21% in terms of EBITDA margin. This added to a nominal value of BRL 129 million, a net debt lower than BRL 200 million.
An operational number that was very strong, a deleveraged company, a company that is far from financial problems, with a lot of redundancy in capital structure, allowing us to continue with 2023 and the next years, allowing us to know that we are in the right path to deliver the best return to our shareholders. Here, net profit BRL 209 million, a growth of 31% compared to 2021, always showing the growth of the numbers, an improvement in revenue, SG&A under control, growing less than the revenue, and a bottom line that can be highlighted, an adjusted net margin of almost 10%. Next slide, please. This is the one I most like to present to you. This is clearly to show you how this group is conservative and the managers, the administrators, we have a long-term vision. We're not here for the short term.
We're not here to deliver a nice quarter to you. We're here for sustainability in the next 42 years. The company celebrated its birthday last year, 42 years. We'll be here for the next 42, 44 years. The first thing we have to look is capital structure. Brazil is a very volatile country with difficulties, macroeconomic difficulties. But when we look at the micro economy, we are very well installed. We are very well placed in the low-income sector because of our Direcional, Minha Casa, Minha Vida, and the mid to low income in Riva, very successful operations, mitigating risks. We will continue in this market because we don't have any kind of competitor here in the markets we're working in. Competitors are having more difficulty in participating in this market.
To close here, a net debt over equity, adjusted net debt over equity below 13%, one of the best debts in the debtors. Cash position of also BRL 1.200 billion. Our cash can pay four years of indebtedness, 35% of the indebtedness over 48 months. Really, the liability management is something that gives us a lot of comfort for us to be able to go to market, focus in engineering, new business, and now to be able to surf a very favorable wave with the expectation that we have of the Minha Casa, Minha Vida program that is stronger now because of the government, the new government. Here to the right, we have this pie, and we have our capital market paying for 91% of our debt. We have been increasing our SFH share here. This is the SFH with low interest rates.
Most probably we will refer part of these BRL 300 million that will mature in the next months with the resources of the famous PJ, which is for financing the production. When there is an opportunity window, we will be doing what we have been doing in the last years, continuing to extend the profile, stretch the profile of the debt, being able to deal with this day after this. I would like to close my presentation and now go to press questions and answers. Thank you very much, everybody.
Thank you, Paim. Now, here we have our first question, Bruno Mendonça, Bradesco. Bruno, you have the floor.
Good morning, everybody. Thank you for the presentation. Your question, two here.
Ricardo, looking forward in the pipeline, beginning with level one, you said in the last call that you didn't believe that Direcional would go back to this segment. From here on, we had the local government that attracted many people here. There was a structure that seemed to be very satisfactory. Do you believe that it is possible for level 1 to have some kind of similar structure that can be interesting for you if anything has changed from here on? First question. Second, with regards to Riva. Here, we have seen credit environment which has been worsening. Caixa continues resisting, but we don't know up to when. Can you tell us a little bit about how you've seen the sales perspectives and launch strategies of Riva from here on? Thank you.
Bruno, thank you for your question.
First, with regards to the Level 1, no doubt, the local government in São Paulo has been able to shield the main uncertainties that exist in the program of this type, specifically where payments are done with resources from the budget of the municipality, Pode Entrar, and the Union, which is Level 1. Pode Entrar, when one shields these main risks by construction companies and developers, one sees a strong demand for share. Companies interested in here. As long as there is, from a financial point of view, a margin that will justify the risk of the business. Here with this program, this was very balanced. The margins are okay, enough to operate within the program, and there was a very well-done shielding of the payment risks and payment schedule from the public branch.
In the past, this was one of the big causes of paralyzed works, companies that had more serious works from the financial point of view. When we talk about the new Level 1 potential, if there is security with regards to payment, there will be no delay in payments because in the margins of this kind of project, there is no room to operate with third-party capitals or debt. We have working capital for one month. We produce a month, we have to receive the next month. We have no room for delay of payments, specifically with capital costs with this level. We do not have room to delay payments here because of the compressed margins we worked with. If this is shielded, protected, I believe we can do a Level 1 project.
We would try to limit any kind of exposure that eventually we might have in Level 1. A certain percentage of our business as a whole, this percentage should be lower than what we had in 2013, 2014, and 2015. Even with this greater security in terms of payment schedule, we will have exposure below we had before. It is important to wait for announcements here in terms of price, how this payment is going to occur. How it is going to be done, so that we can see our appetite in order to try to operate in this program. Level 1, no doubt, once you have control of costs in terms of works. The construction works, and it is strong. It is very interesting from a return of a capital allocated point of view.
Because it is very little capital in a short term, but you have compressed margins and you do not have room for mistakes. I would say it is interesting for the continuity, increasing the working capital of our assets. But in case we do participate here, we will be very cautious trying to mitigate realities that we have experienced in the past, and certainly can be mitigated, I believe. This happens, our exposure should be lower. Perhaps something we will do here for sure. Riva. It is interesting to share with you my view with regards to mid-income segment. At the end of the last year, I made it very clear, I am certain that this segment, when we analyze the market as a whole, will reduce in size this year. We do not have funding available. The cost of this funding is larger.
Banks have to pay Income redemption here, savings accounts from savings accounts here. But reducing the purchasing capacity, purchasing power of our customer. Our customer that is buying our product has to have more income, so our addressable market is reduced here. But there has been an interesting phenomena. When we look at the macro, we know there is this concern, and when we analyze 2023 in the mid-income segment, we have tried to reduce its representativeness and increment our share, our participation in Minha Casa, Minha Vida launches. You should see a greater mix here, right? More Direcional, less Riva as a share of the total.
But because of credit restriction scenario we have been going through, my impression is that those companies that have access to the PJ will have a huge differential in a smaller market, but there will be a very relevant lack of company funding, right? PJ. And we believe that when we have continued in the company, being very conservative with leverage, huge focus in cash burn generation, we will be a company that will have access to this resource. And I believe to access to the PJ will be the differential, and eventually for those that won't be able to operate in this segment. So I believe that those that can perform here will certainly have success in the project. So I would say, I said this to the market. The market was very concerned with the scenario.
Of course, the macro is very challenging, but when we look at the opportunities here, when we look at the company as a whole, I think that we have to wait to see what's going to happen with the supply of this product. But I think we might be surprised and have a performance right. I would say the projects in advanced approval stages to have products in the market we have. So, depending on what we are able to see during this year of 2023, from the point of view of demand and credit granting, I think that we can touch on this mix depending on what we will be able to deliver in terms of return, SPE and SPPs and Minha Casa, Minha Vida.
But here, I think we have to analyze what's going to happen, because I've noticed a reduction in the recurring supply, and we have to see where we're going to have this balance between supply and demand in a smaller market. But I believe where we can have very attractive returns to operate in this segment. Let's wait. So, when we see a 4 Q Direcional performing better, gaining shares in our sales, when we consider January and February, we have operated in Direcional with share over Riva last year, compared to last year. But here in March, I see a very positive Riva performance. Let's wait. It's early to come to conclusions, but perhaps we might have an even better performance than the reality we are prepared for in this company.
Ricardo, if you will allow me just to add to this, Bruno, I think that this comment that Ricardo said about the corporation is very strategic, the PJ. And we've had new PJ suppliers. We have new potential suppliers, which we should inaugurate very soon. So, we will go from just a very few pockets to more money here, more PJ corporate supply here.
Thank you very much. Very interesting. So, I was going to ask exactly this question, if this PJ or corporate money was concentrated in cash or diversification. What is this diversification, traditional banks or funds? Traditional banks, and one that you represent is one of them. And there are some other banks, too, regional banks, developing and very close to the pilot, so that we can launch projects.
When you have a scenario like five years ago, where we had one single supplier, SBPE, now we might have five SBPE scenarios, right? Suppliers of scenario. This helps us in our funding source. It diversifies our risk, because we might have a player with less appetite. I believe that this supplier portfolio is a strong element. Since we are not very leveraged, we have a very stretched debt. These banks have a lot of appetite of raising credit for us, raising funds for us. We are very excited here to increase our corporate suppliers.
Thank you, Bruno. Next question. Fanny, Banco Santander. [Foreign language] Fanny, you have the floor.
Good morning, Paulo, Paim, Ricardo. Two questions. First. [Foreign language] Ricardo has talked about the VSO and the net sales speed of sales.
What I want to understand is how do you see this trend, margin recovery versus speed of sales? Would it make sense to work with flat margins to deal with Riva, where you said the scenario was challenging? This is my first question. Second, with regards to POC, percentage of completion, how do we see a trend of revenue recognition in the two, and what is the impact of the sale of the SPE have with revenue? Also, regarding rains, right? Here in the Southeast, the situation is very serious, so there might be a strong impact. That is it.
Fanny. First, with regards to margin versus speed of sales. It is important to make very clear here, in spite of this reduction of net sales in the 4 Q versus the third, I am not concerned with the products we launched in the 4 Q.
There was a huge concentration of Minha Casa, Minha Vida, and we have had the best first quarter in the company. It is always very important to make this clear, the seasonality we have in our sector. But January and February are very different than the sales performance we have seen. January, February 2023 compared to the previous years. So maybe we have had a VSO of around 12 sales that have dropped. Of course, when this happens, you are not very sure of the impact from the elections and the cup. We see a first quarter that is very positive in terms of demand for our products. An interesting point to stress here, 1.3% growth of gross margin. Adjusted gross margin comparing 4 Q to 3 Q.
An important tipping point, I would say it was expected, but it is difficult to say when this is going to happen because of our cycle and our mix effect. Our REF was 0.1 of the REF margin, backlog margin. It is important to make very clear; we are working to deliver a very healthy margin. It is even over than what I always say should be the recurring margin of a business, which is 34. We delivered 36.3, 2.2 percentage points over. Also in this moment, with very high capital cost, low visibility with regards to what is going to happen to interest rates from here on, global scenario, and considering an inflation that is benign, the increase of VSO, of speed of sales, make sense.
With stable margin, half percentage point here down or up, this is natural, but a search for the speed of sales would generate more value for us than a search for margin with a loss of VSO and the need to allocate working capital in our project. We go for a greater gross margin, demand for capital, and then you have financial expenses hurting, resulting in a much more leveraged operation. I think our margins are very healthy, very solid, and VSO is a priority for us, right? The need to return capital in the last years, right? This has been a priority. Here we have a leverage in the levels that we've worked in. In the 4 Q was below 13. We paid dividends in January, but this is what we have been trying to do in this environment we're here.
If capital costs drop, then we will rethink of what can make sense from here on. As of now, I think this is it. POC, Fanny. When we, POC is percentage of completion, it rained . 4 Q for us in the states we worked in have had greater rain impact than the 3 Q. São Paulo has had a lot of rains and has caused a lot of damage in the last years, in the new year, now in Carnival. The problems in the north coast of São Paulo. The 4 Q had more rain than what is happening now. It's incomparable. But I don't believe that we can say that this impacts the POC. Obviously, we begin works in April, so what we launched in the 4 Q and is being launched in the 1 Q will not have revenue here. Only from the land here.
The revenue will grow more in the second and third quarter, but normal life for the works that are ongoing. There will be no impact because of the rain, or what I can say can justify any kind of revenue reduction. I think everything is going very normally in this 1 Q, and the first highlight are the sales that have performed better than the first Qs of the previous years. Great. I also believe we're going to have a growth of revenue in 2023 at a much better pace than 2022. I think that it's what we've been saying, this growth will be very strong in 2023. Yeah, growing during the semester. Yes.
Okay, Fanny. Thank you. Next question. Daniel Gasparete, Itaú. You have the floor, Gasparete.
Thank you. Good morning. Two questions.
The first one is to understand how you see the margin and cost dynamics. We have seen the cost of material dropping. I want to understand how you see this is going to happen during the year, and if we have room for the reversion in terms of economies of the works in the second semester, beginning of 2024, because of the inflation levels, budgets that were higher than before. Also, the expectation of the announcements of Minha Casa, Minha Vida, conversations with regards to the reduction of subsidies in Level 2. What is your expectation here relative to these two matters here?
Thank you, Gasparete. We have noticed, and I would say in an even more relevant way in the last month and a half, reductions of product costs reductions. This is positive.
We have several products where we have been able to negotiate reducing prices, and we will continue working with this effort. I think the competitiveness gain here in terms of cost will help us to see to families that at a certain moment we couldn't, because we had to raise the price, the sale of the prices of our products. It's a little early to talk about the reversion scenario here, right? I think 2023, this is a more recent movement. I don't think it's probable that we're going to have a movement here in this sense. In our budget, we always consider the expectation of future INCC because of our revenue being paralyzed here because of the sale. I would say that it's a little early to imagine that this INCC can be reverted.
I think we have had a reversion of the budget relative to 2018 and 2019, but I think it's early to think of this. When we consider 2024, we have to be clearer with regards to the intensity of this reduction of costs of products that we buy. In spite of things seem to be very positive, and that's what has led us to go after a VSO, a faster VSO, and reducing the capital of our projects. Here we want to shorten the duration of our cash flow in a very high inflation scenario. I think the focus here will have a greater impact than any movement where one thinks of a reversion of budget, right? We're in a very new process in this product reduction cost. Relative to MCMV program, we've had signs here.
The chief of staff, Rui Costa, told us about the possibility of eventually using part of these resources approved in the transition to complement subsidies granted by FGTS level one, and eventually to level two. I would say the following. In case this happens, the impact will be very relevant in the gain of VSO and our capacity to see to families that have much lower income than the families we see to today. When we reduce the income necessary so that our customer can buy our product, the impact is BRL 30, 40 in the income. Many people enter this addressable market. I think that we still have ongoing two measures that might have a very relevant impact in our MCMV segment. This is one of them. The other one is the future FGTS.
I would say both of them have a capacity of impacting the MCMV operations in a very significant way, and even the 420 bps. See the implementation of the use of complements here to the subsidies and the future FGTS. These are news. In case they do come about, they certainly might impact the operations of all those here that are operating within the program.
Excellent. Thank you, Ricardo.
Thank you, Gasparete.
Next question, Gustavo Cambaúva , BTG. Gustavo, you have the floor.
Hello, everybody. Good morning. I would like to ask a question with regards to the discussions, this asset monetizations agenda, a sale of portfolio. You also saw the SPE, you have Direto. I would like to understand how you see this for 2023, what you have here in terms of expectations to accelerate monetization of assets, doing some kind of specific transaction.
And here also, I would like to understand how you see the target here in terms of leverage, because in the last years, you grew the company a lot, and you continued paying dividends. So, I would like to understand here with regards to current indebtedness, what is going to happen with the company from here on? How is it going to work in this sense? Higher interest rate scenario. Does it make sense to reduce this, reduce the payout?
I think eventually, Paim can add to my answer. Well, capital cost is very high. Somehow, to monetize these assets via receivables or SPEs, we have been able to work with discount rates that are insignificantly lower than our capital cost. So, when one maintain these discount rates, we have been able to. We will continue selling.
And also, I would like to apologize to Fanny because this is one of the points she asked about, and I did not answer. I would like to answer the question she had asked. So, we have an expressive amount of equity invested in land, still bought in 2015, 2016. Equity allocated in a land without a launched project does not generate revenue nor results, much to the contrary. So, to be able to maintain the land has a cost. So, we do carry part of our.
We do not generate return here. So, when we have a project that is launched and most of the risks, we have approval terms and everything, what we have is only the execution of works, and we can give security to the potential buyer. It is important to anticipate this cash with this discount rate we have had, and we will continue doing this.
Also, I see the revenue of the 4 Q was lower than expected. Yes, we sold less, less than the 3 Q. I think it is natural. In my view, the margin has a strong value. So this sale that did not happen in the 4 Q might happen in the next Qs. The margins have been very solid, so we have not lost the result. We just deferred it. I think it is better than lose margin. 4 Q, there was an impact in our revenue and the sale of three SPEs, of which revenue was not included in 4 Q, but in other revenues. So, when we can anticipate the profit from this project, this is value generator, and we will continue returning capital to our shareholder, try to maintain our book closer to stability as possible.
But it depends on the growth of operations one year or the other, where cash generation might not be in the same level as net profit. But when we look at the next years, everything has been stable, payout has been high. This is one of our priorities here, and we will try to continue delivering the highest payout possible, as long as it makes sense to sell these assets with discount rates. Otherwise, we will wait for more adequate moments to sell these projects. Is there a point here? I do not know if you would like to add this, Paim.
If you will allow me, Cambaúva, we have been talking to you that the capital is priority for decision making, dividends, buyback, investment. We will not abuse from leverage.
What we have been doing in the last years, specifically in the last year slide that you saw, when we generate cash. We closed the 4 Q with 13% net debt over equity, distributed BRL 104 million dividends, went back to 20% net debt over equity. This year, if we are successful with our plans, we will generate cash, reduce leverage, pay a dividend, reduce the equity, and we will do this gradually. We will be doing this as long as the discount rate for the sale of assets makes sense. We intend to continue with low leverage. I think that we should maintain the operations not very leveraged without extrapolating these numbers going over 20% that we have been doing in the last quarters.
Great. Thank you very much.
Thank you, Cambaúva . Next question, Pedro, Credit Suisse. You have the floor, Pedro. Good morning.
Thank you for your presentation. I have two questions that complement the previous ones. If you can share with us the rationale behind the sales of the SPEs, if it was to strengthen cash generation or what projects that were not so well sold and the opportunity emerged, and also what other types of sales we can imagine from here on based on this model. Then with regards to margin, you said that the priority is to speed up the sales of Riva. When you have a flat margin of around 76%, up to what point can we imagine a lower Riva margin, a low-income margin absorbing this so that consolidated can remain at 36%?
Pedro. I talked about this with Cambaúva , but to add to this, if we have the opportunity to sell assets with discount rates lower than our capital cost, we will sell.
Because in our view, this generates value and has allowed us to grow, continue returning capital to the shareholders, being closer to stability, allowing our ROE to grow because of the increase of net profit and maintenance of booking at a stable level. If it makes sense to generate value, then why not sell these assets where we have very expressive equity allocated? Because we have a lot of equity here, the return of the capital here is lower than the return that we deliver in projects. We are getting a business that demanded in the past, trying to learn with these mistakes, not commit them anymore. But projects with margins, allocated capital, the cost of this capital, you sell, you have the capital and allocate it in new projects that will give greater returns or return it to the shareholder.
This is the reasoning here behind of what we've been doing. The idea is to continue doing this if discount rates are not prohibitive. Riva and Direcional margins. In a normal context, we should have Riva with margins over Direcional because SPE projects demand more capital, and there you need more margin. Of course, in time, you can have different scenarios that make you escape from this logic because of the context we have to face. I would say currently, it has made more sense to allocate capital in MCMV projects because of the uncertainties with regards to funding availability, the reduction of our market, demanding greater demand of customers, more money from customers to be able to buy our product. But I think there are positive aspects here in this market. This market has reduced in size, but we can end up performing very well.
It is difficult to say what is going to happen with the product mix, work with more margin in one segment, and then suddenly we can have similar speed of sales, right? I do not see any problem working with lower VSO in Riva than Direcional. I think what we are going to avoid is having stocks here in this segment. But Riva VSO, lower than Direcional, it is under control. It is part and it is natural. I think it is difficult to talk about margins. At a first moment in our projects, we see opportunities with MCMV. We are cautious with the mid to either mid-income family.
We have to see what is going to happen to supply. Demand, I am sure of, but I think we might have a relevant reduction of supply, and this might mean opportunities, even in a segment where macro might be going against this.
But we cannot generalize things and believe we are not going to have opportunities here.
Great. Thank you. Just a follow-up question. What would you say is a commercial strategy to accelerate, to speed up the Riva?
Discounts? No, we are not applying discounts, Pedro.
Thank you.
Let us wait. We are going to January, February without discount.
Thank you, Pedro. Next question, Igor from XP.
Hello. Thank you for your question and your presentation. Two questions here. The first one, the Pode Entrar. The risk that you see here. Aquia working with a high number of units. Do you believe the local government would call Caixa to operate here? How do you see? Second question has to do with launches.
Do you have? The Riva operations will be lower this year, but with Direcional now compensating things, would you have room to grow the pace of launches this year relative to last year? So if you could tell us about this first quarter, because in the fourth you launched a lot, and this first one, the strategy is to reduce launches a bit here.
Igor. Because of the structure that was set up and published, we are very comfortable with the risks. So, we presented projects, and in case our projects are chosen, winners here, we are very excited with this operation. I think this is something we had to do. We delivered a lot of value during level one period. We do not see risks. They have been mitigated. We have received proposals from private banks to operate the escrow, and it is under control.
Now we are waiting for the disclosure of these results to see how our projects were qualified. So, first quarter, we launch less, right? We have Carnival, we have New Year, so this is seasonal. Every year this ends up happening, and it is normal. Our fourth Q had strong launch volumes. So here, what we want is not launch simply to launch. We do not have launch as a priority in the company. We launch in case we notice a strong demand for the product. So, to have inventory, because of everything we said with regards to prioritize cash generation this year, to have inventory here, to build the inventory here makes no sense. So, we have a project volume to be approved this year. And in case there is a demand, we will certainly operate with very similar levels, ones that are over, superior to last year.
We don't want to say, because it would depend on the market, the demand, and credit availability. In case there is, we had the conditions of seeing to this demand. In spite of the fact, and it's important to stress, in the next two years, our priority is not to have such a relevant growth of launches as like last year. We want to execute everything we grew in terms of launch and sales in the last two years with the efficiencies levels that we have delivered in the last years. I would say that the greatest value we generate here in the company is have our revenue getting close to our launch levels with the maintenance of the margins that we have been able to deliver, and also capturing gains, operational leverage gains in our expense lines. So priority is maintain efficiency in execution more than growth.
Although we have project and sales structures to eventually deliver in case there is a demand, very similar numbers or slightly more than we had in last year's.
Yeah. Thank you very much, Ricardo, Paim, Paulo.
Thank you, Igor. Next question, Rafael from Safra. Rafael from Safra.
Good morning, everybody. I would like to do a follow-up. Talk about the states you work in. I remember the fourth quarter, you said that São Paulo suffered more pressure. Rio too. Minas Gerais went well. Brasília, Manaus too. So how is this first quarter? Is it similar? Should this change the representativeness in these states here in the beginning of the year?
I would say we've had improvement in our operations performance in São Paulo from the point of view of speed of sales. São Paulo was a state that demanded more capital, specifically with the purchasing of the acquisition of lands. So, the return is slower when compared to other states where we didn't have to disperse off so much equity to buy land. But our market is balanced in Brazil as a whole. However, we've seen opportunities that can be used in other less obvious markets, and we've performed better in these places. In terms of operation scale, São Paulo and Rio have huge scale possibilities greater than other states, right? And ends up compensating more capital need at a greater scale, diluting our SG&A, greater dilution of our sales expenses. This is not happening yet.
For 2023, I think São Paulo and Rio will have huge representativeness in our launch. When we compare the size of the market for the volume we are launching, I would say our share in these markets is lower than the participation, the share we have in less obvious markets. Although, absolute values of launches, São Paulo has very good representativeness here in these companies, right? They are not the largest states, but it is one of the three or four main areas here in terms of operations. I think we could be doing more than we are doing in the less obvious markets. The return that we have noticed in these areas, over-allocated capital is lower than other states. We have tried to have greater representativeness in other states than in Rio, than São Paulo. This should continue being a trend.
Although we have noticed better negotiation conditions of certain areas in these two states, land prices dropping, less need for equity to acquire the land. These are cycles, right? We are at the moment where we eventually should focus in new land bank projects, specifically now where things are more balanced, less companies going after projects in the cities. As I would say, the other states have been able to deliver greater returns here.
Very clear.
Thank you, Rafael. Renata Cabral from Citi.
Good morning. Thank you for accepting my question. You already talked about the top line of the 4 Q. You have felt a reaction in the 1Q 2023. I want to know if you have already felt the effect of the cap increase in MCMV. Is this the main reason for having a stronger beginning of the year?
Second question would be your impression with regards to measures that have already been approved relative to MCMV as an extension of five years in terms of amortization of FGTS. How is the perspective of Caixa during the rollout here?
Renata, I would say that the increase of the cap in the program that happened in the 4 Q, 5% of the cap of BRL 264, considering Rio, São Paulo, and Brasília, there is no impact in the demand. There was no change in interest rate, subsidy increment, financing term, but increases to be able to work with certain products. These products could be unfeasible because of cost increases the sector went through from mid-2020 to end of 2022. Now it will allow us to certain projects to be able to fall under the program.
I think it is positive from the point of view of having more projects falling under this program, and again, of representativeness of MCMV. When we look at our mix as a whole, demand is just to render feasible projects which were not feasible before. With regards to Caixa, I would say we have a very qualified team in Caixa, very experienced. We had a government transition or a transition from the presidency of the bank too. There was no impact in the Caixa here. This is work that it is really an example. It is a reference, the Caixa team, what they have been doing. There is no doubt, I can talk about this here. With regards to everything, things have been happening in a very surprisingly positive way. No impact whatsoever.
With regards to the implementations of measures approved during last year, 35 years price is already in effect, and the FGTS. Now with all the vice presidencies defined, the whole team established, I am sure that this will go into effect in the fastest time possible. It's difficult to say when. What I would say is that this program certainly has a capacity of have impact in the products that have target families of income of up to 2,500 BRL. This is very significant. We'll be very segmented, but we'll see the policies here to be able to measure the size of this impact, but I think certainly this allows us to be very optimistic with regards to this segment specifically.
Thank you. Perfect.
Thank you, Renata. Next question, Joel Goldman. Just to remind you, if you have any question, please raise your hand. Joel.
Good morning. Thank you, Paulo.
Ricky. Well, I have a question. I want to understand how much more Direcional can grow in terms of sales. Apart from these conversations that are happening with regards to MCMV implementation, what is the best outcome here for you? How much more can the company grow? Can you see the company growing 50% in launches? Or would you be growing gradually? That's what I want to know.
Growth, I would say, when we analyze the level of launches, we had last year, is not a priority anymore for the next two years here in the company. Okay, in terms of volume, square meters launched, it should remain stable. When you look at the PSV, there might be an increment closer to price increments or something close to inflation. But our priority here is execution and then execution with the least demand for working capital possible.
Eventually, looking at the opportunities that make sense. So, we do not see the value being generated due to a continuity of growth at a very accelerated pace because we know execution in our business is critical, and it is the key of everything. So, we're reaching launch levels that puts us in a constructed area growth in the next few years, which is relevant and will demand attention here from our team so that we can continue with this journey and so that we can have comfort here. So, we always have to be very careful. No matter how many changes in the program, we will analyze opportunities and eventually change the product mix but not grow over what we are capable of being able to execute.
Mix, to look at those projects that will give us greater return than what we allocate makes sense, but to grow and apply all this efficiency that we've had to deliver our works, that wouldn't make sense.
Okay. Very clear. Thank you.
Thank you. Now we have come to the end of our Q&A. I will go. I think we have one last question, André from Itaú.
Good morning, everybody. Thank you for your presentation and the question. I would like to very quickly ask you with regards to what you said in the beginning, the expectation of the reduction of minority interest from here on. How is this related to the stake? This year is very relative, right, 85%. Could you just tell us a little bit about that?
André, when you get the share of this minority interest as a proportion to our net profit is 30%, right? BRL 30 billion relative to 206. So almost 30% of our share. When we look at what we have launched, we see the minority interest going to 15, and this year, 2023, should go to 10%. Perhaps it might make sense to launch one project or the other, and then you can vary this number. But you will see that in time you will see minority interest going down to 10%. Of course, we're going to continue with projects with partners if it makes sense. But I would say representativeness here tends to be reduced. You can see here where we have partners but not consolidating the revenue. You will see here this growing. From here on, there might be an operational leverage gain, commercial sales expenses.
With regards to minority interest and financial expenses, since we don't have the expectation to have an increment in our leverage, our revenue grows and our sales expenses remain constant o r if it drops, if we have a reduction of interest rate in the country, I would say that these can be lines where we can have greater relevance from the point of view of net margin gains. So, they went from almost 25 to 10. The minority interest dropped from 25 to 10.
Thank you, André. Now to close our Q&A, I'll give the floor back to Ricardo for final considerations.
Thank you, everybody. I would really want to thank you for your participation. We had a very healthy Q&A session, excellent questions where we were able to address several relevant points here in our operation.
We are beginning 2023 with positive expectation, specifically with regards to Minha Casa, Minha Vida program. We will analyze how this is going to occur, the mid-income segment. But the possibility of being able to migrate from one segment to the other and using all the opportunities here is one of our strong points here. We are in the beginning of the year. There are many opportunities we're going to try to take advantage of, and I'd like to see that our operations have very positive perspectives from here on, and we expect to deliver very good results in the market we work in. Thank you very much, all of you, and have a very good day.