Good morning, and thank you for standing by. Welcome everyone to Direcional's audio conference to discuss results relative to the fourth quarter 2019. Here with us today, we have Mr. Ricardo Ribeiro Valadares Gontijo, CEO, and Henrique Paim, CFO and IRO. This event is exclusively for analysts and investors and is being recorded. All participants will be connected in listen-only mode during the company's remarks. After that, we will have a Q&A session. Further instructions will be provided. Should you need any assistance during the call, please request the help of an operator by pressing star zero. This event is also being broadcast simultaneously over the internet and may be accessed at the company's website, www.direcional.com.br/ri. The following address also carries the respective slide deck. Slide selection can be controlled by you. Any replay facility will be made available after the event is over.
Before moving on, we would like to state that forward-looking statements made during this audio conference concerning the company's business outlook, operating and financial targets are based on beliefs and assumptions on the part of the company's management, as well as on information currently available. Forward-looking statements are no guarantee of performance. Investors should have in mind that general economic conditions, industry conditions, and other operating factors might affect the future performance of the company and thus lead to results that might differ materially from those expressed in these forward-looking statements. I would like to turn the floor over now to Mr. Ricardo Ribeiro, who will start the presentation. Please, Mr. Ricardo Ribeiro, you may carry on.
Good morning, everyone. I would like to thank you once again for your participation at our earnings disclosure relative to 2019 fourth quarter. Let's start on page number four, slide number four, where we have the main highlights of Direcional throughout last year. Quite significant numbers, I might add. We closed 2019 with the largest cash generation in recurring terms in the company's history, having reached BRL 167 million . Since 2013, the company has generated over BRL 780 million in cash and paid out over BRL 400 million in dividends. Quite impressive numbers. We also had a gross margin at the MCMV segment, which was quite robust last year, which reached 39% in the fourth quarter. That was driven by all the investment Direcional has made, also of the experience we have amassed in the engineering factor of the company.
Having a construction company and a control over the whole construction chain within the company has made a big difference, and that, of course, reassures us as to the future company outlook, because we do believe that the environment tends to become more competitive as we move forward with a larger number of projects being executed at the same time. Moving on to slide number five, still mentioning the highlights. In 2019, we saw a growth of 16% in our gross revenue, 47% in gross profit, and over 400% in our net profit when compared to that of 2018. That significant increase reflects assertive measurements we took in the company, and our focus going forward is to increase our sales volume. As for our revenue mix for the company, brackets number two and three have reached last year 81% of the total revenue.
Bracket number one accounted for 12% and mid-standard 6%. As in the fourth quarter, we delivered a gross margin of 39% in Minha Casa, Minha Vida, and 29% in mid-standard, and 9% in services. The increase we saw in revenue coming from Minha Casa, Minha Vida in the mix was quite relevant and helped us deliver a growing gross margin last year when compared to the previous year 2018. It is important to highlight also the significant growth we had in gross margin for the mid-standard segment. That growth was due mainly to the change in the economic scenario of the country as a whole, with a lower or significantly lower interest rate in the market, and also due to a change in the business model we implemented for this segment, where we have industrialized the construction process. We also focus on transferring before delivering.
With that, we decreased the number of cancellations and thus the capital invested in that. On slide number six, we have the evolution of our operation in brackets 2 and 3 of MCMV. For the past 12 years through December 2019, we saw a growth of 3% in sales for the MCMV. It is important to observe that the 1.5 bracket saw a sharp drop in 2019 when compared to 2018. That significantly impacted the sales volume of Direcional for that segment, specifically BRL 360 million in that bracket and BRL 80 million in 2019. In other words, a drop of more than BRL 240 million in that bracket alone, which had to be offset by an increase in sales in brackets 2 and 3.
The net revenues for MCMV grew by 33% in the last 12 months, closed on December 2019, when compared to the year to date, December 2018, and have reached something close to BRL 1.2 billion. The gross profits reached BRL 458 million in the last 12 months as of December 2019, a growth of 46% when compared to the last 12 months as of December 2018. On top of growing our revenue, we also saw a strong growth in margins for MCMV throughout the year 2019. On slide number 7, we see a breakdown of our launches and development. We closed 2019 with launches of approximately BRL 1.950 billion, which accounted for a growth of 16% when compared to 2018.
If we take into account the mid-standard brackets 2 and 3 of MCMV, given a context of a less attractiveness of the 1.5 bracket last year, the growth reached 40% in terms of launches. On slide number eight, we see a bit of our net sales. For the development area, we reached last year BRL 1.620 billion in net sales, which accounted for a growth of 8% when compared to 2018. If we exclude the 1.5 bracket from the comparison, we saw a growth of 44%. We closed the fourth quarter of last year at BRL 371 million in terms of net sales, which accounted for a growth of 14% when compared to the third quarter of 2019. I would like to emphasize here the sales in the mid-standard bracket, which grew 74% in the fourth quarter of 2019 when compared to the fourth quarter of 2018.
On the next slide number nine, we talk about the speed of sales, the VSO. In the fourth quarter of 2019, we saw a VSO of 15% in the MCMV segment and 8% in the mid-standard bracket. It is important to emphasize that our speed of sales in the mid-standard bracket includes several units we have in inventory in the wholesale sector, and those units are not being sold in the retail market. As we are not having sales in that segment, there is, of course, an impact coming from that specific bracket, which brings down our VSO for the mid-standard bracket. We closed the fourth quarter of last year with a consolidated VSO of 14%.
One of the attitudes we have been taking at Direcional, trying to increase VSO, starting in the first quarter of 2020, is the launch for the MCMV only after financing has been obtained by legal entities. That takes about 60 to 90 days after the development has been registered. When we start sales after that contracting, the level of cancellations drops significantly. With a reduction in the number of cancellations, which is a simple measure to take, we managed to have a significant increase in our VSO. However, as I said, this process takes between 60 to 90 days, 2 months to 3 months.
In all likelihood, during this transition, which we started now in the first quarter, we might eventually see a drop in the number of launches because of this slightly longer term we will have to abide to before we make developments available to our sales force. On slide number 10, we talk a bit about our inventory available for sale. Last year, BRL 2.4 billion in available products for sale, 64% of that total were launched last year. In other words, it is a recent inventory.
The concluded inventory saw a very sharp drop and closed the year at around BRL 240 million. The inventory for MCMV accounts for only 1% of the total available inventory. Just for comparison purposes, at the end of 2018, we had about BRL 360 million in concluded inventory. In other words, throughout last year, we sold about BRL 120 million in terms of completed inventory.
Without a doubt, that, of course, helped us generate cash to the level we did. Currently, our inventory is located mainly in the southeastern area, accounting for 74% of that volume, and in the MCMV segment, which accounts for 80% of the total inventory for sale at Direcional. On the next slide number 11, we closed the fourth quarter of last year with over BRL 22 billion in sales potential in our land bank. More than BRL 4 billion were allocated to the mid-standard and BRL 18 billion to the MCMV segment. Out of those BRL 18 billion, approximately BRL 1 billion is allocated to a product that we call flexible here. In other words, plots of land that can be used both for MCMV and also for FGTS. Given the current market conditions, it is very likely that part of that might migrate to the SBPE.
Our land bank today is also concentrated in the southeastern region of the country with about 60% of our sales potential. I would like to turn the floor over to Mr. Paim for him to address the main financials for last quarter and last year as a whole.
Good morning, everyone. Thank you for participating in our earnings call. We are going to go through our main financial highlights relative to the fourth quarter and also relative to the whole year 2019. On slide number 13, we see a breakdown of our cash generation for the past seven years, which added to 783 million BRL. In other words, it is a very strong cash generator, our business, which proves the company's ability to weather different cycles and explore several opportunities that emerge throughout the way when there is a change in the economic scenario.
In 2013, back in 2013, we had an important stake in mid-income, but then because of a high number of cancellations we suffered on that segment, we changed our business slightly and moved down to segment 1. Then we moved from 1 to 2 and then to 3. We are now once again operating in the mid-standard segment, which proves our strategic ability to make decisions and make changes as the scenario changes, always with an eye at cash generation and dividend payout. As for dividend payout, for the past seven years, we added up to BRL 420 million of total dividend payout. We are big dividend payers, have been so for the past few years. On the right-hand side of slide 13, we see a bit of our capital structure. It is a very comfortable capital structure, which shows our conservatism as we approach this business.
It is a business based on cycles, so we cannot lose focus on our leverage level. In that scenario, we have brought our net debt down from 2018 to 2019 fourth quarter by 26%, adding up to only BRL 100 million in terms of net debt. On top of that, we have an average term of amortization for net debt of 37 months, one of the largest average terms in the industry. Moving to slide number 14. In terms of net revenue and gross profit, we had a drop throughout the fourth quarter of 2018 when compared to the fourth quarter of 2019. A marginal drop in our net revenue amounts, driven mainly by an impact of the segment 1, because in the fourth quarter of 2018, we had an important source of revenue coming from that segment.
We reduced the importance, the relevance of that segment throughout the quarters of last year because of a lack of resources, as you know. Now we have stabilized that number at 368 million BRL. A highlight in net revenue was a growth of 25% year-on-year, having reached something close to 1.5 billion BRL. On the right-hand side, on slide 14, we have a snapshot of our gross profit breakdown. The adjusted gross profit we have consistently grown quarter-on-quarter. If we compare 2018 with 2019, we see that our gross profit in adjusted base has grown 47%, with a margin at 34% in consolidated basis. Going on to slide number 15. As for transfers, this is where we see a very distinguishing point on our side, a competitive advantage. Of course, there is a learning curve for us to have reached those levels.
In other words, the ability to work around transfer in a very expedited manner as we transfer our clients to financial institutions or financing institutions. That, of course, helps our cash generation significantly. We did notice a clear evolution quarter-on-quarter in our ability to make those transfers in that way. From 2018 to 2019, we managed to transfer 41% in excess of the previous year, reaching a level of BRL 1 billion in transfers. On the right-hand side, when we talk about SFH and others, that effect is also seen, which shows, once again, the company's ability to obtain that learning ability to conduct those transfers. We did reach BRL 358 million in transfers for SFH in 2019, which translates in a growth of 21% when compared to 2018. A very important highlight in our numbers for this year.
On slide 16, the last one on the right-hand side, we see a clear evolution in our ROE, which grew by 54% when compared to the fourth quarter of 2018. When you compare numbers back in 2018 to the last quarter of 2019, we see a clear uptrend in ROE for the coming quarters also. Our adjusted net profit is also growing. A growth of 55%, as you can see on the right-hand side, when we compare fourth quarter 2018 to fourth quarter 2019, reaching the number of BRL 100 million in net profit when compared to 18 million in 2018, which clearly shows that the company is on the right path in terms of good execution, of strategy and in business practices. Thank you very much.
Thank you. We will now start our Q&A session exclusively directed to analysts and investors. To ask a question, please press star one.
If at any moment your question has been answered, press star two to remove your question from the queue. Questions will be addressed as they arrive. First come, first served. For journalists, please contact our press office through Ms. Aline by the telephone number 313415444 or via email aline.araujo@direcional.com.br. Please hold while we collect the question. Our first question comes from Mr. Alex from Itaú BBA.
Good morning. Thank you for taking my questions. I have two questions. First, concerning the Direcional operation. You announced last week this new initiative of splitting off with Riva. The marginal growth that we saw in segment 4 and SBPE, that growth was coming from that segment. Looking forward now, how do you see the growth of the MCMV operation under Direcional? Do you still expect a level of 1.5 billion, or do you see room to grow in that segment specifically?
Number two, if we were to look at sales expenses, we saw a certain level of dilution, which is still low. Can we expect changes as different operations are merged? Should we expect a smaller percentage of sales expenses as a whole?
Okay, Alex, thank you for your questions. I'll be specifically talking about Direcional. We cannot say anything about Riva at this point. As for MCMV, after there was a change in the government about a month ago or three weeks ago, after that, we see the market getting more stable or the operation becoming more stable. As of late February, we already see a very stable volume with no interruption in transfers, which is quite positive. We are now at a moment where we need to wait for possible adjustments that might be made to the program. We are quite bullish in terms of outlook.
I do believe that if changes emerge, they should be positive. Here at Direcional, we are waiting for that announcement. We do not expect anything major or very drastic. We only expect positive impact, as I said. In that light, we have been discussing internally about the possibility of operating at a lower price segment. Our average price four, five to four to five stories is around BRL 150,000. As we have more information about the program going forward, we might work around other projects with units at around BRL 130,000, where we see a very expressive and growing demand.
We know that the Brazilian sales pyramid is quite open at the base, so we do believe that the speed of sales for that product, which we elected last year to reduce the number of launches, we now believe that we could perhaps resume those operations because, as I said, we're becoming more optimistic around that segment. I do believe there is room for us to offer a higher number of units or products for that segment. As for sales expenses, I'd say that you will see a positive impact when we start launching our products with a contracted legal entity. The number of cancellations will drop, and because we pay a % of the commission at the time of the sales, when we have a cancellation, that commission is a loss. We see a very important drop in commercial expenses starting in the second half.
That will come from this lower number of cancellations. We should see a gain in efficiency, as I expect, which will be very relevant. We have also been working at our sales stand. We have been now converting to sell at our stores. We do have a strong operation in terms of reducing commercial expenses, and I do believe this will become more visible in the coming quarters.
Okay. Thank you.
Our next question comes from Nicole Inui from Bank of America.
Good morning. Thank you for your presentation. I have two questions. If you could give us more color on the gross margin. Where are those savings coming from for MCMV, and how should we be looking at gross margins throughout the year? Can you maintain that level? Do you see any pressure on any specific item?
In short, can you maintain that level of gross margins for MCMV? A second question. I know you cannot talk about Riva, but on Direcional's side, can we have some more detail about the services that Direcional will be providing to Riva going forward? The services you plan on providing to Riva. If you could give us some more color, some more detail on that would be good. Thank you.
Nicole, thank you for your question. As to your first question, to gross margins. One of the highlights for Direcional has been our ability to execute our plans, our engineering plans. That's only natural because we are quite experienced in MCMV, segment one, and construction, where we work with very tight margins. Very few companies are able to operate in that segment because of the tight margins.
All that learning we have accumulated since 2009 has been proving to be very efficient as we are now delivering very good margins above the industry average. What I do believe to be recurring gross margin, which we approve as we go through our internal committees, as we launch new products, is around 34%. But for the past quarters, we have been able to achieve important savings and economies of scale in our projects. As those projects surpass the 60% level of completion, where we are confident enough that we will see those savings materialize, then we start to recognize those savings, and that is how we have managed to deliver those levels of gross margins, which are quite healthy levels as you mentioned. I do believe that it is important for the market to take into account that margins will converge to that level of 33%, 34%.
But we do believe we should be able to present or deliver higher gross margins in 2020 because other economies and savings have been recognized. Those numbers will reflect in higher gross margins going forward. I do believe that. As for cost pressures, we have not felt any specific cost pressures that we could say are significant to the point of impacting our gross margins. We have been able to operate with things under control, and we have been working specifically in São Paulo, where the market as a whole, but not for Direcional, but São Paulo has been proving to be a very strong market, which has resumed growth in a more expressive manner. It is only natural that we focus on the city of São Paulo in the near future. We have been looking very closely to the São Paulo market.
We have been anticipating our plan in terms of execution to prevent a hike in costs or a lack of labor. Right now we are quite comfortable in São Paulo with our building ability and no significant cost pressures. As to your second question about our service contract with Riva, as I said, I cannot say anything about Riva right now. That contract has been filed at the CVM, at our SEC. I cannot comment on it, unfortunately. But if you have any doubt, those documents are public once they are filed at the CVM, and I hope the material we have filed will answer your questions. I apologize, but I cannot touch upon those issues right now.
Okay, thank you.
Our next question comes from Andre Mazini from Citibank.
Good morning. Thank you. A question around cost. You have answered some of it, but what part of the cost, if any, is pegged to U.S. dollars? Do you have any contracts in U.S. dollars? We see this very fast appreciation in the U.S. dollar, and it takes some time to impact on costs. The question is, how relevant is your level of contracting in U.S. dollars?
Andre, from the inputs that we buy, a very low volume is impacted by the U.S. dollar, the foreign exchange rate. Of course, some of the imports, like our molds that we import, but we do also have local suppliers, so the impact is not that major. You might have to migrate, change suppliers from international to local. Aluminum is a commodity, as you know. We might see an impact on price, but not relevant. Another input is steel.
Even though we have a very strong steel production in the country, when the U.S. dollar goes up, that of course impacts the industry. In some cases, when the U.S. dollar goes up, there is a pressure on steel costs. We are paying close attention. Copper for electrical cables might see some impact as well. But cement, sand, concrete, bricks, those are all national. Cement is a perishable material, as you know. So we buy from local suppliers. And concrete, which is the main input that we use, given our construction methods, we see no major impact from U.S. dollars. We buy a very high volume of imports, so we will see some isolated points of impact, but which are easy to mitigate given the diversity of inputs. I cannot say there will be no impact, but whatever impact we have will be minor.
Okay, thank you.
Our next question from Mr. Luís Stacchini from Credit Suisse.
Good morning. Thank you for taking my question. A follow-up on what you just said. You mentioned, you are talking about expecting for the announcement of new rules going forward. As new regulations are announced for the MCMV, that might imply a reduction of subsidies for the coming years. So how do you see that dynamic? Do you see a drop in those subsidies affecting your business? If you could mention a bit of how you see that announcement, which is about to be made by the authorities, by the government. Also, if you could talk about that trade-off between margins and speed of sales for the MCMV. Your speed of sales for Direcional is still relatively low, even when you compare that to the company's historic levels.
You did mention this new model as you are now intending to make launches once you have already contracted under a legal entity to decrease cancellations. In terms of the executive team, who should we expect to see leading the company going forward, especially now with the Riva agreement?
Thank you for your question. Okay. Given the competitiveness that we have seen in the market, we have become very efficient in terms of quality, in terms of cost. As we mentioned, we are very comfortable when we need to change our product mix. So we might, for example, include more units in the same size of land. We increase the number of parking spaces so we can maintain our gross margins at a very robust, healthy level, and still have launches at a lower average price. So the VSO is expected to increase when compared to current numbers.
We do have measurements in the pipeline to increase that speed of sales. As for the program, the FGTS plan, which will reduce subsidies going forward, that is a positive measurement. There were rumors and newspaper headlines that never materialized or proved to be true, but they do lead to some volatility in the market, because they announced more drastic reduction in subsidies, which made no sense at the time. But we have been working around maintaining the size, if you will, of the program with no reduction whatsoever. I think the veto, which was made at MP 889, relative to a more drastic reduction in subsidies, that veto was upheld last week by our Congress, and that is a very positive indication of the relevance of the program for the country today in terms of job generation, in terms of servicing a very needy bracket of our population.
We are talking about over 1,000 companies working for MCMV. The subsidies, which were maintained for this year, are also provided to other buyers for segments 2 and 3. It is a very tight program. The current government has been fostering this competitive environment, so everybody is trying to look for efficiency gains. This has been a very positive announcement for the future of the program. I think the reduction of subsidies going forward will not impact any reduction of the average subsidies. I do not think we should see a reduction in affordability for the program, which would happen if the subsidies of complement were to be reduced. I do not see that happening. I do not see that being discussed given the importance of the program in the areas of safety, job generation, so on and so forth.
My expectation is to see the program to go on as is. As for the gross margin, vis-à-vis a relatively low VSO. The first step to increase VSO is, as I said, the launching of our products after we have the contract signed with a legal entity. Our level of cancellations will sharply drop because of that, and we shall see that happening in the coming quarters. It will not happen from one quarter to the other, so we expect to see this having an effect in the second half. We expect to see a drop of 50% in our cancellations, and with that, VSO will naturally grow with this drop in cancellation, this significant drop in cancellation of 50%. Direcional has not been offered products at a price level above the market average.
I do believe our products are being sold in a very competitive manner, at a price that is very close to what the market is offering. I think I did mention this before. Given our efficiency in construction, I do not see our margins going down, but I think we should go after a reference VSO. With the high efficiency in building, will certainly lead us to have gross margins, which will be lower than the market average. That is what we pursue.
On the other hand, when we say we are adjusting our products to offer apartments at an average price of BRL 130,000 , to do that, we will naturally have to adjust the specifications of those products so that we can maintain our current recurring gross margins. We do not want to bring gross margins down. We do believe we can increase VSO without touching the gross margins.
I know it is taking a little longer than we would like to, but I see that happen going forward, Luís. We will continue on this path. As of now, I see no reduction in gross margins to a level below 34%, which is the recurring number we have as of now.
Okay, thank you. As for those new types of launches, contracted launches, as you were calling them. There is some adjustment to be made in the first quarter. Could you quantify the number we should expect after you adjust the base? The base?
Okay, Luís. Yes. This measure that we take is very, very healthy as we see it. We see that this drop in cancellation will lead to significant increase in efficiency in numbers for this quarter and for the launches we have planned for this year 2020.
Only two of the areas where we work, where we have a very high VSO, and we want to prevent a lack of units to be sold. I am talking only about two areas where we will maintain this policy of launching without having a contracted business done. For all the other areas, we will see an impact in the first quarter, and it is only natural given the period that I mentioned of 60 to 90 days. It will take some time for us to see any impact on our numbers. It is difficult to quantify that number right now.
That is not going to happen in March. I do believe that given that term of 60 to 90 days, the amount of launches will see a significant reduction, because from 50% - 60% of what would be launched in this half of the year will be launched in the second half.
Because we closed the year with an available inventory of BRL 2.4 billion, and given our focus on sales, today launches are no longer a bottleneck for the company. For us to maintain our profitability levels, I see no impact in our sales volume. I think it is a healthy measure, it is a cautious measure, and we are taking it a very good moment where we have a very good level of availability for sale. Without a doubt, we will only see an increase in launches going forward. It is difficult to quantify that now because we still have 30 days ahead of us to close the quarter, this current quarter.
Okay, I understand. Thank you.
Thank you. Our next question comes from Mr. Marcelo Motta from JP Morgan.
Good morning. A quick question, if you could comment on the company's cash outlook. You have a policy of 40% of the cash vis-a-vis the profit. How does that look for 2020 in terms of cash generation?
Okay. In the first quarter of this year, both in January and February, there was a certain impact on our transfers because the government did not come up with their 10% in subsidies. In February and March, we saw interruptions in that inflow, which of course impacted a transfer process. January and February, we will see an impact in the company's cash generation. Those transfers were brought to a normal level as of late last month, so we saw no interruption whatsoever for the past 10 days, which is great news. There might be some impact on cash generation in the first quarter because of that, as there was in the first quarter of last year.
As we see it shouldn't be recurring throughout the year, given the measures that have already been taken by the original development ministry and by the finance ministry. We are, if I may, very comfortable. We have to wait and see if in March we are able to update projects that were tied in January and February. The month of February suffered a higher impact than January. As for the use of that cash, which is being generated, as Mr. Paim said, and the company has been very clear for the past three quarters, we have not been held in our cash resources, which are not going to be used. We have been measuring the company's cash level vis-a-vis the growth demand is or is generating.
As our transfer project has been very efficient, and we expect to have better VSO, we as Direcional have worked with a focus on a low leverage level and a very healthy cash generation. Of course, as we grow faster, that cash generation will decrease because of a need of cash for new projects. You can rest assured that our policy is the following. If once we are able to maintain our low leverage level, which is a very important thing for an industry, which is quite volatile, short cycle, with all of that, we will be able to continue to pay good dividends out. We see no major change in course for Direcional right now.
Okay. Thank you.
Our next question, Mr. Ygor from Santander.
Good morning. Thank you. A follow-up on cash generation.
In the fourth quarter 2019, you generated BRL 35 million, while other competitors saw a cash burn. I would like to understand what drove that cash generation. Number two, about the Caixa Econômica. Are they more restrictive? Thank you.
Okay, Ygor. In the fourth quarter, it is difficult to compare our operation with the operation of other companies, other peers. It is difficult for me to identify the differences, which impact our cash generation and their cash generation. We see several companies that did not generate cash in the third and fourth quarters of last year, whereas we had an expressive cash generation, but I cannot tell you why we did and they did not. You did notice that we reduced our inventory level. The sale of that inventory was one of the drivers for our cash generation, but other companies did the same.
Maybe one company sold more than others, but it is difficult to know. We would need more detail to make that comparison. What I could say is that our operation has been efficient enough to leave us at a very comfortable level, and we are focused on a very expedited transfer processes. That is what I can tell you. As for the Caixa Econômica, it is difficult for me to say. We did not see a reduction in LTVs in the past three quarters. I think the Caixa has been doing a very important work, a very efficient approach, in reducing default levels. They have been trying to attract clients that will bring fewer problems. We saw that they did a write-off at BNDES last year. We do not want, as an industry, we do not want Caixa to have major losses. Of course not.
All the members of this chain should be working in a profitable manner, because we do know that if we have high default levels, the bank will not have the desire to work in this industry. I do not see major variations when compared to last year. No major difference that I have seen, that I have noticed.
Okay. Thank you.
Once again, to ask a question, please press star one. Thank you. The Q&A session is now over. I would like to turn the floor back to Mr. Ribeiro for his final remarks.
Well, thank you, everyone. Once again, thank you very much for the questions. That is the richest part of the call, without a doubt. Thank you very much. We expect to continue along the lines we have been treading for the past quarters, delivering growing profitability.
We are very optimistic about the country's macroeconomic scenario despite the more recent volatility and the world scenario, be it because of oil prices, be it because of the coronavirus. As we see it, the impact of those items on our activity is relatively low. So far, we've seen a maintenance of the level of visits to our sales stands. No impact whatsoever coming from the coronavirus. For now, I do believe our operation will remain impact-free, if you will. We hope this will continue. We will continue to work hard on our plans, and the fruits of that can be seen in our numbers. Once again, thank you. Have a nice day, and our IRO team remains available should you have any more questions. Thank you.
Thank you.
Thank you. Direcional's earnings call for 2019 and fourth quarter 2019 is now over. You can now disconnect your line.