Good morning. Thank you very much for waiting. Welcome everyone to the conference call of Direcional to discuss the financial results of the third quarter 2019. We have here with us today, Ricardo Ribeiro Valadares Gontijo, company CEO, and Carlos Wollenweber, CFO and IR. We would like to say that this is an event just for the analysts and investors. It is being recorded, and everyone will be at listen-only mode during the company's presentation.
Next, we are going to start with our Q&A and further instructions will be provided. Should any of you require support during the conference, please call help by pressing star zero. This event is also being simultaneously presented on the internet via webcast, and it may be accessed in the address www.direcional.com.br/ri. There you can also download the presentation. Listeners will control the slides.
The replay of this event will be made available right after the closing. Before proceeding, let me mention that forward-looking statements are based on the beliefs and assumptions of Direcional management and on information currently available to the company. They involve risks and uncertainties because they relate to future events, and therefore depend on circumstances that may or may not occur. Investors and analysts should understand that conditions related to macroeconomic conditions, industry, and other factors could also cause results to differ materially from those expressed in such forward-looking statements. Let me now turn it over to Ricardo Ribeiro, who will start the presentation. Please, Mr. Ribeiro, move on.
Good morning, everyone. I would like to thank you once again for your participation in our conference call for the results of Direcional. We are delivering a third quarter where we can see consistency of our numbers and consistent improvement of the company. We are highly satisfied because we can see now the results of the strategic decisions we made some time ago. Let me start by making some highlights, which I think are very relevant and should be made very clear for all of you who have been with us observing the company.
The main highlights are a very strong increase in our revenue. On the third quarter, we had 18% increase over the same period last year. In addition, we also had cash generation, which was very robust, BRL 43 million, even in a quarter where we had approximately 45 days or 50% of the time without any transfers of individuals from Minha Casa, Minha Vida.
In addition, we delivered an increase in gross margin of 500 BPS comparing the nine first months of the year with the same period last year. It has been the largest growth margin of Direcional ever. In Minha Casa, Minha Vida ranges two and three, the growth margin was 38%, which is a recurrent result throughout all the quarters of 2019. I would also like to highlight the gross margin of the mid-income, which reaches 40%.
Here we can see the execution capability of Direcional, and we have been showing consistency there, which really makes us very confident to move on in the process of growth of our operation, being absolutely sure that we won't miss any cent and possibilities of saving because our operations are very robust. Growing without efficiency makes no sense.
But growing with proper control of the company as we have it, is something very positive for us and the shareholders. I would also like to highlight that we can see huge opportunities ahead with the change of macroeconomic seen in Brazil to work within the same format that we have focused on Minha Casa, Minha Vida with the same processes, with the same credit approval for customers who purchase the unit in one segment above the cap of the program. We could call it maybe range four, but with completely different funding sources. The fundings come from the market. They do not depend on savings accounts, for example. So we are really confident there won't be any limitation of fundings for this segment considering the economic scenario we have with low interest rates. That's very promising.
We've seen also more job opportunities coming into the market, and this is going to grow even further in upcoming quarters. For Direcional to operate within the same format, it doesn't matter where fundings come from. What matters is that we believe there's going to be an increase in demand that we can execute and really occupy the space we have, really understanding that. We are highly optimistic about this perspective that is opening to us. And we can see the possibility of really expanding the operations of the company in the near future, and we are very satisfied to say that. Now on slide five, still about highlights, I would like to emphasize that in the quarter we had 89% of our budgets of Minha Casa, Minha Vida, 93% of our sales, and 81% of our revenue.
Just correcting one thing, it was not in the quarter, it was in the first nine months 2019. Analyzing the past three years of the operations of Direcional, we can see the participation of Minha Casa, Minha Vida ranges two and three in our revenue went from 12% in 2016 to 81% in 2019. In addition, the growth that was very robust has meant increase in efficiency, and gross margin was one of the highest, 38% in the high. A very positive highlight is that today there is no segment in our company, and we've been working recurrently. So excluding range one of Minha Casa, Minha Vida, which is about to be completed by the end of the year. So in the two segments, we'll be operating ranges four and MCMV two and three, so segment MUC and MCMV two and three.
And with increase of operations in the so-called MUC range four, we still see gains in synergy, especially concerning our G&A expenses and commercial expenses. Slide six, we can see the progression of our operations as we've been doing for Minha Casa, Minha Vida ranges two and three. We had an increase in sales, quite significant, 23% for the past 12 months after the third quarter of 2019. 64% increase in our net revenue of BRL 1.2 billion , and the growth of 73% in gross profit in the segment of BRL 439 million . All the efforts of the company are focused on keep on increasing sales. We have launched a very significant volume of projects, more than what was sold. And we have faced some challenges in the program as opposed to 2018.
Completion of the range 1.5, a significant decrease in the segment with amount to show almost 40% of our sales last year with SOS, which is very high because of the very high level of subsidies for these customers. We also face some operational difficulties because of transfers, limitations, especially for individuals in the first two months of the year.
Now in the third quarter, we are facing the same problem again. We have been selling more, but had it been for these difficulties I have described, probably we would have delivered even better results. Now slide seven, we have launches going into the operation per se. We have closed the third quarter with BRL 437 million launches, 100% to Minha Casa, Minha Vida. First month, BRL 1.4 billion or 17% growth over the same period of 2019. 2018, I mean.
We are quite comfortable with our capacity to launch products and offer our projects to the market considering the approval of our projects. Our priority from now on are sales, and launches will be made depending on the demands we have for our products. Concerning net sales on slide eight of the presentation.
In this quarter, we had an impact, a non-reoccurring impact of an increase in number of cancellations because of the interruption of the process of transfers that we observed for a while. This interruption might have impact on the fourth quarter as well with some higher levels of cancellations, but this is a non-recurring aspect, and it is likely to be minimized as of the first quarter next year.
The operation in the fourth quarter is running very smoothly, but sales made in the third quarter, which had a credit approval expired because the funding contract between customer and the funding agent was not made, will still lead to some additional cancellations in October and a little bit in November as well. Third quarter, we had net sales of BRL 306 million or 20% growth as opposed to the third quarter 2018, and a 3% reduction compared to the second half of 2019 over 2018. The last 12 months, we reached sales of BRL 950 million . Some of them for the MUC, which had 100% growth as opposed to the same period last year, showing once again our optimism with the action in this level of so-called range four prices between BRL 250,000 and BRL 400,000 , which is the price of unit.
Now talking about it, we had a SOS of 14%, which is below what we considered to be the SOS recurrent of the company. It was not as we expected because of the impact we had of cancellations at higher rates than what we would expect. For the mid-level, our SOS was 7%, and it has been showing significant increase throughout the year half. In terms of inventory of units, we have to be very careful because when we use the term inventory, we are talking about products that are available to be sold and not necessarily completed units. The third quarter, BRL 2.2 billion in units available for sale. It is important to emphasize that completed inventory in Minha Casa, Minha Vida is close to zero. 52% of the products on sale were launched in 2019. They have been recently launched.
Our units on sale are concentrated in the southeast region, 73% of our PSV and Minha Casa, Minha Vida, which amount to 80% of our PSV available for commercialization. Slide 11, talking about our land bank. We closed the third quarter with a land bank of about BRL 21 billion in sales potential. BRL 16.7 billion in Minha Casa, Minha Vida and the remaining amount in MUC. We had an increase in our land banks, and it is divided in four key regions in Brazil. 65% in the southeast, 18% midwest, 15% north, and 3% northeast region, exactly where we have started our operation recently, and we have had significant growth there. Our land bank is very healthy and really ready to support the growth that we are projecting. Let me now turn it over to Carlos, who is going to share with you the financial highlights of the quarter.
Good morning, everyone. The third quarter was very challenging in our operational execution. We were two of the months without any transfers of contracted sales for Minha Casa, Minha Vida. However, the increase in sales and the good performance in transfers of the mid-level income have helped with cash generation in the quarter. BRL 43 million in cash and BRL 132 million in the nine months, as we can see in slide 13. We closed the third quarter with net debt over shareholders' equity of only 4%, which really made us very comfortable to pay BRL 73 million in dividends with an approximate yield of 4%. Our net revenue was BRL 360 million, an 18% growth as opposed to the third quarter 2018. In the year, BRL 1.1 billion of revenue with 41% increase over the same period last year, as presented in the next slide.
As a result of the improvement in gross margin, the growth of consolidated gross profit was even higher, 38% in the quarter and 63% in the year, representing a consolidated gross margin of 34%. It is important to highlight that the reduction in interest rates have increased our sales in the mid-level or the MUC, amounting to BRL 30 million in the quarter or a growth of 140% over the previous quarter, as presented in slide 15. Thanks to the better product mix with the new launches and fewer cancellations in the segment, the gross margin has reached very healthy levels of 43% in the quarter. In Minha Casa, Minha Vida ranges two and three, we are still delivering excellent gross margin of 38% as a result of the good performance of our constructions and the execution of budget below what we had initially predicted.
Slide 16, we can see the performance of the different transfers. As we have heard before, the good performance of our MUC, which was 29% over previous quarter, has offset, and we have then included the cash flow resulting from MCMV. Today, we have already transferred all the backlog of clients coming from the third quarter 2019. As we have already heard, our net sales have been impacted by the cancellations as a result of some operational difficulties of Minha Casa, Minha Vida that have been observed throughout the year.
Our net profit was aligned with previous quarter, with BRL 72 million in the year and BRL 26 million in the quarter. We have delivered net margin of 7.1% and annualized ROE of 8.2%, and we are confident we are going to offer better margin and return throughout the next quarters. With no further comments, I would like now to hand it over for the Q&A session. Thank you.
Thank you. We are now going to start with our Q&A session just for analysts and investors. To ask a question, please press star one on your phone. If at any time your question has been answered, you can press star two and get away from the line. The questions will be answered as they are received. For journalists, please contact the press assistance team by calling Aline at telephone 3134315444 or email aline.araujo@direcional.com.br. Please hold while we collect the questions. Our first question comes from Gabriel Simoes of Itaú BBA.
Hi, good morning. Thank you very much for your presentation. I have two questions. The first one concerns the units of your mid-level income units, MUC. How do you understand this phenomenon? Do you think it was concentrated in one specific region, or is it something generalized throughout the country? Secondly, concerning the so-called range four that you are launching now, I would like to know about the transfers upon constructions that you're going to do. Have you already agreed on some with banks? Can you please tell us more about that? How much would that mean in terms of launches and new projects for the company in upcoming years?
Well, let me start by answering your first question. I think the margin was a combination of factors. First of all, we have a better mix of products. We are not selling only products which are legacy, but BRL 150 million new launches in the segment. We have the healthier mix. In addition, banks are really up-valuing the units, so we have to offer less discount to sell our inventory.
The highest impact comes from cancellation. How can we remove the effect of the cancellation from our margin and revenue? Because we used to have products that had higher prices and higher margins, and reselling them for lower prices, which had an impact on the margin. Once we no longer have cancellations, we have a better recurring margin. There was also concentrated sales in Belo Horizonte, where the cost of plots of land is somewhat lower, and therefore it helps with our growth margin. We don't expect the margins in upcoming quarters to be as strong as this one, but we can see some gradual improvement. We are delivering 30% margins with no difficulties. As we improve our mix, the margin will keep on growing consistently.
Now, Gabriel, talking about range four units, as you've asked, this is a segment where it's very simple to operate in terms of construction process. Nothing changes from what we currently have. In terms of transfers, the procedures are exactly the same. A positive aspect is that there are three banks working with transfer on construction phase, so Caixa Econômica, Bradesco, and Santander.
So there are different options to work with different banks for different products that we have launched for Minha Casa, Minha Vida in the maximum price allowed by the program. We have already working with products where we increase a little bit the price and go into the needed above segment, so no longer under Minha Casa, Minha Vida. So it means very good level of sales and also easy transfer.
Even in products that were originally launched as Minha Casa, Minha Vida, we are excluding them from the program. They have been transformed into range four throughout the sales process. We have observed a very strong demand credit, the new IPCA rate. I think this is really the future of the sector. We can see a great relief in the market with the available income and revenues of our customers much better.
Of course, if the interest rates are lower, the customer tends to end up deciding to buy earlier and easily. This is not what we want to do. We've been doing it already, and we can see the opportunities opening to us. Concerning the volume, the size of the segment in the future, we can easily migrate from one segment into the other or offer prices from different ranges.
Minha Casa, Minha Vida, range four, as we call it, to the market. What is going to define that? It's the demand. We've seen a demand for the level four or range four. Some of the units which were Minha Casa, Minha Vida can migrate into that, as well as land bank of mid-level, which for long time was just stuck in the land bank where we could not launch. It's going to be launched now in the mid-income level. What's going to define that is the demand. We can go from one range to the other with no difficulties, and I don't see problems in having, within few years, the company operating 50/50, for example, should the demand really indicates that. A very important point is that I don't see the operations of Direcional in Minha Casa, Minha Vida being reduced.
No, I just think there are not going to be changes. This segment of middle income level or range four, as we call it, is an add-on to our operations at Minha Casa, Minha Vida. New opportunities and not a replacement of products that we have been focusing on, and I would like to make it very clear.
Great. Thank you very much for your answers.
Our next question comes from Roberta Weissmann with Bradesco BBI.
Hi, good morning. Thank you for the call. My first question concerns your presentation of a very significant growth in launches, SOS, which has not been growing so much. Considering that you have this performance in the market, do you see a possibility to increase in the number of SOS, bring down margins, and improve and have a diversity in the number of products? Can you please tell us a little bit also about possible changes in the subsidies and the new laws being approved for a program in the upcoming year? Please share with us your thoughts about it.
This is Carlos speaking. I'm going to answer your first question. We have always been very conservative, and we are the companies that really prefer to operate with very concrete things. We have a very good margin in the segment Minha Casa, Minha Vida. We are delivering a record margin, and we still have got some space to speed up our sales. Before we think about adjusting final prices and offer discounts, which make no sense, we have some flexibility as we have more Pró-Soluto, we would have the right provision, maintaining the right levels of provision, improving our sales speed. It's a leverage we have.
We have always been very conservative, and we will keep on being conservative. We understand the kind of alternative funding systems, but this is a leverage that we have to improve really sales speed. Concerning the perspective for future programs, I think it is a bit too early to go into that. Nobody has clarity about how the government is going to set the key parameters and how it is going to be from now on. In the meantime, what we have heard concerning ranges two and three is that no big changes are expected. We have seen more significant changes concerning range one. Considering the fiscal situation of Brazil, stop operating in range one is very negative from a social perspective to the country. For companies, it makes no sense operating in range 1 considering the context and the possibilities that we have heard.
It is very likely that until we have more clarity, we would prefer to focus on ranges two and three. We will say it is no longer very attractive, to be honest, because we have interest rates today available in the market below those of range three of Minha Casa, Minha Vida. So range three is the one that makes more sense. Range three has been replaced by market operations, in my opinion, and also range four with a new perspective opening to us.
Concerning subsidies, I have seen the report about the new proposed legislation. I think there are some questionable issues there in terms of what might happen with the program with the range 1.5 primarily. So I am really concerned about the impact of this decision on those that are of the lower income range.
I don't think that is the right way to go, but as a company, we have to operate within the conditions that are given to us. And considering what we have heard, I can tell you that we are going to concentrate on Minha Casa, Minha Vida on range two, and this is what we have been doing since the end of last year. Does not depend on subsidies. They are customers that would be less impact should really the new legislation and decisions of the government are approved. We cannot really consider that what was read is going to be approved. There is going to be further discussions. But limiting subsidies to a percentage of the previous profit pool and so on. But if maintained as has been proposed initially by the government, this is going to have a major impact on future businesses.
Regardless, I think we have to wait. Of course, it would be a hard blow on the low-income groups of the population. But that would reinforce our strategy of focusing on range two and ranges four and maybe range three, but depending on fundings from the private market and not the FGTS or the workers compensation fund.
Thank you very much.
Next question, Luiza Tacconi with Credit Suisse.
Hi, good morning. I have two questions. First, just asking about the gross margin of Minha Casa, Minha Vida in the previous question. Is your margin really growing up in a situation where most margins in the area are going down? I know that you have been saving in constructions and all that cost, but how do you expect to strike a balance between SOS and sales?
How do you think sales speed has to go up, and how much are you willing to do with smaller margins so that you maximize your return on investment? Let me try to understand where do you see the balance within Minha Casa, Minha Vida? I would also like to understand how you are thinking about cash generation as you are going to have much greater transfers of Minha Casa, Minha Vida, and net sales of middle-income level going up. If you want to make some comments about the lower interest rates and whether it makes sense to sell more. Tell us a little bit about this. What do you understand about cash generation, the profit curve? Will it be maintained in the short and mid-term or not? Thank you.
Well, first part of your question about making do with a smaller growth margin and SOS, contracted sales and sales speed. Direcional is very efficient in engineering. I think this is a very important strength that we have in-house, and it is something very clearly put to the industry. Once our operation is going into a very good performance, and we do not suffer the impact of other companies.
We have really no contamination of non-recurring effects in our lines. Our efficiency in our construction processes is a clear point, and this is why we have delivered results no matter where we operate in terms of segments, even with very low prices of units. I do not think that we are going to change that. Because of our efficiency in construction, I do not think we have to sell our products at lower prices, lower than what the market prices are. I would like Direcional to sell products at a fair market price, but considering our greater efficiency in construction, I think we can deliver recurring growth margin above the average of the market. That is what I want to do.
Yes, we have been working very hard towards selling more. It is our priority. Increase in our sales will provide increase in revenue and as a consequence, reduction in fixed costs, especially SG&A. It means better net margin as well. I think there are still a number of points from a commercial perspective that can be improved in the company. This is where we can really improve. I would not like to simply miss this opportunity and start giving a discount. Yes, we can sell it at market prices and work in-house so that we can increase sales speed.
If we simply reduce margins, it means we will really not benefit. That would be the last resort, so to speak. In the quarter, we had an impact of cancellations. It may still impact our fourth quarter. Our recurring sales of [PD One we delivered in the third quarter. Consider what we had in the third quarter. If we just use it as a reference, we might maybe be running a risk because we were impacted by cancellation. I have to say I am very optimistic about our growth margin considering our construction capabilities. We have been communicating higher growth margins because of internal savings as opposed to the initial budget to some of the construction projects. It is important for you to know the growth margin should not be recurring.
There are some quarters where we had higher growth margins because when you include savings, what is accounted for in the quarter. The percentage of constructions that go into the upcoming quarter end up producing higher growth margins. But I think it will get to a level close to the ones we used to have in previous quarters. It won't be 38%, really. There's going to be some level of settlement, but still very healthy margins.
Concerning cash generation, this is Carlos, we are very comfortable. Minha Casa, Minha Vida is a very, let's say, seamless operation in terms of sales process and transfers. We have cash generation, which is recurring because of ongoing projects. Our expectation is that cash generation will be above the net profit of the company, considering the sales of completed inventory units in the middle income segment.
Which is something that will take four or five quarters to be able really to sell all the units in middle income levels we have in inventory. We have a very interesting opportunity right now to increase the net profit of the company without increasing our operations or increasing by having more shareholder participation. In the first nine months of the year, about 20% of our net profit were delivered at the level of shareholders, which are partners of SPE. We are now inviting our partners rebuying their interest by attractive prices, especially the ones who have a higher need for liquidity. I think that from now on, we have to consider cash generation considering the kind of rebuying of units, which could be a very interesting opportunity. We are very confident about recurring cash generation from now on.
Great, Ricardo and Carlos. Thank you. Just a follow-up about commercial efficiency that would be used for improved sales feed. What's the problem with your commercial efficiency? Are there some disparities geographically? Do you see any regions where there are processes that can be improved? Can you tell us about that?
Not an issue of process, really. I think we have a sales process, which is fine. Integration of sales and transfers is doing okay. I think the point for improvement is the following. Whenever you grow a lot, you need more people. So you have to train the people, you have to qualify the team, you're making investments in people, and it really makes a difference, and we've been focusing on it quite a lot. Migration to digital sales is also where we can see an opportunity of gain, and this is where we've been making significant investments.
I think these are the two points. So people, and it makes a huge difference. In teams where we've been working for one year or more, the performance is above of those of recent teams. The change in profile of our consumers, which is a reality for many segments in retail, it's also clear. Then there are investments being made in digital, and we are really benefiting from it. Concerning the previous question that I didn't ask about the hotels, we have an interesting situation. We have four hotels, and 100% of them are distributing recurring revenues on a monthly basis. The distribution of dividends has been increasing. With the reduction of interest rates, these assets will be provided greater value.
The cap rate today, we could sell one room like that at higher prices, and there is also a specific cash generation and improvement in operations of the units. I think ideally those units could be sold, but just in the near future. We have to improve still their operations. But yes, there is a demand for these assets. We just have to wait for the optimal moment to start selling the units.
Great. Thank you very much.
Next question, André Mazini with Citibank.
Hi, good morning. First question about cancellations. They have increased somewhat, but considering that 10% margin was quite high, I think cancellations of mid and upper income has decreased. Could you please tell us what are the percentages of cancellations for ranges two and three, and for also MUC? You've been talking about 38% as the gross margin of Minha Casa and 36% of MUC. I know you're not going to operate in segment 1 anymore, but what is the margin you have there and also brokerage fees, et cetera?
Let me try to answer your two questions. First, talking about cancellations. Since the third quarter last year, cancellations decreased significantly because we sold most of our backlog to a real estate fund. What is left are constructions and projects that had been delivered for a while. So those that had to cancel it have done it already. We can tell you later about the breakdown between the segments, but cancellation in the mid-level income is really not significant.
Cancellations at Minha Casa, Minha Vida, the accounting impact it has is very close to zero, because these are projects whose construction process has a very low impact, and also the plot of land costs much less compared to a mid or upper-income project. But as Ricardo has emphasized, we can see a very clear trend of a significant reduction in the amount of cancellations.
There was a moment in which the banks, for different reasons of changing internal rules and things like that, didn't operate in January and February. Then almost 60 days with no operation in the second half of the year. So we've been impacted by issues of different customers. But once they are reapproved, they were then conditioned, and we no longer could make the sales and had to move towards a cancellation.
In the beginning of the year, subsidies went down, and customers who had bought at a level of subsidies had to cancel because they could no longer afford it. Having said that, we expect that next year, in the fourth quarter, there's going to be an impact because of the periodization in the third quarter. But we also expect reductions in level of cancellations, and this is going to help significantly increasing and obtaining better net sales. Now, going into the question about range one. Well, in range one, we are performing quite well because of price of sales, better conditions of credit lines in Minha Casa, Minha Vida, and middle income. The margins are very healthy. The middle income, which lower the margins, is offering a better margin. But in range one, we are in phasing-out stage.
There are two more quarters where we are going to have revenue, then we are going to deliver all ongoing projects through the end of this year. There are just going to be a few units for the first quarter of next year. The impact on the results of this segment is really neglectable. We are focused on delivering the units as quickly as possible. There were some delayed payments in this segment, so we are speeding up the construction so that we can try to bill them still within this year, and then we won't run the risk of not having payments.
Even if there is a cost of speeding up the construction, fine. We are going to expect to operate within the same margins that we have shared with you. Once again, it's a segment that is no longer relevant to us, just a few more quarters to phase it out, and we don't expect to have more launches. 2 quarters? End of this year, beginning of next year. By the end of the first quarter, we won't have any more revenue coming from this segment.
Great. Thank you. Have a nice day.
Next question, Igor Monteiro, Santander.
Good morning. Thank you for the opportunity. I would like to understand more if we think about Provisional Measure 899, the new legislation, in a conservative scenario, how do you see the company in range two? Can you maintain the operation? Would it be flat, or do you also expect to grow more? What would you project that as being?
Well, if you're concerning this new legislation and what will be approved so that we can calculate how much would be available for Minha Casa, Minha Vida in 2020. We don't know what the volume will be and how it will be distributed and breakdown between the different ranges of the program. I think it's too early to draw conclusions. Because of that, it's difficult to say how big the operation will be in range two. We don't know what kind of adjustments will be made and whether they are going to happen or not, because we don't have information about it yet. Concerning the possibility of growth, our volume of launches for the past 12 months has been still much higher than what we can sell.
In terms of sales, I am positive that the perspective is going to get closer and closer to the volume of launches, because it makes no sense expanding and increasing our inventory of ready units. We are going to increase revenue, increase launches. That will depend on the changes of parameters in Minha Casa, Minha Vida from now on. Opportunities of growth, when we analyze number of launches, we see that possibility in range four and in range three, but outside Minha Casa, Minha Vida.
We would have more funding of FGTS available for families that effectively need that, so more affordable than the market fund. The more we see the reduction of interest rates or market funds, the better, because it means an incentivized funds for the families that really need it. I don't see reduction in the operations of Minha Casa, Minha Vida, and I can still see growth in the operations outside Minha Casa, Minha Vida.
What is the growth margin of range four, in your opinion?
Igor, range four probably has a growth margin very close to the one that we have reported for Minha Casa, Minha Vida before having the savings in construction. Between 33% and 34%. To really have a project that makes sense to be launched in the market, I think this is the ideal figure that we have in mind before approving launches in the company.
Great. Thank you.
Next question, Marcelo Motta, JP Morgan.
Good morning. Two quick questions. Can you tell us about the capital structure? You have a dividend goal. If you think that there is low leverage, there is a constant cash generation.
Do you expect to have a higher dividend payout in the midterm? And concerning the acquisitions of interest and the impact it has in cash generation, can you tell us of how much has been invested in the third quarter with those two partners you mentioned you have rebought? Is it BRL 5 million, BRL 10 million, BRL 50 million? So that we can understand that better.
Capital structure is very comfortable. If you stop and think, we have reduced leverage, what was 5.2 in the third quarter last year to 4.4 in this quarter, 2019. BRL 146 million shared in the first dividend, +BRL 74 million beginning of the fourth quarter. And respecting our policy of paying 40% of cash generation, we are distributing a consistent yield, quite interestingly, and it depends on being more or less aggressive.
It depends on the opportunities that we see for buying out front partners or FGTS increase growth and opportunities of new launches in range four. Before making any decisions about increasing dividend payouts, we comply with our policy. It is a highly attractive percentage of dividend payout. And we are paying attention to opportunities that are brought to us so that we can extend the company.
One year ago or one and a half year ago, thinking about a BRL 2 billion company, we can see now opportunities of growth and we want to benefit from it. In terms of the amount of acquisition, we cannot report that yet. There is no relevant. It's not that relevant anyway, but we are still not authorized to be disclosed. It's going to be in the fourth quarter. A number of partners of ours, some negotiations that we have ongoing, but it's not something of any major relevance, really.
Great. Thank you.
Once again, I would like to remind you to ask a question, please press star one. Please hold while we check if there are more questions. Thank you. The Q&A session is now finished. I would like to turn it over to Ricardo Ribeiro for his closing remarks.
Once again, thank you all very much for your participation. I think it was a very rich and interesting Q&A session, and we had the opportunity to clarify what we have been observing in the scene of the market and how we have adjusted our practice to the positive perspective of the market. Should there be any more questions, please call us and we hope we can keep on maintaining the same successful path that we have had throughout the year. Thank you very much. Have a wonderful, nice day.
Thank you. The conference call results of the third quarter 2019 of Direcional is now closed. Thank you very much. Please disconnect your call. Thank you. Thank you and have a good day.