Good morning, and welcome to Gafisa's first quarter 2023 earnings call. Today's conference will be conducted by Sheyla Resende, CEO, Luis Fernando Ortiz, VP of Business, Edmar Prado Lopes Neto, CFO and IRO, and Renata Yamada, VP of Legal and Management. We would like to inform you that this conference is being recorded, and that all participants will be on a listen-only mode during the presentation. After the presentation, we are going to conduct a Q&A session. Before proceeding, we would like to inform you that statements that may be made by the management of the company involve risks, uncertainties, and may refer to future events. Any changes in macroeconomic policies or legislations and other operating results may affect the performance of the company. Please, Ms. Sheyla, you may proceed.
Good afternoon, everybody, and welcome to the first quarter of 2023 earnings call of Gafisa. We finished another quarter with a strong operating performance, with a focus on financial performance, strengthening, and also consolidating our presence in the high-income segment, and focusing on our client. Now let's talk about our financial results and operating results as well. Gross sales came to BRL 301.5 million, BRL 54.3 million more, or 22% more year-on-year. In the last 12 months, we reached BRL 1.2 billion, a 41% growth or BRL 384 million year-on-year. Net sales came to BRL 285 million in the first quarter of 2023, a 22% increase year-on-year. In the last 12 months, the net sales came to BRL 1 billion, accounting for a growth of 49%, or BRL 280 million year-on-year.
Our developments in the high and middle income segments accounted for 77% of net sales in the period, and 75% of the last 12 months sales. Our SoS in the first quarter of 2023 was 11.4%. Our inventories reduced by 14% quarter-on-quarter, coming to BRL 2.2 billion. Out of this total, the high and middle income segments accounted to 81%. 97% of them are concentrated in Rio de Janeiro and São Paulo. In 1Q 2023, we delivered the Stratus Itaim project, located in the city of São Paulo, with a PSV of BRL 161 million.
Our land bank accounts for BRL 11.8 billion. Our financial performance also advanced. In the quarter, our net revenue came to BRL 293 million, accounting for a growth of 50% year-on-year. In the last 12 months, our revenues came to BRL 1.2 billion, which accounts for a growth of 46% year-on-year. Our strategic movements have been planned with a focus on high-end products with a high value added, located in prime regions in the city of São Paulo and Rio de Janeiro.
We keep moving ahead with our mission of consolidating a strong operating result with a focus on financial results, offering clients special products and unique experiences. We would like to thank the new investors and our employees for your trust in us, and we are going to continue to write a successful history. Now I would like to turn it over to Mr. Ortiz, who will present our operating performance.
Thank you very much, Sheyla, and good afternoon, everybody. Let's start with slide five. We posted a strong sales performance in the period. We reached BRL 301 million in gross sales, a 22% increase year-on-year. In the last 12 months, we reached BRL 1.2 billion, which accounts for a growth of 31%, or BRL 384 million year-on-year.
On the next slide, we can see our net sales, which came to BRL 285.1 million in 1Q 2023, with an increase of 24% year-on-year. In the last 12 months, the net sales totaled BRL 1 billion, which accounts for a 50% increase, or BRL 280.1 million when we compare against the figures of the first quarter 2022. In the quarter, our SOS was 11.4%, a growth of 197 bps year-on-year or quarter-on-quarter, rather. Considering our net sales, 77% of those sales are in the high and middle high income segments, which strengthens our execution of our strategic plan, which is focused on the prime segments with unique experiences and special products. Our inventory accounts for BRL 2.2 billion. Approximately 88% of our inventory is under construction.
The high and middle high-income segments now account for 80% of our inventory, and 97% of that inventory is located in Rio de Janeiro and São Paulo, which highlights our portfolio strategy. Considering our deliveries and transfers, we finished one project in the quarter, Stratus Itaim, in the city of São Paulo, in the Itaim Bibi neighborhood. Stratus has only 22 units, one in each story, with apartments that range from 250- 500 sq m, with a very striking architecture. The PSV is BRL 161 million, and it is a high-income project with a unique location delivered by Gafisa. Now, slide nine. As Sheyla said in the opening remarks, we finished another quarter with a very strong operating performance, focusing on our clients. Gafisa consolidated its presence in the high-income segment, strengthening its presence in premium neighborhoods in São Paulo and Rio de Janeiro.
With the support of renowned architects, we are transforming the neighborhoods where we are present, and we are adding value to the neighborhoods. I would like to turn it over to Edmar, who will talk about the financial performance.
Thank you, Ortiz. Good afternoon. It is a pleasure to join you today. My name is Edmar Neto. I am the CFO and IRO of Gafisa. I would like to move to slide 11 now, where we can see a snapshot of our financial performance. Our strong operating performance, as Sheyla and Ortiz mentioned, led our net revenue to BRL 293 million. Considering the last 12 months, there was an increase of 46%, totaling BRL 1.2 billion. CAGR in our revenues of 10%. That is a new level that is consolidating the new size of our company. Let's talk about our adjusted gross margin.
We reached 27% this quarter, which accounts for a very strong growth in comparison with 4Q 2022. On slide 12, I would like to show you some details about our receivables. We have good figures to show you. We reached BRL 1.5 billion, a 71% increase year-on-year. Another indicator that posted a significant growth this quarter was backlog revenue. It grew by 123%, coming to BRL 664 million at the end of the quarter. Now slide 13. We can see here a snapshot of our cash and debt. The company finished the quarter with BRL 500 million in cash and a net debt of approximately BRL 1.1 billion. We should highlight the fact that these numbers are fully in line with our numbers in late 2022. Right now, Gafisa is fully in compliance with all its financial covenants.
As Sheyla mentioned earlier, we are moving on with our mission of strengthening our financial indicators. One of the ways in which we are doing this is to focus increasingly on a healthy execution of the company's projects. I would like to turn it over to Renata, who will talk about ESG. Renata, the floor is yours.
Thank you, Edmar. Good afternoon, everybody. For this year, we planned our ESG actions according to our materiality matrix that was based on the perception of all of our stakeholders, showing and bearing witness to our commitment with the sustainable development goals. That is why when we defined our plan for 2023, we included ESG as the main topic. Many of our actions aim at reducing the consumption of water and power, and it also includes deeper studies to reduce carbon emissions in our works.
We conduct studies for the certification of environmental certificates. For example, the AQUA-HQE certificate, which aims to ensure that the constructions reduce impacts and also have a good management from its beginning to its end. We have a commitment at Gafisa with diversity and inclusion. We try and find equality of opportunities for all employees with well-being as the core. We maintained our Great Place to Work status, which is a major part of that plan. I would also like to highlight our governance, which has transparency and information measures that can be seen in our reports to the market, for example, with CDP Climate and also the GRI Sustainability Report. We continue to be attentive and careful with our ESG policy, adopting every measure necessary. I would like to thank you very much for your attention and begin the Q&A session.
We are now going to begin the Q&A session. If you have a question, please click the Q&A icon in the left-hand side of your screen. The first question comes from Daniela Mota.
Why did Gafisa choose not to launch any product this quarter? When do you expect to see the next launches?
Thank you very much, Daniela. This is Luis Ortiz. Indeed, we planned for new launches to take place in the second quarter 2023. We are already developing and approving those projects. in 2Q 2023, we are going to continue to focus on selling our inventory. From a macroeconomic standpoint, the products that are under construction are the ones that are selling the most, and they account for over 80% of our inventory, the products under construction. So that is going to be our focus for the second quarter. In the second quarter, we are going to begin our plans and to put everything in place to start launching new products.
If you wish to ask a question, please click the Q&A button at the left-hand side of your screen. The next question comes from Paulo Negro.
What are the main reasons behind the increase in your sales performance this quarter?
Thank you, Paulo, for your question. Well, basically, we believe that there are two main reasons why we posted such a strong sales performance. The first one is the management of our sales team. We organized our management last quarter. We made our team more product-oriented, and we also had a good performance online. Combined with the more efficient management in the team and also with our projects today with differentiated architecture, we invested a great deal in the architecture and also the great locations in São Paulo and Rio de Janeiro.
We are working in the most significant neighborhoods of those cities. Combining all of those factors, we believe that those are the reasons why our performance was so good this quarter, much superior than our last year performance.
Again, if you wish to ask a question, please click the Q&A button at the left-hand side of your screen. The next question comes from Mr. Herman Lee with Bradesco BBI.
Good afternoon. Thank you for taking my question. We have two questions. The first one is, what is your expectations for launches this year considering a less optimistic macro scenario? Second, what is the company's strategy for the current inventory? Thank you.
Thank you very much. About the new launches, we are working on projects, high-income projects that are highly differentiated. They are not replicable. We are being very cautious with the products that we are going to launch from now on. In the second half of the year, we are going to have new launches coming. From a market perspective, we believe that since these are unique projects, they tend to perform really well. In the second half of the year, and of course, we are going to always pay attention to the macro scenario to make launch decisions, but we believe that they are going to perform well. When it comes to inventory, as I said earlier, we are managing our sales team very efficiently. We have a great inventory in the premium neighborhoods of São Paulo and Rio de Janeiro.
We have been managing our sales performance very well. In 4Q 2022 and this quarter, our numbers were way above the previous quarters. We believe that we are going to continue to work just like that with an efficiency-oriented approach, focusing on our products, because that has been very successful.
If you wish to ask a question, please click the Q&A button at the left-hand side of your screen. The next question comes from Mr. Tiago Vieira.
What was the reason behind the increase in revenue?
Hello, Tiago. Thank you very much for your question. When we look at everything that's going on here at the company, you can see that we have been working on four pillars. We have been working very hard on four pillars in our strategy. The first one is increasing operating performance, and that leads to better financial indicators.
We are migrating to high income segment, and we are focusing on the clients. That's what we have been doing. The revenue is just a translation of that strategy. We have been focusing on exclusive products that are very appealing to our consumers, and we have been able to sell more despite the challenging macro scenario. In comparison with last year, for example, we are consolidating a new level of results. When you look at the indicators for the last 12 months, you can see that we have been above BRL 1 billion for revenue and sales, and we are going to continue to do that transition in a very effective way.
If you wish to ask a question, please click the Q&A button at the left-hand side of your screen. The next question comes from Jessica Curry.
Why did the company increase its margins in comparison with the last quarter for Q2 2022?
Thank you for the question. Well, as I said earlier, we have been focusing sharply on improving the operating indicators, and they are related to the margins of the project. We know that the sector has been facing a very challenging scenario with high inflation, but we have a sharp focus on each project that we have here in the company. As a consequence, we had a margin increase of more than 8 points, and that is going to guarantee that we can perform the transformation that we want to perform. Another indicator that is very important for us is the margin, which is over 32% right now, and receivables.
We have an inventory of receivables this quarter that was the highest that we've had in a long time, which is very significant for us. Over BRL 1.5 billion in receivables. That is critical to us, and that is going to ensure good financial indicators in the future. We are working step by step and focusing on the good execution of each project that we have right now.
Again, if you wish to ask a question, please click the Q&A button at the left-hand side of your screen. The next question comes from Juan Luis with JL Capital.
What is your take on the current level of cancellations, and what are your expectations for cancellations in the coming quarters?
Well, I believe that the number of cancellations has been improving. Today, we have a lower level of cancellations than a year ago. If you look at the gross and net sales indicators, you can see exactly that. Our gross sales grew by 41%, and net sales by 50% year-on-year, and that is a result of lower cancellations. Now, with a high-end portfolio that, of course, helps us with credit and qualifying credit and also pricing. It is very important to have the right pricing right now. We are working to improve it even further. Looking ahead, I believe there's still room for us to improve the number of cancellations even further. But I am not going to give you any predictions of what that number should be. But our goal is to continue improving and decreasing the number of cancellations.
That concludes our Q&A session for today and Gafisa's conference for today. Thank you very much for your participation. Have a great day.