Good afternoon, ladies and gentlemen. Thank you for waiting. Welcome to Helbor's first quarter 2024. This webcast is being recorded and simultaneously translated. If you need translation, this tool is available by clicking on the interpretation globe icon located at the bottom of your screen. There, you can choose the language you prefer. For those listening to the conference in English, there is an option to mute the original Portuguese audio, just by clicking on Mute Original Audio. Participants will only watch and listen during the company's presentation. After which, we will open the Q&A session. If you need help or want to ask a question, please use the Q&A icon on the bottom of your screen.
Before proceeding, we would like to inform you that any statement made during this webcast related to the company's business, perspectives, projections, and operational and financial goals are based on the beliefs and assumptions of Helbor's management and on information currently available to the company. Forward-looking statements are no guarantee of the company's performance. They involve risks and uncertainties because they relate to future events and therefore depend on circumstances that may or may not occur. General economic conditions, the industry, and other operational factors can lead to future results that differ materially from those expressed in such forward-looking statements. Now, I will turn the floor to Mr. Henry Borenstein, President.
Good afternoon to those following. Together with Marcelo Bonanata, we will talk about the results of the company relating to the first quarter of 2024.
We ended this quarter with the consolidated sales value of BRL 443 million, of which 85% accounts for the sale of completed units and those under construction. We launched a development in partnership with Cury in Rio de Janeiro. Furthermore, reflecting the position of using our land bank strategically to assist the company in the process of reducing financial leverage, we signed a contract to sell land located in the East Zone of São Paulo for the amount of BRL 38.5 million. It is worth highlighting that for another quarter, we recorded net cash generation of approximately BRL 3 million, reinforcing the company's de-leveraging trajectory. Therefore, we ended the quarter with a net debt to shareholders of equity of 68.5%, a reduction of 0.9 percentage points when compared to the value recorded at the end of last year.
We remain attentive to the macroeconomic scenario, focusing on selling inventory and committed to delivering the projects planned for this year, and thus maintaining our focus on the company's de-leveraging and cash generation. Now, Leonardo Piloto and Marcelo Bonanata will present Helbor's main operational and financial data. You have the floor.
Good afternoon, everybody. This is Marcelo Bonanata. I would like to thank you for your participation. Thank you, Henry. Thank you, Leonardo. In the first screen, we see our land bank. Today, we have BRL 10.9 billion, and being the Helbor share, BRL 7.3 billion in 34 projects. And 73% of these developments are located in the city of São Paulo. In the following slides, we see our land bank over the São Paulo City. I would like to highlight the location of our land banks. Noble and prime neighborhoods, Jardins, Moema, Chácara Santo Antônio.
We have one of the best land in the city of São Paulo at the corner of República do Líbano, keeping the quality land bank that Helbor has. As Henry mentioned, the company is going through a funnel today, concentrating its efforts on the characteristics we have in high level and very high level. On the next slide, we see the launching we had in the first quarter in the city of Rio de Janeiro, Américas 19, in partnership with Cury. I would like to mention, in this case, this is a land that we have for many years, and we are looking for a partnership. I think we were really happy in partnering with Cury, a partnership that is getting stronger for new projects with a PSV of BRL 349 million, 20% Helbor share. It is a medium development.
We have 22% of the units sold. Closing the first quarter, the sales are increasing. This was launched in the first quarter, and we are happy with the Cury's partnership. Here, we have the deliveries of the first quarter 2024, and it is important to talk about this because 2023, Helbor delivered very few units, and we were highlighting that in this year of 2024, we have important deliveries and also in 2025. We would like to highlight that we delivered a W Residences in March, at the end of March, with a PSV of BRL 460 million, 58% Helbor's share, 62% sold. We have mentioned this, that W Residences São Paulo, we launched in September 2019, and with all the problems of the pandemics, we have resumed the launching last year.
With a very significant volume. This year we began the year with sales evolution, and it is worth knowing it. The residence is a differentiated one. It is selling well. When it is an inventory and you have a price, it is just with a brand like ours. We will have the last phase of Passeo Patteo Mogilar, Mogi das Cruzes. Caminhos da Lapa is also very important, is a new neighborhood, Caminhos da Lapa. W Residences São Paulo, as I mentioned, and Helbor Window Moema, a case to our company. In the next slide, we see the contract sales in the first quarter. If I am not wrong, this is the first quarter with the highest sales of all. I would like to highlight, once again, the event of inventory sales, Só a Helbor Tem. One in Mogi das Cruzes, another in Curitiba, and in the city of São Paulo. They break records of previous editions.
This is almost our 120th edition. This of March broke all records in the three editions of the three sites, showing that we are on the right path, holding an event that is well-known and consolidated. We closed the first quarter with BRL 443 million sold total and 25% more in relation to the first quarter 2023 and 4% more than the fourth quarter of 2023. So a good behavior, a good performance. With this performance, we send our SoS above. We close with a 14% against 13% of the fourth quarter 2023 and 10.4%. The Helbor share 12.6% against the 12.5% of the full quarter of 2023. Now, our inventory, we have a total inventory of BRL 2.7 billion, and Helbor's share BRL 1.5 billion, located in 95% in the Southeast. This is per segment, medium, medium high, and high and ultra-high standard. 76% of our inventory is under construction.
In the last slide, we show the composition of our inventory. It is important to mention that the red inventory goes to BRL 657 million but we have a high delivery in the first quarter. Most important, the legacy that today is BRL 192 million, is decreasing every period, and here is concentrated basically in three projects. One in Santos that used to be a hotel. It changed its category from hotel to residential. We are almost at the end of the hotel pool, and then we will have the different façade and opening for sales, and we have very good expectations. The other is a project in Alphaville, also a hotel, and now is a residential we are selling and a commercial in São Vicente. Slightly slower, but we are decreasing this inventory gradually.
But the most important, our legacy that used to be very big is decreasing, and the inventory we have now is of high quality and gain price. The legacy inventory is an inventory all over Brazil and focusing in commercial rooms, hotels, products that at that moment was difficult to sell. Today, our inventory is almost in the city of São Paulo, residential, and basically with a final consumer, with margin and gain price. So this is my participation. Now, Leonardo, it is up to you.
I will start with slide 14. We start with our net operating revenue, comparing a 10% over first quarter of 2023. We have a decrease of 15% compared to the fourth quarter of 2023 for two reasons. First, the sales index with more evolved works, and the second, the seasonal factor in the first quarter when compared to the fourth quarter.
So these two factors explain this 15% drop when you compare both quarters. The next slide, we show the revenue and margin. We have a reduction from 28.8% to 26.8%. This backlog margin are developments that are not concluded but can be appropriated according the development. As we deliver, we will not have these developments being delivered is a backlog margin. These five developments we delivered in the first quarter do not belong to the backlog margin. The future sales will go directly to the results in this delivery cycle. We took two developments from the backlog margin. So this shows this drop of 2 percentage points . So they are the pains of the deliveries. Backlog margin will reduce, and this will increase again as we launch new projects. This is the explanation for you. The next slide. We also talk about gross margin and net margin.
Gross margin of 31.2% aligned with what we signaling that we can deliver gross margin recurrently between 28% and 30%. Net margin 11.2% when we compare with the fourth quarter. It seems that this is bad, but it is not. In the fourth quarter, we reevaluated some assets, and that is why the margin has this number. Nothing new. Everything is going according to our expectations. Next slide. These are the general and administrative expenses. We had an increase quarter against quarter of some values, especially in the stock for employees/benefits, especially health. That is really hurting the results of some companies. In the first quarter, we had two legal agreements, and we have recognized this in its integrality. So we had an increase in these expenses. In this slide, we are talking about the net results of the parent company. Net results BRL 7 million in the first quarter.
I would like to spend one or two minutes to explain the context of it. We received several questions of why the net results of the parent company is always smaller than our shareholders. It seems that we are minority, but it is not. Helbor has participation higher than 50%, but our partners, they are our shareholders at the SPE and not holding. We take our net result in our part, but this net also pay the debt. That is why the net revenue attribute to the parent company is lower. It is like you compare Helbor's net revenue or profit with the gross profit of our partners. I hope this has been clear. We can go into more details in the Q&A session. This is the debt profile, the gross. It went from BRL 1.93 billion to BRL 2 billion.
We had an expressive capture in the end of the first quarter of BRL 350 million. This would increase it, but we just consider this effect in the net debt. We see a drop in the net debt of almost BRL 2 million, very in line with the first and the fourth quarter. We had a decrease of 0.9 percentage point. When we compare the quarter with the year of 2023, the ratio went to 2.8 p ercentage points. This will show the trend. The first quarter of 2023 with BRL 71 million in cash. In the fourth quarter, we reported after eight quarters, the first quarter, we generated again a low value. The trajectory for the entire year is decreasing. We estimate that 2024, the debt trajectory will be decreasing.
We would like to affirm that quarter after quarter, it will be negatively dropping, but this figure depends on delivery performance. If we deliver 15 days later or 20 days, it is enough to go from one quarter to the other. So I would like to emphasize that this leverage over 2024 will happen, but we cannot write on stone that this will be quarter after quarter. Okay? With this, we close here the financial and operational session, and we will open for the Q&A session.
We are open for some Q&A, and the first question is from [Ernesto Lozardo].
Good afternoon. During 2023, you reinforced that 2024 would be a de-leveraging year, generation of cash, recovery of margin, and increase in the percentage of profit. But what we saw was an increase in gross margin, cash burn, nothing. With the 21% of the consolidated, what to expect for the next quarters.
Thank you for your question. I think it is a great opportunity to clarify your question about the de-leveraging and net profit attributed to the parent company. Every time we give this information, everybody has a feeling that Helbor is [minoritizing] the project. No. It is a comparison that you need to compare oranges with oranges. The net profit is basically the partners in their companies, they have debts that we do not show here. Our part is the net profit of the SPEs less financial debt. We pay for this alone. That is why you have this feeling that the net profit of Helbor is very small in comparison to the parent company. The second is that the company is talking about increase in the participation of every project. This is not overnight.
The projects that going through our results are launches that we did three, four years ago, and we create the partnership five years ago. What we are saying is the manager is willing to increase the percentage of the new launchings, okay? I don't know if it is clear. Your other question about the cash burn return. No, in this quarter, we generate BRL 3 million in cash. It was not cash burn, but cash generation. If there is something that we did not answer, please tell me.
Leo, I'd like to complement. This is Henry. The most important is that the company is focusing on deleverage. As Leo said, this year will be net debt reduced during the year. Unfortunately, the quarter does not show this indicator.
Our commitment is that until the end of the year, we will have this net debt smaller because the developments are being delivered. The repass is very strong. We have a target that is the highest, 14 developments being delivered, and many in the second phase, and many things delivered in the next three quarters. Important developments, not only W Residences São Paulo was in the final of the first quarter. We'll see the reflex on the next one and highlight Helbor Patteo Klabin, which is a very important development that will be delivered this year with a cash generation that is very good. We are focused on the deleverage that will come in several ways. A stronger repass, delivery of new developments, sales of land bank. We are not selling land, but we changed our focus. That's the reason.
We understood that right now, some land is not a priority for the company. We prefer to focus on other lands in our land bank at República do Líbano and [Higienópolis]. This strategy of selling part of the land bank will help us with this deleveraging.
Okay. Thank you.
Thank you, [Ernesto]. Next question, [Herman] from sell- side.
You are in a moment of delivering projects from the past cycle. The repasses are being positive. The SBPE scenario is hurting.
Yes, we are in an intense delivery cycle. Not only us, but the market. Many has been said about the savings accounts scenario, the credit, but we haven't noticed this, the funding available of the savings account to the individual. Sometimes we and other players will get the funding in CRI, but the final buyer takes in TR plus. It's plus 7 as the pandemic we had. Today, I think it's around 9 high, 10 below, but the economy is more closed. The rate is a little higher, and we won't decrease so soon. No negative news in this point, and we are following very attentive. Thank you for your question.
I'd like to add. The events, because we have many things ready and we have a partnership with Bradesco, is a proof that the client, the end user, see some advantage in buying now. We are with a strong repass. Shortening it more and more, and the banks are making it easier. The consumer sees that is an advantage to buy. Our inventory is lower than the new launch. It's a very positive moment, and we see a good response from the end buyer and the banks.
The next question is from [Matheus Nogueira].
What is the feeling for selling the legacy remaining for 2024? Can we imagine a number closer to zero at the end of this period?
[Matheus], thank you for the question. I would say yes. Except for instance, what we have in São Vicente, which are commercial rooms and some also in Rio de Janeiro, but it will be very close to zero. This is our objective. As we said in the beginning, we had two problems. The hotels in Alphaville and Santos. In Alphaville, we changed it for residential. Santos, we are doing the same. So there is a possibility to get close to zero except for these commercial developments that are still ongoing.
Next question from Mariangela Castro, sell-side analyst from Itaú BBA.
How do you feel the pressure of labor cost?
We have two pillars here. One is the ongoing works. We have a strategical positioning of being a pure-play incorporator. We do not build. We have a partnership with the contractors with a PMG. What gives us a very important protection on cost pressure, labor, et cetera. The second, of the new launches, we do the feasibility of the project considering the new cost scenario. In spite of having the PMG protection, the new come with a higher cost and we protect it, repassing the price. We are in the mid, high and ultra-high standard. So we have a margin to work with our client. Risk management is with this PMG well established with very good contractors that are our partners. We have an equity alignment.
The second, for new launch, we need to understand the project, be very careful to select the contractor and also to agree on the sales price. We can also say that our land bank helped us a lot in this re-qualification of a price. Because again, these are well-located land and we can get a better margin in pricing.
That is it. The next question, [Matheus Nogueira], analyst buy-s ide [Vermont Investimentos].
The last capture real in the first quarter would be used for what? Reprofiling of the values due date in the short term?
This is a very good question. We got it in the last of the first quarter. This value entered integrally in the minimum rent of the company for payment and prolonging the profile of maturity of the company. A great part of this was to pay a debt and what debt?
A debt was due in the second quarter for a debt of five years with a very competitive cost. So strategically, this was very important for the elongating of the financial liability of the company. The second, if these repasses will generate cash for the company. In the past, we said that no, the repasses this year will be basically for paying the senior debt we carry with the projects. When we close a development, we are going to pay for the entrepreneur. Since we have a deleverage in the company, specifically in the production financing and the company continues to get funding to elongate our corporate debt. So deleverage will be for the business. The repasses will not be enough to face the PNA and corporate debt. So in an organized way, we are having longer period for the new debts.
I hope it is clear. It's important to make it clear that the developments we are delivering this year have 70% in average already sold. We have the repairs that will pay the entrepreneur plan, but our profit depends on the selling of these units. First, we will pay the entrepreneur plan, and we are recognizing this and decreasing our corporate debt.
Next question, [Ernesto] from [Bravo] sell-side . Thank you for your participation. This is your second question.
Thank you. Could you go deeper in the financial expenses of this first quarter? Can you expect that this volume in this level—
This is one of the things of delivery. Until the end of the year, last year, we have ongoing works, and consequently, a great part that we were paying were being capitalized as inventory. When you deliver a development, we don't have the benefits to capitalize this interest rate.
All the developments we delivered in the first quarter, the financial expense of them is not a capitalized cost and now is a financial expense. That's why you interpret this important increase in financial expenses. Due to this, we no longer activate the financial funding system, and now this is recognized as financial debt. This is temporary because we deliver the developments, and very soon we will settle with. We have new deliveries. Again, the interest that will not be capitalized and will become financial expenses line. For this year, I would expect a fatter financial expenses line because last year we were capitalizing this as a cost and not as an expense. I hope it's now clear. We are still here. If you have any other question, please send us. We are available to answer. We will be waiting some more minutes before closing the call.
Leonardo again here. We have no more questions. We'd like to thank you for your participation and for the questions that you've made. I will give the floor to Henry.
Thank you. I'd like to thank you all for attending to this conference call. I'd like to thank Marcelo, Leo, and all our IR team, and we are available to you for any further details. Thank you very much.