Good afternoon, ladies and gentlemen, and thank you for waiting. Welcome to Helbor's second quarter 2023 earnings conference call. This webcast is being recorded and simultaneously translated. If you need translation, this tool is available clicking on the interpretation globe icon located at the bottom of your screen. There you can choose the language you prefer, Portuguese or English. For those listening to the conference in English, there is an option to mute the original Portuguese, just clicking on Mute Original Audio. Participants will only watch and listen during the company's presentation, after which we will open for 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 that any statement made during this webcast related to the company's business perspectives, projections, and operation 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 not guarantee of the company's performance. They involve risks, uncertainties, and assumptions because they relate to future events and therefore depend on circumstances that may or may not occur. General economic conditions, industry conditions, and other operational factors can lead to future results that differ materially from these expressed in such forward-looking statements. Now, I will turn the floor to our presentations.
I am Franco Gerodetti, Financial Director, and we are here to talk about the results of the company for the second quarter of 2022. We closed the first quarter with financial and operational indicators that are positive that kept the results of the company. That is the strategy adapted in the last quarters. The new semester BRL 771 million, being 93% related to the ready units and in constructions. The result of assertive strategy of the period that focus on the sales of the stock units. We reduced in more than 30% the inventory of units of our legacy. We also would like to highlight [audio distortion]
We have a greater revenue over the sales, as you see, BRL 334 million, an increase of 56% over 2022, and 24% increase compared to the first quarter. Here in this slide, we see the gross profit and gross margin. People said, "Well, our margin dropped." Naturally, it would fall due to the strategy focused on ready and in-construction inventory. We still have our legacy that every quarter has a smaller value. I don't want to talk about the past, but two, three years ago, this legacy was more than BRL 2 billion, and today this legacy is much smaller. Yes, it brings a smaller margin to our balance sheet, but this is positive.
The ability of selling the inventory, we see that we have a new cycle of pulling the margin upward. We have the same margin of the six first months of 2022, for now 2023, and depending on what we sell in our legacy, some developments had a very narrow margin. We can see our gross margin increasing a little. In this next slide, we see the backlog net revenue and margin. We have a mix of revenues that were within the quarter. They were part of the first quarter. With some deliveries, I have a fluctuation in this value, and the same happens with the margin. The important message here is, it is within the projections of the company.
We are very certain to say that the current cycle, the developments launched as of 2019 continue to bring a significant margin, and we will continue to see this effect from now. Now going to the DGA. We see the last 12 months comparing 2023 and 2022. We see a slight moment in SoS. This is what I like to highlight. The discipline that the company has in looking at costs. This is part of our DNA. The same, we will continue to be very careful with our expenses. This is the result of the parent company, BRL 7 million in the quarter. We closed almost at 14 in the six first months. We were impacted by the interest rate here.
The volume of financial expenses had a negative effect on our result, but the important here is to keep our operational strong, and the result will be a consequence of the macro and micro factors. We are sure that we are going into the right direction. This is the debt profile. As we mentioned before, this first semester was of very little deliveries, and this does not allow a greater leverage in our numbers. We had two deliveries in the entire semester, and the higher volume of deliveries, talking financially, will be in the last quarter of the year. What we will see in cash generation will be positive and more robust as of the last quarter of 2023 and over the year of 2024. In 2024, we will also have a significant volume of deliveries around BRL 1.6 billion.
These two factors together will help us to leverage, which is our strategy number one. This is where the company is putting all of its efforts. Cash burn. Again, we had a cash consumption within the expected, following what I mentioned. The quarter that we still had the debt service due to the Selic that was very challenging. A great investment in SPEs, initial investments for the work, and the investments in the pre-launching phase, and investments in marketing and publicity. Basically this is it. We will see improvement in this cash burn figures as we have our deliveries with a positive movement. Basically that's what we had. Let's go now to the Q&A session. We will open the session. If you have any questions, please send it using the Q&A icon that is at the bottom of your screen. Thank you.
Our first question is from Hugo Grassi. Thank you, Hugo, for being with us. First, congratulations for the results. With the review in the master plan, how do you see opportunities for new acquisitions? The second, relating concerning the existing land bank, is it the case to review some of them to approval under the new parameters? Is it possible to have an idea of the PSV of the existing land bank?
Thank you, Hugo. We have a large land bank of high quality. Today, we are not thinking about acquiring new piece of land. We have two goals here. First, to reduce our inventory, and then the consumption, the use of our land bank a long time. With the land bank of this today, we don't need to worry in the first moment. Now, concerning the change in the master plan.
Yes, we are reviewing all our lands. We will change it, of course. We will keep this potential for an increase. If you have already measured how much this will increase in our land bank, we don't know because these reviews are still ongoing. We had a meeting, we are briefing it. There were projects that would build larger apartments with the new law. You can generate parking lot at every 60 m. You can generate one. I don't have to run studies. Some projects could be efficient only of this nature. We are reviewing all of this, and soon we will be able to measure this gain. Today, I cannot tell you. Relating the acquisition of new land, only if it was extremely good.
We've been creating a land bank that is in the city of São Paulo, and when we look to the map, we see that we have these central regions and the most important neighborhoods. You said that for some of them, we will review the parameters, and we are doing this for most of them because many of them were impacted by the change in the master plan.
The next question comes from Pedro Lobato from Bradesco. Thank you, Pedro, for your participation. How do you expect the evolution of financial leverage in the second semester of 2023 and 2024 due to the pipeline and deliveries of the company? You have expressive increase, but this can reflect in the margin in addition to the potential PSV.
As you mentioned, the leverage, we believe it will be a common process as we deliver. It's good to remember once again that we spent almost the five previous quarters with no deliveries. The first semester also, in 2023, we had a reduced number of deliveries. We have this leverage over this year and next year. Now, concerning the change in the building potential, as we've seen, this will happen for some projects. Because in some of them, we had a significant improvement in the building potential, and the cost base will not increase at the same proportion. Because you have already the land, and the land, the square meter is very expensive. You have already the land. If you increase the potential, your margin will improve. In a project like República do Líbano, you double the potential.
We will increase or improve the margins, equating the projects to the new law. We have many people working on this in the company, the commercial, the suppliers. We still don't have a defined number for that, but the news are very positive.
The next questions come from Elvis Credendio. Thank you, Elvis. The first question is about the master plan. You mentioned that the company's land bank should benefit with this review. We have covered this already. The second question concerns the sales of the inventory due to the success of the event, Só a Helbor Tem . Since the company is focusing on the sales of the inventory, are you going to hold more events over the year? What other strategies are you taking?
Thank you, Elvis, for your questions. The first question was already answered. That concerns about the potential of the land bank. Now, talking about Só a Helbor Tem , I said I would like to hold it every month, but we need to create demand for this. We create the demand. We first fill up the pan, and then if you do it monthly or in short terms, the effect is not so good. The strategy of Só a Helbor Tem is two events over the year, one in the first half and another in the second half. We have designed one for the second quarter of 2023 and one for the fourth quarter of 2023. But we have the structure ready, so we go according to the moment opportunity. There is no launching. The sales team is there selling the inventory, but there is no boom.
We saw all this uncertainty because of the new administration, so we decided to anticipate Só a Helbor Tem , and it was a great success to hold it in March. Now, we saw again an opportunity because we saw many people saying that they were buying because of the economic uncertainty, so they decide to invest in real estate because it's a safe investment. We didn't schedule any launch for the second semester. We decided to have another Só a Helbor Tem . Now the strategy comes back.
We won't have a Só a Helbor Tem in this third quarter. We will leave it to October or November. The strategy and working on each development along, focus on this development, our teams, our sales company. If I can say quickly, we have our house with almost 400 brokers working in large São Paulo and Mogi das Cruzes. We have our partnership channel that is increasing.
In 2021, we had a share of only 7%. Today is about 28%, going to 30%. The partnership increased this share, canalizing the sales in other states with the road show in Espírito Santo, Rio Grande do Sul, Cuiabá, Bahia. We have more than 80,000 brokers registered. We closed a partnership with a new company called Voice. It is exclusive with us. It does not belong to Helbor, but it sells Helbor exclusively. We have more than 100 brokers working with us, reinforcing our sales team.
This is the best strategy to make our team stronger, investing in our human material, bringing more people to work with us, and also training more people. We have a training program for new brokers in our company. We are reinforcing this. According to the product selling well, July was a very good July. I think that things are doing well. In the fourth quarter, we'll talk more about the Só a Helbor Tem .
Thank you. The last question from Elvis relates to real estate funds. The market is again being recovered. Is the company going to benefit for the recycling of assets for FIIs?
I think so. In the last years, we have launched recycling. We use the FII, especially for commercial developments, renting these developments, and then packaging the real estate with the rental agreement. This volume of commercial units is reduced, but we are with an eye on it. There is an opportunity. We do believe that this market can benefit us as it did in the past.
The next question is from Marcos Antônio de Carvalho. Thank you. Does Helbor have a commercial with WeWork?
Yes, we do have some real estate rented to WeWork. The obligations are on June. They are really usually revenue share, so it's well allocated because the credit risk of WeWork does not impact the company. It's important to remember it is a very good asset, very well located. So maybe if we have a problem, we will continue to have a good rental performance. This is one of the examples that we can benefit on this FIIs market.
Mariangela from Itaú, thank you. What level of inventory can expect Helbor to return to launches? With the decrease in INCC, do you see any savings possibility?
Mariangela, thank you for your question. We are not linked to inventory levels to launch. Last year, we had 10 launches. Last year we had an expressive number of launches, so it wouldn't be a recovery, but a continuation. We have launches scheduled for next semester. We will continue focusing on our inventory, and we have launches for this second semester. Less than last year, but we do have launches because we have the products with the quality. For sure, it's not a recovery, it's a continuity. The second question relates to the drop in INCC. Well, what happens, Mariangela, is that we had in the last years, a significant increase in the cost of construction.
With this drop in INCC is a deacceleration. We are going to a more balanced level. I don't believe this will reflect on a drop, but we have left that moment of a high increase, and the market was surprised with this increase above inflation. Franco has these statistics. The actual increase of the works were above INCC. But INCC is very important to have a balance and not to have a high increase because this is the index that adjusts the installment of the client. When it's too high, you inhibit the client to pay or to buy it. With this accumulated in year, I think it's slightly 3% with these levels that will reach 5%, 6% at the end of the year. This is very nice. The client, and will be also easy to buy in the pre-construction phase.
Well, we saw, Mariangela, the level of construction increasing in the last years. I don't see it coming back, but at least it is stabilized now. The important now is to have good land bank where I will be able to have a gain in some regions. This will be possible with the projects that are located in the prime regions. That's what we have with our land bank. We are well prepared for this challenge and to keep our margins in a high level, as we did last year and the previous year.
The next question is also from Marcos. With the new master plan and the new financial limits of the Minha Casa, Minha Vida program, some companies are in Helbor's radar.
Well, Marcos, we do not work with Minha Casa, Minha Vida. Last year, we had two launches of the HIS, the Housing of Social Interest. This is of opportunity, but Helbor does not think of going to Minha Casa, Minha Vida. We are not in this program, Minha Casa, Minha Vida. We have two projects with HIS and some projects that is as it was the rule for HIS, and with the new master plan, it contemplates a clarification for the rules of these programs. When we launched our two projects, we're consulting a legal team, and we are exactly as the master plan is establishing for these two activities. We will have some projects in this segment, which is not Minha Casa, Minha Vida, Caixa Econômica, but of social interest.
The next question from Francisco Silveira from Darwin. Thank you, Francisco. Any launch expected for the second tri, but I think second semester.
Thank you, Francisco. As I said previously, we have some launch scheduled for the second semester, and it depends much more. Well, we are working for it. It depends if we reach a moment that there is not sales enough, if there is no demand for the product. But we are already working on it. We have a demand for what we are scheduled to deliver, to launch in the second semester. So only if a catastrophe happens and we see that there is no demand. Otherwise, there is no thing that will impair this project.
Well, the next question is from Yuhzô Breyer from Trígono. Thank you, Yuhzô, for your question. Concerning partnerships and participation of no controllers in the revenue, how does the company see the strategy of new partnership?
We always use our partnerships strategically. Helbor does not build. We outsource this activity. When we outsource, we always invite the partner to have equity participation. When we look in our balance sheet, we have about two-thirds of participation in our projects. We have the intention to increase this participation. When we make this decision, it takes some time to happen because my projects are ongoing with the current participations.
We need a new cycle with a higher participation. We are doing this in this more recent land bank that we acquired, we have a higher participation. This will reflect in the balance sheet as we build what we have in my pipeline, and that will be replaced by this more recent development with a higher participation from Helbor.
The next question is from Ademar Delazare, an individual investor. Could you comment on the final results distribution, the parent share and non-parent company share?
Well, let's remember one thing. We have more than 200 active projects, and I don't have the same participation in all of them. In some, the participation is 90%, 100%, in others, 50%. Over the quarters, what do we see? Depending on this mix of sales, if I sold much more projects with a smaller participation, Helbor's participation, the profitability will be offered to the other shareholders. In a quarter that we have a more significant sales, we see this participation more relevant in the parent family balance sheet. It depends on the mix of sales. Each of these projects, they have different margins and this also has an impact. Some with a smaller margin, other with a higher margin. The combination of these factors creates this fluctuation in the net profit or total of the parent family. Parent company, sorry.
The next question is from Paulo Samarco, also an individual investor. Thank you, Paulo. Recently, we saw MRV doing a follow- one, trying to decrease the leverage. Does Helbor have something similar?
Well, Paulo, we constantly analyze our possibilities of fundraising in the fixed or variable income. This is constant in the company. We understand that the value of the Helbor's stock or share is far beyond what the company has. Maybe at this moment, it doesn't make change to go to the market or access the market with such a low value of the shares. The actual price of this share is much higher than what we are seeing now. We are doing this constantly discussing this possibility.
The next question is from Marcelo Rogero. Thank you, Marcelo. In what quarter of 2024 shall we see a significant reduction of the debt?
Well, Marcelo, as I said, now in 2023, we have a high concentration on the last quarter. When I deliver, I still have the process of on lending that takes 30- 60 days. Every time we have a delivery, both for the on-lending operation to an individual, it takes 60- 90 days. The deliveries of this year will be in 2024, and in 2024, we have many things concentrated in the second semester. It will depend on the deliveries and the speed of this on-lending operation.
The next question from Watson Xavier. Thank you. Accessing the helbor.com.br website, we saw a launch this month. Is it the Helbor Open Mind? How was the acceptance of this by the market? About the deliveries in 2023, we see a release where we have high percentages of evolution.
Well, Watson, thank you for the question. In the first question, answering it, we didn't launch Open Mind in July. It is scheduled to be launched by the end of August. In July, we had a great demand from some clients. We served these clients. We were selling for this client, but we did not go to the market, and we shall do this in August. We have a good acceptance. Without any type of publicity, we had a very good acceptance. Again, a good evidence of our good strategy. If you have the demand, we will launch, and this is happening with Open Mind. The second question. According to it, we did not have any delivery in July. We will have a delivery in August, a development in Vila Madalena, and yes, all development are within the contractual terms.
The next question is from Diego Lobato. Thank you, Diego. I'd like to understand the main reasons for the last quarters, the participation of non-controllers to have higher in relation to the general percentages, and why the best projects have such a relevant participation of non-parent company.
We have different participations in this process. In some, we have a smaller participation. In others, it's higher. Some of the legacy, we have a higher participation. Since they have a smaller result in the balance sheet, this decreases the part of the parent company. More important than that is to be able to sell these inventories, and in the next quarter, we will see their participation equal in the same projects with no contamination, so to say, from these projects where we have a smaller participation. This mix of sales will change and will bring participation equivalent to the parent companies.
The next question comes from Paulo Morales. Considering Helbor's expertise in outsourcing the building activity in itself, is it in your radar the consultancy to buyers of allotment land bank? If I understood, we provide the consultancy for the buyers who build their own houses.
No, our Fazenda Itapety, we launched one year ago, is a standard allotment. We will deliver the entire infrastructure, a very robust infrastructure. If you don't know it, I invite you to go there. It's a unique development in terms of allotment. No. Helbor will be the standard. We will deliver the infrastructure. But Paulo, within our expertise, we do have conditions. But as Franco mentioned, we are selling the lots, but not the building. Right? We can sell the ready houses or sell the project, providing this consultancy to the client.
We see some clients, especially investors, who do not have time. Time is the most precious asset we have. "Oh, I'm going to buy, but do you help me? I need someone to manage this real estate." We do have this expertise. It depends on the development, depending on the moment. We have total expertise to give this consultancy to our clients. We don't see any need for that, but if the need comes, we are here. Well, we answered all the questions. We are always talking, and we have this commitment to answer 100% of the questions. We are coming to the end of our presentation. I'd like to thank you for your participation and invite you to follow the company in the next quarters. We will have some novelties in our area at your disposal.
Thiago, Luís, our email is ri@helbor.com.br, and please contact us for any questions you might have. I'd like to thank you for coming, for your participation, for your questions. Every time you have these questions, this enriches. It's an input. I'd like to thank you, Franco, Luís, Thiago, giving the support, and to all our collaborators from Helbor, the sales companies, everybody who work with us to make Helbor a very big and large company, delivering what it promises and delivering the way we show in our publicity. Let's go to the third quarter, and we'll see you soon. Thank you