Good afternoon, ladies and gentlemen, and thank you for waiting. Welcome to Helbor's first quarter 2023 earnings conference call. 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 your preferred language. 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 statements made during this webcast related to the company's business perspectives, projections, and operational and financial roles are based on the beliefs and assumptions of Helbor's management and on information currently available to the company. Forward-looking statements are not guarantees 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 and other operational factors can lead to future results of the company that differ materially from those expressed in such forward-looking statements. Now, I will turn the floor to Mr. Henry Borenstein, President of the company.
Good afternoon to everyone following this webcast of Helbor's results.
Along with our Sales Director, Marcelo Bonanata, and our Finance, Investor Relations Director, Franco Gerodetti, we will present the company's results for the first quarter of 2023. It is worth mentioning that this period was favorable. We ended it with positive operating and financial indicators, continuing the recovery cycle of the results generated by the company, which has been reaping the fruits of its strategy. Concerning launches, we closed the quarter starting sales of the first phase at the Reserva Caminhos da Lapa development, which had a net PSV of BRL 212 million. A volume of launches that is in line with the company's strategy and remains attentive to economic and market indicators before making the decision to launch new projects. Speaking of sales, we totaled BRL 354 million in the quarter, of which 92% corresponds to finished and under construction units, reinforcing the company's effort to reduce its inventory.
Before closing, I would like to highlight that we released our first sustainability report this week, presenting the actions we developed in environmental, social, and corporate governance areas, reinforcing our commitment to transparency and accountability to our shareholders. In addition, the report also highlights our achievements and challenges, supporting our continuous pursuit of sustainable practices in our operations. Franco Gerodetti and Marcelo Bonanata will present Helbor's main operational and financial data.
Thank you, Henry. Good afternoon once again. I will go briefly on the highlights of the first quarter, and then I will give the floor to Marcelo. As we mentioned before, we had a good quarter of sales with a volume of BRL 354 million, 9% above the first quarter of 2022, and 32% higher in relation to the fourth quarter of 2022.
Approximately 91% of the sales account for the commercialization of the ready units and in construction that help us on projects that we will deliver this year, next year. We have the SoS with the 10.4% in the period, 1.2 percentage points above the first quarter and 2.8 percentage points compared to the fourth quarter. We had another event called Só Helbor Tem with a very expressive volume of sales, BRL 128 million, and in São Paulo, we had a record for this event. As for net operation revenues, we had BRL 270 million in the first quarter, an increase of 28.4% compared to the first quarter, and 25.7% higher than the fourth quarter of 2022. Another important point is our gross margin that reached 29% in the first quarter, proving once again the recovery, our margin recovery of the last years.
Now I will give the floor to Marcelo to talk about our operational performance.
Thank you. Good afternoon, everyone who is participating in this event. We will talk about our land bank. Our potential land bank is BRL 10 billion, Helbor share BRL 6.3 billion that unites 34 projects. If you see, 73% are distributed in São Paulo and 21% in the metropolitan area. Land bank, as Henry said, is the most valuable asset that a developer has. And we have a land bank of great quality, giving us good developments. We distribute our land bank in the city of São Paulo. We see that we have BRL 7.5 billion of total PSV, BRL 4.6 billion for Helbor share.
Talking about quality land bank, we are in the best neighborhoods in the city. I think that one of the points of Helbor is the geographic diversification in the city of São Paulo. We are in all regions and with a diversity of products. We go from studio to very high standards. So this gives us flexibility to embrace several segments in several locations. I highlight here some neighborhoods that we are transforming, but we have in our land bank, Jardins, Moema, Chácara Santo Antônio, Itaim, with very diverse products, reaching several brackets, social brackets, and in the very prime regions in the city of São Paulo. In this slide, we talk about the first quarter launches. We had one launch that was the opening of the third phase of Reserva Caminhos da Lapa.
This development is part of a conglomerate we have in Lapa, in partnership with Tegra Incorporadora S.A . A new neighborhood is being built. We started in 2016, and we have more than 1,000 units delivered, and we launched more 2,000 units transforming the neighborhood. And even an urban intervention with a new street. So it's a new phase of this new development, one of the best we have. And this is one of the few developments of urban transformation. The PSV was BRL 212 million. Units from 90- 150 sq m. And at the end of the quarter in March, we had a very speed in these sales. And in this slide, we show the two important deliveries we had for the company. One in the city of Mogi das Cruzes, Paseo Patteo Mogilar.
Also, your urban and in real estate development that we had some large areas, and this has about 100,000 sq m. We develop commercial park, a mall, a square with private investment. One of the best used squares in the city with a fountain and with a cell phone, smartphone charger. This is one of the developments we delivered in the first quarter with 324 units well sold, 83% sold, 80% Helbor shares. Another development, which is My Square, is at the ParkShoppingBarigüi. We are almost trying to develop this region. We have commercial to two dorms, three rooms, and this is a development with two and three bedrooms with a service area for the region. So it's iconic development, beautiful with high acceptance. 50% is Helbor share, 87% sold, 252 units, a medium high standard development. In this slide, we show Our Só Helbor Tem.
This is the largest event of sales of real estate inventories. Nobody reaches this number of events. We reached 109 editions. We had a good expectation, but this event surprised us. We had three Só Helbor Tem in the same day, one in São Paulo and in Curitiba and Mogi das Cruzes. We reached BRL 128 million in one weekend. We sold 35% more than the first event of last year, and 18% more than the second event in the second semester of last year, showing that Helbor sold these inventories without putting the value down, just the opposite, adding value. And with a great partner of ours, Bradesco, providing special conditions for the client with only 10% of cash pay and with a long financing term. We saw people, the anxiety of the clients. In Mogi das Cruzes, we had people arriving to the stand at 8:00 A.M.
In São Paulo, we had one client arriving at 3:00 A.M., so anxious to acquire the unit. We would like to have one event of this every month, but we can't. But it's a great success of real estate sales in Brazil. In the next slide, the contracted sales. We total BRL 374 million , 9% above the first quarter of last year and 32% above the last quarter of 2022. 223 are Helbor's share and the others, for partners. Only 8% of this launch, and 92% of everything sold in the quarter was the sales of inventory and ready developments. Now is our SoS. We had an SoS, a total one in the first quarter that was 9.1 last year, and 7.6 in the fourth quarter of 2022. So a very robust SoS. We harvested the fruits that we planted.
We were concerned with the country, but the market showed to be very positive for real estate sales. Many people are concerned with the moment of the country, the instability moment, and they know that real estate is a very safe or secure investment. This is to show our inventory. The red units, we see a drop in relation to the first quarter of 2022- 2023 of 41%. In 2022, we didn't deliver anything during the year, and this year we had two deliveries in the first quarter. So this drop of 40%, including the two developments we delivered in the first quarter. So we had only 14% of the total inventory only for ready units. So the company is concerned with the ready inventory. We are concerned in selling it, but much more than producing new developments. We will launch. We are prepared.
We did our homework, but we will do this in the right time, according to the market.
Well, now, Franco, it is for you to talk about the financial indicators. I will go very quickly to the financial part to open the Q&A. As we have seen, net operating revenue is a very relevant number, and here, because of the sales in the first quarter, the sales of ready units and products under construction. In the average, we had incurred costs for the units being built, and this is already in the pipeline. Now, going to the next. This is very relevant. We have been insisting on this subject in the last quarters, but it is important to highlight, we are recovering our margins once again.
This is a result of the mix that we had the legacy products with a more squeezed margin vis-à-vis the new cycle, with margins above 30%, 35%, or even more. We have been seeing this, and that is a movement that we expected to happen. We still have a space or a short room for this because we have a much smaller inventory legacy. From now on, we will have this value around 29%. In the next slide. This is the backlog in line with our margin. It is 29%. The Helbor history is at 32%, 33%. We are following this number. Also within what was expected and we are scheduling for the future. The next slide. I will go fast here. As we always say, the company is very comfortable. We see the last 12 months.
If you compare in the first quarter of 2023 or 2022, we have an increase of 4.1%, very below of the inflation. The expectations continues to be the same, with a very rigorous policy for expenses and control. The next slide, the net results. Once again, we had a positive quarter. Maybe it is likely below the last ones, but within expectations. We will always have a fluctuation depending on what we sold in the quarter. Sometimes we have a higher participation in money in development, in others, it is a shorter participation. So depending on this, we have a better or worse result for our parent company. Now, this indebtedness, if we look one year against the other, the gross debt increased in 2022. This was expected. 2022 was a year with no deliveries.
Looking ahead, we will have in 2023, 2024 years with strong deliveries, especially 2023 more concentrated in the second half, and also at the end of the year, where we will have a higher movement concentrated in the beginning of 2024. After delivery, we have a delay of 30, 60 days. So that is I am saying that we will see this more in 2024. During 2024, again, a great number of deliveries, and we believe we will reduce the leverage and bring the company to a reasonable level and have an effect to recover the prices of our shares. Here, cash burn. In the first quarter of 2023, we had BRL 1.480 million. We have investments to use. We had two deliveries in the first quarter, but the effect will be seen in the second quarter.
Once again, we were expecting this decrease, but these numbers we will change over the months. Basically, this is what we have. I thank you for your attention.
Now we will open the Q&A session. If you have a question, please send us using the Q&A icon in the bottom of your screen.
Alexandre, thank you for your question. I'd like to congratulate you for the disclosure of the sustainability report. It was time of Helbor to do one. Very interesting material. As for the financial issue, why with a high level of indebtedness, the company is still distributing dividends.
Thank you, Alexandre. We work a lot in the sustainability report. Helbor was responsible for this, and we were able to give a good result that we published this week.
As for the dividends, we had deliberated since last year with our board, and we did it again. We decided to distribute the minimum dividend value. It was not a relevant value, but even though we decide to continue distributing it, especially because we believe that we have this leverage this being 2023 and 2024. We also wanted to give this message to the market. This quarter, despite of the cash burn for investments, but is much smaller than the other quarter. This year was BRL 71 million, and we were able to hold the purchase of land banks.
Well, good afternoon. I'd like to more cover on the company's inventory pricing dynamics and how the demand side is feeling in the market.
Thank you for the question. Talking about the inventory, today, the company's inventory is very small in relation to the last years.
The under construction and ready unit, we are repricing the minimum of INCC and with price, we reprice above INCC in several cases. This reflects on the gross margin of the company. If you saw, we reached 29%. This margin was almost 11% in the past. With this month, we gain in price and not only in construction units, but also ready units. When you have the launches of the new phases and legacy, the legacy of these developments in the past, and then we had the mutual arrangement crisis. But even with this, we were able to be positive. We understand that we was able to reprice the real price. In this three, the legacy account for 25%, so almost 2 points in relation to the previous period.
Talking about market, what we see, the numbers of the first quarter showed that unlike the beginning of the year, where we had high interest rates, we know that the revenue, the real estate market is not compatible with high interest rates. But even though we had a surprising first quarter, the event for selling the inventory showed these very people, much people interested in the real estate market. The credit grant facilitates this. We are gaining in price in our inventory. This is relative to the launches, but the inventory is still attractive. We are very excited. But when we opened, it was surprising. We had very strong sales in April and in May. We live one month at a time. We know that many things are with not so favorable winds, but even though, we see a greater demand, greater than we thought.
We are excited, but with our foot on Earth looking to the market. Consequently, with the drop in the interest rates, we will be better. What we were able to do up to now really surprised us. And to Marcelo. This was a year of less launchings in the market, and this collaborates to sell the inventory. We see that this is scarce in the first semester, so we are now absorbing our inventory, which is a good position.
Vitor Esmage asks, "The land bank that is not with projects is marked in fair value or by cost?"
This is our market study done for each development. So we see the potential, and I can say that it is the market value. If I have a development in a certain region of São Paulo, I put the VGV for the square meter of the region.
It's not neither fair value nor cost. Just to remind you, we will not see these values in the financial statements of the company. For those who are structured, we do see, but we have many things that were exchanged, and then this land only goes to the conditions we had. Usually, it's very close to the launch because in the case of exchange, it's not interesting to transfer to the financial statements because we pay many expenses that are not necessary at that time.
The next question is from Marcelo Macedo. "What is the number of deliveries forecast for the second, third, and fourth quarters of 2023?"
In the first quarter, two developments. In the second quarter, two more. Now, as I said, good concentration in the second half. Three more developments in the third quarter and the rest concentrated in the last quarter. The return of what we are delivering in 2023 will be seen in 2024.
Next question from Victor Smith: Why the margin of new projects is greater than the legacy? Is it for expansion of revenue per square meter or the cost decrease?
Well, this legacy is related to the mutual remissions. So these were the projects that suffered more, and we had a cost reduction. This legacy brings a smaller margin because of this. The new cycle that is started at the end of 2018, projects are concentrated in the metropolitan area, projects with less number of units and projects with a margin always above 30%. We don't go with no projects with a margin below 30%. Before this crisis of the mutual recession, our gross margin was always around 30%-35%.
We are able to deliver the new launches with a gross margin of 29%.
Thomas Ward asks: How do you see the dynamic of real estate prices in São Paulo? Are there differences due to typology and location?
Yes. There is. We launched last year a development in Itaim, and the square meter is BRL 47,000. In Jardins, we work BRL 45 million the square meter. This that we have at Lapa, a wonderful development and beautiful. It's 11.5 or 12. So, we have neighborhoods in São Paulo that are much larger than some cities. They say that São Paulo is a country. So we have this diversity, large territory extension, and we have big differences. So we have a great differentiation according to the region.
The next question is from a personal investor, Felipe. The ratio between net debt and PL exceeded 70%. Do you have any acceleration in debt in this exhibition?
This is the only operation of the company. In the past, we charged it, but there is no guarantee. The emission has, again, in case it happen, and is a emission of a low value. The balance is BRL 38 million. We are talking with our creditors for this outstanding balance. But we have already the pathway to continue the operation.
Robson Cardoso: Is there any change in the launch perspective for 2023? How the company is looking to this demand. Is there any change in the scenario? Is it possible to talk about launches of April and May?
The company is still focused in the already launched developments, those that will be delivered this year and next year.
This is to increase the cash. We have several projects approved in our pipeline, but as Marcelo said, we are living one day at a time. What we can inform you is that the company will only make new launches when we understand that this product will have a good liquidity and is proper to the market moment. Otherwise, we are going to wait. We will continue to focus on selling our inventory. Perhaps we will launch a development this semester in a region where the price improved, but we want to have the right price, the right place. So probably we will have this development in June if the pre-sales meet our expectations. If the pre-sales is cold, we will wait to launch this development.
The next question is from Juliana Tomas, analyst at Buy Side. In relation to the short-term debt, is there expectations for profiling?
No. The company has an excellent bankability. We are always in contact with our financial partners and the business plan due to the contract. The due term, suppose, is in the next period of short term. We know that we have also the grace period. So it seems that the debt is due all at the same time. No. But we have the grace period, and after the grace period, we will have the due date to pay. But we always put the due date at the end of the contract.
The next question is from Vitor Schmidt. A follow-up on the land bank. In the case of the terrain with no feasibility study with the ready market, how do you market?
There is no position here, and we do not close any business without market and feasibility study done. This is the first point.
We have a committee in the company with several people involved, and we always make our decisions jointly, always looking at the feasibility and the market and the different scenarios of the market. However, just to make it clear, suppose I bought a piece of land in cash. I put it in my financial statement, and I carry it over. But as I said in the beginning, the great part of our land bank is from exchange.
Vitor Schmidt, this extension of gross margin in new projects versus legacy impacts the turn of the inventory in months, or it's just a geographical choice?
Gross margin projects with a higher margin in the new cycle and lower margin for legacy projects. There is no turns in the inventory. Some years ago, we had the commitments with a geographic expansion. We did it, but today we are operating in the places we decided to be.
Another question from Victor. How much the INCC is affected?
We follow it. Some already delivered here that we have a debit that also follow this affected asset. It impacts the debt, and there is no impact because the way the company works traditionally.
Our last question is from Marcus Antonio de Carvalho. Helbor reported a negative adjustment of BRL 86 million for the purpose of pricing of the final inventory in the first quarter of 2023, totaling BRL 3 billion. Isn't this an indication that the real estate price are being adjusted downgrade?
We adjusted it in the average of our inventory. It was almost 3%, 2%-3%. This was the average of this adjustment, and some we adjust, others not, depending on location and our feelings of sales expectations.
We can tell you the inventory that we do not do this. We are selling and also in São Vicente. These two inventories, a commercial inventory that has liquidity but not that much. You don't have a speeding sale. We particularly, every month, we see product by product. We see the sales speed month after month because you need to have speed and then you gain price. Most of the developments, we are able to reprice because we have a good sales velocity. A great part, we try to keep the value to keep our positioning.
Good. São Cardoso Xavier: What are the next steps for Fazenda Itapety?
Thank you. The Fazenda Itapeti we launched last year. We launched the first part of the first development. Now we are preparing the launching for the second phase, and we have good expectations.
Already preparing a second development, which is a complement of the first. We've been preparing the city, the region, and now with a very nice movement of about 35% of the sales are outside the region of Mogi das Cruzes. We have a good migration from São Paulo, the ABC region, Guarulhos. We are reaching these people for a second house or as investment that is outside the primary target region.
As I said, as I always say, we answered 100% of the questions. We are still at your disposal for any other question. Please contact the IR. With this, we close our call, and I give the floor to Henry for his final comments.
Thank you very much for your participation. We will see you back in the next quarter. Thank you, everybody, and have a nice afternoon.