Good afternoon, ladies and gentlemen. Thank you for waiting. Welcome to Helbor's fourth quarter 2022 earnings conference call. We inform all participants that 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. For those listening to the conference in English, there is an option to mute the original Portuguese audio, just clicking on mute original audio. We also inform that participants will only watch and listen during the company's presentation, after which we will open for Q&A session. If you need help or want to ask any question, please use the Q&A icon at the bottom of your screen.
Before proceeding, we would like to inform that any statements made during this webcast related to the company's business perspective, 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 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 those expressed in such forward-looking statements. Now, I would like to turn the floor to Mr. Henry Borenstein, the President of the company. Mr. Borenstein, the floor is yours.
Good afternoon, everyone. For those watching this conference call, along with our Sales Director, Marcelo Bonanata, our Finance and Investor Relations, Franco Gerodetti, we are here to share with you the company's results for the fourth quarter of 2022. It's worth stressing that this quarter was very challenging, and due to some operational factors, we are continuing the cycle for resuming our activities. That is evolving at each year. Now, concerning our launches, we have reached 7 million. Concerning the sales, we have the total VGV BRL 1.4 billion, 53%, and those units ready. Now, we would like to highlight the 41% reduction of the inventory that total BRL 150 million. Now, the year 2023 continues with challenging macroeconomic indicators, and we are closely monitoring them, so that we can make decisions concerning what we are going to launch over the year.
I would like to thank you for those who have placed their trust on us, and we would like to remain our commitment to maintain our business model, generating value for shareholders and keeping with the company most outstanding in the sector, focused on responsible and transparent management. We also would like to point out that we held another event, Só a Helbor Tem , on March 25th and 26th, simultaneously in the city of São Paulo, Mogi and Curitiba. The purpose of this event is to reduce the company's inventory of finished and under-construction units, reinforcing once again the company's commitment to reducing its leverage and generating positive results. So now, Franco Gerodetti and Marcelo Bonanata will present Helbor's main operational and financial data. Now you have Franco and Marcelo with you.
Let's move on to the results of the fourth quarter and the sales volume of the year. And of these, 29% correspond to ready unit and 47.2 of launches. The VSO of launches the year was 36.9 and the total VSO was this. In the year of 2022, we launched 13 projects in total. A net PSV of BRL 1.7 billion, and Helbor's part was 57% with a total of BRL 464 million concerning the year of 2021. And the gross margin reached 28.9% in the fourth Q, 0.7 percentage point higher than in comparison with the fourth quarter 2021. We closed the year of 2022, 1.4 percentage points above as compared with the previous year, reaching 27.0%. The net profit of the parent company was BRL 51 million in 2022. Now I'll give the floor to Marcelo Bonanata, that's going to talk about the operating performance.
Good afternoon, everyone. First, I would like to present our fourth quarter of 2022, with a potential of BRL 9.8 billion. We would like to highlight that high percentage of this in the city of São Paulo, and 60% in the metropolitan region of São Paulo. We also had, and composing our total earnings. Now, we distribute the land bank throughout the city of São Paulo and the potential land bank total BRL 7.4 billion and Helbor's part BRL 4.5 billion.
So we have several regions of São Paulo and where we concentrate in neighborhoods such as Jardins, Itaim Bibi, Moema, Vila Nova, and places with urban mobility. And the major virtue of Helbor's, the assets are projects that vary from compact apartments to ultra-high in practically all regions of the state of São Paulo. And this is the major advantage of Helbor's. We have to highlight some launches such as Leopoldo and practically, we are going to deliver the lands in the city of São Paulo.
Now, we are going to talk about the launches in the last quarter, the fourth quarter of 2022. The highlight was the launch at Vila Nova Conceição at Rua João Lourenço, one of the best streets in the neighborhood. It's a differentiated project we launched in December of last year. And the second phase of the Helbor Patteo São Bernardo. It was the second phase following the model of the company with bigger projects, bigger lands, and we do this. The idea, we focus on this project, and that's why we have achieved the success we have achieved so far. Now we are going to talk about the contracted sales. We closed the second quarter with total sales 4% higher than the fourth quarter of 2021, and practically is in line with 2021 with a slight drop, 147 in 2022. This was an atypical year.
We cannot forget we had one of the most troublesome elections culminating with the World Cup, especially in the last quarter of 2022, which is usually a more active quarter. And it was affected by these two events that took place in our country. Even so, we performed well and above the level of 2021. Now our VSO. We closed the fourth quarter, considering everything that happened at the end of the year, the SOS. Now let's talk about our inventories. I would like to highlight that we have the inventory of quality and with ultra-high projects, as I mentioned, and in addition to our standard. And the ultra-high performed very well, and we would like to show in this segment today, we have several ready construction. In the fourth quarter of 2021, we have 871 ready.
Today, the fourth quarter of 2022, we had a drop of 44% in our inventory, 491 then. I would like to reinforce the work that the company has performing in decreasing the inventory, especially the ready inventory. Here, we can observe that the greatest inventory was in 2022 because we still had a higher inventory. Now, I'll give the floor back to Franco .
Okay. Very briefly, I would like to talk about the operating revenue and our operating revenue is in line with what we expected. We have relevant construction works, and in 2023, we have our project. Now it's aligned with what we expected since the beginning of the year. The next slide. We were pleased to see this slide and see that we'll be able to transform into figures this comparison. The increased margin of Helbor.
We had a tight margin, and then we have a more robust. We have seen that since 2019, we had an increase of our margin, and we will close 2022 with 28%, with the legacy 19.6% and new cycle 29.3%. As Marcelo said, our inventory relation in relation to this legacy is lower now. We are trying to react or respond, and today we are talking about BRL 350 million. From now onwards, it's going to have a lower participation in our margin. We are going to sell with a margin of the new cycle. I would like to show you, Helbor is a pure developer, and we hire third parties, and because of that, we pay a higher price. Then we suffer with the circumstances. Now, moving to the next slide, we are talking about the backlog margin.
It continues at a satisfactory level, and we've seen some drop, but the trend is from now onwards to maintain at this level. As we move forward, we are going to see our growth margin getting closer to the backlog margin. Then we can make projections. Now, concerning the general and administrative expenses, the company has a very well-controlled G&A. Sometimes we had some uncertainty, and we haven't had a year where we had the inflation and the cost inherent to the business. Now, let's go back a little bit and talk about net earnings. We can see in this slide, just to remember that this is the model we've been using. In 2022, we had an impact of the interest rates that interfered in the result and was even higher than 2021, but we have a trend of positive results.
Now, concerning indebtedness, we had an increase of indebtedness. It was a scenario that was expected for a simple reason. 2021, we had no deliveries, and the deliveries were very much concentrated in the third quarter. We're going to have the impact this year and next year. We expect to have a drop of leverage and closing 2023 and 2024. Now, talking about the cash burn, this slide talks with the previous slide. Due to this gap of deliveries, we have a cash burn of BRL 71 million. We had a land bank, a lot that had been acquired in 2022, and we have talked some of you, our land bank has come to a halt. However, we still have land lots.
We have the payment of land, the payment of the launches that were made, and we also had a volume concerning the construction work, concerning the financing of the constructions. In 2023, we had some payment of debt, and the interest rate was one of the reasons of the cash burn in 2022. The expectation for 2023 and 2024 is to reverse this situation. That's basically what we had to say. Now we would like to open for Q&As.
If you have any questions, please use the icon Q&A at the bottom of your screen. Thank you. Good afternoon. Thank you for your question. The first question is from Bruno Mendonça from Bradesco. How are the sales, and what is the strategy for this final stretch?
The construction works are doing very well. We are going to deliver the residential. Our expectation is in May and June, and begin the deliveries in July and August. Concerning the sales, I was talking to Marcelo. I should tell you that in the first quarters, we leveled off with last year. In 2020, we had some difficulties and access to credit, and with the model units. Now we are in a more mature plan, and we are at a cruise speed, and we are performing very well. We have been discussing the new launches with the new systems. I'm not going to say that it's a very low cost, but the price today is more in line with the reality of the market as compared that when we launched it, that we intended to break paradigms.
Today, we have a strategy and the speed of sales, and we begin an event that's going to be 29, 30 and 31st in the last floor of the residential. Concerning the Art Week of São Paulo, and we are breaking it. Pull of an artist, and is having a great repercussion. The media, Mônica Bergamo, and are giving us a press coverage. We have some strategies and activities today. Obviously, there are many things to be done, but we have achieved the level we deserve. I would like to say that people now are understanding the real truth of it, and it has to do with a project that has a brand, and it's iconic in the city of São Paulo. Once again, we have these sales, and now it has shown that our strategy is correct. We are in the right path.
Okay. The next question is from Elvis. What are the company's plan for launches in 2023?
Thank you for the question. The focus of the company is to sell what is being constructed that we are going to deliver this year, next year. The company is focused on these facts. We want to reduce our leverage. In spite of the challenging economic scenario, I can say that the company has projects approved. But we know that this is a challenging year, and we still have some inventory we have to work and sell. The company is more focused in selling the inventory and the legacy that is left.
Our next question is from Elvis too. How was the sales performance of the event Só a Helbor Tem?
Hi, Elvis. It was surprising. We had three simultaneous event, São Paulo, Mogi, Curitiba. It was surprising. We are reporting to last year. It was well above our expectation. In Mogi, for instance, the first client arrived at 8:00 P.M. on the previous day. Our event is the largest event of the sales of inventory in Brazil. Is an event where the salespeople buy and sell it to the clients and with the advantages. Talking for price, we never worked with absolute discount, and we are able. The creation of this event started in 2016 with suggestion by Borenstein with Bradesco, and again, we were able to innovate. A differentiated rate, and we finance up to 90% of the event, condo expense, and the quality of the product. We could only have this successful event. Without giving up margin, and we are very fortunate.
We have our feet on the ground, and it had leverage, and we were able to close with an excellent quarter. We know what's going on in the political and economic sphere. But in this moment that with a strong purchasing wave and people buying real estate properties, and the event only confirmed our expectation. Now I give the floor to Marcelo.
The majority of the projects, we had over 70% of the construction work already executed. There was the prepayment. We were able to make a prepayment of the tax too.
The next question from Márcio Lima. What is the cash necessary for the payment of the company's expense? Is it the same level of 2022 with expectation of 2023, and we could be in a comfortable position without incurring further indebtedness.
Now, thank you for your question. Firstly, we are going to explain how we manage the company. The first thing I can say is that our sales projection for the year, since December last year, we have a conservative position. I can say that we have a very conservative position the first time. We have this result from this year and next year. The scenario we are going to face, and we have aligned and try to manage our cash. We are more conservative in the area of sales. The second point, this year continue maintaining our indebtedness and the financing of construction. We have a reduction, and we are going to follow the same system and try to maintain the same level of indebtedness. Second, we have this fact of 2022, and we had some expenses concerning the new projections we have for this year.
Another additional point is the management of the assets of the company. Once a month, we have a committee meeting and we look at the operation project by project and make decisions concerning what to do and which path we should take. Lastly, we are going to have a high volume of deliveries this year that will concentrate in the third and fourth Q.
We are going to continue pretty much with the same level we have now. We want to make the deliveries, and we are very alert concerning the sales of the inventory and to reduce our leverage at the end of this year in 2024. In terms of volume, it's similar to the previous year. We have many positive aspects we want to capitalize on. We have some launches that help with the rates. We have the marketing and the expenses, and we have to set aside the cash.
The next question is from Daniel, an investor. I would like to know what the company is going to do in terms of shares.
Thank you of your question. This year is year to maintain the cash. I think this year, we have to take care of our indebtedness. This is not in our horizon. Although, this does not represent our assets. It is not in our projections to make the purchase of shares.
The next question is from [inaudible] , an individual. I would like if the Metropolitan project has a suspensive clause considering the macroeconomic situation.
This SOS is much higher. It should be now about 15%-20%. The sales are taking place at higher value. All of our developments. This is a very peaceful investment. Those investment is within our projections.
Our next question is from Tania [inaudible] .
Good afternoon. In the next general meeting, I do not see any proposal concerning the compensation of the board.
Tania, last year, we approved in a general meeting BRL 17 million, both for the board of officers and the board, BRL 18.6 million. So it was below that was proposed. This year, the increase was only 7%, and this was due to inflation. There was an increase of BRL 1.4 million. We are preparing program for incentive in the long term, and we are going to have a long-term project. So we understand that this is an irrelevant increase due to the size of Helbor. The compensation is linked not only to corporate goals. As it happened last year, there was a forecast of BRL 17 million, and we realized BRL 15 million. So this has to be made clear. This is linked to the goals.
The next question is from Paulo Moraes, an individual concerning the Itapety project.
Hi, Paulo. We are preparing the second phase and the other phases of the Fazenda Itapety, and the sales are being increased, and we are preparing for the new phases. This phase, the Fazenda Itapety, three phases. We are ready to launch phase II and III, and this takes time. Allotments take time. But we already have another plot of land of the same size, and we intend to sell whatever is available within two years. We are going to have another allotment ready.
The next question is from Marcus Antonio. The adjustment to the adjusted value were based on Helbor with BRL 41 million and the appreciation, 30%.
Thank you very much for your question. Here, we have some projects. They were placed as properties for investments. We have the rental contracts, practically two properties that had some variation in the previous year, both of them in 2021. This is not something new. One is in São José dos Campos, and the rental was about 30% of the property in 2022. We closed an occupancy of 90%.
We can talk about this. It is an aeronautical company in São José. In January, we put aside one part, and we are also having rental contracts in this area. This year, we made some quotations. The strategy here is precisely the same one we adopted in other projects of Helbor. In São Bernardo do Campo, we rented to H&M, and then we sold it. So the strategy worked very well. These are commercial real estate properties we had in the inventory. We could form this cushion of rental and then sell them.
Of a corporate project. Now, going back to your question, we sold the real estate, and we did the same thing in Rio de Janeiro two years ago for 80 million BRL. The goal is the same, is to wait a little bit to have a longer history of rentals. The strategy would be the condo fees and the land tax. Once it's lowered, we can sell them at an appropriate price.
The next question is from [inaudible] . What is the prospect for launches this year?
Douglas, as Henry had said, in addition to sales of quality, we already have some projects that have been approved. One was approved and developed. We started the year focused on selling our inventory. We are going to plan for the second semester. We are in with a peace of mind, and we are selling our inventory, and we are prepared to launch. We have projects approved, but this will depend on the macroeconomic scenario. We are not going to create more inventory. We are only going to launch if we see a real opportunity.
Our next question is from Carlos Herrera, who talk about the first quarter 2023 and based on what happened in 2022 and what you plan for this year.
The first quarter is above our expectation. We had expectation concerning the economic and political aspect that things were more quiet. We are having higher sale than we expected, including with the event, we sold more than we expect. We expect to have the number of sale higher than we expect. We went back to decimal places. Now, we don't have a full reading of the year.
We still depend a lot on the macroeconomics. The moment is positive, and after the event, we think that in addition to all the advantage of the event, the financing conditions, we heard many clients saying, "I want to take my money out of the bank and invest in real estate properties." So I don't know if this is going to be momentaneous. We are going slow, and that's why we are going to do it only if we are absolutely sure. Living one day after the other, one month after the other, because things are still troubled. The expectation for the second half is that the interest rate may decline. We are still fearful, and we are going slowly.
The next question: Could you explain the main measures to deleverage the company?
As we mentioned, we have a major focus on the projects under construction. We can say the first quarter was very satisfactory. We didn't have any new launches. The company is waiting to see. The second point, we have some sales directed to some products we still have, and we have done that, too. The last point is, we are treating our cash very carefully, and it's very hard to approve new purchases of plots of land. The cash will be used for the launches of last year. We are still thinking about the interest rate to see if it's going to decline or not, imagining what the scenario will be. We did not deliver anything for 13 months. This year, we are going to deliver many projects. Today, the company has future developments that are well-located, concentrated mainly in the city of São Paulo.
There are some commercial and we have a healthier inventory as compared to the past. As Marcelo said, this event has really taken us by surprise, and it was better than we expected. We do not know if this situation will continue for the rest of the year. We are trying to sell the inventory, and we have been working hard in our company 24 hours a day.
Next question is from Marcus Antonio. Okay. So about the delivery of My Square. There were many complaints. Has the project been delivered?
The condo will be installed this Friday. I am not saying the clients were not right. We are using the six-month grace of period granted by the law. We are not going to deliver it late. It is a residential project and has generated some expectation.
This has been solved, and we have already scheduled the delivery, and we set it RA1000. That says that Helbor has the same evaluation in the real estate sphere. Yes, and people complain for anything. This weekend, the inventory is doing very well. We are delivering a project that has exceeded the expectation of those who bought it. We have delivered over 4,000 property in that area. People will live with quality. Helbor has the history of delivering their projects on the due date or before that. In the last two years, we had some problems in the supply chain. This happened not only to Helbor, but to other companies. So far we have not exceeded the contractual term.
We are going to use two or three months of the grace period, and considering everything that happened during the COVID epidemic, I think we did a great job.
The next question is from Pietro, he is an individual.
We should pay BRL 0.09 earnings per share, and this year will continue with 25% of our earnings. It is about BRL 12 million . I have not made the calculation, but it is about 33 million shares.
Our next question, by Marcelo, who is an investor, individual. Thank you for your question. Considering the delivery 2023 and 2024, what would be the percentage of the net debt?
As we mentioned before, we have a period for concentration of deliveries in the second half of this year. When we deliver, we have a certain period for the individuals to take possession. If it is delivered July and the heavier effect would be September or October. It is more emphasized at the end of the year. Throughout 2024 will be scattered over the year. We are hoping to have a greater reduction towards the end of next year. We still have indebtedness concerning construction works from last year, and we are going to have an increase in our financings as a result of that.
The next question is from Charles Oliveira Almeida, an individual.
Thank you for the question. We recurrently analyze the capital share of the company. As I mentioned before, our share does not represent at all the value of the company. So in our radar, we have a much higher level of the price of our shares.
The next question is from Felipe Ramos, an investor. Doesn't the volume of rescission tend to increase with the failure of delivery?
Thank you for your question. We always establish this correlation, the termination with deliveries. This is common in the marketplace, taking upon with the previous question, and we had a very low level of termination. We have a close control of our clients, but we understand that we will deliver products with high quality, very well located. It's nice to remember that we are closing a cycle. The construction was in another level. We are understanding that the projects we are delivering now are not in the same price as they were in the past. The market has changed a lot, and this concerns us. But looking at 2022 with the last deliveries up to this moment, we don't have any red or yellow light going on.
The company has suffered a lot with the terminations in the past. We became experts in this segment. But the situation is completely different from that time. Today, the person only will give up if the person cannot really pay for the property. This has to do with the product, and this issue with the high income is lower. With the medium and medium-low, people are more exposed. What happened in the past concerning the terminations was the drop in the price of the property. The real estate price was cheaper than what they paid for the project. Today, we see there is a different cycle. The sale price is maintained or even goes up in some cases. We see the possibility of this price going up due to the price of material.
The terminations always happened, and in our model, we consider these terminations healthy. I would like to add, in addition to the My Square, we had the deliver in Mogi, and we had a zero rate of terminations. The event that's overstaying. The launches in the marketplace are above the inventory we have. What we see in terms of termination, we have a department that handles this issue since we suffered this in the past. Those who usually terminate it because they lost their jobs or cannot pay for the purchase. So both the level of termination and default are at a low level. But this is not something that is making us suffer as it did in the past.
We have another question by Marcus Antonio. About the committed properties.
Marcus, thank you very much for your question. What happens is, first, when we see that 85% is changed. We sign a commitment of sale and purchase, and he also undertakes to deliver the land lot with the documents. The launch is when we transfer the land to the SPE, and we cannot transfer before that. At this point in time, we agree what we have to give him. We launched a lot of projects in the past, and we had a certain percentage of exchange, and we recognize his commitment, and we bring the land to our balance sheet, to our accounts.
Okay. We arrived at the end of our presentation concerning fourth quarter of 2022.
Thank you, Marcelo. On behalf of the company, I would like to thank all of you that participated in the webcast. We have a total focus on reducing our inventory. It's a long process. From the purchase of the land lot to delivery, we take three and four years. The company's focused on reducing the leverage. We are available to answer any questions you may have using our appropriate channels.