Welcome to Lavvi's earnings call for the second quarter of 2026. The presentation and comments on the results will be presented by Dida Horn, CEO, Sandra Esthy , CFO and Naira Pesce , IR Manager. There is simultaneous translation available on the platform. To access, click on Interpretation at the bottom of the screen, and choose your preferred language. This conference call is being recorded and will be available at the investor relations website at ri.lavvi.com.br as well as the slide deck that is going to be used for this presentation.
All participants will be in listen-only mode during the company's presentation, and then we are going to start a questions- and- answer session when further instructions will be provided. Before proceeding, we would like to take the opportunity to emphasize the forward-looking statements are based on the beliefs and assumptions of Lavvi's management on information currently available to the company. These statements may involve risks and uncertainties concerning them. Considering that they require the future events that may or may not occur.
Investors, analysts, and journalists should understand that events related to macroeconomic scenario, industry, and other factors could lead results to be materially different from those expressed in such forward-looking statements. Now, we are going to start the presentation, giving the floor to Mr. Dida Horn. Mr. Horn, please, you may start.
Good morning, everyone. Thank you so much for being here. The second quarter has been a very important quarter for Lavvi. We had a launch that I consider landmark for the company, Jardim da Hípica, the largest project in our history. It's a project that we really believe unique plot of land in front of Represa de Santo Amaro. The exact kind of project that the customer still displays in the market. Customers responded very positively. We ended the quarter of BRL 565 million in sales or 44% of the PSV at launch.
So I think this speaks a lot about the quality of the project. Of course, the macroeconomic scenario remains challenging. We have seen an increase in cancellations, and we are monitoring this closely. At the same time, we see a very consistent demand for our projects, especially when we deliver well-located projects and branded add value. About Novvo, we also had a very strong quarter. Novvo Santa Marina, our most recent launch, ended the quarter with more than 50% of its PSV sold and reached an SoS of 75%.
This demonstrates that we still find a very healthy demand in the low-income segment. In the consolidated, we ended the quarter with BRL 875 million net sales, backlog of BRL 3.1 billion and growth margin of 38.8%, indicators that make us very confident about the future. On the financial end, we had a net revenue of BRL 495 million and net income of BRL 83 million. We keep renovating our portfolio, and we have a land bank of approximately BRL 9.5 billion PSV. Looking into the future, our vision remains the same.
We are going to continue to address our projects with discipline, to allocate capital in a way that it makes sense. And we believe that this combination, good land, differentiated projects, good brands, will permit the company to grow with profitability and to generate value to our shareholders. Once again, I would like to thank our shareholders and partners once again, and especially the work of all Lavvi team. Thank you very much. Now, I would like to give the floor to Sandra, who's going to give you more details about the operational results.
Thank you, Dida. Good morning, everyone. Now, on the operational results. In the second quarter, we had two launches that total BRL 1.4 billion of potential PSV or 848 Lavvi's. On slide five, the first and pretty much expected, Jardim da Hípica, Lavvi's biggest launch of BRL 1.3 billion PSV closed the quarter sold by 44%. There are two residential buildings with 84 - 200 sq m and an apartment tower with units ranging from 21 - 57 sq m . There is an immersion room, decorated apartments, and a wonderful square of 10,000 sq m that can be seen from any part in the region.
On the following slide, the first phase of Novvo Santa Marina in the region of Água Branca in the city of São Paulo that closed 51% sold in the first half of the year. You can see our launches and sales. Comparing year-on-year, there has been an increase of 8% in launches and 12% in sales, keeping SoS at 22% in the quarter. Comparing as a first six months, even though there was a drop of 6%, sales were 3% higher than in the first half of 2025, with a highlight to Hípica, accounting for 64% of our sales.
We have been feeling that the market is more difficult as customers are worried with the INPC pointing to the figures. At the bottom on the right, you can see the cancellations of the first six months higher than in previous periods. These were caused by indexers claiming financial difficulties. These cancellations are not concentrated on any project and were not massive at the time of transfer due to lack of credit. In addition, 40%- 45% of the units were sold this quarter. We have a very, which makes it possible for customers to transfer despite the high interest rate scenario.
We are trying to find alternatives for our customers to keep them in our portfolio. On slide 8, you can see our SoS for the last 12 months is still at 50%, very much helped by the sales of Minha Casa, Minha Vida , reaching 79% SoS in the period. On slide nine and 10, you can see our inventory closing at BRL 3 billion or BRL 2.4 billion in Lavvi's share, 7.2% concentrated in three projects. One was delivered in less than one year and two this quarter. Moving to slide 11, there has been the delivery of Green View Residence in the district of Butantã in the city of São Paulo.
A building with small units and the other one with 152 units with 152 sq m . On slide 12, we have Grand Square, 78% sold. Most of them have transfers. Moving on, we have 84% and 88% in terms of financial settlement. On slide 13, you can see the land bank closing the quarter with BRL 9.5 billion of potential PSV or BRL 6.9 billion as Lavvi's percentage. BRL 1.5 billion is for the Minha Casa, Minha Vida segment, representing 21% of the land bank in our shares.
In the current scenario of high interest rates and high inflation, it's important for us to operate in Minha Casa, Minha Vida , which proves to be resilient despite the more challenging times. I would like to give the floor to Naira for the financial results of the quarter.
Thank you, Sandra. Good morning. Starting on slide 15. Lavvi's second quarter financial highlights were net revenue of BRL 495 million, 33% over the previous quarter. Adjusted gross margin, adjusted by SFAS interest 27.6%. Net income of BRL 43 million with a net margin of 15.7%, ROE of 24%. Backlog of BRL 3.1 billion with a gross margin of 38.8%. Adjusted cash burn of BRL 28 million or generation of BRL 72 million in the ex-land view. Net debt was BRL 525 million at the end of June.
Moving to slide 16. In the first chart, we see the revenue of BRL 495 million in the quarter, a growth of 3% in the annual comparison and 33% compared to the first quarter of 2026. The main highlight was the launch of Jardim da Hípica, which accounted for a large share of the sales in the period and increased the share of new sales in the composition of revenue. In the first six months of the year, net revenue reached BRL 868 million, 6% higher than the first half of 2025. In the second chart, the adjusted gross profit totaled BRL 186 million with a margin of 37.6%.
In the quarterly comparison, the growth reflected mainly the higher volume of revenue with emphasis with Jardim da Hípica, Novvo Santa Marina, Grand Square. In addition to the higher gross profit, we had margin expansion in the quarter going back to the levels of 2025. On the right, we can see the negative financial result by BRL 3 million in the quarter. Whose performance mainly reflects the increase in financial expenses after the issuance of the CRI, launched at the end of 2025. In the bottom side, the SG&A totaled BRL 27 million.
The increase compared to the previous year is mainly related to expansion of the workforce to support the company's growth. In the semester, we also had investments in systems and technology to improve internal processes. Subsequently, commercial expenses totaled BRL 49 million. This increase mainly reflects the investments made in the promotion of Jardim da Hípica, which had a comprehensive communication strategy than other of the company's launches.
In addition, we had high expenses related to ITBI, and registration of units, including Minha Casa, Minha Vida, because of the launch of Novvo Santa Marina. Finally, the net income attributable to controlling shareholders was BRL 83 million, with a net margin of 15.7%, pressured by commercial and financial expenses. Moving to slide 17, we can see that the company has a historical evolution. In last 12 months, Lavvi reached approximately BRL 1.8 billion in net revenue and BRL 361 million in net income.
Another important point is the gain in the relevance of Novvo, which has been increasing share of the company's revenue and reinforcing our strategy by diversifying our business. On slide 18, we've seen an annualized ROE of 24%, a level that remains quite healthy and reflects the company's ability to generate value. On slide 19, you can see the backlog revenue from backlog sales ended the quarter at BRL 3.1 billion, up 21% year-on-year and 11% compared to the previous quarter.
The backlog margin reached 38.8%, the highest level in recent years, mainly reflecting the launches of Jardim da Hípica, Novvo Santa Marina, Novvo Vila Prudente, and Nest Vila Ipojuca. This represents approximately BRL 1.2 billion in future gross profits to be booked over the next few years as work evolves. Going to slide 20. The company recorded adjusted cash burn of BRL 28 million in the quarter, excluding dividends. In [HCM view] there was a generation of BRL 72 million, reflecting the good operational conversion capacity of projects under development.
We ended the quarter with a net debt of BRL 525 million and leverage of 30.6%. Finally, on slide 21, we reinforce that the third installment of the dividends approved by the Board of Directors will be paid on August 14th, 2026, totaling BRL 70 million, continuing our strategy of generating and paying out value to our shareholders. Thank you very much for your participation. Now we are open for questions- and- answers.
We are now going to start our questions- and- answer session. If you want to ask a question, please click on the Q&A icon at the bottom of your screen and type your question. If you want to ask a question using the microphone, click on the raise hand button. Please wait while we collect questions. The first question comes from Elvis Credendio from Itaú BBA.
Good morning. You had a very successful quarter in terms of your launches. The mid and high-income market as a whole has been deteriorating, with performances getting worse in Q2. How confident are you with the pipeline for the second half of the year, considering the slightly more challenging market? Are you going to make any changes? Still on that, I know it might be too early to think about 2027, but thinking about the macroeconomics, what are you thinking in terms of volume, product mix?
Are you going to increase Minha Casa, Minha Vida? Can you tell us a little bit more about 2027?
Hello, good morning. This is Dida. There are some mid and high income segment launches in the second half of the year. Despite the difficulties in the market, we are very confident about those launches. We believe that we have land at very differentiated locations with very good projects that we are going to launch. We have a plot of land in Moema, very good position, big size. We think our theory, when we have something that is very good, even at very difficult times, we can sell, such as the Hípica, that we have seen hundreds of units at a very difficult time in the market. We have very, very good locations. Upscale Place is the other one.
That's a plot of land that we bought from a hospital. It's right in front of a hospital. There are lots of hospitals around it, and we are focusing on this public. We think that we have differentiated projects and plots of land to sell, even at difficult times. About Minha Casa, Minha Vida, yes, we have increased the operations. We are doing very well in everything that we have launched. We want to increase, and we are very much focused on buying land, and we have lots of plots of land being negotiated with a higher SoS.
We think that very soon it's going to get to one-third or even 40% of our sales will be with the Minha Casa, Minha Vida project.
Next question comes from Gabriel Moreira from XP.
Good morning. Thank you very much for taking my question. I have two questions. The first is about low-income sales. Do you see any bottlenecks, especially in July? If there is a bottleneck, whether that has affected the pace of transfers and the Hípica. Do you have a schedule for future phases of the project?
Hello, Gabriel. This is Sandra. Thank you very much for the question. I'm going to mention the transfer to bank. We are not seeing any bottlenecks in our transfers. Sales are taking place at a very good speed, and transfers are going on normally. About Hípica. Well, about Hípica We have lots of things now. This semester, many large units, and we have recently opened a unit with small units, and our expectation is to have new launches at the beginning of next year. Our expectation is to launch in the first half of the year.
There are units that have been very well sold. The best one, 85 sq m , and we have more units like that. Our idea strategy is to focus on those launches next year. In this manner, we are always active in projects such as big as those. It's not a sprint, but it's a marathon. We're selling and selling and selling all the time, as there are new things, and little by little, we can always have novelties. We want to get the unit that we think that will be very high demand. Then you can attract more sales for the project as a whole.
Our next question comes from Herman Lee from Bradesco BBI.
Good morning, everyone. Thank you very much for taking my questions. First, could you give us a color update about the demand in June and behavior in sales after the closing of the quarter, is it consistent, or do you feel any slowdown? Do you see any more aggressiveness in prices in terms of mid and high income projects?
Actually, July has been a very good month for us. The fact is that July was a very good month. We have sold our inventories very well. Hípica because we sold very well. Now, if you ask, do we feel the competition lowering prices? Well, yes. The market is more difficult. We are not selling as we would like, and some companies are lowering their prices to expedite sales. Of course, this affects the market as a whole, and no one likes having competitors. But at the end of the day, if you have special projects, you end up assuring it. So for Hípica people say, Well, the competition is cheaper.
Well, there is no competition here. We have nothing to do with them." But yes, we have seen the market practicing slightly lower prices.
Thank you very much, Dida.
Our next question comes from Rafael Rehder , from Safra.
Good morning. How are you? I have two points more focusing on the competition. First, about sales. Do you see any difference in demand according to type of product, footage? I think that the market is difficult as a whole, but do you find it more difficult to sell larger units, or whether it's easier to sell smaller units. Is there any distinction between the projects that you see on demand? What about plots of land? Do you see any easier impact in mid and high income segments where the prices are going down with better terms to pay?
For Minha Casa, Minha Vida, we see an increasingly more difficult environment. We have been noticing that the competition is having difficulties to buy good plots of land for the low income. In terms of footage, that's not what determines. It's not footage. It's whether it sells or not. We have launched a project with large footage, 150 sq m , and we sold 100% in one week. There are some projects with smaller units that take longer to sell. I think that the main thing is the audience. We see that very, very high income, lots of money.
They're still buying much more consistent. Minha Casa, Minha Vida is doing very well, so the very low income, but the middle is what suffers the most. They feel the financial difficulties. Sometimes they can't keep up with the prices, more difficulties with the transfer. It's not directly related to size. There are mid to high size projects. We sold everything, all footage. We sold everything that we expected. It's more related to the audience than to the site. I was talking to Cyrela the other day.
We see that the demand for plots of land has gone way down, except for the very special. We can find the competition going after plots of land. Prices never go down, but they stop going up, which is good news for us. Really, we've seen the demand for high-income plots of land has gone way down. In the past, when we talk to the owners of high-income plots of land, they would have 10 proposals. Now they have a fewer, so they have offers. Today, to get a plot of land for Minha Casa, Minha Vida, to the low income, you really need to go after to work intensely to find good land because the market is very competitive.
There are always opportunity. There will always be. You need to have patience and to be cautious to go after good businesses, not be desperate to buy and buy just anything.
Well, thank you very much.
As a reminder, if you want to ask a question, please click on the Q&A icon at the bottom of your screen and type your question. If you want to ask your questions using the microphone, just click on the raise hand button. The next question comes from Gustavo Fabris from BTG.
Hello, good morning. I have two questions. The first one is about the cancellations. What kinds of alternatives have you been studying internally to reduce the level of cancellations or to facilitate the resale once there has been a cancellation? What about the margin for sales of inventory? We saw a slightly higher impact to give liquidity. The margin is very much influenced by new launches. How do you see this in the second half of the year? Because as you said, the market is difficult, especially to sell inventory units of ready-to-sell units.
About cancellations. I couldn't fully hear your question, and if I don't fully answer it, please let me know. We try to meet the needs of customers. When we see they have difficulties trying to renegotiate the installment that maybe they are not managing to pay the full amount, we try to dilute, and we also try to downgrade. If we see that that unit is too difficult, we try to offer other ones to keep them in the portfolio. It's not something very new. It's what we've always done. We had higher cancellations in the first half of the year.
I don't know whether this is recurrent. Let's see what's going to happen in the future. It might be a one-off, but we need to monitor it closely so that it will not increase. At the end, we can resell the units. Sometimes they have higher liquidity that go back to our inventory, and sales are excited because there were customers that wanted to buy, and that's why we can sell them quickly. 40%, 45% of the canceled units we could sell, and we can keep on selling. About the margins of the inventory. The finished inventory, we don't want to leave it. We pay a lot.
We pay tax and administration fees. There is always a trade-off. We need to think with it worthwhile giving the discount, holding it. Would it make it more impossible thinking of the CDI? We analyze proposal by proposal to see whether the discount that the customer is suggesting to try and give up our inventory is good. Have I answered your question?
Yes, you have. Very good. Thank you very much.
Once again, if you want to ask a question, please click on the Q&A icon at the bottom of your screen and type your question. Our question- and- answer session has now ended. I would like to give the floor to Dida Horn for his closing remarks.
Thank you, everybody, once again for your attendance. I would like to thank you very much for your trust and to say that if you have any questions or any needs, please just get in touch with us. We are very much interested in being close to everybody and to answer any questions you may have. Thank you all very much, and have a very nice day.
Live conference call has now ended. Thank you so much for your presence, and have a good day.