Good morning, everyone. Welcome to Lavvi's earnings call to announce the results of the second quarter of 2025. The slides deck and comments on the results will be presented by Ralph Horn, CEO, Sandra Attie, CFO, and Vitor Charak, Investor Relations Analyst. The simultaneous translation tool is available on the platform. To access the interpretation, just click on the interpretation icon at the bottom of your Zoom screen and choose your preferred language. This conference call is being recorded and will be available in the company's investor relations website, www.ri.lavvi.com.br. Just as the slide deck that we are going to use. Please be advised that all participants will be in listen-only mode during the company's presentation. 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 that forward-looking statements are based on the beliefs and assumptions of Lavvi's management and on information currently available to the company. Forward-looking statements may involve risks and uncertainties as they relate to future events, and therefore depend on circumstances that may or may not occur. Investors, analysts, and journalists should consider that events related to the macroeconomic environment, industry, and other factors could cause results to differ materially from those expressed in such forward-looking statements. Now, we are going to start the presentation by giving the floor to . Please, Mr. Horn, you may start.
Good morning. I would like to thank you all for being here. It's an honor to have you with us in this conference to announce the results of the second quarter of 2025 of Lavvi.
We are very excited about Lavvi's performance in the second quarter. First, we launched Soleil in Chácara Klabin, which came at a pace a little below our average. Then we launched Le Six, total success with almost BRL 1 billion PSV, and we sold almost 50% in a quarter. We continue to grow at a very good pace in terms of cash land in the quarter. For the first time, with our net debt position reaching BRL 49 million or 2.7% of the shareholders' equity. In the excellent bases, we generated BRL 111 million cash in the second quarter. So we remain optimistic about the year of 2025 with great products for the second half of the year. But we know that the market is not easy. Thus, I emphasize again that we will evaluate launches quarter by quarter with great caution to keep our operations healthy.
Thank you very much, all shareholders. Now I'll give the floor to Sandra to talk about the operating results.
Good morning, everyone. Can you hear me? So once again, we had a very good quarter. On slide number five, you can see the launch of Soleil Boca do Lobo Klabin. We have BRL 366 million PSV with studios and smaller. Our customers are not in a hurry. And please stand by because for a minute we lost the audio. About 264 sq m . As the name suggests, this is going to be the first project with six-star services. With concierge, messenger, personal trainer, dry wash, and car wash, everything to make the lives of our customers easier. The tower of the studio has been fully sold and in consolidated, we have 48% of the PSV before the end of the quarter. Today, we have 55% sales.
With these two launches, we ended the quarter with BRL 1.3 billion launched or BRL 1.2 billion in Lavvi's percentage, 30% above Q2 2024. In the quarter, we are 11% below our percentage. On the side of sales, we ended BRL 780 million sold in a quarter or BRL 610 million in terms of our share, 8% above Q2 2024, despite the more challenging scenario. 55% in the last 12 months. We are seeing an increase in the number of cancellations, but we would like to highlight that half of them are related to the Minha Casa, Minha Vida project, the low-income housing project sponsored by the Government of Brazil. We are moving to slide number eight, where you can see the speed of sales. In terms of inventory, this gives us time to sell before delivery.
We continue with a low inventory of finished units which is just 1.7% of our PSV. As we said before, we acquired five plots of land in the first half, two high standard in Moema and two Minha Casa, Minha Vida, the low income, in two other regions in the city of São Paulo. This leaves us with BRL 9.5 billion land bank. This PSV is going to be allocated to the Minha Casa, Minha Vida, which has provided a great return for our operations. The land has been acquired 20% by swap and 80% in cash, and this represents 22% of the PSV. I would like to give the floor to Vitor to share with you the financial highlights.
Thank you, Sandra. Good morning, everyone. I start on slide 12 with the financial highlights of the second quarter.
The net revenue is up 63% year-on-year, driven by the launch of Le Six. In the half, we grew 41% year-on-year. The adjusted gross margin is 36.3% in the quarter, and 37.5% year to date, up by 4.5 and 31 percentage points year-on-year respectively. With that, the net income reached BRL 119 million in the second quarter, and BRL 205 million in the first half of the year. ROE is 28%. Our backlog revenue grew 38% compared to the same period in the previous year. Cash burn in the period was BRL 31 million. Year to date, we burned BRL 78 million in cash, and we would have generated BRL 246 million cash generation at plan. Finally, we ended the quarter with a net debt of BRL 49 million. In addition to these results on slide 13, on the right-hand side, you can see the financial results.
Despite variations, when we break down the revenue and expenses year-on-year, the financial result is flat because of more robust gross cash coming from the quarter and from sales with shorter times. On the bottom of the slide, starting in G&A, as a share of the revenue, there has been a reduction in the quarter. Likewise, sales expenses also went down in terms of share of the revenue year-on-year. This reflects the launches in the quarter. On slide number 14, you can see a consistent growth of the revenue and net profit if we see the whole year with margins above 20% since our IPO. On slide 15, the ROE is 28%, demonstrating great resilience. On slide number 16, you can see backlog revenue totaling BRL 2.5 billion as a result of sales that will be booked into our results over the next few years.
The 36.4% margin means approximately BRL 800 million of gross profits to come. On slide 17, you can see the period for the first time since the IPO with a net debt of BRL 49 million, with a net debt over PL of 2.7%. The company burned BRL 31 million cash, especially because of the purchase of the land that Sandra mentioned. Looking in ex-land vision, we would have generated BRL 111 million or BRL 246 million in the first half of the year. In closing, this is our last slide. Last Tuesday, the dividends were approved, amounting to a total of BRL 282 million, which is the minimum mandatory for the quarter, and they will be paid out to our shareholders still this month on the 25th August . To finalize, we have BRL 754 million in value generated for Lavvi's shareholders.
Thank you very much for your attendance, and now we are open for questions.
We are going to start our questions and answer session. If you want to ask a question, please click on the Q&A icon that is on the bottom of your screen and type your question. If you want to ask questions on the microphone, please click on Raise Hand button. The first question comes from Gustavo Cambauva from BTG Pactual. Please, Mr. Gustavo.
I have two questions to ask you. The first one is about the launch pipeline that you see ahead of you. How do you see the macro scenario? Do you have any expectation in terms of the volume of launches? Also, if you could explain a little about the Hípica project and what you are expecting. The second question is about acquisitions for your land bank.
Can you give us an overview? We have the Minha Casa, Minha Vida projects and also the high income. What do you see in terms of lands? Where is there less competition, more opportunities? Are you placing greater focus on low income or medium and high income? In terms of land, what seems to be the most appealing to you right now? Thank you very much.
Good morning, Gustavo. How are you? Gustavo, in the second half, we have almost closed a partnership with a builder in the city of São Caetano. We are going to launch a project there with the PSV of BRL 600 million . It is almost done. We will be launching it very shortly. We have two Minha Casa, Minha Vida. One has already been approved. We have started launching, and the other one is in approval phase.
Also, we are going to join Cyrela in a major project, a land with BRL 600 million PSV, and we have 50%. There was another launch this year whose approval delayed. We had some problems. Thank God they are past, they are behind us, that might make it impossible. Now it is normal, going through the regular flow of approval, and hopefully we will be launching it on March 26th. As to the land bank, we are always looking for land. As we are not desperate to buy Minha Casa, Minha Vida, we are trying to identify good opportunities. It is not too difficult, medium and high, even though there is much less competition. As we like large plots of land, the difficult thing is to find large plots of land. But we are working hard as it takes a while.
We are always looking, and there are a few things on the pipeline for us to close and we hope we will close. Not too much competition, what we will get in our race or is Cyrela, because they are much more active in the market.
Thank you, Ralph. Have a good day.
Our next question comes from Herman Lee from Bradesco BBI. Mr. Lee, please.
Good morning, everyone. Thank you very much for taking my question. We just have one question. Selic is at 15%, and we are seeing a negative impact in access to credit. How does Lavvi assess the access to credit by your customers?
Hi, Herman. Good morning. About individuals and companies. Yes, we have had access to corporate rates, but it is good for us. We can contract. We always contract.
One good thing, as we have a very high SOS, this line is kind of on standby because then I can pay the construction with the revenue from customers. The faster we sell in a reduced flow, the more customers are buying with shorter time spans. We can access less this line that is expensive today. I can contract loans, but thank God if we sell well right from the beginning, as we have been seeing, we do not need to use it. On the side of companies, this rate is very high, but as we usually say, our portfolio is very healthy. On average, we have 37%. When we get to the keys, those customers, just with 37%, despite high interest rates, they can transfer and they can still pay the installments. We are not having much problem with that.
This year we launched Soleil and Le Six, and we are always monitoring LTV to see how it goes. It is 34% of the LTV, so we are okay with that.
Thank you very much, Sandra and Ralph.
Our next question comes from Ana Júlia Zerkowski from UBS. Please, Ms. Zerkowski, you may ask your question.
Good morning. I have a question about the beginning of the second half of the year. How was your performance in July? What is your operational performance? Do you see a slowdown that might be reflected in a lower speed of sales? Also the sales performance of Le Six and Soleil. A second question about gross margin. What level should we consider is normal for Lavvi from now on? Should we expect more projects for Novvo? What is it going to be like? Thank you so much.
Hello, Ana Júlia.
How are you? July was a very good month for us. We sold BRL 150 million overall. Half of that was between Le Six and Soleil. I think that we are at 30%. We sold two in June and two in July. We sold one in August. Now it is kind of slowed down. As this is a very good product, we are not so worried about it because we are the only one with two units per floor. It is a high building, so we are selling it again. It did very well. It is reaching about 14 units. You asked July Le Six and Soleil and margin. Sandra is going to answer.
About margin, we hope to follow as we did last year, slightly above. It is going to depend on the product mix that we sell. Our launches are coming with a margin that is above our REF, but some are below.
I would say that I believe that it's going to be slightly above last year's margin. It's more upwards than downwards.
Thank you very much for your answers. Have a good day.
Our next question comes from Mr. Ruan Argenton from XP.
Hello. Thank you very much for the space. Good morning. My question is more related to labor. What is availability of labor, cost of labor that you have? We know that this is structural in the city of São Paulo. Have you seen any change in these dynamics in the last few months? The second question is more about dividend. There is a little bit of the vision that you are really accelerating in terms of land bank and using the opportunity to buy these other plots of land. What about dividends? What's your expectation in terms of extraordinary payment of dividends?
Hello, Ruan. How are you? As to labor, in fact, we are having a shortage of labor in the market. This is a serious problem, and we don't think this is going to be solved so quickly. We are delaying the new launches because of that. Constructions that would be ready in 48 months, now we're thinking in terms of 50 or 52 months because this causes delays. For those that are going on, we are going as fast as possible. There's just one that we are going to be at six months, the other one, two, three months. The delay is not so bad, but we're really worrying about that matter. For the future ones, we are doing what we need to do. For Minha Casa, Minha Vida, it takes up a lot of labor and will continue to do so.
We have a structure of concrete wells that takes less labor, and we try to find solutions. The main solution that we are using now is to delay deliveries, launches, and deliveries.
Hello, Ruan. Good morning. About dividends. We continue every quarter at the minimum, but now we are assessing, but we don't know about date, volume, or anything. This is very initial to pay out dividends to avoid taxing if it happens next year. This is something that we are talking about, but it's still very much in the beginning. We don't have much more information to give you.
Thank you, Ralph, Sandra. Good morning.
Our next question comes from Mariângela Castro from Itaú BBA. Please, Mariângela.
Good morning. Thank you for the presentation. I have two questions. First, about the sales of studios. You said that Le Six had a studio tower that was consolidated. You said in the past that this is not always the best decision for the company. How are you dealing with this in this project? What is your LTV without considering studios? I think that you are considering the funds that pay up front. What is your portfolio like without considering sales? The second question, why not range four of Minha Casa, Minha Vida? You are in range three, but there is range four.
Good morning. On studio sales, we remain very careful. Although we had two major successes in Beneficência Portuguesa and Le Six because they are just next to the hospital.
It is impossible not to sell it. It is very liquid. Everyone wants to buy something right adjacent to the hospital. In Beneficência Portuguesa, between studios and small units, more than 600 units. If it is close to the hospital, we are not so afraid. If we buy a plot of land just for studios at a location that is not too attractive, we do not buy land just to buy it. The easiest way for us to make money is to build a studio tower because there is no underground. You do not need to build the garage. Both Le Six where the PSV was 11.5% of the PSV, whereas it represented 20% in the other one. We think that the risk is low, even if it were not quite close to the hospital. Sometimes we lower prices.
Range four, about your second question, the range four, we are keeping an eye on it. We are talking to companies. We are seeing how they are using that. Of course, we are going to make the most that we can from range four with interest rates slightly higher. Now I am going to give the floor to Sandra.
Hello, Mariângela . Good morning. I said 37% LTV in our portfolio. Taking out studio towers that we sold entirely to the fund, this number goes down to 30%. There is one project, for example, that is about 67% LTV, and when we take out, it goes down to 5%. It is atypical. It is a project that we saw too many Chinese, and they advanced payments a lot, and we only have 5%. But the average is 30% taking out these studio towers that I mentioned to you.
Very clear. Just a quick follow-up.
Why did you sell everything to a fund in Le Six instead of selling each unit individually?
Our Le Six, was not to a fund. It was pulverized. Precisely what you said.
You know it all, Mariângela .
As a reminder, if you want to ask a question, please click on the Q&A icon at the bottom of your Zoom screen and type your question. If you want to ask your questions on the microphone, please click on Raise Hand. Please wait while we collect questions. Our questions and answer session has now ended. We are going to give the floor to Mr. Ralph Horn for his closing remarks.
Well, thank you very much for being with us. We remain very motivated. Everything is going very well.
We are always worried about Selic, and we feel that our customers need to think, call the manager if they want to buy. Well, you know the story. We are going to do our best to try and make products that bank managers cannot block our sales. Thank you all very much, and we will hopefully continue to grow. Kind regards.
The conference call has now ended. Thank you very much for your participation, and have a good afternoon. Thank you.