Good morning, ladies and gentlemen. Welcome to Lavvi's conference call to announce the results of the first quarter of 2025. The presentation and comments about the results are going to be presented by Ralph Horn, CEO, Sandra Attie CFO, and Maria Luiza dos Anjos Oliveira, IR Manager. This call will be presented in Portuguese with simultaneous translation into English. To change the audio, you can press the globe icon on the lower right side of your Zoom screen, and then choose Portuguese or your preferred language. This conference call is being recorded and will be available at the company's investor relations website, www.lavvi.com.br, as well as the slide deck that you're seeing. We inform that all participants will be connected in listen-only mode during the company's presentation. Then we are going to start the questions and answer session when further instructions will be provided.
Before proceeding, we would like to take the opportunity to say that forward-looking statements are based on beliefs and assumptions of Lavvi's management and are based on information currently available to the company. Forward-looking statements involve risks, uncertainties, and assumptions because they relate to future events and therefore depend on circumstances that may or may not occur in the future. Investors, analysts, and journalists should understand that events related to the macroeconomic scenario, the industry conditions and other operating factors may lead the results to be materially different from those expressed in such forward-looking statements. Now, we are going to start our conference call, giving the floor to Mr. Ralph Horn. Please, Mr. Horn, you may start.
Good morning, everyone. First of all, I would like to thank you for your presence here today. It's an honor to have you with us at this conference to talk about Lavvi's results for the first quarter of 2025. We are happy with the company's performance at beginning of the year. Although we had smaller launches, we had a good inventory sales performance.
I would like to highlight that despite a slight operational slowdown this quarter, our accounting results continue at a strong pace. In terms of cash, we ended the quarter with a cash position of BRL 2.5 million net cash, and as expected, the company burned cash in the quarter to buy land. Even so, we announced the payment of minimum dividends approved by the board in the amount of BRL 21 million to be paid in May. Soon, we will have the launch of Soleil and Le Six, and overall, there will be approximately BRL 1.2 billion PSV, both 100% Lavvi.
We're optimistic about our products, but we know that speeds will not be as strong as in 2024. Due to a unit ticket and the raise in interest rates, customers are more careful, are taking care in their conditions. Thank you so much. Now I'm going to give the floor to Sandra to talk about the operational results.
Good morning, everyone. As Ralph said, we have had a quarter with smaller launches. First, the second phase of Marajoara closing, the second project of Novvo with 61% sold. On slide six, we launched the Aura Pacaembu Studios in partnership with Cyrela with 52% sold until March, thereby totaling BRL 200 million sold. So in Marajoara, we launched the second phase, but we are booking 100% of the project this quarter. On slide seven, we see launches and sales.
Despite fewer launches, looking into the last 12 months, we grew 3% in Lavvi's percentage and 21% in sales, thereby keeping our 60% SoS. It was strong in terms of inventory sales, even though this quarter is slower because of the summer vacation and Carnival. Skipping to slide number nine, inventory dropped 3% in our share, showing that it is at a healthy level. 60% is related to launches since 2024. We have a low ready-to-sell inventory accounting to only 2.6%. In the scenario of scarce funding and high interest rates, some products might be slightly more challenging, but overall, we are able to solve well. I am sorry. On slide 10, this quarter, we had the approval of the license of Wonder Ipiranga, and 72% of the units have already been fully transferred or settled.
Sales advanced well in the last year, and today we only have 7.5 units in inventory. Lastly, we would like to present our land bank. At the end of the quarter, we had in cash a land or property in Itaim, a noble area, very few land available. We closed with BRL 5.6 billion in terms of our share. We are still looking at real estate properties to resume our launches. Now I am going to give it over to Malu to talk about financial results.
Thank you, Sandra. Good morning. Now starting on slide 13, Lavvi's first quarter financial results show net revenue grew 17% when compared to the previous year. [Non-English content] The interest adjusted gross margin was 39.3% in the quarter and increased of more than 2 percentage points year-over-year. Net income reached BRL 87 million, with a net margin and ROE of 26%. Looking into future revenues, our backlog is BRL 2.4 billion with a gross margin of 36%.
We had a burn of BRL 47 million in cash, and if we disregard land purchase, we would have generated BRL 135 million in cash. Now moving to slide 14, our revenue is BRL 335 million on the quarter, and we are reaching a new record for the company with BRL 1.2 billion in the last 12 months. The margin for the quarter, ex-interest, was 39.3%, impacted by the accounting of the first and second phases of the Novvo Marajoara project, whose margin was above our REF. The adjusted margin for the last 12 months was flat compared to the previous year. Our investment income is still positive. The drop in the last 12 months is due to the impact of the recognition of interest arising from the two corporate CRI issuances taken by the company in 2024.
Our administrative expenses, despite the percentage increase compared to the previous quarter, remain stable in relation to the revenue when compared to the last 12 months. Commercial expenses this quarter include launches that will come in future quarters. They went to 8.5% of our revenue. Finally, net income was BRL 87 million with a net margin of 26% and a new record reaching BRL 359 million in the last 12 months. On the next slide 15, you can see a vision comparing not just to 2024, but since our IPO. Here you can see what I said in previous slides about the company's record in terms of revenue and profit recognition. Now on slide 16, you can see ROE 26%, 1 point above Q4 2024 and 4 points above 1Q 2024. On slide 17, on the last column, you can see backlog revenue totaling BRL 2.4 billion.
The result of sales already made that will be booked in the results over the next few years according to the evolution of construction. Considering a margin of 36%, it will generate to the company approximately BRL 860 million gross profit in the future. Although Novvo Marajoara impacted the current margin, the positive impact of the REF was up only 0.5% b ecause of PSV volume. Now on slide 16, we closed the period with BRL 2.5 million of net cash. Our net debt to equity ratio of -0.1%, which indicates that the company has more cash than debts. The company burned BRL 47 million cash, especially because of the purchase of the property in the district of Itaim, mentioned by Sandra in the land bank. Excluding investments in that, we would have generated BRL 135 million in cash. To conclude, this is our last slide.
On Tuesday, BRL 20.6 million were approved in dividends equivalent to the minimum mandatory of the profits for the quarter, which will be paid out to our shareholders on May 26th. Finally, we have BRL 725 million in terms of amount that paid out to shareholders since 2021. Thank you very much for your participation. Now we are open for questions.
Now we are going to start our questions and answer session. If you want to ask a question, please press or please click on the Q&A icon and type your question. If you want to ask your questions in the microphone, please click on the Raise Hand icon. Our first question comes from Elvis Credendio from BTG.
Good morning, everyone. I have two questions. First, about the gross margin. You highlighted it was slightly higher this quarter because of Novvo Marajoara. So what was the margin of these projects exactly? It was above the REF and the feasibility of projects under the Novvo brand. Do you see higher gross margins, even if it's more of a one-off effect of this project? Question number two is to understand how you see the size of the Novvo operation. Are you more excited with this segment, and which are going to be the challenges that you see to grow and deliver profitability? That's it. Thank you so much.
Good morning, Elvis. I'm going to first answer about the gross margin. As the revenue of the quarter was smaller than in previous quarters, the booking of Novvo Marajoara could drive up our margin. There are a few points above our REF margin and Novvo products, Barra Funda and M arajoara, are above our REF margin. About Novvo operation, Ralph is going to answer this.
Hello, Elvis. How are you? Elvis, how are you?
We are very happy with the results of the operation, with the results of our Novvo operation. We have another two plots already reserved. Yesterday, we closed another one. We have three plots of land. We are very happy, even though SFH funding is slightly more scarce. We might get to 30% of the company with Novvo. Let's see how things evolve. We are going to surf the wave that is good. The two things that we did sold very well. We're very happy with this operation. We are gaining experience. We're almost delivering construction. It's very good to have in-home production, because we go through a first cycle. In short, Novvo is going to account for almost 30% of the company. Thank you.
Thank you, Ralph and Malu.
Our next question comes from Ana Júlia Zerkowski from UBS.
Hello everyone. Good morning. Thank you for the space. We would like to understand better the beginning of the second quarter. Could you tell us a little bit about the operational performance of April? What is your feeling for May? What about launches and performance of sales of the launches? A second question, thinking of cancellations, and you said that you are seeing this in the second quarter, what is the level expected for the year in line of Q1 or more in line with the last 12 months?
Ana Júlia, just a minute. Ralph is down. He's going to answer about the operation in Q2. About cancellations. In Q1, once we think about Novvo, we have many more units. Half of the units that we reported as cancellations in Q1 come from Novvo.
Customers that paid the first installment and until the transfer, they ended up giving up. "No, I thought better. I have a problem," this or that, and they give up. That's why it had a higher impact in terms of number of units. What we did not have, we delivered Ipiranga, and this is good news. The number of cancellations did not come from the Ipiranga project. This is something that we monitor very closely and what would be really scary is that to get to a project, we can't transfer any customers and everything drops. Only three have been canceled. Six were refused, but it's a very small number as compared to 576 units that it has. I think that we are confident. We are not worried about that right now.
Apart from Novvo, we've always had about 11 or 12 units canceled per month. When you see the detail, each one in one project, the other in another one, nothing is concentrated in a single project, and this is how it's going to continue. About the operations in April, Ralph is going to talk about that.
We launched Soleil. We are going to book it. We have sold 20% of it. Customers are thinking more about buying. They're negotiating with us. They think very much before buying. Now we have the Cubatão, an BRL 800 million launch. Very good location, but it's much busier. We are feeling demand, and this is something that people really want. They don't think so much because they really want to live there.
I think that we are going to have better liquidity there, and we have a convention with agents, and there are many agents who want to work with that project. We're still selling every month. Each case is one case. When we need to slow down, we do, and we want liquidity. At high-interest rates, we want liquidity to try and sell inventory, and it's not always so easy.
Thank you so much. Have a good day.
Our next question comes from Ruan Argenton from XP.
Hello. Good morning, everyone. Thank you for the space. I have two questions to ask. The first one is about land. If we look at last year, last year was quite relevant in terms of purchase of land, and you have had significant acquisitions this quarter. I would like to understand your mindset for the year. Do you think you're going to accelerate the purchase of land to recover, to replenish your inventory?
The other question is related to how careful customers are today. How do you measure this carefulness? How much could that influence your pace of launches in the future? If you see that customers are more careful, you would rethink the launches planned for the second half of the year, or are you still not worried about that? Thank you.
[Non-English content] Hello everyone. How are you? Ruan, I am going to go for your last observation. Customers are more careful because interest rates are very careful. You put BRL 1 million in the bank, and at the end of the year, you have BRL 1.15 million. You are still looking for land because we need to replenish, but now we want to buy cheaper than last year because of high interest rates. Today we want more swap than cash because cash yields a lot. We have a team to do that, and our team is very strong, and we are trying to contract even stronger people. We are always looking. One good business that I close, it pays off, and everything takes long. We never stop.
Today, we want to pay less than we paid last year because today we think that the Speed of Sales can be lower than last year, but there is still demand. My Home , My Life , same speed. We are going after. We do not really feel the competition in the medium and high. From My Home , My Life , not too much competition. There are few players in this segment, and we are happy about that.
[Non-English content]
Great. Thank you.
Our next question comes from Mariângela de Castro from Itaú BBA.
Good morning, everyone. Thank you for taking my question. I have two questions to ask. The first is about revenue. Your revenue is slightly lower this quarter because of fewer launches because of Soleil. Is this going to evolve along the year? You offset a lower revenue this first quarter. Is this going to be the same in future quarters, or is the speed going to pick up in future quarters now to make up for the slower pace in Q1? Is the main term of POC. I want to follow up Elvis' question about margin. We are seeing the margins of Novvo much higher than the medium and high-end products.
Was this something you expected, or could you say that My Home, My Life projects are delivering margins that are above expected, above you had seen in the feasibility studies. How are you dealing with that? Thank you.
Mariângela, this is Malu. The revenue is because of quarters. We thought that we would launch Soleil in Q1. Now it has been left to Q2 because of the suspensive cause, and as it happened to Novvo Marajoara, that we displaced revenue, same thing will happen for Soleil. Now about gross margin. Our REF margin is a basket of land that we bought in the past that our land over PSV was higher, but now it is smaller. It is not the Novvo. It is well above our REF. Our launches are also performing above REF. We have a basket of products in REF that on average is 36%.
We have been seeing the recent launches such as Heaven, Novvo Barra Funda, Novvo Marajoara. They are above the REF. It is not just for Novvo, it is each product. But today, as we have a basket with several products and negotiations of land and so on.
Thank you so much, Malu. This is very clear. Another question. Without considering your REF margin, thinking of feasibility for Novvo and what you are booking now, do you see My Home, My Life products with a better margin, a margin that is better than expected because you have more cost savings? Or was it in line with the plans, with your budget and what you expected?
Hi. For Marajoara, it was not lower cost. We increased prices. Because the land is at very nice avenue and this affected prices a little bit. Margins are better because of prices, not because of a lower cost.
It is clear, Ralph. Thank you so much.
Our next question comes from Rafael Rehder from Safra.
Good morning, everyone. Thank you for taking my question. I have two questions to ask. The first one is, what is your expectation of deliveries for the year, and what is the LTV for this portfolio? How do you see cash generation? This is more. Do you see any difference in your customer mix this year? Maybe fewer sales to investors because there is a higher interest rate. But do you see any differences compared to last year?
[Non-English content]
Hello, Rafael. This is Sandra answering your question about sales to investors. Usually, we sell more studios to investors. Considering the new master plan, we do not need to make so many studios. In fact, we have fewer investors in our portfolio. About deliveries for the year, we have approximately 2,000 units to deliver this year. We have had the permit for 570 units in Ipiranga. We have 2,000 overall. Cash generation is impacted by that. As we said before this year, we were expecting zero cash generation, flat. We improved a lot in terms of what we said last year that we were going to burn 2024 and 2025. Now we will be able to have zero. Neither generating, neither burning.
About LTV, all the projects in our portfolio, everything that we have today have an average LTV of 38%-40%, which benefits us at the time of transfers, when we want to transfer these customers, despite the challenge of high interest rates.
[Non-English content]
Oh, that is it. Thank you so much, Sandra. Thank you.
[Non-English content] As a reminder, if you want to ask a question, please click on the Q&A icon that you can see at the bottom menu of your screen. Or you can ask your questions on the microphone, clicking on the raise hand button. We have a question in writing from Rafael Aguiar. Could you give us a little bit more detail about the land in the district of Itaim? Where is it located, when is the project going to be launched, and what level is it going to be?
Hello, Rafael. The land is on Clodomiro, close to Google. A building almost 4,000 sq m. It took us one year to negotiate it. We want to have high income with a brand. It is almost 100% decided, and there is something very nice to come. More details in the future because we have not made any final decisions yet.
Thank you. [Non-English content] . Please wait while we collect questions. [Non-English content] Our questions and answers session has now ended. I would like to turn the conference over to Mr. Ralph Horn for his closing remarks.
I would like to thank everyone. We are very driven and motivated for a more challenging year as it always is. Thank you very much for believing in us.
The conference call has now ended. We thank you for your participation, and we wish you a very good day.