Good afternoon, ladies and gentlemen, and thanks for waiting. Welcome to the conference call of LPS Brasil to discuss the results regarding the third quarter, 2020. Today with us are Marcos Lopes, CEO, Francisco Lopes Neto, VP, Beatriz Machert, IR Officer, and Robson Paim, CFO. We would like to inform you that this event is being recorded and that all participants are going to be in listen-only mode during LPS Brasil's presentation. We'll then start the Q&A session when further instructions will be provided. Should any of you need assistance during the conference call, please reach the operator by pressing star zero. This event is also being simultaneously webcast on the company's IR address, www.lopes.com.br/ri. In there, you will also find the presentation available. You will be able to control the slides. The replay of this event will be available soon after its closing.
As a reminder, all webcast participants can ask questions on LPS website to be answered after the end of this conference call. Before moving on, I would like to let you know that any statements made during this conference call relative to LPS business outlooks, projections, operating and financial goals, are based on the beliefs and assumptions of the company management. Forward-looking statements are not guarantee of performance. They involve risk, uncertainties, and assumptions, since they refer to future events and therefore depend on circumstances that may or may not occur. Investors and analysts should understand that general conditions, industry conditions, and other operating factors may affect the company's future results, and again, lead to results that will materially differ from those in such forward-looking statements. First, Mr. Marcos Lopes will present the operational results of the company.
Then Mr. Francisco Lopes will present the results of CrediPronto, and finally, Ms. Beatriz Machert will talk about the financial results. We'll then open for the Q&A session. We would like to turn the call to Mr. Marcos Lopes. Please, Mr. Lopes, you may go on.
Good afternoon, everyone. I would like to thank you for attending one more conference call of LPS Brasil, in which we will present the earnings of our third quarter, 2020. Today with us in this presentation, we have our VP, Francisco Lopes Neto, our IR Officer, Beatriz Machert , and our Financial Director, Robson Paim. I will start by highlighting that along the third quarter, we saw a gradual recovery of the real estate market, and we accomplished solid results in our operations vis-a-vis the challenging scenario of the second Q. Transactions in our own operations had growth with the pickup of launches.
Our franchise segment continued to grow, and CrediPronto kept high levels, showing excellent results once again. In this period, we kept our commitment with the company's digital transformation and had substantial improvements on our website movement and lead generation. For the fourth quarter, we are going to have the delivery of the new CRM that will be relevant to improve the lead management of brokers and franchises expanding business opportunities. After my initial considerations, we can move on to the presentation now, starting on slide five with the highlights of 3Q 2020. On slide number five, you see that our franchises had excellent results in the quarter, with growth of 44% on transactions compared to the third quarter 2019, reaching a record GTV of BRL 1.2 billion. CrediPronto mortgage volume added up to BRL 861 million in the quarter.
Another record with mortgage volumes, with an increase of 107% compared to the same period last year. Still about CrediPronto, we recognized BRL 15.9 million of results from the operation in this period regarding the profit sharing of June, July, and August. As a result of the good performance of all our business fronts, the company's EBITDA added up to BRL 26.1 million. We closed the quarter with an EBITDA margin of 52%. Likewise, the controller's net income before IFRS totaled BRL 10.5 million, 232% higher the amount recorded in the same period last year. All the initiatives that were directly to digital had significant growth, with a growth in 160% in the leads coming from Lopes website year- on-y ear. In the same period, we also had an increase of the relevance of organic leads by 1,700 basis points.
Remember, organic leads are spontaneous without the need for investment, which means that both Lopes brand and its website are more relevant on online searches. Moving on to slide number seven, I will talk about the launches for the third quarter 2020. On the first chart you see to the left of the screen, we can see that the volume launched in the quarter was approximately BRL 3 billion, with the launch of 42 projects. That represents a volume 15% higher the same period last year, and almost a sevenfold increase than the second quarter 2020, when many launches were postponed to the second half of the year impacted by social distancing measures. The launches that were performed were distributed in the state of São Paulo, Fortaleza, Curitiba, and Espírito Santo. The São Paulo market accounted for 86% of the total volume launched.
In the state of São Paulo, launches in the capital accounted for 77% of the volume launched in the state, whereas the metropolitan region and the inland extent of São Paulo accounted for 18% and 5% of launches respectively. To your right, you have the number of projects launched in the quarters at the average price of units launched, in which we observe an increase in average ticket, both compared to last year and compared to the previous quarter. Moving on in our presentation, let's move on to slide number eight. Here, we see the results that we had in transactions. To your left, we have the company's consolidated results. That is the potential sales value of our own operations, plus the ones that come from franchises. Year- on- year, we have an increase of 18%, totaling BRL 2.4 billion in the period.
When we compare to the previous quarter, we see an improve of 109%. To your right on the charts, we see our franchise operations with an increase of 44% in the volume transacted in the period compared to the third quarter 2019, and up 114% compared to the previous quarter. I've mentioned before, but the total volume transaction by franchises in the third quarter 2020 was at record level, supported by Rede Lopes integrated system that continues to improve better results every quarter. With the flexibility of social distancing measures and the recovery of launches, we had a gradual recovery of transactions. In the end of the quarter, we had growth of 2% in the volume of transactions in our own operations compared to the same period 2019.
As for comparisons to the second quarter, the increase was 105%, showing that the primary market is recovering in the second half of the year. Moving on slide number nine, we show you the result of transactions by region as well as our geographic presence. We closed the quarter in 10 states plus the Federal District with 110 stores altogether, 18 own stores and 92 franchises. Please observe that the state of São Paulo continues to be our main market with 67% of transactions. Transactions in the south of Brazil, particularly our operations in Londrina, continue to show good results and closed the quarter with 14% of the total. Another highlight are our operations in Fortaleza and Espírito Santo with transactions of 8% and 6%, respectively. Showing again that other cities, in addition to the state of São Paulo, are picking up.
On your right, we have the breakdown of our franchise transactions. São Paulo continues to account for the largest part, 53% of the total, and Rio de Janeiro is the runner-up with 31% of the potential sales value transacted. Now, we are going to slide number 10, where we show the speed of sales over supply and over launches. Let's just start with São Paulo, the city of São Paulo. We see a relative stability in these sales over speed and 6.4% increase in sales over launches with 16.9% and 22.3% increase respectively. To your right, we have an analysis of consolidated numbers. Again, we see an increase in both sales over supply and over launches, the latter with more substantial growth. We closed with sales speed over launches at LPS Brasil was 13.2% for speed over supply and 26.4% in speed over launches.
These indicators show that the real estate market is heating up in some regions in Brazil with a good absorption of products launched recently. Still on the slide, we can see the breakdown of transactions between products that were recently launched and products that are launched more than six months ago. You see the concentration of transactions in São Paulo was greater in launches, whereas the consolidation of operations show a concentration of projects launched for more than six months ago. Remember that some regions in the country still haven't resumed launches in the second half of the year because again, supply is made up of the launches of units pre-social distancing. Well, this is what I had in terms of my first remarks.
Now we are going to go to Francisco Lopes Neto, that is going to talk about CrediPronto, and then Beatriz, our IR officer, will talk about the company's financial results. Thank you very much.
Well, thank you, Marcos. It's a pleasure to be able to present the results of CrediPronto to you. This is an operation that indeed has been positioning itself quite well in such a sensitive time in which credit has been crucial for the liquidity and advance of sales. So we have our operational results here, and we can highlight a record volume of mortgage in the quarter, + 58% of the previous quarter with BRL 861 million of new mortgages.
Compared to the same quarter last year, we had growth of 107%, as it was mentioned, which is almost a twofold increase compared to the average of private banks, as you can see in the bottom left part. Also the evolution of portfolio is very important. We know that we have prepay. Brazilians have a very long funding period, 30 years, but prepayment is something that is a given in the sector, especially when you are talking about real estate funding in Brazil. When we have new businesses and the portfolio continues to grow and generate the profits that we are attaining. The growth of our portfolio, if you go to the bottom right chart, you can see that the portfolio grew from the third quarter 2019 to the third quarter 2020, 17.6%. This growth even accelerated in the third quarter 2020.
It was an average of 4.4% per quarter, and now we went up 6.1% right now. As we mentioned, our profit sharing was BRL 15.9 million, and in addition, we have the origination revenues of BRL 7.4 million, which was also accounted for in the period. On the next slide, we see the recognition of our profit sharing in the year with BRL 39.4 million in 2020, way above the same period last year, which was BRL 14.1 million. Again, remember that in the beginning of January, we already had a level to overcome of BRL 1.8 million. Still, the comparison is quite interesting, and we can see that profit sharing is evolving. If you go to the right side of the slide, you can see the levels that we are witnessing now, about BRL 5 million, BRL 5.5 million a month.
Now, I am going to turn to Beatriz, that is going to talk about the financial results per se. Thank you very much. I wish you an excellent morning. Beatriz, that is up to you now.
Thank you, Francisco. Good afternoon, everyone. We are going to start the analysis of our financial results with slide 15 and the consolidation of our gross revenues. To your left, we have our transaction close of BRL 1.3 billion. That is multiplied by the net commission of 2.03%, goes to a gross brokerage revenue of BRL 26 million. To that, we add other revenues like the company's ROI and CrediPronto that considers profit sharing and the 21% commission. To total the gross revenues in the period of BRL 55.6 million, we also have to add the amount of BRL 3.6 million relative to the deferment of revenues in CrediPronto upfront.
On your right, we have the breakdown of commission per region with a net commission in the quarter of 2.03%, a slight drop compared to the third quarter 2019. That is explained basically for the reduction of the average ticket of transactions and the regional mix since we had a higher share in other places such as the South and the Northeast. It is worth noting that the São Paulo capital net commission remains stable. On the next slide, we have net revenues and costs and expenses in the quarter. To the left, we have total net revenues with BRL 50 million growth of 31% year-on-year. Net revenue per segment of operation, we see substantial increase in CrediPronto's share, adding revenues of commissioning and profit sharing, added up to BRL 21.2 million. Thus, CrediPronto's share increased considerably, going from 22% to 42% in the quarter.
As a consequence, transaction and franchise shares added up to 58% with BRL 29.1 million in the period. To your right, you have an overview of costs and expenses of BRL 24.1 million, it is stable year-on-year. In the quarter, we had some increases in terms of technology infrastructure that were offset by reductions in headcount and occupancy, especially because of working from home and work hours reductions. This quarter, we accounted for BRL 5.8 million in labor and civil contingencies provisions. No new lawsuits, just an update of values. If we analyze the numbers without the contingencies, we would have a reduction of 12% in our total cost and expenses, going from BRL 20.1 million to BRL 18.3 million year-on-year. Now, let us go to the next slide 17, where we compare our EBITDA and net income of the controllers in the quarter.
To the left, company EBITDA with BRL 26.1 million, margin of 52%, growth of 84% compared to last year. Especially because the increase of revenues in CrediPronto, as mentioned. To the right, we have the net income of controlling shareholders before IFRS, increase of BRL 7.3 million, getting to BRL 10.5 million with net margin of 21%. On the next slide, 18, we see the results by segment. Operationally speaking, all segments had positive contribution. BRL 5.8 million in transactions, BRL 1.8 million in franchises, BRL 18.5 million in CrediPronto. Altogether, BRL 26.1 million EBITDA, as we saw in the previous slide.
After discounting depreciation, financial results, and taxes, net income was BRL 16 million in the quarter, margin of 32%. And after we discount the minority breakdown, we get to BRL 10.5 million for the controlling shareholders. Going to slide number 19, we see the impacts of IFRS effects on our results.
The main impacts are related to quarterly reassessment of shares in the controlling shareholders. The highlight is the financial results line with negative variation of BRL 5.9 million due to variations in calls and puts. Total impacts coming from this reassessment was BRL 5.7 million. However, without any cash effect, and therefore, we recommend analyzing our numbers without this impact for you to better understand the company. On slide 20, finally, we have cash variation in the period and the total availability of the company in the end of the quarter. To the left, cash generating and operating activities, BRL 18.6 million, is strongly impacted by the good results of CrediPronto. To your right, when we added investing and financing activities, there was a cash burn of BRL 18.1 million in the quarter. Our investment activities are related to the digital project.
As Marcos mentioned, it is our priority, and funding activities has to do with the amortization of the loan from Itaú, April last year, and also minority distributions. Therefore, we closed the period with BRL 109.7 million in cash position. Added to the financial investments of BRL 30.4 million, we have an availability of BRL 140 million. A very comfortable position for the company. These were my remarks about the financial results, and now we are going to open for your questions. Thank you very much.
Ladies and gentlemen, we will now start the Q&A session. If you have a question, please press star one. To withdraw your question from the list, press star two. Our first question comes from Alex Ferraz from Itaú BBA.
Good afternoon, Marcos, Francisco, Bea. I have two questions. The first is about your transaction volume with franchises. We see very interesting results in the quarter, very much connected to interest rates and the number of opening of new stores. That was a bit stronger. In your mindset, how much do you think you can grow this business? Do you think this volume is close to recurrent? Do you think you have much more room to increase? I would just like a bit of color here. The second question is a bit broader.
Perhaps you don't have a firm answer. When you take a look at all the period of the pandemic, as we know, it's very hard to make plans. Digitally speaking, probably it was a catalyzer for many things. Have you noticed any change, any new opportunity in digital, or the initiatives that you were working on just accelerated? Can you think of the impact of any opportunity that the period brought you, digitally speaking?
Hi, Alex. This is Marcos speaking. Good morning. Thanks for your question. I'm going to start with the first. Yes, we have been trying to grow in a sustainable manner. If you see, we increased the number of franchises by about 10, and we can grow more, but we are very selective. Going from 90 to 100, that's quite easy. What is important is that our franchise is not similar to the franchise of, I don't know, just any other retail store. Here, you're talking about real estate. We have to have a good franchisee, a good broker that can sell well, but also that is knowledgeable about the real estate market, to have a group of sales that is robust. We are very selective.
The answer is yes, we are going to grow. We are working for that. Since 2015 to 2018, the real estate market retracted a lot, so we waited to move on with the project. With the stability and as things went back to normal, we resumed our pace of growth. Then, the pandemic hit, and we were a bit more conservative. We see an interest in increasing franchises, and we also see that many franchises that were already with us also matured and are performing better. This is something that is going very well with the company and should grow. As for digital during the pandemic, we really seized the moment to do lots of things that were already in our pipeline, that we had already been planning, and we advanced to the market. You have the virtual tour, the online lobby.
We had several marketing actions that were performed. What really made us happier is the increased number of hits to our portal. This has been very gratifying to see the numbers grow, and we still see a long way of growth ahead of us. We know that digital transformation is not something that has a beginning, middle, and end. It starts, it has a mid, but then it has a long way to go. We wanted to show quarter- on- quarter the results that come from this initiative. We have a new executive director that is now very much integrated to us, Joaquim Torres, with renowned reputation in the area, very much focused on the company, on the real estate market, on indicators. Now we are structuring our team to be able to meet the challenges of 2021.
Thank you very much.
Our next question comes from Gustavo Cambauva from BTG Pactual.
I would like to ask two questions. About CrediPronto, you are showing a very strong growth in portfolio, way above sales. I would like to know what you expect in terms of growing this portfolio from now on, and also spreads in terms of mortgage credit. Today we have a higher level of spread. I would like to know, in your conversations with Itaú, do you think spread is going to keep at this level for longer? Even if that could leverage the results of CrediPronto for next year. My second question is more related to the real estate market. What kind of recovery do you see in the fourth quarter, next year? To try to understand your pipeline of launches. When we talk to listed companies, they're all quite optimistic.
So, amongst your main clients, how do you see, what do you expect in terms of launches for the fourth quarter and next year?
Gustavo, good morning. This is Francisco Lopes. I'm going to start answering your questions, and then I'm going to turn to Marcos, okay? Well, I think that your question is excellent. And basically, interest rates have a direct impact on the cost of capital, of course. And so, this is something that has an influence on the spread. I believe that the evolution we can see is that the benefit of Selic was not fully enjoyed yet because we have mortgages that were generated in the past, and we are just starting to benefit from the drop in Selic. On the other hand, we have some portability issues. Previous mortgages with higher levels migrate, and then they have readjustments in terms of rates.
It is something that is very hard for us to give you a precise guidance in terms of evolution of spread for the future. What we do know is that it is favorable now to us. It's being kept at the levels that you saw. But, it will still depend on, first, the Selic rates to continue stable and what the market is going to, or how the market is going to evolve. But so far, we believe that this level that we accomplished this quarter is probably going to be kept or even grow a bit further on. What is important is that we are growing in terms of portfolio and origination. I'm going to turn to Marcos to understand the remainder of your question.
Hello, Gustavo. How are you? Good to talk to you. The question is very good and along the line with what we see in the market. We already experienced a recovery of launches. The third quarter already showed that. The fourth quarter continues to be so, and for next year, even better. We also see increasing land bank pipeline. I think Lopes is benefiting from this movement. The more money we have in the capitals market with developers, the better for the market as a whole. We, in a way, benefit with the launches. We continue to be quite optimistic, and the prospect in a scenario of low interest rates is very good for the real estate market because that is an opportunity for people to buy. Mortgage credit is going up. CrediPronto is growing even further than the mortgage market as a whole.
When we have lower, an audience that in the—l ower interest rates bring people to the market that could not afford it before. This is something that we believe is very beneficial for us to have more liquidity, more revenues for the mortgage market. Remember that the used property market is also a market that has been presenting quite good results. The scenario is quite good. That's the idea: to increase the number of launches, to increase the pipeline. Then what we have to know is exactly how the economy is going to behave for next year. I think that we are more positive than negative, more optimistic than pessimistic. I think that we have more clients coming into the market because of inclusion, because of credit, rather than an increase in unemployment that can affect us adversely.
But anyway, these are my observations, and I'm ready for any other questions.
Okay, great. This is very clear. Thank you very much.
Remember, if you want to ask a question, you just press star one. We're now closing the Q&A session. We are going to go back to the company CEO, Marcos Lopes, for his final considerations.
Well, thank you very much for attending our earnings release for the third quarter 2020. Remember that we continue to be here firm a nd strong, keeping the company healthy and maintaining the position of leadership that we have. We are very happy with the results that CrediPronto is bringing us. This was something that we worked very hard. Now we have a solid portfolio. We are growing a market that is going well, and we are growing even more than the market. Again, we continue with our commitment with digital transformation. Every day we wake up trying to do better than yesterday. Tomorrow is going to be better than today. That's it. Thank you very much.
LPS Brasil conference call is now closed. We thank you very much for attending and wish you a good day.