Good morning, everyone. Thank you for holding. Welcome to Melnick's earnings call concerning the results of the second quarter of 2023. I would like to point out that for those who need simultaneous translation, the tool is available on the platform. To use it, you have to click on the button, interpretation, the globe icon at the bottom of the screen, and choose your preferred language, Portuguese or English. For those who will listen to this teleconference in English, there is an option available to mute the original audio in Portuguese by clicking on the Mute Original Audio button. We would like to inform you that this event is being recorded and will be made available on the company's website, ri.melnick.com.br, where the complete material concerning this earnings call will be available.
It is also possible to download this presentation by way of the chat icon, both Portuguese and English. During the company's presentation, all participants will have their microphones on mute. Following that, we will begin the questions and answer session. To ask questions, click on the icon raise hand or Q&A at the bottom of your screen and type in your question. When you are called, a request to activate your microphone will show on the screen, and then you must activate your microphone to ask your question. We would like to clarify that any statements that might be made during this teleconference regarding Melnick's business prospects, as well as its operating and financial projections and goals, are based on the beliefs and assumptions held by the company's management and information currently available.
Forward-looking considerations are not a guarantee of performance and involve risk, uncertainties, and assumptions since they refer to future events, and therefore depend on circumstances that may or may not happen. Investors should understand that general economic conditions, industrial conditions, and other operating factors may affect Melnick's future outcomes and may lead to results that materially differ from those expressed in these future considerations. Here with us today are the chief executives of the company, Mr. Leandro Melnick, CEO, Mr. Juliano Melnick, CFO and Investor Relations Director, and Mr. Fernando Marques, Administrative Director and Investor Relations. I will now give the floor to Mr. Juliano Melnick.
Good morning. I would like to thank you for attending Melnick's earnings call regarding the second quarter of 2023. Firstly, let's go over the highlights of the quarter on slide number three in the presentation. We have a solid cash position of BRL 420 million, and even after the payment of recurring dividends, our net cash position remains stable at BRL 181 million at the closing of this quarter.
Net sales in the first half of this year reached BRL 416 million, which means a 12% growth in relation to the first half of last year. Net sales of inventory increased by 14% to BRL 291 million in the first half year. Finally, after the closing of the second quarter, we paid out an additional BRL 33 million in dividends. Moving on to slide four, where we break down the company's launches. As you can see, there were no launches in the second quarter of this year.
We focused on the sale of inventory, taking advantage of the deals done during Melnick Day, which took place at the end of last quarter, and also on the preparation for the launches in the second half of the year. It is worth noting that in spite of the absence of launches in this quarter, we closed the first half of the year with a net PSV of launches of BRL 432 million, up 14% the net PSV launched in the first half of last year. It is also important to note that we have been increasing our participation within our own business since the company's share of launches in the first half reached 77% of the gross PSV launched, vis-à-vis only 48% in the first half of last year.
This strengthens our strategy of reducing third-party participation by way of purchasing land in cash and decreasing the number of developments involving partners. Let us now move on to slide number five, where we discuss the company's net sales. In the graph on the left-hand side, we can see the SoS in the quarter at 9%, and since there were no launches in the period, the quarterly SoS of remaining inventory is the same 9%, in line with previous quarters when there were no Melnick Day events, like the third and fourth quarters of last year. In the quarter, we had BRL 111 million in net sales and BRL 416 million in the first half year, a 12% growth when compared with the first half of last year.
Net sales of remaining inventory, as mentioned, amounted to BRL 291 million in the half year, up 14% when compared with the same period of last year. In the pie chart on the top right-hand side of the slide, we can see the breakdown of sales by business unit, where almost 92% of sales happened in our Incorporadora, the development business unit, 6% in the Open unit, which operates in the low-income segment, and 2.2% in our Urbanizadora, the tracks development unit. It's worth noting that our Urbanizadora hasn't launched any projects this year yet. Launches are slated to happen now in the second half of the year. Finally, in the bar graph on the right-hand side of the slide at the bottom, we look at the projects under construction that will be delivered this year.
We can see that 89% of units have already been sold, giving us a whole second half of the year to sell the remaining 11%. Also noteworthy is to see the projects under construction to be delivered next year also present a high level of sales and have 82% of their units already sold. In the next slide, number six, we break down the company's inventory by year of completion.
We ended the second quarter this year with approximately BRL 1 billion worth of inventory, but only BRL 58 million of it corresponds to projects that will be completed this year, giving us a full half year's worth of sales. In the graph on the right side, we see the composition of our concluded units inventory worth BRL 307 million, of which BRL 34 million is our Urbanizadora unit, BRL 95 million corresponds to residential units, of which BRL 54 million is already leased.
Out of our leased liquid inventory, the commercial units amounting BRL 178 million, roughly one-third of it corresponding to BRL 63 million, is already leased. Here, I would like to draw your attention to our reversible lease policy, where we offer our tenants the possibility of buying their units using the amount of rent paid totally or partially as down payment.
We have been able to convert around 50% of these leases into sales. In slide seven, we go over the company's deliveries. We delivered the third and last phase of Grand Park Lindóia project, one of the large projects ever developed by the company, with a shopping mall, a commercial tower, and now six residential towers. Certainly the most complete mixed-use complex in the region. We concluded this last phase with approximately 90% of units already sold. In the next slide, number eight, we discuss the company's extensive land bank.
Currently, we have BRL 5.7 billion in total PSV, and of which BRL 3.9 billion corresponds to Melnick, comprising 39 lots or phases. Around 25% of these lots and phases have already been approved, allowing us the opportunity to launch the best product for the market at the best time, rather than the next project to be approved. Lastly, it is important to mention that 22% of the PSV has been paid for in cash, and in this quarter, we purchased BRL 273 million in potential sales value.
The financial indicators in slide nine show in the graph on the top left-hand side of the screen that our net revenue in the quarter was BRL 242 million. The graph on the right-hand side shows the gross profit in the quarter, BRL 51 million, with a gross margin excluding finance into production of 21%, which is higher than the 19% of the previous quarter.
At the bottom of this slide, we see our net income of BRL 22 million and a net margin before minorities interest of 11.6%, also higher than in the previous quarter. Moving on to slide 10, we show our capital structure. We closed the quarter with a net cash position of BRL 181 million, which translates into a debt of BRL 238 million, almost fully dedicated to financing the construction work of our current projects, and a total cash position of BRL 419 million. Presently, our shareholders' equity is BRL 1.195 billion, and our capital structure represents a net cash to equity of 15.2%.
In the quarter, we generated BRL 21 million in operating cash and paid out BRL 23 million in dividends. In the half year, operating cash generation was BRL 27.5 million, and we paid out BRL 34 million. Finally, after the quarter's closing, we paid out an additional BRL 33 million in dividends. Thank you all for your attention. I would like now to give the floor to the company CEO, Leandro Melnick, for his final remarks. After that, we will open the Q&A session.
Good morning. Good morning. Just a moment. We are having some technical difficulties, so let's start again. They are experiencing some technical difficulties. They are working to fix it. I think it is working now. Let's start again. Good morning. Excuse me for the problem. We are highly motivated for this second half of 2023, which characterizes by the beginning of this cycle of reduction of interest rate and a recovery of the speed of sales, prices, and margins in the real estate market.
Melnick has decided to be conservative in these past few years, which were marked by a period of uncertainties, volatility, and high interest rates. The company now moves into this new economic cycle with high cash position, unleveraged, with a robust lead bank and highly qualified, showing the company is very well prepared to take advantage of this moment. in these past quarters, we reinforced our share in the middle and upper middle income, and also in the tract housing development and the affordable housing Minha Casa Minha Vida program. This diversifies the company operation using our knowledge and allowing us a sustainable and quality growth. We have also been showing our consistency in our policy of profit generation and the recurring paying of dividends. The paying out of dividends and profit generation in an unleveraged company makes the company very profitable and with great return for the shareholders.
In the coming quarters, we will begin projects on land that we have paid for in cash, which will help us increase our margins and our ROE. Our conservative policy of launches, focusing the company on preparing for the recovering of the market, puts us in a good position to take advantage of this new moment. Thank you. Let us move on to the Q&A.
We will now begin our Q&A session. Remember that to ask questions, you must click on the raise hand or Q&A icons at the bottom of your screen and type in your question to join the line. When you are called, a request to activate your microphone will show on the screen, and then you must activate your microphone to ask your question. Let us now proceed to our first question. It comes from Elvis, sell-side analyst from BTG Pactual. Elvis, we will now open your microphone for you to ask your question. Please, you may proceed.
Good morning, Leandro, Juliano. The first question I have is about inventory. The company has a big part of its capital allocated in inventory. If you could talk a little about this, your strategy, how the sales of this inventory will happen. If you are planning to have another Melnick Day to increase sales, if you are going to sell the rented units to some real estate firms, what is your strategy to sell this inventory? The second question is about cost of construction and margin. INCC index has been decreasing, so if you could talk about how you see the cost of material, the cost of construction, and if you think you can revise some of the budgets already made for these projects. If you could have some increase in margins because of this. Thank you.
Hello, Elvis. Thank you for your question. Juliano here. I would like to answer your question about inventory. I think, and then we will talk about our construction cost. We have an idea in the company to reduce our finished units inventory. We know that this is heavy on our operation, and how we see this. First, this was the topic of this first half, of not having launches and put our efforts in Melnick Day. It happened at the end of the first quarter. We had many clients in our database, and we started working with these clients to sell this inventory, so we continue working. Our inventory, I believe, is a very liquid inventory and will remain strong in working to sell this inventory.
Our great strategy is still the reversible lease, because now with the beginning of the drop in interest rate, the environment for businesses starts improving here in Porto Alegre, and our possibility for sales increases, so we can sell this inventory faster. While this does not happen, we have this policy. We have one-third of our units leased, our commercial units leased, and when the deadline expires, usually 12- 18 months after leasing, we have been able to sell these units back to the tenants. Approximately half of the tenants are buying these units. I think it's important and we'll keep speeding up this opportunity. I will now give the floor to Leandro for him to talk about the costs.
Hello, Elvis. Leandro here. Complementing the question of inventory, I think it's important to notice that the inventory of launches in these past two years have been selling very well. All our projects, the projects that we have launched in these last two years, around 75%, 80% sold. Deliveries for 2023, 2024 of these projects under construction, they are also very well sold. It shows that Porto Alegre, our projects are performing very well. This higher level of inventory, it's because of two factors. One, how the company has been having a very solid cash position. We did not reduce our prices significantly in these last two years because we understood we had a structure that was the best way to comparing our prices with the market price. Regarding inventory, our inventory is in assets, older assets that are focused on projects, commercial projects, stores, offices, and they are leased.
We are waiting for the best moment. This moment is coming close to start working on this. When you zoom in into our inventory, we do not have an accumulation of inventory in these last launches. It's a very healthy inventory. It is apparently a huge inventory, but this is all on lease, and it's leased. About construction costs, we are very confident regarding this cost. We pay a close attention to this item, and we understand that the moment now is a moment of tranquility, of calm. These past few years have been very tense. We have not been thinking about reducing our construction costs in the budget, but we are paying attention to this. It's a very important item. But the normalcy of costs, occasionally in the future, we're going to have some opportunity to save some cost.
Thank you very much.
Thank you, Elvis, for your question. Our next question comes from Mariangela Castro, sell-side analyst from Itaú. Mariangela, we'll open your microphone so you may ask your question. You may proceed.
My first question is a follow-up regarding these discounts. I would like to understand what level of discount the company has been implementing, and what you expect for the next quarters, especially this older inventory. If we'll see some level of discount or it really is not part of your strategy, or your focus on the reversible lease. Second question, if you have seen in Porto Alegre some difference between the concluded units inventory prices and launches price. If a new launch is not just Melnick's launches, but other companies, if this has been bringing in a perception of better prices for the inventory or if the prices are very similar.
Hello, Mariangela. Thank you for your question. We have been noticing, starting with your second question, have been noticing a warm-up of a recovery in the prices of launches. Making on a parenthesis here, people are usually following São Paulo's unit, but São Paulo usually responds to these changes before the rest of the country. We have seen more consistent prices in São Paulo. This is positive for the other regions because now they start this movement that has already happened in São Paulo, especially on the high end. When the prices start increasing, even because the oldest inventory starts getting lower. In Porto Alegre, this older inventory is very low level. Now we are talking about inventory of projects under construction or being launched. We see the price of these units, even the older prices start increasing in price.
The tendency now is that we are now beginning a new cycle in exactly the expected behavior, as we see in São Paulo, a reduction of inventory and companies are being able to recover prices. Now we are seeing this in Porto Alegre. Of course, this changes all the companies' figures, and we understand that this cycle is not going to be such a fast cycle. This does not change from one month to the next, but we see a consistent move in coming quarters. Now, your first question. We now have an understanding that it is not necessary a high level of discount due to the speed of sales of our inventory. Our inventory is not concentrated. With a deeper analysis, our projects are on the average 75%, 80% sold, so the inventory is getting lower in several projects, so they are selling well.
The question of giving discounts to sell inventory does not seem to us a very good midterm strategy. We do not need this. We are focusing on the reversible lease. What we have been doing is we are reversing, converting this portfolio of leases into sales. It takes around 18 months, and then the tenant from lease makes the purchase. This has been happening on a significant level, but it has been happening consistently. It is important for the company because we can preserve our margins. We do not bring the market as a whole down. I think it is a strategy that this more concentrated inventory, it takes around 18 months to sell, and not with campaigns focusing on discounts, but instead this reversible to sale strategy.
Thank you for the answers. Our next question comes from Carlos Herrera, sell-side analyst from Condor Insider .
Good morning, everyone. Could you comment what you have seen in July and this first week in August, if we see an improvement compared with the previous quarter, or if you expect an improvement only in coming quarters?
Thank you for your question. Talking about these more current months, July is always an atypical month. It is a school vacation period, so the second half of the July, it is colder in terms of sale, but it is within expectation. I think this change, the country is reducing its interest rates for the first time after a long time, so it gives the market some boost. This decreasing movement of interest rate, but this is too short a time to see big changes. It is not a sudden change in August when compared with July, if you do not consider the seasonality of vacation period. But we see this as a constant movement.
We have been focusing greatly on inventory, so we didn't have any launches. Now in the second half of the year, we are going to have some launches. What we feel is that the market now is in a different mood, that in this new mood will now reflect on better sales.
Thank you for your answers. Our next question comes from Vanessa Rocha. She's an investor.
Good morning. What is your strategy for Minha Casa Minha Vida affordable housing program? What percentage are you predicting for launches? What percentage of the launches?
Hello, Vanessa. We have a strategy of growing that is conservative and where we operate. As we understand that this recovery would happen, we started working with Minha Casa Minha Vida a few years ago, but not in any accelerated way. We could have this learning curve, and the speed of launch was not a visible demand. We have already announced a few projects in this segment. We have already delivered. Caixa Econômica Federal gives us some qualification, have a high level of qualification. We have a very good land bank.
We have closed some partnerships with some smaller companies that have more capillarity. We also have another operation, and I'm going to link this, which is our Urbanizadora, the tract housing unit. Today, it's the largest Urbanizadora, the largest tract housing development in the state. We operate more in the country sides, the country city, and it also has to do with Minha Casa Minha Vida. This has been very assertive because our Urbanizadora also started slowly, focusing on the best moment. We are prepared. We have been consistently prepared. It's our company's profile.
It's our model, to develop with low risk, to foresee what's going to happen so we can prepare. We are not talking about Minha Casa Minha Vida right now as a new topic. We have been building this with partners, with our sales team, with a very well-built land bank, and Melnick's capacity to be a company in a state that is very large, and we know we have a very strong brand recognition.
This brings us competitive advantage, which is the ability to buy land through swaps, which is typical of this segment, where many families and local companies see Melnick as a very safe company for this kind of activity. We see this in a good light. We have been increasing our participation, but not in any way accelerated. It's not our profile. We are prepared for this moment because we have been preparing for this for the last two or three years.
Thank you for your answers. We'd like to remind you that to ask questions, you must click on the Q&A icon at the bottom of your screen and type in your name to join the line. The Q&A session is now closed. Melnick's earnings call concerning the results of the second quarter of 2023 is now concluded. I would like now to give the floor back to Mr. Melnick for his final remarks.
Thank you for attending this call. It's been a pleasure to be with you here. I hope the answers were satisfactory, and we'll see you in the next call. Thank you. Thank you again. Have a nice day.
The Investor Relations Department is available for any further questions you may have. Thank you all for the attendance. Have a nice day.