Good morning, ladies and gentlemen. Thank you for waiting. Welcome to PDG conference on our new results of Q2 and first half of 2024. Here with us, Mr. Augusto Reis, Chief Executive Officer, Chief Financial Officer, and Investor Relations Officer. Please be advised that all participants will only be listening to the conference. After, we will have a Q&A session on the chat. Before proceeding, we would like to clarify that any statements that may be given during the conference, forecasts, and operational and financial goals are beliefs and assumptions of the company's management based on available information. Considerations about the future are not a guarantee of performance, and they depend on events and circumstances that may occur. Investors should understand that general economic conditions, industry conditions, and other operational factors may affect the company's performance and lead to results that differ materially from those expressed in projections.
Now, I would like to give the floor to Mr. Augusto Reis, that will make the presentation of our results.
Thank you, Renato. Good morning, everybody. I hope everybody is fine. I would like to thank you for your participation in our results conference, where we're going to talk about the results of Q2 and the accumulated of the first semester of 2024. Before moving to today's agenda, I would like to comment on the company's main strategic focuses for the first half of the year. We continue with the company's strengthening growth agenda, with special attention to all aspects involving the ix.Tatuapé and ix.Santana launches. The work of ix.Tatuapé is in initial superstructure phase, with around 20% of the physical execution completed, as foreseen in our work schedule.
The project is being executed in strict accordance with established quality, cost, and schedule parameters initially established, in line with all the other schedules. Also in line with our strategy seeking to surprise our customers, this physical schedule for the work is two months ahead of schedule. Regarding the ix.Santana project launched in the last quarter of 2023, we continue with the necessary work to start the work in the coming months, focusing on commercial activities. We also continue working on the agenda of upcoming launches to generate more and more product for sale. In April, we launched our apartment customization program PERSONALix, where we offer some finishing kits to our customers that can choose the one that best suits their style and personality. The program had very good results.
We started with a customization of 47% of all the customers that bought with us, which meant 100% of our sales target. With the positive result obtained in ix.Tatuapé, the strategy is extended to other projects in the company. Starting with our agenda for today's presentation, I will start with slide three, where we present the main highlights of the period. First, we recorded a 72% reduction in financial losses in the half-yearly comparison. Also, in the half-yearly comparison, we reduced 60% in reduction in net loss. We recorded 38% reduction in cancellations in comparison between the first half of this year and the first half of last year. As a result, we achieved 140% increase in net sales. General administrative and commercial expenses were reduced by 10% in the half-yearly comparison.
In line with the strategy of deleveraging, reinforcing cash, and reducing costs, in Q2 2024, we sold two plots of land that did not fit into the company's launch strategy. In July, at a meeting with the board of directors, a capital increase of BRL 114 million was approved. As for legal requirement, a period of 30 days was granted for current shareholders to exercise their preemptive right to subscribe new shares. The capital increase to convert competitive into shares will be completed during the second half of this year. This is an important step towards continuing the company's deleveraging, reducing risks, and improving financial indicators.
Additionally, at the extraordinary general meeting held on July 10th, reverse splits of share issued by the company was approved to the proportion of 10 :1 without changing the share capital to comply with B3 standards, preventing the shares from remaining quoted below BRL 1. The shares will be traded in groups from October 21st, 2024. On July 31st, we released our second sustainability report reflecting our principles, objectives, and commitment to people and the environment. This report includes economic operation and social environmental performance indicators. In addition to highlighting policies and practices that are fundamental to the sustainability of our business, we seek to reflect all the effort of our team in this period. It is a source of great pride for all of us. It represents more than a mere formality, it represents the materialization of our principles and purpose, concerns, and objectives.
Now moving to slide five, we present the company's sales performance. In Q2 2024, gross sales totaled BRL 20.9 million, 14% above Q2 2023. In the six-month period, the gross sales totaled BRL 36 million, which is 4% below the BRL 6 million at 2023. Launch represents 38% of sales results for the semester. During Q2 2024, cancellations totaled BRL 6.8 million, 53% below Q2 2023. Cancellations totaled BRL 17.8 million, 38% below the value recorded in the six semester of 2023. Net sales totaled BRL 14.1 million in Q2 2024 and BRL 18.2 million in the first six months of the year, representing an increase of 281% and 114% compared to Q2 2023 and the first six months of 2023 respectively. In Q2 2024, 32 units were transferred, which is equivalent to a PSV of BRL 1.7 million.
In the first semester of 2024, we transferred 79 units, which is equivalent to BRL 4 million, and a reduction in the number of units transferred in the six months of 2023. We continue to make transfers through a quick process, through a very careful credit analysis, and strictly aligned with our commercial strategy focused on generating cash. Talking now about the company's inventory on slide six, we present the composition of inventory actually available for sale. At the end of the quarter, this inventory totaled BRL 370 million, registering a reduction of 3% compared to Q1 2024, and an increase of 27% compared to Q2 2023. This increase was mainly due to the launch of Vicentina that happened in Q4 2023.
About the composition of our inventory, 37% refers to lounges, 52% is located in the city of São Paulo, which is the company's main operating location currently, and 66% are residential products. On slide eight, we present general, administrative, and commercial expenses. General and administrative expenses were reduced by 1% quarterly and 50% in the half-yearly comparison, mainly due to lower expenses with legal advisor services. Commercial expenses were reduced 27% in the quarterly comparison and 3% in the half-yearly comparison due to lower expenses with units in stock. As a result, general and administrative expenses added to commercial expenses were reduced by 14% in the quarterly comparison and 10% in the half-yearly comparison. We constantly evaluate the company's structure and processes in order to keep them aligned with our financial strategy. On slide number nine, we present the variation in our extraconcursal debt.
This debt was reduced by BRL 4 million during Q2 2024, mainly due to the migration of extraconcursal debts to concursal debt. You can see in the chart that there was an interest of BRL 79 million in the period. Regardless of the liquid net reduction being BRL 4 million, it was corresponding to an amount that is superior to the interest in the period. This extraconcursal debt are debts that have a higher cost. The concursal debt increased by BRL 60 million, 5% during Q2 2024, mainly due to the qualification of new creditors within the scope of the judicial recovery. In total, considering the capital increase already made, payments to creditors and donations made to the company, we have already amortized BRL 1.5 billion in debts due to bankruptcy, which is a very significant amount for the company.
Moving to slide 11, we are going to talk a little bit about our deleveraging. Adding the extraconcursal debts, concursal debt, and costs to be incurred. At the end of Q2 2024, the extended leverage totaled BRL 1.9 billion, an increase of 3% compared to Q1 2024 and a reduction of 61% compared to Q2 2023. Regarding the amount of leverage, I would like to highlight that our concursal debts will mature until 2042 and may be repaid through payment in stock options through conversions into shares. Extraconcursal debts continue to be renegotiated and may be eligible for judicial recovery over time. On slide 14, talking a little bit about our income statement, I will highlight the main variations and impacts of the period. We recorded a financial loss of BRL 42 million in Q2 2024, a reduction of 70% compared to Q2 2023.
In the six-month period, we recorded a financial loss of BRL 83.6 million, 70% below the first six months of 2023. The reduction in financial losses resulted from the reduction of the balance of the extraconcursal debt, resulting from the debt recalculation carried out in Q4 2023, and also through payments through conversion of debt into shares. This recalculation has already been mentioned in the last call when we talked about the closing up of the year 2023. In relation to net loss, we recorded a reduction of 48% in quarterly comparison and 60% in the half-yearly comparison. Finally, I would like to reaffirm that we remain committed to the company's recovery agenda with a focus on leveraging and improving operational efficiency.
We continue to work on our strategic agenda and technical aspects of upcoming launches, carefully monitoring economic and sector conditions, seeking to maximize the success of our ventures, and monitoring the economic conditions of the country and of the sector to maximize our results. With that, I close here, and I will open to Q&As.
Thank you, Augusto. We have the first question here from [Sergio Brito Forum from Invest]. It says, "Good morning. Congratulations on the material and the result." He asks you to summarize how is the operational process of the company. The recovery of the company is important and is expected by the market. Could you comment a little bit on that?
Good morning, [Sergio]. Thank you for your question. If I could summarize, I would say that currently the company is focusing on two main agendas. The first continues to be the deleveraging process and the commitment to our obligations of the judicial recovery, which is a fundamental process for our recovery. Exclusively, on the process of the new launches. They have a maturity time. Currently, in addition to our two ventures, we are already discussing and working on the others because we need to begin a lot in advance. These are the two main agendas of the company, and obviously without losing focus on our main indicator, which is cash. With the difficulties of a company that goes out from a restructuring process. This is our main operations indicator and survival and continuity of the company, which is cash. These are the main agendas.
To conclude, I think that we have gone through much more difficult moments. Now, I think that we can focus most of our time to development and to survival, which I think is very good for what we've been going through.
Second question that [Sergio] asked is, what is the impact expected with the reduction of debt as of now?
[Sergio], the company has a very representative amount of debt. Of course that we have extraconcursal debt and concursal debt, but most of this indebtedness, we believe tends to continue being solved through the plan and the movement of the capital increase and issuance of new stock options. What is very positive for the company because it does not pressure our cash flow, and the opposite of that would be a big complication for our survival. In addition to being a process that we didn't believe that will continue existing, it will continue increasing. One of the points that is our main difficulty, which is our balance, because our balance is a limitation for the company to access capital at market costs.
We are very optimistic with this process of continuity of negotiations and payment of debt through this conversion method and the issuance of new stock options. With that, restructuring our balance and giving us access to new lines of credit, which is how our market works. Of course, this is useless if we do not have a very good operational agenda simultaneously that walks hand in hand. We have launches to come that are being prepared. We need to be continuously working on both agendas because they need to go together.
The next question is from [Kleber]. He writes, "Good morning. Congratulations. What are the expectations for sales in the second quarter, and what are the risks?"
Good morning, [Kleber]. Thank you for your question. This year has been a difficult year for the market, and it's no different for us. We are confident, and I think that if we compare our perspective for the second quarter, second semester, I think that they will be commercially better than the first one. We don't have great expectations that it is a typical semester, positively speaking, but we believe that it's going to be better than the first. Of course, due to the insecurities that we see, not internally, but also externally, we are praying that the economic scenario does not get worse and continues in its trend to improve and not the opposite. In general, the expectation is that the second semester is better than the first.
[Kleber] still has another question. "PDG counts on a land bank in its recovery strategy?"
Yes, we do. Along the recovery process, the company was able to maintain in its land bank some important land plots. In our localization strategy, which is São Paulo, we have land that are under the characteristic of product that we believe to be the most appropriate for our moment. In addition, as we have already mentioned in the prior calls, we were able to acquire a land during 2023, an important land plot that has a very good location in São Paulo, also within this strategy. Like I said, we keep our strategy simultaneously with traditional recovery. The activity to prospect new areas, to approve new areas is still ongoing because we believe this is fundamental for our growth agenda and recovery agenda.
Next question comes from [Alfredo from BP]. Congratulation on the results. He says, "What is the expectation for the scenario of the sector?"
Well, [Alfredo], I believe that you are referring to the expectations for the next quarter. Like I said, it's a positive expectation. I think that Q3, in which we already are, is more sensitive to the scenario, but the expectation still is good. Of course, when we look at the market as a whole, there are indicators that are more positive in a sector where the company does not play a role, in the sectors of Minha Casa, Minha Vida that are leveraged by all the focus that the government gives to that. But in general, we believe that the market as a whole tends to have a better behavior, a better performance in the next quarters of this year.
[Alfredo] still has another question, and he says, "Thinking about company recovery, how does PDG aims to stand out in the market? What are the levers that the company is going to use to be distinguished in the market?"
Very good question. This has been and was a part of our agenda in several internal discussions, and we believe that the change of our ix brand has to do a little with that. One of the things that we strongly believe about our products is that when we look at the products that we have launched recently, we already noticed that we have details in the development and the attention that the product development team has allied with the engineering team. So we have been delivering distinguished products. Of course, there's no miracle because it's a market that there are a lot of people working. But if we do that carefully and treat each product as being unique, we in fact can put a very good product in the market, products that are really finished, that are very good.
I think this is already a distinction. When we talk about price versus region, it is more difficult because price is defined by the market, because if you sacrifice the price, you sacrifice margin. We, more than other players, are much more sensitive to that, I believe. In fact, it is a strategy that cannot be our focus. I would say that within our strategy of operating in São Paulo, which is a market that has a lot of offers and that all main players operate, I think that we need to operate with very well-developed products, with a lot of planning, being very carefully so that we can offer different products. Together with that, our service strategy, which is also very important, that is our strategic pillar for the ix. brand, which is try to provide better experiences to our customers.
I think that with these two focus of product and service, I think that we believe that with time, after we conquer the confidence of our customers, I think we can get distinguished.
We have one more question here. The company Great Place to Work has improving its reputation in the financial market and with its customers. Is this strategy sustainable?
[Kleber]. The seal Great Place to Work for us is much more a proof or an evidence of what we perceive here on a daily basis than an achievement by itself. When we opted to choose the certification, we already trusted a lot that we could get that because we know, we see here on a daily basis in our work environment, the dedication of people, the commitment to the company. In fact, getting the seal was much more proof of all that and a way to convey this message to those that are not inside the company, to convey this message to the market. We chose the seal because we believe that it is a very trusted kind of seal in the market. But it was a way to show the market the effort that the company makes and the results that these efforts are reaping, are achieving.
Those that have already participated in moments of company restructuring know how difficult it is to keep the team motivated due to all difficulties that we face. I think that we have been achieving that, and I think that the seal proves that. We sure believe that this is the path we should be in. Not because of the seal, but because people that are in an environment where they feel good, they bring better results within the mid and long range to the company. If you can strengthen the company culture and engage your collaborators, this is fundamental for the company to be able to conclude its recovery process.
I believe this is it. Thank you, [Kleber]. [Kleber] says congratulations on the recovery of the company. If you have any other questions, you can click on the Q&A icon on the screen. I think that with that, we wrap up and finish our questions. You can send questions to the email ri@pdg.com.br, okay? I will give the floor for Augusto to give his final considerations.
Thank you, Renato. Thank you to all those who have participated and spent time here with us. It is very important to see that the market understands the efforts that the company has been making over the past years. We continue to focus on this process of company recovery, and we still believe in that, and we are very motivated to overcome the challenges. They are many, they have not finished, but we believe a lot in the dedication of the team and on the sector, because it is a resilient sector. It is a market that never stops. We believe that we will have very good moments to celebrate as of now. This is it. Thank you everybody once again, and see you on our next call.
With this, we conclude the earning results conference of PDG regarding Q2 and first half of 2024.