Good morning, ladies and gentlemen. Thank you for waiting, and welcome to the first quarter 2023 conference, PDG S.A. We have here Mr. Augusto Alves Reis, who is the chairman and financial president and Investor Relations manager. During the presentation, we will be able to go through all the information. We will also have a Q&A session at the end. Before we start, I would like to mention that all the declarations that might be done according to the PDG, according to the operational and financial goals, are according to the assumptions and based on the available information. Considerations of the future are not about the performance itself, but we also have circumstances that might or might not occur. Investors and the market should understand that the general economical situations and the industry issues might affect the future of the PDG and conduct the results that we do have.
Now I will hand over to Mr. Augusto, who will be able to introduce the conference.
Thank you, Renato. I hope you are well, and I would like to thank you for being here this morning. We will be able to provide you the first quarter results and numbers. Before we move to our agenda, I would like to briefly introduce our main work focus of this first quarter. In the first quarter, we focused on the definition of our goals for the year and the process of the conclusion of the launching, and also for the projections of the year itself. We have a special attention to the sales of the units, considering our iX. Itapeva launching. After the first quarter, we had 15 units sold.
Taking into consideration, we are in the final projection for the beginning of the works, and in April, we started a trend shift with Audace in order to have the financing for the works. Bear in mind that the commitment that we do have with our investors is to start the works upon October. Our next launching is for the second semester, and we can anticipate that we do have the approval of our legal project. Now we have this. This is going to be a new product that we have planned and developed carefully with our internal team and our external partners as well. As for the improvement of our customers and our CSI survey, the development of our project and our digital journey has kicked off, and we will also provide you information about.
We have our ESG agenda, and we also have a diversity and inclusion. In March, we finished the R3, in which we didn't have social capital changes. As for the B3, below one real. We also had all the legislation undergoing, and according to the CVM and the best practices of finance, we hired Grant Thornton for the independent auditing, and they have started to provide financial analysis for this year. Through the first quarter, we also initiated our credit conversion, considering the creditors as it is foreseen in our judicial recovery plan. All the creditors are informed of this topic. Starting the presentation itself, slide two, our agenda. On slide four, we have the executive summary in which we have the highlights and subsequent events.
I have mentioned about the Itapeva financing, the construction of iX. Itapeva, and we have 8.2% of first-quarter 2023 sales over-supplied launches. We also have a reduction of 36% quarter-on-quarter compared on the first quarter of 2022. The cancellation reduction of 45% quarter-on-quarter, first quarter 2022. We also have a 3% reduction of leverage. As for the operating results we have for the first quarter, the gross sales totaled BRL 19 million, 14% decrease over first quarter 2022, and the cancellations amounted to BRL 14.2 million. We also reached 6%. During the first quarter, cancellations amounted to BRL 14.2 million, 45% lower than the first quarter 2022. This is a very important leverage to increase sales given the units provided. Net sales totaled BRL 4.8 million in the first quarter 2023.
As I have been mentioning, the key indicator is the net sales, the gross sales. Also considering everything that is not going to impact in our cash flow. We also had 48% reduction comparing with the first quarter of last year. We also had a reduction of sales. It is also in line. On slide seven, after the first quarter, our market value amounted to BRL 1.3 billion. The total finished inventory, BRL 243.5 million; 34% is concentrated in São Paulo. As for the launching, is 4% on the and then the conclusion of first quarter, and taking into consideration our prompt stock, BRL 243.5 billion, 34% is concentrated in São Paulo, which is our key market, and 49% refers to residential products.
Our general expenses: we are able to demonstrate that we have 38% increase quarter-on-quarter, and that was mainly due to the higher provision for profit sharing. This provision is conducted in the last quarter of each exercise. However, that hasn't been conducted in the previous year, so then we had the first quarter conducted. We have a non-recurring impact for the first quarter. Then you will be able to see the normalization of that. We also have commercial expenses reduced by 36% quarter-on-quarter. Our general and administrative expenses added to commercial expenses were all reduced by 1% on quarter comparison. At the end of first quarter 2023, we had 148 employees. As for all the efficiency and cost reduction of our processes we have conducted and we will have reinforcements by enhancing and developing our team, considering all the launchings.
On slide nine, we have our extraconcursal indebtedness. The gross debt increased by BRL 114 million, 4%. On slide number 10, we have the indebtedness; the concursal debt increased by BRL 37 million, 3%, during first quarter 2023, and that is due to the accrual of interest and the qualification of new credits in the judicial reorganization. The total, considering the deleveraging, we were able to have the amortization of BRL 1.1 billion of our indebtedness. We are then working in order to accelerate the process of the reorganization, and on slide number 11, we are able to see these process deleveraging our extended leverage totaled BRL 4.6 billion. The remaining value, we also had that considering the increase of capital. Our indebtedness debts are being taken into consideration, and we will also be able to have a positive point for our results.
We are also seeking for results and solutions for our non-concluded works. We are able to understand the whole operation and also the liability since the end of 2016 that we had our judicial recovery. We were able to have a reduction of BRL 2 billion liability. In 2021, 2022, we had a very meaningful reduction and also the conclusion of the financial recovery. This result shows the recovery performance of the organization so that we are able to have very positive results with this very expressive leverage. On slide number 12, we have the financial operational result income statement. We have a gross revenue, 11.3% and operational net revenue. We were also able to have a net that is according to the debts of the organization that were all registered.
To finish our presentation, I would like to emphasize that we have a big focus on this deleveraging agenda, innovation, and also our launching. The conclusion of the increase of capital for the concursal debts for equity that might occur in the second quarter, that is extremely important for the debt leveraging. We also want to improve our indicators. As we have been mentioning in the last calls, this is extremely important for the organization. Another important point is that the beginning of the iX. Itapeva works; besides this work, we also have other launches for this year and our digital journey process. We are also prospecting the buying process of new lands, remembering that the recovery process goes through our current and the acquiring and purchase of the new lands. We are carefully following the current economic scenario.
We are well aligned for corrections in case they are necessary, and we do reinforce our commitment to the judicial recovery with special attention to our customers, our team, and a focus on the recovery by taking into consideration all the risks and the learning curve. Thus, I am going to finish the results and open for Q&A. Thank you, Mr. Augusto. We will now start Q&A. If you have got any questions, any doubts, please send through the chat. Ruby. The organization has been recovering the first quarter, a very meaningful impact in case of reclassification of the indebtedness to concursal debts following the recovery plan followed by the organization. Well, good morning, Ruby. Thank you for your question. Well, fortunately, our recovery plan is extremely warrant.
We do have the expectation of it in our balance every time we do have our extraconcursal or to concursal debts. The good news is that all the impacts are very positive given the extraconcursal debt has a higher expense. All the debts in the concursal, so that consequently there is no immediate disbursement. We do believe, and it's important to perceive, considering all the capital processes and the negotiations of extraconcursal debts, is that is going to bring very positive impacts for the future in a long and a medium term as well. Next question, Felipe. Congratulations for another quarter and for the recovery of the PDG. The iX. Itapeva sales are within expectations, is the financing 100% closed? Yes, the iX. Itapeva sales is in line with our individual planning and our initial planning.
Obviously, in a nutshell, the market has been having a reduction in the sales force. However, I have been mentioning in our quarterly conversations that we have been very conservative considering all the sales. In line of what we have foreseen, yes, unfortunately, we have been very conservative and that this de-warming of the economic scenario hasn't been something negative. As for the work financing, we had the process. The financing contracted and the initial steps are foreseen. We do have some issues to comply with, but we do have our partner and everything's agreed, and I'd like to thank for the partnership and their reliability moving forward. Felipe, another question from Miles Capital. Are you negotiating the new financing for the next launching? How is your expectation on this topic? Yes, sure.
We have got the project approval even before what we were thinking about, even considering the iX. Itapeva. We have the planning, and we want to have everything completed to start the sales. We are very attentive to the scenario and the market itself. We have learned from the past, and we don't want to make the same mistakes. Our judicial recovery plan is kept for the next quarter, next semester. Yes, we are taking that into consideration, and we want to have this structure. Next question from Renan, Reag Asset. Congratulations for the material, the presentation, and results. Can you comment anything about the new launching segment, region, VGV, et cetera? Thank you, Renan. Our next launching will be in São Paulo City. Everything is concentrated here in our judicial recovery plan. Our next launching will be in the North area of São Paulo, BRL 100 million estimated.
Average ticket, medium to high. It's not a high standard, but it's from medium to high. Our next question is also from Renan. The organization has been reducing the SG&A but recovering operations. Should we expect any stabilization in this line? Yes. Naturally, the stabilization process, as we have the organization structure stable, and we do have some movements considering our structure. With the recovery of the launchings, we do need to re-emphasize some areas of the organization. Given the timing and the direct relations with the launchings, we did have some reductions, and we also have a demand for the hiring process. Although these new launching, we have been looking to emphasize the structure and have the SG&A, and we will then be able to keep that. Once the organization have this, we will be able to improve.
But in the short term, we don't have any expectation of the increase for this line. Next question from Felipe. My last question. How does the capital increase get impact in the financial expenses? Should we expect any reduction post-increase? Felipe, it can impact in two ways. The key one is that every time that we are able to have a negotiation of our extraconcursal debt, because it hasn't been restructured, and once negotiations start, given the increase of the capital process, that has a very positive impact. We have a capital increase, and once we have the payment of the concursal debts, then the debts that are paid, we then improve the balance. We have these two ways. We do have the oscillation of results introduced through the semesters, and that impacts the debt planning of the organization. Next question from André Marces.
When is the credit conversion going to happen towards actions, and what is going to be the pricing for the action for the payment of the creditors? Well, we do have that in line and that this process will be concluded in the second semester after all the steps, and we do take into consideration all the internal queries. The value of the credit is foreseen in the plan, and we have followed in the last years based on 90 and the final approval of our capital process. I just would like to emphasize that you can send your questions on the Q&A here on the platform. Okay? You can also additionally send your questions to our email. Next question from Rubens. Does the organization have prospected new lands and the obtaining of financing or deals of partnerships for the launching? Yes, we are prospecting lands.
We have acquired a new land here in the state of São Paulo, and this process of recovery goes through the land bank. Even though we have restructuration of the organization, we were able to think about this recovery process and the lack of liquidity, this period post liquidity is very complex. We have acquired very important lands, and we do understand what is important for the organization and even considering what we do have reported. Next question. What has been most difficult for the organization recovery? Purchase of land, obtaining financings or closing deals? Well, considering what you've listed, I think it is about launchings. As we have been showing all the quarters, we have everything demonstrated considering what we've been through, and the financing process is the most difficult one.
For us, having the first one and the following ones, and considering our performance of our first launching, we were able to acquire the market reliability. We have been down quite a lot, and we do need to emphasize. Thank you. If you have got any other questions, you can send to ri@pdg.com.br. Now I will hand over to Augusto for the final considerations. Well, once again, I'd like to thank you for participating, who have been participating with us. It's very good to have you here and have our team aligned. We know all the work that the team has been developing, and I think that the market is going a very tough moment. Even considering this market, we have difficult moments. However, we are very cautious, and we are trying to do things the best way possible.
The real estate market, we have learned from the past, and we don't want to make the same mistakes. We will go through, and we will provide you good news. Thank you very much, and I hope I can see you in our next quarter results. Thank you very much. The conference of the first quarter 2023 is finished. Thank you very much for your participation, and have a nice week.