Good afternoon, ladies and gentlemen, and welcome to Plano & Plano second quarter 2024 results conference call. This call is being recorded and can be replayed at the company's IR website. The slide deck will also be available to be downloaded. I would like to inform you that all of the participants will be in a listen-only mode during the presentation, and later we will hold a question and answer session when more instructions will be provided. Before proceeding, I would like to mention that any statements that may be made during this conference about the business prospects, forecasts, and operating and financial targets are beliefs and assumptions of the management of the company, as well as information currently available to Plano & Plano.
Forward-looking statements are no guarantee of performance as they involve risks, uncertainties and assumptions, and as they refer to future events and therefore depend on circumstances that may or may not occur. Investors and analysts should take into account that events dependent on the macroeconomic environment and the sector and other factors may impact on future results of Plano & Plano and cause them to be materially different from those contained in the forward-looking statements. With us today, we have Rodrigo de Senna Vohs, our CFO, Rodrigo Uchoa Luna, our VP, and João Luís Ramos Hoppe, our IRO, as well as Anselmo Tolentino Soares Júnior, our CFO. I'd like to turn the floor over to Mr. Rodrigo Uchoa Luna, our VP, who will start the presentation. Mr. Luna, please.
Good afternoon, everyone, and welcome to our second quarter conference call to discuss our results here at Plano & Plano.
Before we go into the operating and financial details of the period, I'd like to mention a few highlights. Plano & Plano comes to the end of another quarter with sustainable growth and consistency in our deliveries. In the second quarter of 2024, we have had significant milestones. Among the highlights, I like to highlight the PSV that we had of BRL 1,064 million in the private market. This result really confirms what we mentioned on our last conference call when we said that there would be an increase in launches as of the second quarter of this year. Our launch plan for 2024 continues to be very robust. We continue to work on the approvals, and we continue to prepare our projects in line with our plan for the year.
Our net sales also reached a new record, BRL 797 million. That is a 37.7% increase year-on-year. We also had record highs in net revenue, BRL 698 million, and also a record high in net income, BRL 95.3 million. These results bear witness to our solid performance and to our ability to perform. They underscore our commitment to growth and excellence. As for Pode Entrar, a program that showed a lot of progress in the construction works in comparison to the previous quarter. This progress yielded substantial increase in revenue, also bolstered by the performance of the POC amounting to BRL 48.8 million. In comparison to the first quarter 2024, there was a BRL 36.2 million increase. The company has also been successful in acquiring new land bank lots.
We achieved our land bank target in the first half of the year, and we continue to analyze good opportunities for acquisition with our premises, with our assumptions to minimize the capital invested in land bank and also to have well-positioned and well-located land bank that will allow for better businesses, so that in the course of time, we can reap benefits from the scale economics with the development market, also construction market in line with these projects. In line with this good moment of the company and with our ambitious plans, I'd like to highlight how important our branding work has been in the company. We have made a lot of progress, and we have re-qualified our offices. Our corporate headquarters were relocated at the start of this year. Our headquarters are now better for our staff, for our clients and for our suppliers. The work environment is better.
The devices available are better. We're focusing on better communication, internal communication, and on increased productivity. We are on our way to become a bigger and better company, a more relevant company in our segment. We also need to mention the Instituto Plano & Plano. As of the 27th of June, 2024, we've been operating. The Instituto Plano & Plano is an extension of our commitment to change lives, going beyond our core business, creating substantial social impact.
With a purpose to offer good quality education and skill development, we are empowering the communities where we work, creating real opportunities for social migration. We're very confident about our operations expansions in a profitable way with controlled risks. I'll now turn the call over to João Hoppe, who'll present the financial and operating results of the quarter.
Thank you, Luna. Good afternoon, everyone.
In the second quarter of 2024, the company launched 11 new projects with a PSV, a pre-sales value, including physical swaps of BRL 1.064 billion. This figure accounts for a 128% increase in a quarter-on-quarter comparison, and an 80.7% increase year-on-year. This is a record high for the company considering one quarter in the private market. When we look at Plano & Plano's stake, we see that the pre-sales value was BRL 1.043 billion. That is a 149% increase quarter-on-quarter, as we had BRL 418 million in that quarter, and that is a 77% increase year-on-year, as in the same period in 2023, we had BRL 589 million.
Total net pre-sales in the second quarter were BRL 797 million, a 34.3% increase in comparison to the BRL 594 million recorded in the first quarter of 2024, and a rise of 37.7% in comparison to the BRL 579 million recorded in the second quarter in 2023. This is also a record for us in the net sales for the private market in a quarter. On the thirtieth of June, 2024, the VSO for the private market in the last twelve months was 50.3%. That is a 1.1 percentage point increase year-on-year.
Considering our total, VSO, including the Pode Entrar sales, the VSO for the second quarter of 2024 was 56%, a 6.8 percentage points increase in comparison to the second quarter of 2023. All of the units in the Pode Entrar program are acknowledged as 100% sold when the agreement is signed, and that signature took place in December 2023. Also, BRL 800 million in the PSV for the quarter were launched in June. The company concluded the second quarter with about 0.97 year available in inventory for sales based on the volume of sales in the past 12 months. This indicator shows how efficient or how efficiently we have been working with our inventory. Our target is to continue to reduce this indicator, creating a virtuous cycle in the performance of our launches.
During the quarter, our revenue performed really well and totaled BRL 698 million, a 43.77, pardon me, increase year-on-year. This result is 40.6% higher quarter-on-quarter, showing substantial improvement on our operations. Year-to-date revenue rose 40% year-on-year. Or rather the last twelve months, revenue rose 40% year-on-year. Our Pode Entrar program had a revenue of BRL 48.8 million in the quarter, and that is an increase of BRL 36.2 million quarter-on-quarter. So we can see that our POC is performing well. As for future year revenue that hasn't been recorded yet, it's important to highlight our growth in the launches and sales. In December 2022. On the thirty-first of December, we had BRL 504 million, and on the thirtieth of June, we have BRL 1,770 million.
It's a BRL 1.206 billion increase. As these revenues are recorded, we're confident that the gains in scale are gonna be seen in our financial results too. In the second quarter, the adjusted gross profit was BRL 238 million. The adjusted gross margin was 34.1%, lower quarter-on-quarter as we focus more on VSO, and we had the Pode Entrar program with an adjusted gross margin that was 21%.
The adjusted gross margin in the private market in the second quarter, excluding Pode Entrar sales, was 35.2%. That's a very healthy level considering the increase of VSO that a company continues to deliver. At the end of the second quarter, our REF margin was 39.5%, similar to what we had in the first quarter of 2024.
This indicator is influenced by the projects sold in the Pode Entrar environment too with tighter margins. The profitability of Pode Entrar is comparable to the private market because there are no commercial expenses on this project because it is a direct sales program to the city of São Paulo. Analyzing commercial expenses, we see an improvement when we think about revenue year-on-year. There was a 3.3 percentage point drop going from 12% of the net revenue in the second quarter of 2023 to 8.7% in the second quarter of 2024. This improvement is a result of better client conversion and increase in scale.
When we measure our representativeness in revenue and we compare the first quarter to the second quarter of 2022, we see a drop of 2.2 percentage points going from 10.9%- 8.7%. G&A over net revenue had a 0.2 percentage point increase compared to the second quarter of 2023, going from 5.8- 5.6. When we compare it to the first quarter of 2024, we see a 1.6 percentage points improvement. The company has been growing solidly and sustainably in the past years, and that calls for continuous efforts to sustain new levels of expansion. We have been able to keep our expenses under control. At the same time, we reach substantial growth levels in our operations.
Comparing the last 12 months between the second quarter of 2023 and the second quarter of 2024, we see improvements in net margin and net income. In the last twelve months, net margin was 12.3% and net income grew from BRL 202 million to BRL 296 million, a 46.5% rise. In the second quarter of 2024, the net margin was 13.7% and the net income was BRL 95.3 million, a 38.2% growth year-on-year. Quarter-on-quarter, the net income had a 129.6% increase. Net income in the second quarter of 2024 was also a record high in the company.
In the second quarter of 2024, the company recorded an adjusted EBITDA of BRL 122.9 million, a 17.6% margin. That is a 31.7% increase year-on-year, which was BRL 93.3 million. In the second quarter of 2024, the company reverted the cash consumption recorded in the previous quarter and had a cash generation of BRL 87.5 million. Year to date, cash generation is BRL 62.5 million. On the 30th of June, 2024, gross debt was BRL 277.6 million, and cash and cash equivalents were BRL 278.1 million.
With that, the company had a net cash of BRL 0.4 million at the end of the second quarter of 2024, and a net debt over net equity was 0.1%. This is the end of the presentation, and we're available should you have any questions. Thank you.
Thank you. We'll now start the Q&A session for both investors and analysts. If you have any questions, just click the Raise Hand button. If your question has been answered, you can just click the same button to leave the queue. Please bear with us as we collect the questions. Juan Jinton from XP has the first question.
Hi, everyone. Good afternoon. Thank you for taking my question. I'd like to understand two points. The first around launches.
On other conference calls, we said that approvals and the rate of approval would be a challenge for the company this year. We see that this quarter, launches grew considerably. I'd like to understand if you have seen an improvement there, if it's a more comfortable scenario, and how you see it. I think that's my first question. The second question has to do with gross margin. What do you expect looking forward? To break it down, you talked about the gross margin in Pode Entrar that dropped slightly quarter-over-quarter, and you talk about the contribution margin. I'd like to understand if this contribution margin should also have volatility in the course of time in Pode Entrar, and also what you expect in the private market margins for the future. Thank you.
Hello, Juan. Thank you for your question. The launches challenge remain.
Our launches pipeline in the second half of the year is being addressed, and that is one of the critical points for the company. We're very confident. We're working hard to sustain the growth that we have been talking about with sustainable growth year on year, especially 2023, 2024 and 2025. We believe we'll be able to deliver good figures in growth still in 2024 in launches.
Yes, that remains a challenge. As for the gross margin, breaking it down between Podia and Trair and the private market, let's start with the latter. We've been talking about the adjusted gross margin around 34%-36%. I believe the private market is going to be around these figures in the course of 2024, maybe 2025 some of that time as well.
This quarter, private market had 35.1% in the gross margin. Pode Entrar has a fixed price structure. The price is only adjusted after one year after the contract has been signed with the consumer price index. That has an impact on the quarter that we report on. The gross margin in the quarter was 21% for Pode Entrar. Considering future dynamics, we expect Pode Entrar to have about 26% margin for Pode Entrar. This is a contribution margin, considering it is a very interesting project for Plano & Plano. There is an improvement on scale. We see commercial expenses going down, and some of that comes from Pode Entrar. We don't have commercial expenses basically with that program.
The contribution margin in the program as a whole around 26%, with the contribution margin diluting the fixed costs of the company. Thank you, Juan. Have a good afternoon.
Tainá Costa from UBS, you may ask your question.
Hello, everyone. I've got two questions. Following up on the previous question, but focusing more on the REF margin, what explain this minor drop you have between the quarters? Is there any inflation issue, competition issue, or is it a matter of mix? My second question, I'd like to hear from you what this operating moment is like coming back from Faixa 1.
What strategies you have adopted to relocate operations, and if these changes that you have had for tier 1 and tier 2, Faixa 1 and Faixa 2, if they are going to have the company focusing more on tier 1 and tier 2? That's it. Thank you.
Hi, Taina. Thank you for your question. As for the REF margin, it's well in line with our perception of opportunity comparing margin and VSO. At the end of the day, what we're looking for is adequate profitability, thinking about our inventory, launch products, and the speed at which we can generate liquidity and cash. We manage that quarter by quarter, and these minor fluctuations are to be expected. As for the FGTS, tier 1, again, it's always what we understand to be an opportunity.
We need to be well-positioned, and when the Minha Casa, Minha Vida program brings in more subsidies and affordability for this income bracket. Our VSO has been quite consistent. Our margins have been in line with what you have. We've always had in every product. We're likely to have an increase in the coming months because the opportunity for this moment, for this market, has high liquidity, low supply, and we're really well-positioned to operate there. Thank you for your question. Thank you, Taina. Have a good weekend and good afternoon, everyone. Antonio Crisci from Santander, you may ask your questions, sir.
Hello, everyone. Congratulations on your results. I have a question about your penetration into the middle income market. How are you feeling? You've been doing that for the past three years. How is the sales team being trained for that approach?
Hi, Antonio. It's a pleasure to talk to you. As I have always said, the middle income market in São Paulo is really, really large. It is really dependent on interest rate, inflation, and income. In recent times, we notice there are very few launches for this group, but the financial cost for transfers is a bit higher than this market would like to have. Thus, we're really prepared with well-positioned land bank to seize opportunities. As supply is really low and demand is really high, we may launch products that are well-positioned to seize this opportunity. When you talk about a 10.5 interest rate and a lack of resources and savings accounts, this is a market with less supply because companies are more afraid to make launches to try and address this market.
We, in our activity with our land bank, having the possibility to deal with Minha Casa, Minha Vida tier three group with higher income, as well as in the middle class segment, taking advantage of the low supply levels in the market, we're always attentive to see what opportunities may arise. It's a very large market in São Paulo, but it needs to take advantage of moments when the economy is more stable and interest rates are a bit lower.
Our sales team is well prepared for these opportunities. In these characteristics, we're gauging the right moment to launch these products. In 2024, we still have an important launch to come out in this group addressing a market that has very little supply available, and we're very optimistic that it's going to have high acceptance rate and liquidity. All right. That's very clear.
Thank you. Congratulations, and have a good afternoon. Thank you, Antonio. Rafael Rehde from Safra, you may ask your questions, sir.
I've got two questions. My first question has to do with the budget supplement that was mentioned or that was announced yesterday. The way it was distributed looks to me like there could be a shortage of resources, and I'd like to hear what your opinion is. The pricing dynamics that you have. We have seen this past two months some increases that weren't expected. Are you passing on inflation increases, and what do you expect to capture there? What opportunities do you expect to have?
Thank you, Rafael. It's great to talk to you. This supplement was expected.
The government is attentive to these movements with the curatorship board to stay on top of the demand and needs of the Minha Casa, Minha Vida program. If consumers' purchasing capacity's gone up because of the inflation. The Ministry of Cities, looking at the income brackets and the credit lines offered by others, funding is always an important issue. Bearing that in mind, the government is really attentive to these movements. This increase was already on the federal government's radar, and this is being monitored closely so that we can live up to the demand at a time when affordability is adequate for the consumer. It's a high demand, a growing supply, and these adjustments in the line items of the FGTS budget will be made constantly. This is not a concern.
This is part of our conversations with the Ministry of Finance as well as the Ministry of Cities, alongside the curating board. We know that whenever adjustments are necessary, they'll be made. As for the INCC, considering dollar at the price it is with exchange rate, that is, inflation process, right, inflation pressure, pardon me, INCC being the National Civil Construction Cost Index.
This is not something that affects the everyday activities immediately. It comes in the medium to long term. As the affordability is favorable right now, we have room to readjust our pricing as per the need to adjust our price tables according to inflation and the National Civil Construction Cost Index, the INCC adjustments. All right. Thank you very much. Have a good weekend. Our next question comes from Herman Lee from Bradesco BBI. You may ask your question, sir.
Hello, Rodrigo and Luna. Thank you for taking my question. I've got a couple of questions. Pode Entrar, can you give us an update if there are new bids that are coming, what the overview would be? Dividends. Well, you're net cash, right? And you're coming to a healthier leverage level, so what are your expectations on that front?
Hello, Herman. In Pode Entrar, we have one project 100% approved with the municipality. The PSV is BRL 270 million, and we're waiting basically for the internal processes. The municipality announced that they won another 10,000-unit block, and this 10,000-unit package needs to be funded by the Caixa Econômica Federal. If this mortgage comes out, then they'll be able to hire these 10,000 units, which include these BRL 270 million in PSV.
This is a project that has got economic feasibility too. It's economically viable, and if it doesn't come out as Pode Entrar, we can launch it in the private market as Minha Casa, Minha Vida. We really depend on the municipality. It is a decision that could be taken really quickly or take a couple of weeks or not be taken at all.
We are always very clear on not making promises around matters that haven't been confirmed yet, so that's the color you asked me to give. As for dividends, in the past year since 2021, we see that our company is growing our operation levels, and with growing operations these additional increases have a good base for launches and sales. We have the construction risk measured.
We get paid the cash, so we understand we're gonna be generating more cash in the coming years due to the sheer size of the company alone. Having said that, in 2023, our payout ratio was 37% and 25% the years before that, the minimum we must pay.
As more cash comes in, we can increase our payout ratio. That's a decision made at the end of the year looking at the economy, looking at the budget for the coming year and opportunities that we see on the table. Generally speaking, we should increase our payout ratio in the coming years. Just to complement what Juan just said, all of our growth plans exclude the Pode Entrar program. Anything that happens in the Pode Entrar program adds to our growth plan. It's on the shelf.
It can be higher any time due to a political intrinsic matter for all of these operations that involve the government. If it's contracted, if it's higher grade, if not, our growth plan for 2024 does not consider this project in the Pode Entrar program. Very clear, João and Rodrigo. Thank you. Have a great weekend. Elvis Credendio from BTG has a question.
Hello, everyone. Good afternoon. I have also got two questions. First one about launches. You mentioned a middle income project. It's a large project if I'm not mistaken, right? Could you just give us some more color, some more details about this project? What their PSV would be, the average ticket, the sales performance, if you expect it to be similar to the Minha Casa, Minha Vida programs or a bit slower. My second question has to do with provisions and allowances.
When you look at provisions for bad payers, it goes up about 50% this quarter, right? Can we expect that to be the same rhythm, the same pace to the end of the year, or should there be changes? Hello, Elvis. It's great to talk to you. This middle income launch that we're planning for the third and fourth quarters is something that everyone is looking forward to.
The licenses with the notaries are almost finished. We have had many meetings with the sales forces, and everyone is really eager and excited about it because the demand is really strong. Looking forward to this project as well.
Middle class projects sell at a different speed than the Minha Casa, Minha Vida programs, but we're very optimistic that this project, when it is launched to the market, it is going to be something that our consumers are going to be going into. It's coming out of the oven, and we're very confident that soon results are gonna be great. It's between BRL 600 million and BRL 700 million, and we're very confident that it's going to be successful. João is gonna answer the second part of your question. Hello, Elvis. We have the company's growth that is accelerated. We see the compounded growth rates. It's something that has been varying between 30%-40%. When you look at December 2023, our PDD was BRL 41.3 million, now it's BRL 70.5 million.
This comes from this growth from the company. Our credit with our clients is about BRL 300 million, and we haven't brought forward receivables, and we don't plan to do that soon. We prefer to capture in the capital market. We have a CRI of BRL 300 million that could be turned in BRL 75 million in much more advantageous conditions than bringing forward receivables. But again, it grows with the provision for bad debt grows with the current situation. We see more delinquency now. It went from 4%-6% this year. We see an increase in delinquency, and we see the company growing, and that's why the provisions for bad payers is growing as well.
We want to have a clean balance sheet and we want to be conservative here too. Thank you, Luna. Thank you, João. Have a great weekend. Should you want to ask any questions, just click the button Raise Hand. Please bear with us while we collect further questions. Should you have any questions, just click the button Raise Hand. Please bear with us as we collect further questions. This is the end of the question and answer session. I'd like to turn the call over to Mr. Rodrigo Luna for his final remarks. Good afternoon, everyone. Thank you very much for joining our conference call to discuss the second quarter 2024 results. We continue to be very attentive to what is going on in the economy and politics and all of the impacts on elections. We see a strong demand.
Our sales teams have been very busy. We see a VSO that is very consistent. Looking at our capacity, looking at the city of São Paulo, we really are present everywhere in São Paulo, North, South, East, West, and Center, and we can really absorb all of the market opportunities out there. We're very optimistic that our launches in the second quarter 2024 are in line with our plan to grow and the plan that we have had since the end of last year. We're quite confident, and we're going to be watching closely to absorb everything that the market can offer. Again, thank you very much for joining our call, and have a great weekend. Thank you very much. This is the end of the Plano & Plano conference call.
Thank you very much for joining our session, and have a good afternoon.