Good afternoon, ladies and gentlemen. Welcome to the conference call for earnings for Q3 2023 for Plano & Plano. We inform that this event is being recorded, and all the participants will be in the listen-only mode during the company's presentation. After the company's remarks, we will begin the Q&A session when further instructions will be supplied. If any participant needs assistance during the conference, please request the help of an operator, dialing asterisk zero. It is being transmitted also via the internet, via webcast. It can be accessed at the address ri.planoeplano.com.br, clicking on the banner Webcast. The slides of the presentation are available for download on the webcast platform. The information is available in reals and BR GAAP and IFRS applicable to real estate developers in Brazil, except where stated otherwise.
Before proceeding, we would like to mention that any forward-looking statements during this conference call concerning the business outlook, forecasts, financial and operating targets are based on beliefs and assumptions of the company's board and also on information currently available. Considerations about the future are not guarantees of performance. They involve risks, uncertainties, and assumptions. They refer to future events and may or may not occur. Investors should understand that general economic conditions, industry conditions, and other operating factors could also affect the future results of the company and could result in different things. We count today Mr. Rodrigo von, Mr. Rodrigo Luna, and João Hopp, respectively, CEO, Vice President, and CFO and Investor Relations Officer. Now, I'd like to pass the floor to Mr. Rodrigo Luna, Director Vice President, who will begin the presentation. Sir, you may proceed.
Thank you very much. Good afternoon. Thank you for participating in our conference call for Q3 2023. Let's begin on slide five. In accordance with our plan of the last few years, we have delivered sustainable growth and also improved its management in many fronts, making the company more resilient and capable of really using the opportunities in the market. Our efforts helped us to reach record quarterly sales with BRL 638 million, 51.7% above the same period in the previous year. During this period, we sold 2,932 apartment units. Concerning the launches, Plano & Plano reported a growth of 24.5% in comparison with Q3 2022, with a total of BRL 528 million in VGV. Our new products consolidate our leadership in the market, especially in the metropolitan region of São Paulo, the main market in Brazil.
This success is due to rigorous and strict planning in our capacity to launch products that are interesting and really meet the needs and wishes of the consumers. In the quarter, the company made actions to sell its units to generate capital and continuing with the objective of having low inventory. In this way, the net sold of the company advanced 3.7 percentage points in comparison with the previous quarter, reaching 52.9%. And with other actions after a campaign for products contributing for an increase in revenue and dilution of our expenses. Another result from these actions was the excellent cash generation, BRL 107 million from the units sold. The net margin went up from 8.6% in Q2 2022 to 13.6% in Q3 this year, a strong growth of 5 percentage points.
Another important highlight in Q3 is in the net profit obtained by Plano & Plano, BRL 76 million, an increase of 119% in comparison with the same period last year. When we analyze the year-to-date profit, we can see that it is higher than the whole year of 2022. This is due to our capacity to operate with high efficiency and a good planning to have sustainable growth. The purchase of plots of land continues, most of them in the way of barter, in order to maintain our business model very light in assets. Our land bank for future projects is worth BRL 14 billion. Concerning the new housing program, Pode Entrar, we are delivering all the documentation of the approved units. The projects that are approved will happen according to the schedule.
We trust that we may continue to expand the company's operations in a profitable way and with controlled risks. Now I'd like to pass the floor to João Hopp, our CFO, who will talk about operational and financial highlights.
Thank you, Rodrigo. Good afternoon. It's a great pleasure to be with you this afternoon with the results of Q3 2023. Slide number seven. Net sales in Q3 2023 resulted in BRL 638 million, 57% higher than in Q3 2022, and 10.2% higher than the BRL 579 million in Q2 2023. Year to date, sales reached BRL 1.75 billion with an excellent increase of 50.5% in relation to the same period last year. With this, now we have a new annual and quarterly sales record. The company launched in Q3 five new buildings.
Including barter BRL 485 million, which represents an increase of 14.4% in relation to BRL 424 million in Q3 last year. Year to date, Plano & Plano launched BRL 1. 514 billion in VGV, a growth of 44.3% in comparison with last year. Slide nine. On September 30th, 2023, the VSO of the last 12 months was 52.9%. If you compare with the previous quarter, an increase of 3.7 percentage points in relation to 49.2% of 2023. In comparison with September 2022, the improvement was even greater in VSO, 10.5 percentage points. The increase in VSO was consistent in the last quarters as a result of better commercial management and also units according to consumers' wishes. The company closed Q3 with the inventory available for sale below one year. The reduction of inventory over sales has been consistent in the last quarters.
The reduction shows that we are on the right track and good results as a result of improvements made. Slide 12. Net revenue of the company, BRL 557 million, 39% higher than the BRL 400 million in Q3 2022. When compared with the revenue BRL 486 million in Q2 2023, we see an evolution of 14.7%. Year to date, revenue grew 35.7%, reaching BRL 1.4 billion. The revenues are solid with the evolution of the projects and the sale and launches using the methodology completion. In this quarter, the company had a gross adjusted profit of BRL 178 million with a margin of 34%. In the quarter, the company made actions to sell older units to generate cash. Although these actions have contributed for a lower gross margin, it was an important contribution for net revenue, decreasing expenses, and generating cash.
Also, we see that the REF margin continued on the same level since the sales were concentrated here. In this quarter, REF margin had growth going from 40.30% to 40.5% in Q3 2023, representing an increase of 0.2 percentage points. When we measure the commercial expenses in relation to revenue, Q3 had an improvement when compared with Q2 2023, going from 12% to 10.5%. Nominal growth of commercial expenses in relation to the previous year happened due to the increase of net sales in the company, which grew 51.7%, while expenses went up 30%. Slide 15. When we look at administrative expenses, we also had a reduction in relation to revenue. Q3 2023, 5.2%, while in Q2 2023 it represented 8%, and in Q3 2022 more. The company has had a solid growth, which also requires efforts for continuous expansion.
The expectation of growth, we hired specialized teams for medium-income companies. Next slide. Net profit can be seen here, resulting of a growth of 119.6% in relation to Q3 2022. With this Q3 2023 net margin grew 5 percentage points in relation to the previous year. The company had an adjusted EBITDA of BRL 103 million, an increase of 71.4% in relation to Q3 2022 with a margin of 18.7%. Slide 19. The company's operation had a cash generation of BRL 107 million in Q3. Most of the positive cash comes from the increase in VSO and an increase in the sale of units that were practically ready. On September 30th, 2023, gross debt was BRL 475 million and considering equivalent cash, BRL 346 million. The net debt dropped to BRL 119 million.
The net debt over PL is 18.6%, 28.5 percentage points below the 47% that we had on December 2022. Now we are available for questions. We would like to begin the Q&A session.
Thank you. Now we will begin the Q&A session. To ask questions, please dial asterisk one, and if your question is answered, you can remove the question by pressing asterisk two. Our first question comes from Rafael Rehder from Safra Bank.
Good morning. Thank you for the presentation. I have two questions. The first, I would like to talk about cash generation. Can you give more details of how much came from the sale of older units and how much we can consider as normal cash generation? The second, the issue of the budget. The government's program was around BRL 70 million, this year, BRL 100 million. The way things are going, we will have something close to BRL 100 million. Do you believe this new level is sustainable? Thank you.
Thank you, Rafael. João. Concerning cash generation, this quarter was a little different. We do not believe it is a normal quarter. In Q4, according to our projections, we should have cash consumption. So this was influenced by the VSO that grew in units that were not in the promotion. So I believe the normal for 2024 is a lower level. We do not have the budget ready for 2024. What we know is that next year we will continue with accelerated launches. So this was a quarter that was different. It is welcome, but we should be cautious in making projections for the future.
Rafael, good afternoon. Thank you for the question. The FGTS program, we have this case being judged by the Supreme Federal Court. They will continue only next year. In the projections proposed by Minister Barroso, we will need another four years with a budget close to BRL 100 million, which is good news. We will have time to adjust to the new rules, the new reality. As you said, this government increased the budget this year BRL 100 billion. According to our calculation, it is possible that the budget stay on this level during the next few years, bearing in mind that this government has a very good relationship with the government housing program. It's a very successful program created by the current president, President Lula, in his second government. In spite of this judgment, we believe in a good stability of the program for the future.
Thank you. Good afternoon.
Now the question of Ruan Argento from XP Investimentos.
Hello, good afternoon. Two topics. The first, details about the quarter. I'd like to understand the government's program and how we should look at this in the future, should this situation persist for one or two more quarters. Second point, we hear that the government's program is being discussed.
Well, this is João. The issue of margin, we can evaluate that this effect on margin is only for this quarter. We believe that in Q4 we will go back to levels that are closer to recurring levels. We want to be always above 36%. We have the state housing program. This brought benefits for families that earn up to three minimum wages, but it's very tight to fit units in this program. So we use this to sell products for ready units. So we believe that this number will go up in the next quarters because the REF margin is stable. So the REF margin is stable, as I said.
In relation to Pode Entrar housing program, this is an internal analysis. We are preparing the contracts. As I said, end of November will bring the first contracts. Some clauses are being discussed with the government. So I believe we can see something this year. We don't believe that all the projects will be approved this year. We had BRL 1.3 billion in VGV. We believe that BRL 700 million may be approved this year from the total BRL 1.3 billion. So this is what we expect. Thank you, Ruan.
Thank you.
Our next question is from Matheus Meloni, Santander.
Thank you for the question. The issue of margin, the strategy to sell more quickly to generate more cash, do you intend to maintain this in the next quarters? This could bring lower margins in the short term.
Thank you for the question. The strategy, looking back and looking at next year, we'd like to increase the VSO to be between 55%-57% VSO in 12 months. The numbers are there. It is growing. This happened only in this quarter, this sale. We have an internal goal that was reached, which is the VSO of launches. Next year, we're working together with sales to increase a little more the launch VSO. So the company wants to have a VSO of 55%, 57%, and this event is probably only in this quarter, the sale of older units. Is it clear?
Yes, thank you.
Thank you, Matheus.
The next question, Pedro Lobato, Bradesco BBI.
Thank you for the opportunity I'd like you to talk about competition. Competition due to changes in the program, especially here in São Paulo, and also purchase of land plots for future buildings. I'd like to understand. I'd like to know if these actions can have a result on profit.
Good afternoon, Rodrigo Luna. Concerning competition, it's always cyclic. Before the pandemic, we had a lot of competition, fierce competition. Then we saw small and medium companies with a lot of difficulty. Competition decreased. After the pandemic, we see some companies looking at the low-income market with different eyes. It's cyclic. Yes, there was a little more competition in the last 60 days, especially in terms of launches. But since there are many plots of land for this product, we don't see any difficulties. Now, your second question, let me understand. Is it the Pode Entrar program?
No. No, I'd like to know if there will be impacts on growth.
Can you repeat the beginning of the question?
The company.
Okay, I understood now. The question is about the follow-on. We closed this process. We made a material fact. This operation, the follow-on, was desirable for two reasons. To increase the company's free float, the liquidity, and with a better price for shares. That was the first objective. The second, a primary issue from 2023 to 2025 with a comfortable cash position. It was not necessary, the follow-on. We began the studies. The interest rates were very high. We stopped the studies, and nothing changes in our projection. If we look at the last 12 months, we had BRL 500 million in VGV. Looking at the future, we want to continue increasing sales in 2024, 2025. So nothing changed in our plans because of the cancellation of the follow-on.
Thank you.
The next question is from Elvis Credendio, BTG Pactual.
Good afternoon, Luna, João. Two questions. A little about medium income families, the segment of medium income. When we look at Minha Casa, Minha Vida government housing program, we see positive things in the future. How do you see the feasibility of medium income family projects? Are they as good as the other programs? Why do you continue growing in this segment instead of expanding in low income? So I'd like to see how you see also the company's leverage. Will you continue de-leveraging the company? Do you want to continue growing? Or can you think also of increasing the payout dividends? Do you intend to increase the dividends?
Hi. Concerning segmentation, as a strategy, we defined that the company will have 30% of the portfolio in what we call lower middle class. Lower middle class with family income of six to 15 minimum wages. It's a very large market in São Paulo, in the metropolitan region.
We see a lot of space to operate because of our capacity, competence to build and design products that are high quality with excellent price. We say that Plano & Plano products have a cost-benefit ratio that is marvelous. So we are sure that we can operate on a large scale in this wage bracket, lower middle class. We continue with this objective. We made the first launches this year. There are others for next year. It's a vast market where we see great possibilities and it is our strategy to grow in this area in the next few years. Concerning dividends, the leverage and net debt over assets, we wanted to get to 0.2. We will try in the next few years to be within this level.
What we see now, we are preparing the budget for 2024, and depending on the budget for 2024, we can begin to think to increase the payout ratio. We paid the minimum in 2021, 2022, but nothing is decided yet. We can think of increasing the payout. As if we can deliver results, yes, we can think of increasing the payout.
Thank you.
Thank you.
The next question is from André Dibe, Itaú BBA.
Good afternoon, Luna. Good afternoon, João. Thank you for the presentation. What Elvis said, the company's exposure in medium income, are you thinking of creating a wage bracket until BRL 12,000 for families with earnings of BRL 12,000? What would change in the company's strategy? And also a question about Pode Entrar, the issue of the escrow account here that you mentioned. Thank you.
Okay. Thank you, André. Now, concerning this possibility of selling for families until 12 minimum wages, housing credit is important to really allow companies to have credit in the long term. Of course, we are cautious concerning the sustainability of the funding. When we see a great demand in the lower wage brackets, when we see debates on the FGTS program, and President Lula saying that he wants to expand this, we see this as welcome, but we're cautious, looking at this as an evolution in the long term of the Minha Casa, Minha Vida program. So it's welcome, but it has to be sized according to the size of the market and the cost of this funding, if it will be okay.
João, concerning Pode Entrar, the escrow account, as far as we know, and this is already signed with the Caixa Econômica Federal. For example, there is an escrow account with an account. The money will be deposited in tranches, as we say, and we believe this is how it will work. This doesn't change the schedule for payments.
The payment for us will be made with the same dynamics that we have in the bid, 15% down payment and then the rest in monthly payments according to the completion of the construction and a part at the end. So this is according to the contract. One of the things that construction companies are requesting is a guarantee if there is a discontinuity of the payments according to the current legislation. So escrow, there is a deposit, and it is being made in Caixa Econômica Federal.
Thank you.
Reminding you that to ask questions, please dial asterisk one. We'd like to conclude the Q&A session, and now I'd like to pass the floor to Mr. Rodrigo Luna, Director Vice President, for his final comments.
I'd like to thank you all for participating in our conference call. Thank you for your attention. We continue trusting in the last quarter that we'll also be strong, Q4, with a booming market, a challenging year, when interest rates in Brazil and abroad have been higher. But the demand for housing in Brazil is very strong. The numbers in the market show this. Construction companies really working with a strong demand. I thank you all for your presence, and I wish you a good weekend. Thank you.
The conference call of earnings for Plano & Plano is concluded. We thank you very much for participating, and we wish you a good afternoon.