Good afternoon, ladies and gentlemen. We would like to begin the earnings conference call for Plano & Plano for Q4 2022. This event is being recorded, and all the participants will be in the listen mode only during the presentation. Next, we will begin a Q&A session when further instructions will be supplied. If any of the participants needs assistance during the conference, please request the help of an operator dialing asterisk zero.
This event is also being transmitted simultaneously by internet via webcast at ri.planoeplano.com.br. Please click on the banner webcast. The slides are available for download on the webcast platform. The information is available in BRL and in BR GAAP and IFRS applicable to real estate business in Brazil.
Before beginning, we would like to say that any declarations made during this conference call concerning the business perspectives of Plano & Plano, projections, operational financial goals are based on beliefs of the management of the company, as well as on information currently available. Considerations about the future are not guarantees of performance. They involve risks, uncertainties because they refer to future events and therefore depend on circumstances that may or may not occur.
Investors should understand that general economic conditions, industry conditions, and other operational factors may affect the future performance of Plano & Plano and lead to results that may differ materially from these. We have today Mr. Rodrigo von Uhlendorff, Rodrigo Luna, and João Hopp, Chairman, Vice President, and CFO, Investor Relations of Plano & Plano. Now I'd like to pass the floor to Mr. Rodrigo Luna, Chairman, Vice President. Mr. Rodrigo, you have the floor. Thank you.
Good afternoon. Thank you much for being with us in the conference call for the earnings of Q4 2022. Please, let's begin on slide number five. In accordance with our plans in the last few years, Plano & Plano has delivered a sustainable growth. As well as it has improved its management in many fronts, making the company more and more resilient and better prepared to take advantage of the opportunities in the real estate market in Brazil.
In the last two years, we had a challenging scenario. The obstacles brought us even more inspiration and creativity. The solutions used to overcome the challenges include dynamic and careful management in all the activities of our operation. In this last year, 2022, we worked a lot to overcome the pressure on costs, the higher costs for construction in order to overcome politics, political crisis, elections, and the World Cup.
The results came, and we delivered financial results following the history of the company. Amongst other actions, to overcome the challenges due to the world economic crisis due to the pandemic, we reviewed our projects, we found alternatives in construction techniques, we obtained productivity gains, and we defined new guidelines for the structure of our launches and in the marketing and sales expenses. We have the capacity to adjust our prices, our sales prices, in order to gradually increase the prices due to inflation and taxes.
We would like to highlight the increase in adjusted gross margin in Q4, with an increase of 2 percentage points above Q3, reaching 34.1%. Also, we would like to highlight the increase in our REF margin at the end of Q4, which reached 36.3%, representing an increase of 1.5 percentage points when compared to that of the end of Q3 2022.
This improvement in the adjusted margin and REF margin is the result of a lot of work in order to absorb the increase in construction costs. The effect produced, the effect and the results can be seen in the closing of 2022. This improvement in profitability can also be seen in net profit, which grew 67.3% in comparison to the profit of Q3 2022.
Another highlight was the net sales of the quarter, where the company established a new historical record reaching BRL 519 million, 70% above the same period in the previous year. We sold 2,582 units in Q4. Plano & Plano concluded with success its launch program for 2022. This plan was prepared at the end of 2021 and was applied during the year. In Q4, the launches were worth BRL 718 million and totaled BRL 1.805 billion during the year of 2022.
Year to date, we delivered a growth in launches of 23.5% in relation to the same period in 2021. The purchase of plots of land in our land bank continue with financial exchange in order to maintain our business model light in assets. Even with the accelerated rhythm of launches, our land bank for future projects is worth BRL 11.9 billion.
For 2023, we believe we're well-positioned, and we're projecting the continuity of the growth of our operations. Our business is in line with the housing programs established by the federal government in all the ranges of the program. With plots of land capable of absorbing demand in all the ranges, Plano & Plano will certainly benefit from the updates projected for the government housing program, Minha Casa, Minha Vida.
In spite of all the economic challenges with low economic growth projected and high interest rates, we continue our expansion working in middle class and lower middle class housing. We remind you that it's part of our strategy to grow our portfolio in these ranges in order to expand our participation during the next few years. In 2022, approximately 10% of the units that were launched were above the ranges of the government housing program, Minha Casa, Minha Vida.
If market conditions allow for 2023, we should launch approximately 25% of our portfolio for lower middle class. The management continues to trust that we will be able to expand the operations of the company in a profitable way and with controlled risks. Now I'd like to pass the floor to João Hopp, our CFO, who will present the operational and financial highlights. João, you have the floor.
Thank you, Rodrigo. Good afternoon. Please, let's go on to slide number seven. Before we comment the results of Q4 2022, we'd like to highlight the performance of Plano & Plano in the medium term. Since 2017, the company has delivered a constant growth, sustainable growth, both in launches and also in net sales. The growth rate was 29% a year and 37% in sales. 29% in launches, 37% in sales.
This growth includes improvement in construction techniques, governance, and risk management. Also, the company is becoming more resilient. Slide number eight, please. Net sales, 100% Plano & Plano in Q4 2022 reached BRL 519 million, 70% higher than the BRL 305 million recorded in Q4 2021, and 23% higher than the BRL 420 million in Q3 2022. The results establish a new record in quarterly sales for Plano & Plano.
Annual net sales also reached a new record, reaching BRL 1.69 billion, 27% above 2021. Next slide. The company launched in Q4 eight new projects totaling a general volume of sales of BRL 720 million, which represents an increase of 27.3% in relation to the BRL 565 million launched in Q4 last year. Year to date 2022, the company launched BRL 1.8 billion, an increase of 23.5% in relation to last year.
The company's participation in the launches in the quarter was 95%. on December 31st, 2022, VSO of the last 12 months was 43.5%. When comparing with the previous quarter, there was an increase of 1.1 percentage point in VSO in relation to the 42.4% of September 30th, 2022. In comparison with December 31st, 2021, there was an improvement in VSO, an increase of 4.3 percentage points.
The increases in VSO were consistent during 2022, resulting in due to better commercial management and better alignment of products launched. Slide 11. The net revenue of the company reached BRL 436 million in Q4 2022, 9% higher than the BRL 400 million recorded in Q3 2022 and 46.3% higher than the BRL 298 million obtained in Q4 2021. The revenue has continued solid with the evolution of the sales and the sales of our inventory.
We recognize the revenue using the methodology percentage of completion. Next slide. After a period with pressure on gross margin due to higher construction material prices, the price increases had a positive effect in Q3 and Q4 2022. With this, adjusted gross profit and capitalized interest in Q4 2022 reached BRL 149 million, and the adjusted gross margin was 34.1%. A great increase of 2 percentage points in relation to Q3 2022.
This quarter had another improvement in results in line with the REF margin that we had. The company continues to work in the same direction with gradual and progressive improvement. Next slide. In this quarter, REF margin had once again growth, going from 34.8% in Q3 2022 to 36.3% in Q4 2022, representing an increase of 1.5 percentage point. During the last quarters, the company made several actions to recover its historical margins.
One of the actions already mentioned was the increase in prices. The company also tried to establish prices in order to have higher margins. The recognition of the results of the company of the new sales will continue, and the increase in margin in Q4 2022 compared to Q3 2022 shows that we are on the right track.
Another constant measure is a detailed follow-up of the projects and also by the engineering team, optimizing expenses and processes and renegotiating contracts. Next slide. During the year of 2022, sales expenses had an increase of 5.5% in relation to the previous year, while net sales had an increase of 27.4% in the same period, confirming once again the efficiency of the company in client acquisition. Commercial expenses had a reduction from 11.8% in 2021 to 10.6% in 2022.
Considering only the last quarter of the year, commercial expenses went from 10.8% in Q4 2021 to 9.1% in Q4 2022. Concerning management expenses, administrative expenses, the increase in Q4 2022 in relation to Q4 2021 is due to the increase in the number of employees, and also accruals for contingencies in labor lawsuits. Disconsidering this accrual or provision, it would be only 7%.
Also, administrative expenses over revenue went from 7.4% in Q4 2021 to 6.2% in Q4 2022. In the full year, administrative expenses stayed at 6.3% of revenue. Next slide. Net profit reached BRL 57.8 million in Q4 2022, resulting in a growth of 67.3% in comparison with Q3 2022. Year-to-date net profit reached BRL 133.7 million, a drop of 1% in relation to 2022.
The company has gradually increased prices due to higher cost of raw materials in order to have a higher gross margin, higher net margin in a sustainable way. This way, in Q4 2022, net margin grew 4.6 percentage points in relation to Q3 2022, reaching 13.2%. Next slide. The company had an adjusted EBITDA of capitalized interest of BRL 82.8 million in Q4 2022, an increase in EBITDA margin of 4 percentage points and a margin of 19%.
Year-to-date, EBITDA margin was 15% with a drop of 1.6 percentage points when compared to 2022. Next slide. on December 31st, 2022, gross debt was BRL 533 million . Considering cash and equivalent cash, BRL 340 million , net debt reached BRL 193 million at the end of the quarter. The company continues to have the intention to have a net debt over equity below 20% in the next quarters. Right now, the net debt over P&L is 47.1%.
Next. The company's operation had a cash consumption of BRL 13 million in Q4 2022. The cash variation is due to the increase in the amount invested in real estate to be sold due to the good performance of our projects and the increase of the VGV launched in the last periods. We would like to conclude, and we are available for clarification and to answer questions.
Thank you, Mr. João. Now we will have the Q&A session. To ask a question, please press star one. If at any time your question is answered, you can remove it from the queue by pressing star two . Please wait while we collect the questions. Our first question comes from Rafael Rehder, Safra .
Good morning. Thank you, and congratulations for the results. Please talk about, you had a bid, how is this being considered? Do you expect potential gains from the new government housing program? Now in April, we begin to have the consigned FGTS. So how many clients of Plano & Plano may have this benefit from the government in the FGTS program, and also the subsidy for group 2? I'd like to understand how you see these things. Thank you.
Rafael, João here, thank you for the questions. I will answer the first part. Plano & Plano included 7,401 units in the Pode Entrar government program, BRL 1.4 billion. None of these units is in our basic plan. We expect to grow in launches this year. We should grow this year, 2023, but the Pode Entrar program is not included in our plans. It's extra. Two, if we participate in this new program, if all goes well, the program should begin this year and end next year in 2024.
What we can say is that these units will be built with our land bank, and we have a pipeline of launches with our normal program. We can substitute these launches for others. So this government program may have a marginal additional VGV in our growth plan. It's very early to have more concrete data about these 7,400 units. Let's see how many of them will be approved by the government. Now, concerning Minha Casa Minha Vida program, Rodrigo will talk to you.
Well, Rafael, as you said, the consigned program will begin in April. This will increase the income, this will increase the affordability, and will help a lot in the purchase, and favors the performance of the sector. Concerning more subsidies for Group 2, we see the government's intention. Part of the resources will go to expand Group 2, but as you said, we do not have anything concrete yet.
There are great chances of this happening because the current government was responsible for the origin of this program and knows the importance of this program to allow lower middle-class families to buy real estate. But the main concentration will be in Group 1. And for us, who are well-positioned in this market, it will be very important since it will help a lot.
We saw in the last few years, especially last year, companies leaving this market due to the feasibility of these projects. So we can celebrate. We are strong, especially in the second semester. We worked in all these brackets, and we had a large project that we launched in the last quarter with very good results. Almost 60% of the units sold in low competition. Due to this, we were optimistic for everything that will happen in 2023.
Very clear. Thank you.
Thank you. Our next question comes from Ruan Argenton from XP Investments.
Good afternoon. Congratulations for the results. I would like to go back to the Pode Entrar program. What is the gross margin that you estimated for this program? And considering leverage, the program seems to be very attractive. Since these are extra units, what will be the effect on VGV? Thank you.
Well, Ruan, João again. Thank you for the question. Concerning gross margins of Pode Entrar, we see clearly in this program, the sale price in comparison to the other market is a little lower, but this program also eliminates marketing expenses. The price is a little lower, but sales expenses are flat, zero. So the gross margins in Pode Entrar will be lower than the gross margin in the traditional launches. But we eliminate part of selling expenses, and thus the margins of Pode Entrar program are adequate, but there will be a lower gross margin.
The profitability is adequate. In terms of financial flow, there is an escrow account, a guarantee. You mitigate risks during the process as the company builds the projects. We should not have problems in being paid since the financial flow is guaranteed by an escrow account, and payments aligned with the construction. So as you said, it is attractive.
The construction capacity. A very interesting issue here in Plano & Plano. We have an engineering school. We are training engineers. So we train engineers, and we train them during the last two years of their university programs. Thus, they can work in our projects. This guaranteed our expansion and our capacity more than 30% a year, and we are prepared for more growth.
So this government program will represent more volume in 2023/ 2024, but it is guaranteed that we will have capacity in terms of engineering and construction. The land bank is there. We have plots of land, so we are not concerned with these problems. For us, we should not have any problem with construction capacity.
Thank you.
Thank you. Our next question comes from Elvis Credendio, BTG Pactual.
Good afternoon. Two questions. The first on gross margin. We saw an improvement. You said that you were able to increase prices. Are the lower costs helping the gross margin? How do you see gross margin of new sales to have an idea of gross margin and REF margin in the future? The second question, Pode Entrar program, the leverage, and when do you believe the company will be able to distribute dividends since you will have a better cash flow? Do you believe Plano & Plano can distribute dividends in 2023? What kind of payout do you believe would be reasonable?
Thank you, Elvis. Let's talk about gross sales. We have a very focused control by engineering of the construction costs. We had a gain in relation to INCC program, 4 percentage points below the INCC. All of this is reflected in our numbers. Plano & Plano for many years always updated. We always update our plans every month to these gains that I mentioned last year with our cost.
You can see part of the gains in gross margin came from price increases and also expense control and new construction techniques in all the new projects. In 2020, for example, we had a gross adjusted margin of 38%, 39%. The company wants to go back to these levels, so we have space to improve. As we sign the REF margin, we are on the right track.
We are trying to go back to historical gross margins like in 2020. It is not a guidance, but we are working to do this. Now, concerning for the entire government program, there is a down payment of 15%, but you have cash flow to pay construction costs. The most important thing in this project is that the payment is guaranteed, and we do not receive only once. We have to control. We have four phases, and until 2024, this flow will happen.
There will be a positive cash flow. This reduces the company's leverage and the company's dividend policy. We showed that the payment will be the minimum, but as we have surplus cash after financing the expansion of the company, we will distribute dividends to shareholders. But this in 2024, not in 2023.
Thank you.
Thank you. Our next question comes from [inaudible], Itaú BBA.
Good afternoon, João , Rodrigo. Two follow-ups. This issue that you mentioned for the entire program. Some companies believe that the escrow account goes direct to the company's cash. You are saying that it is different. Reminding you that for us, this is a down payment, so probably it will be a down payment, and we receive the cash according to the progress of the project of construction. If we do not have performance, we do not have access to the money.
You have to build, you consume cash, and then you receive, you get paid. But in the accounting, is it considered cash? It is a down payment. It is considered as a down payment. Thank you. The second, the impact of consigned FGTS and more flexible payment terms, 35 years to pay for the projects. What will be the impact of this in affordability since families will have an extra five years to pay the financing?
Luna here. Look, it is a great contribution. We know that the affordability of these products, these sales, adjustments in income versus payment capacity is tight. Anything that comes will help. Last year, in one of the first adjustments of the program in the previous government, and as you said, from 30 to 35 years to pay off the installments, the financing. Yes. We will have more families capable of buying our units, and this will really agilize our sales.
Thank you.
Thank you. Our next question comes from the internet, Malek Padilha Zei n from TC Matrix. Congratulations for the results. What are your expectations in terms of cash generation this year and next year? What can we expect in terms of payout? Do you have an objective for net debt? Also, how many units were part of the Pode Entrar program? Thank you.
Malek, thank you for the question. We already answered this, the cash generation for 2023/ 2024. In 2023, we expect a positive cash generation. In Q3, there should be cash consumption. As of the Q2, we believe there will be a positive cash generation. So now, with recognition of the gross revenue, we're generating cash. We will be generating cash as of Q2.
2024, we don't have numbers to give you, but probably it will continue this way with a positive cash generation. Payout ratio, we're paying the minimum dividends for the time being. In 2024, we will distribute a higher payout ratio. Net debt over PL, as we mentioned in the presentation, our objective is to lower this below 0.2. Our expectation is that this should happen by the end of this year. Finally, number of units in Pode Entrar, 7,400 units. We have to wait to see if it will be approved by the government.
Thank you. Our next question from the internet, Gustavo Volpato, Verona Investment Club. Good afternoon. Congratulations for excellent results. I would like to know about operational expenses. During Q4, there was a provision for labor lawsuits. Will this continue in the next semesters?
Thank you, Gustavo. In principle, no. We're working with the lawyers. When we have labor lawsuits, we make accruals provision. This is only a one-time provision. We don't see this as recurring.
Thank you. Our next question is from the internet, João Pedro Rodrigues, ASA Investimentos. Good afternoon. Congratulations for the results. Could you speak more about the Pode Entrar program? How many units? How is the price for these units? Were you able to recover margin? How do you believe prices will behave during the year? Is there space to increase the price?
Thank you, João. Concerning Pode Entrar, we already mentioned 7,400 units. Price level, average ticket close to BRL 200,000 per unit, per apartment. What we have in terms of margin, we had a price increase. We see in this scenario, in Q1, there is space to increase prices. We should increase prices a little above inflation in 2023. We will try to recover prices above inflation this year. Yes, there is space to increase prices.
Thank you. Our next question is from the internet, Herman Lee, Bradesco BBI. Good afternoon. Congratulations for the excellent results. I'd like to know the operational financial data that you trust the most for this year.
Herman, thank you. Clearly, yes, we have improvements in all the company. 2023 should see an acceleration in launches of new projects. Last year, growth of 24%. This year, if all goes right, and the middle class continues, we should accelerate launches. With an increase in launches and sales, we look at everything. We trust that 2023 will be the best year of the company in its history.
This includes operations, engineering. Increase in sale price, more launches, improving EBITDA margin in relation to last year, better ROI, less debt. Many indicators that we monitor, and we have goals. In this scenario that we see, we trust that we will have the best year in the company's history.
Thank you. Our next question comes from webcast. Lorenzo: "The market for middle income is having problems. Why will you launch more programs in this income bracket?"
Luna speaking. Good afternoon. Thank you for the question. Middle class, especially in São Paulo, there is a great economic consistency I can see, and São Paulo is the locomotive of Brazil. The middle class is very strong in São Paulo, Brazil. We have high interest rates and low economic growth, but it's a market that has had few offers of new projects in the last few years, middle class. When we talk about middle class, we're talking about lower middle class, what we call Group 4.
These are products that go up to BRL 400,000, BRL 500,000, where the impact of these rates is not very high, and we have a strong market there because there were few launches for middle class in the last few years. The market in São Paulo has a lot of space for growth, for demand, as I said, since few projects were launched for the middle class in the last few years. In this wage bracket, it's not high middle class, it's low middle class.
Thank you. Reminding you to ask a question, please dial star one. Please wait while we collect the questions. Thank you. Since there are no more questions, I'd like to pass the floor to Mr. Rodrigo Luna, Vice President, for his final comments.
Thank you very much for the interest in Plano & Plano. Thank you for participating. As we said, 2022 was a year with many problems, but we overcame the problems. We had record consistent results in spite of all the challenges. For 2023, we're very optimistic. We're expecting a very consistent year.
We consider that we are well-positioned in the largest and strongest market in Brazil, in all the regions of São Paulo, with products in all the income brackets. With the new federal government, we have projects ready for launching during 2023. The company is well prepared for this demand that has been consistent during the last few years, and we're all prepared to really consume this demand. Thank you for participating, and we wish you a good day.
The conference call for earnings of Plano & Plano is concluded.