Good afternoon, ladies and gentlemen. Welcome to the conference call for earnings for Q3 2022 for Plano&Plano. We inform that this event is being recorded, and all the participants will be in the listen mode only during the presentation of the company. Next, we will begin a Q&A session when further instructions will be supplied. If you need any assistance during the conference, please request the help of an operator by dialing asterisk zero. This event is also being transmitted simultaneously via the internet, via webcast. It can be accessed at ri.planoeplano.com.br, clicking on the banner webcast. The slides of the presentation are available for download on our webcast platform. The information is available in Brazilian reals and IFRS, BR GAAP applicable for construction in Brazil.
Before beginning, we would like to mention that any declarations made during this conference call concerning the business perspectives of Plano&Plano, projections, and operational financial goals are based on beliefs and assumptions of the company's board, and also information currently available. Considerations about the future are not guarantee of the performance. They involve risks, uncertainties, and because they refer to future events, therefore, they 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 performance in the future of Plano&Plano and lead to results that may differ materially from those expressed in these considerations about the future. Today, we have the presence of Mr. Rodrigo Luna and João Hopp, Director, Vice President, CFO, and Investor Relations at Plano&Plano.
Now I'd like to pass the floor to Mr. Rodrigo Luna, director, who will begin the presentation. Sir, you may proceed.
Good afternoon. Thank you very much for participating in our conference call for Q3 2022. Please, let's begin on slide number five. In accordance with the plans in the last few years, Plano&Plano has delivered a sustainable growth as well as improved its management in many fronts, making the company more resilient and capable of taking advantage of opportunities in the Brazilian real estate market. In the last two years, we had challenges, and we have worked hard on many fronts to mitigate the pressure on costs, construction costs, and to deliver financial results in line with the history of the company.
Among other actions to overcome the challenges due to the world economic crisis produced by the pandemic, we reviewed the specs for projects trying to find alternatives in construction techniques. We had gains in productivity. We defined new guidelines in the expense structure for marketing and sale, and we were able to pass on the cost inflation to our sale prices. We would like to highlight the gain in adjusted gross margin in Q3 with an increase of 3.4 percentage points above Q2, reaching 32.1%. This increase is a landmark in the recent history of results, and we're working so our margins can be recovered gradually during the next quarters.
Also, we would like to stress the increase in our REF margin that we had at the end of Q3, which was 34.8%, representing an increase of 1.7 percentage points when compared to that of the end of Q2 2022. This increase is due to the work that has been done to reduce construction costs and pass on the inflation and higher prices to the units in inventory and future launches. This improvement in profitability can also be seen in the net profit, which grew 78.6% over the profit of Q2 2022. Another highlight is the net sales of the quarter. The company established a historical record reaching BRL 420 million , 28.8% higher than in the same period of last year. We sold 2,113 units in Q3. Plano&Plano, until now, is maintaining its schedule for launches for 2022. This plan was prepared at the end of last year.
The launches are equivalent to BRL 424 million in Q3, and BRL 1.0 86 billion year- to- date in the first nine months of this year. Year- to- date, we delivered a growth in launches of 21.1% in relation to the same period in 2021. We continue to work with a model that is very light in assets. This way, the purchase of plots of land continue to be done using barter or financial exchange. Even with the rhythm of current launches, our land bank for future projects is worth BRL 11.1 billion. It is part of our strategy, the growth of our portfolio in middle-class projects, trying to reach 30% of our portfolio in the next few years. In 2022, approximately 10% of the units to be launched will be outside the ranges of Casa Verde e Amarela for low-income families.
Also in the last quarter of 2022, we will have a strong volume of launches in comparison with 2021. For 2023, we should launch 25% of the portfolio in lower middle-class units. Concerning the new government that we have, we believe that Casa Verde e Amarela will receive new adjustments by the government, especially in the lower ranges. The company is prepared to work in case good opportunities arise. The management continues to trust that it may continue to expand the operations of the company in a profitable way and with controlled risks. With the current scenario, we trust that Plano&Plano will continue with its solid growth strategy. Now, for the first semester of 2023, we have projects prepared and with a projection to have higher numbers than what we did in 2021.
Now I'd like to pass the floor to João Hopp, our CFO, and he will present the operational and financial highlights.
Good afternoon to all. Let's go on to slide number seven. Net sales, 100% Plano&Plano in Q3 2022 represented BRL 420 million , 28.8% higher than the BRL 326 million recorded in Q3 2021, and 10.8% higher than the BRL 380 million in Q2 2022. These results represent a new sales record in a quarter for Plano&Plano. Next slide, please. The company launched in Q3 six new projects, totaling a general volume of sales of BRL 424 million including physical exchange, which represents a small drop of 3.8% in relation to BRL 440 million launched in Q3 last year. Year- to- date, the company launched BRL 1.1 billion , an increase of 21% in relation to the same period last year.
The company's share in the launches was 100%. Next slide, please. On September 30, 2022, the VSO of the last 12 months was 42.4%. When compared with the previous quarter, there was an increase of 1.2 percentage points in VSO in relation to 40.7% of June 30, 2022. In comparison with December 31st, 2021, there was an improvement in the VSO with an increase of 3.2 percentage points. Slide 11, please. The net revenue of the company represented BRL 400 million in Q3 2022, 18% higher than BRL 339 million recorded in Q3, and 22.1% higher to the BRL 328 million obtained in Q2 2021. The revenue has been solid, accompanying the evolution of the projects and the sales of units in our inventory and new launches, also obeying the revenue methodology of percentage of completion. Slide 11.
After pressure on gross margin due to the increase in the price of construction material, the gradual passing on of inflation to the price of sale represented a positive effect in Q3. Thus, gross adjusted profit of interest rates capitalized in the quarter reached BRL 128.5 million, and gross adjusted margin was 32.1% in this quarter, an increase of 3.4 percentage points. This quarter has historical results in line with the REF margin. The company continues to work in the same direction with a gradual evolution and progressive increase in its margins. Slide 12. After a period of pressure on gross margin due to higher construction material prices, we were able to pass on inflation to the price of sale with a positive effect in Q3. In the last quarters, the company made many actions to recover historical margins.
Of the actions, the increase in prices, and the company also tried to price the launches considering up-to-date costs in order to have better margins. The recognition of the results of the company of these new sales is now increasing, and the increase of margins in Q3 in comparison with Q2 shows that we are on the right track. Another constant measure is a detailed follow-up of the projects. We're always looking at the expenses and renegotiating contracts with key suppliers. Next slide, please. During the first nine months of 2022, commercial expenses, sales expenses had an increase in relation to previous year. Net sales had an increase 14.6% in the same period, confirming the efficiency of the company. In sales expenses, there was a drop in relation to revenue going from 11.6% in Q3 2021 to 11.2% in Q3 2022 sales expenses.
Concerning administrative expenses, the increase in Q3 2022 in relation to Q3 2021 is due mainly to an adjustment in the accruals or provisions made in guarantees for contracts under construction. In relation to Q2 2022, the amount of administrative expenses over revenue continued to be 6.2% for Q3 2022. The net profit reached BRL 34.5 million in Q3 2022, resulting in a growth of 78.6% in relation to Q2 2022. Year- to- date, the net profit reached BRL 75.9 million. The company is gradually passing on inflation to the sale price of the units in inventory and the launches, trying to obtain a growth in gross margin and net margin constantly and in a sustainable way. With this, in Q3 2022, the net margin grew 2.9 percentage points in relation to Q2, reaching 8.6%. Next slide, 16.
The company had an adjusted EBITDA of capitalized interest of BRL 60.3 million in Q3, an increase of 3.5% in relation to Q3 2021 with a margin of 15.1%. Slide 17. On September 30, 2022, the gross debt was BRL 465.2 million. Considering cash and equivalent cash of BRL 285.5 million, the net debt reached BRL 179.8 million at the end of the quarter. The company reaffirms its intention to bring the net debt over equity below 20% in the next quarters. Currently, this relationship, net debt over PL is 46.9%. Slide 18. Excluding the payment of dividends and the repurchase of shares, the company had a cash consumption of BRL 9.8 million in Q3 2022. The cash variation comes especially due to the increase in the amount invested in real estate to be sold as a consequence of a good performance of our projects and the increase in VGV.
Now we are available to answer questions. Thank you.
Thank you, Mr. João Hopp. Now we will begin the Q&A session. To ask a question, please dial asterisk one. If your question was answered, you may remove your question from the queue pressing asterisk two. Please wait while we collect the questions. First question comes from André Dibe , Itaú BBA.
Good afternoon, Rodrigo Luna, João. I have two questions. The first in relation to costs. Please comment on the costs during this quarter, labor and materials. We have heard from other companies that prices are dropping a little. Do you believe there are risks in the future? The second, as you mentioned in the presentation the possibility of working in lower ranges of the program if the government gives incentives. How do you see the land bank today? How is your land bank?
Do you have this flexibility, or would you have to use a new strategy? Do you have the capacity to add more projects with the same cost?
Thank you, André. Excellent question. Concerning cost of material and labor, we, as the rest of the market, are seeing lower inflation, less inflation, but less volatility in the prices too in the last few months. Internally, in Plano, we have our own inflation measurement. Our inflation this year is below that of last year, four percentage points. So we have a better scenario now, not only in relation to us, but the supply chain is more organized. We delivered all the projects on time, but we had a lot of work to guarantee supply. Looking forward, in the next 60, 90 days, all our suppliers, we have direct contact. They haven't announced any price increases. So we see a good environment.
Also in terms of labor, there was a wage increase in May, and we don't see any pressure on the cost of labor.
André, good afternoon. What we have done, André, we always say we work together with our suppliers. We have a partnership with them. Labor, for example, we had no problems during this period. We are here making plans for next year. We are calling all the main suppliers. They know how much they will bill to us next year. Concerning materials, the main suppliers haven't caused any problems. Very few problems. Our engineering department has 40 project sites. The costs are now below the INCC index, as mentioned. We have our own cost index. We compare with INCC. In the last 12 months, our cost is 4% below the INCC index. So we believe in stability.
Now, supplementing your question, whether we can continue having our productivity, I can say that we are sure that we can. We have engineers that we hire, graduates. We train these engineers to work the way we need them to work. Today, we have two or three engineers from outside. All the others graduated inside the company. It's like a plant. We have trainees. We have interns. Every year, we hire 10 interns. So we always have a positive harvest of people with our culture. I don't see any problems in operations, in engineering for our growth. Well, I guess that's it. Rodrigo Luna talking about the lower ranges of the government housing program with the new president.
He has said in his interviews that he will have more focus on the lower ranges of the housing program for families to be able to pay for housing with their income. Our land bank, BRL 11 billion, our land bank, we can, with the zoning, to accelerate new launches apart from those we had planned, and also some that have more liquidity. So if we consider that we can have projects that will give us profitability, yes, we can, and we can do this with part of the land bank we have, and also we can buy new plots of land. So we can intensify also the purchase of plots of land for our land bank.
Thank you. Very clear.
Thank you. Next question comes from Elvis Credendio, BTG Pactual. Sir, you may proceed.
Good afternoon, Luna. I have two questions. The first, the changes in the government housing program, Casa Verde e Amarela. I'd like to understand the magnitude and whether it was what you expected, and also the FGTS plan. Do you think there will be changes? Now concerning gross margin. Gross margin is improving, but talk about the gross margin of new sales. For example, what do you intend to do in terms of price increases from now on? Is there a space to raise prices? And what is your goal for gross margin?
Hello, Elvis. Good afternoon. Thank you for your question. Yes, no doubt the adjustments made by the government housing program, Casa Verde e Amarela, were very important to bring back part of the families that lost their income capacity to buy units. The changes were not enough to go back to the levels we had three years ago, but they definitely helped.
They gave a boost, and they helped to recover part of what we had. Projects are very different one from the other, depending on the region where you work and also income bracket. We can't give you a percentage, but certainly the adjustments made have been efficient to increase affordability and to help sell more units and recover margins, as you saw in our numbers. Now, in terms of the future, one thing is the new government with its thoughts and new structures and proposals. Another is the budget. You saw that we had important progress for the use of the FGTS fund. We have part. We saw in 2022, the now longer financing periods from 30 to 35 years financing, especially for the families that suffered price increases due to higher construction costs. But we're imagining an FGTS fund that will be stable and healthy.
Now, we always say that the most important thing in this program is longevity and not the short term. Another important aspect is that the FGTS, when reviewed in the next four years, brought another billion reals. Now we have BRL 9.5 billion and another three in credit for individuals. This helps even more the capacity to buy next year, and this increases the possibilities of having another strong year in 2023 in the government's program, Casa Verde e Amarela. João will talk about margin.
Elvis, thank you for the question on margin. There is an important dynamics. The gross margin we had in 2020 before the price increases. These are the gross margins that we are trying to recover. We do a follow-up on a monthly basis, the price of the square meter, and the inflation during the period as of 2020.
In the last three, four, five months, we were able to increase the price for the square meter together at the same level as our increase in costs. We are selling the units within the margins that we had in 2020. Our objective during the next quarters in 2023 is to recover margins, getting to adjusted gross margins of 36%, 38%, 39%, as we had in the past. We are working in this direction, and we have the new sales with these better margins.
Very clear. Thank you.
Thank you. Next question comes from webcast. Augusto Tadeu de Castro.
Good afternoon. Congratulations for the results. Could you comment a little on the margins of the projects delivered in the quarter? Were they delivered with the worst margins, or will the next margins of the next projects be worse or better?
Augusto, thank you. Basically, what happens, we just reminding you of the recognition of revenue. When we have a sale of a unit, we have inflation embedded. When we send the client for financing from the Federal Savings Bank, we receive a fixed amount. During 2021 and 2022, inflation was higher than what we had embedded. These sales had margins that were worse. We are increasing the price of the new projects. We have a backlog of units sold with margins that are worse and new sales with better margins. As the projects mature, we recognize them, and I have always better and better margins with the new projects. There is a transition of old projects with margins that are worse to new projects with better margins.
Thank you.
Once again, to ask a question, please dial asterisk one. The next question comes from Rafael Rehder, Safra Bank. Sir, you may proceed.
Good afternoon. Thank you for the question. I would like to ask more about your portfolio. We see some companies who increased volume, increased PDD. On the other hand, it is a way to have a more profitable portfolio. Are you thinking of increasing the volume of deliveries, or will you continue with the same level?
Hello, Rafael. Thank you. Concerning pro-soluto , in the past, we had a portfolio that was almost zero, now BRL 146 million that we finance for clients. 18- 20 months. In our pro-soluto, we have an adequate interest rate and IPCA index + 1% a month. Our provision increased this year, BRL 4.8 million, and now BRL 14 million. It is well controlled. We do not see an increase in delinquency this year. It was an important tool, and our direct financing to clients is 8% of the sale price. When we maintain a healthy VSO, an attractive VSO, our intention, we want to make provisions for PDD. If we can decrease this 8% in the next quarters, it will be very good. We're working on this to sell with less full payment.
Very clear.
Once again, to ask questions, dial asterisk one. Now, I'd like to pass the floor to Mr. Rodrigo Luna, Director, Vice President, for his final comments.
Well, I would like to thank you all for participating, for following us at Plano&Plano. I'd like to say that during the rest of this year, we're working hard, and in spite of all the challenges in the sector and to the economy as a whole, we are sure that we will close 2022 with all our objectives, including growth, better margin. We have strong hopes that 2023 will be very good, very strong.
We hope this new government will have fiscal responsibility. We hope they will not change what the Brazilian economy was doing. We are sure that the construction segment, and especially low income projects, are part of the focus of the new government, and Plano&Plano is ready to work. This is the largest and most important market in Brazil, and where we have the main companies. We will be able to absorb many good things. Once again, I thank you for your presence. We wish you a good weekend. Thank you.
The conference call of results of Plano&Plano is concluded. We thank you for participating, and we wish you a good day.