Earnings Call: Q2 2025

Aug 14, 2025

Summary

Q2 net revenue was BRL 84 million and net loss was BRL 59 million, with higher financing costs and labor-related delays weighing on results. A proposed Jacarepaguá sale of up to BRL 510 million could support debt reduction if completed.

As usual, we will start with a presentation by the executive, then move on to a Q&A session. If you need support, please send a message via chatbox. Now I would like to turn the floor over to Mr. Fernando, who will start the presentation, please. Good afternoon, everyone. Thank you for being here. Let's get started. Starting with the results, as Leonardo said, we always have split into strategy, operating performance, and financial economic performance. I will talk a bit about our strategy. We are giving continuity of launches in Jacarepaguá, and we should remember that our PSV to be launched is BRL 4 billion, of which BRL 2.1 billion is Tecnisa's share. Our solid land bank to guide the business plan today is of nearly BRL 5 billion, and BRL 2.7 billion is Tecnisa's. We should say that our major focus is on commercial marketing strategy, and we always control hard on administrative expense reduction. We have reduced over time and have earned productivity. For this semester, we had a 19% reduction, and we also work on backlog gross profit, which has totaled BRL 187 million. I should also explain a bit about that. We have had an important event where we have signed an MOU with Cyrela for the sale of a portion of Jacarepaguá for up to BRL 510 million. That's BRL 0.5 billion, and this is how it will work. BRL 450 million will be paid upfront, and BRL 60 million contingent upon the sales performance of the project for Jacarepaguá, something that is nearly guaranteed. We are talking about a BRL 510 million operation. That is where we are working on, and it still has not been completed. We signed an MOU, and we have October 30 as the forecast to complete. We have, as Cyrela, are working hard to be able to complete this operation by October 30. I should also highlight that in this operation, we do not have the project that has already been launched included. You can see here the diagram. As you can see, what we have in São Paulo, which is major, and we are talking about the gray area, which are those included in the proposal: A1, D2, D3, D1, D2, three, phase one, phase two. D1, phase one, which it says there Figueiras is nearly completed, and we will deliver by the beginning of next year. Those are the lots that are being discussed. We have the E1 there. The blue one is not part of this transaction. Tecnisa has 52%. With this transaction, the proceeds will be primarily used to reduce corporate debt. It's no mystery that financial costs are hard, and especially with the Selic rate. That is a greater reason for us to carry out this transaction. As Leo and Anderson said, we will be open to answer any questions that might come up. Okay. When it comes to guidance, last year we had about BRL 1.6 billion, and we had reached BRL 1.7 billion. Now, the guidance was BRL 1.6 billion. No, it was of BRL 1.7 billion, and we reached BRL 1.6 billion. That is why we reached 95% of the guidance, nearly reaching it. For here, we have BRL 1.5 billion, and if we have this transaction completed, we will have to review it. We carry on and we are working on this transaction. We think it will be completed and signed. All of what we are saying, it will not include this. Then we would have a guidance of BRL 1.5 billion for 2026 and BRL 2.1 billion for 2026. Here I should highlight the BRL 4.9 billion that I mentioned in PSV that we do have, where BRL 2.7 billion is Tecnisa's shares. It is important to say that for this BRL 2.7 billion, we already have BRL 1.8 billion approved as projects. If the transaction does not come through, we will launch this right away. For Tencasa, our low-income segmentation, where we have together with CP Residencial, we have site in Chácara Santo Antônio neighborhood. We are talking about BRL 90 million PSV to be launched in July 2025, as we had said. We have a 30% stake, and we talked about the important transaction for us, important partners that we have. CP Residencial is one of these major partnerships we have. The building, as you can tell, is good located in Chácara Santo Antônio in São Paulo, and it comes with all that you see. You have the pool, yoga area, sand court, gym, pet place, gourmet space, among other amenities that these projects deliver. Here I highlight the gross sales for the quarter, where we can see BRL 139 million being reached. That is what is important to be highlighted here. The graph will show and compare the second quarter of 2024 with this year's. This shows how we work with sales for each of these developments and how we have reached now the second quarter of 2025. You can tell that all of them have been increased substantially sales, where we have Reserva Figueiras and Pitangueiras nearly completed and nearly 100% sold. We should highlight also administrative expense. That is something that really does worry me, and we have been able to reduce our expense 19%. When I consider the first quarter of 2025 to the second quarter, that reaches 19%. When you can see a longer period, we have a 13% reduction. This is our pace to reduce increasingly more. Something I am proud of is although we have this way of work showing greater productivity for everyone and versatility for the third year in a row, we were able to get the Great Place to Work certification, being one of the great companies to work at. Here I should highlight the backlog gross profit. We know that we can only do that once the construction is completed or is progressing, and we have worked on it to see this positive result. This is the amount we have for the second quarter, reaching BRL 187 million. 39% of increase, of which actually is the backlog gross margin of 39%. What I should highlight is that for Jardim das Perdizes, in the next slide, we will explain this development alone. It already reaches 46%, where the other one you have a lower margin, still good 26%, but it is lower. I always highlight here at Jardim das Perdizes, the same thing. It is a good side of the bad thing. The bad thing was 8 years of problems with CEPAC, a lack of auctions. We were stuck. However, the lots had been bought some time ago, and that brings us great margins today and a trend, as I said, 46%, and we are taking major steps to always reach that. I would like to pass the floor to my colleague Anderson, our CFO, to carry on. Go ahead, Anderson. Thank you, Fernando. Good afternoon, everyone. Here for profitability of the operation, we have here the third quarter and BRL 84 million, and this is pretty much aligned with what we have with the first quarter, and we have less inventory. That shows there is an increase of 1.2%, and we completed in 13%, although it is a very challenging scenario that we have out there for the economy. We consider this a good performance. Right here we have the net sales. We see the second quarter reaching BRL 64 million, again aligned to the first quarter of 2025. Compared to 2024, it is not as effective because we had launches in 2024, and this year we did not. Much because of the transaction we are working on, as has already been mentioned. We just did not have launches because since we signed the MOU, we had to stop the launch. Otherwise, we would have done that in May and the other one in August. In this next slide I talk about what we have. We are at BRL 596 million for inventory at market value. This shows that we are delivering well sold developments. When we talk about the maintenance of the units is included here showing that once it is delivered, we are able to generate cash already selling the unit. Here you see the geography distribution, mostly in São Paulo, just a slight 3% in other states. In terms of status, we have 94% under construction. Right here, we should highlight Highlights Pinheiros building located in the neighborhood of Pinheiros. It is 1 tower with 110 units, 45 studios and 2 stores, and it is BRL 166 million for PSV, 100% Tecnisa, and the units are 77 all the way to 86 square meters, and the studios smaller from 26 to 34 in 2 stores. The benefits and amenities to our clients and owners of the apartments, as you can see, bike studio, endless pool, private workstations, and we have versatility in the blueprints. Coming to the financial economic performance for the quarter, we have had a net revenue of BRL 84 million, including the projects where we have Jardim das Perdizes as well. It was a bit less than the first quarter of 2025 because we had to work hard when it came to the challenges that the sector has with labor force. We had to review some of our programs and we had to adjust some expirations. That is why we had to adjust the budget for indirect costs. That is where we had less revenue for the second quarter. We have here for the semester BRL 202 million. What I should focus is the adjusted gross profit. You can see we had a 15% for the first semester of 2024 to 18%, where we are at 3% growth, showing that Jardim das Perdizes is increasingly more giving positive results to our company. Next slide. Here the receivables, scheduled debt, and the debt maturity schedule. As you can see, BRL 621 million total receivables until 2029, where in the short term, we will have BRL 384 million until 2026. When we see the ones that we will have, we are talking about BRL 329 million in debts maturing until 2026. We should remember that we have BRL 596 million of the inventory to work with the long-term debt for 2027. We have a two-year there maturity date to come. Here we show you the net income. We have BRL 59 million loss in the second quarter, much because of the budgeting and the increase of financial costs because of the Selic rate. For backlog gross profits, where we have BRL 187 million that was recognized with the completion of the constructions. Right here, I show you the cash flow, where we have BRL 172 million, where we have a net at BRL 577 equity, where we have a reduction because of the loss of the period at BRL 329 million, and the adjusted cash generation, where we have a BRL 68 million there showing the increase of the interest rate and some of the deliveries that ended up being postponed as we had to revise our schedules. Also the start of some of the constructions where we launched three projects in the last year at Jardim das Perdizes, and that takes up cash. I should highlight that for the next quarters, we have many deliveries to be made. You will see in the slide here that we have here receiving those that will reach BRL 326 million, that will improve us from what we have for the company. I close the presentation here, and I am open to any questions at this point. We will start now the Q&A for investors and analysts. If there is any question, please click the raise hand button or type your question directly into the Q&A box. Let us wait a few minutes to see if we do have any questions coming in. No further questions, so we will conclude our call. Thank you, and we are available for future calls.