Earnings Call: Q4 2024

Mar 27, 2025

Summary

FY 2024 gross sales rose 58% to BRL 1,053m, while adjusted cash generation swung to BRL 95m positive. Launch guidance was met, with BRL 1.5bn targeted for 2025 and BRL 2.1bn for 2026.

Good morning. Welcome to the conference call for the earnings release presentation of the fourth quarter of 2024 with Tecnisa. We have Mr. Fernando Peres, who is Chief Executive Officer, and Anderson Riera, who is CFO and Investor Relations Officer of the company. We have also Leonardo Sloman, who is the Executive Financial Manager. The results are presented in our web. If you need support, please let us know. We are going to have a Q&A session later. I would like now to turn it over to Mr. Fernando Peres, who will start the presentation. Thank you, Leonardo. Good morning, everyone. We are going to share with you some information today. Can everyone see the presentation? Good. Wonderful. Let's start it. We always have our presentation into three elements, strategy. Then Anderson, our CFO, is going to talk about operational performance and financial and economic performance. Our five strategic drivers are the following. Continuity of launches in Jardim das Perdizes. We launched in 2024 a PSV of BRL 1.6 billion. Our solid land bank is very robust to guide our business plan. BRL 5.1 billion in our land bank, of which BRL 2.1 billion is in Tecnisa's share. With your focus on our commercial marketing strategy, there was an increase of 58% in gross sales over the year of 2023. We are very firm on our control over administrative expenses. In 2024, we had a decrease of 7% over the significant reduction we have had in 2023. In terms of operation profitability, we have a very healthy operation. We have a backlog gross profit totaling BRL 203 million, and we are generating additional cash. Cash generation in 2024 amounted to BRL 95 million. We had provided some guidance for Jardim das Perdizes, and we've launched BRL 1.6 billion, and we've met our guidance ultimately. Our margins are quite good at Jardim das Perdizes. The good thing of a bad side, because it stopped for eight years, which meant a lot of problems, but we had bought a piece of land before, so it means that we have very good margins. The guidance that I had given before, now in 2025, we expect to have BRL 1.5 billion in additional launches and in 2026, BRL 2.1 billion more. Now let's talk about our land bank. BRL 5.1 billion in PSV in our company's land bank, or BRL 2.5 billion, which amounts to Tecnisa shares. We already have BRL 975 million in approved projects, and projects under approval amount to BRL 816 million. Now let's talk about our gross sales. BRL 1,053 million in gross sales in 2024 or a 58% increase over the previous years. Sales speed reached 42.4% in the period. Now in terms of administrative expenses, we reached savings of BRL 4 million in 2024, which amounts to 2 percentage point reduction in relation to net revenue. You can see in the chart those two pieces of information. Now speaking of our profitability of the operation and backlog gross profit, it shows how successful our operation is generating positive results. In the end of the fourth quarter, BRL 203 million was our backlog gross profit, or 21% increase over the same period in fourth quarter 2023. We have had cash generation, which is absolutely essential to show how well we are performing in our operation. We've generated in 2024 adjusted cash generation of BRL 95 million. In 2023, our cash was very negative. We went from BRL 256 million negative cash generation in 2023 to BRL 95 million surplus in 2024. Cash generation of BRL 95 million. Backlog gross profit, as I mentioned before, it amounts to 45%. Very good gross margins as you can see. Well, said that, I am going to hand it over to Anderson Riera, our CFO, who is going to go into further details. Thank you, Fernando. Good morning, everyone. Let's take a look at the first slide, operating performance. I am going to tell you about our gross sales. We have Tecnisa's share here. Fourth quarter, BRL 142 million in gross sales, and year to date, BRL 706 million with 29% increase in volume of gross sales. When we exclude cancellations, we have had BRL 609 million net sales or 16% increase over 2023. Our SOS, sales over supply, was 16% in the fourth quarter, and 43% in the year of 2024. Our next slide, we can see our inventory. It closed the year at BRL 716 million, BRL 142 million reduction in terms of sales. 98% concentrated in São Paulo, very much within our strategic focus. Only 2% outside São Paulo. In terms of status breakdown, we used to have 67% of our inventory in units that were in construction, and 28% in projects to initiate, which started now in January. And 5% are concluded units, very low volume. So that's what we had in the end of 2024. In the end of the year, we had launched Residencial Florear. It is one project fully concluded. We have PSV BRL 133 million. Our units have 141 square meters, and also 59 studios, which are smaller, within 17 to 25 square meters. Now let's talk about our financial and economic performance. First chart, we can see net revenue in the fourth quarter 2024, we had BRL 220 million, very significant increase. The share of Jardim das Perdizes in results is becoming more and more prevalent. Year to date, BRL 696 million of net revenue, 39% increase over 2023. On the chart below, we can see adjusted gross profit. Excluding financial operations, we got to BRL 42 million in the fourth quarter 2024, over the third quarter. In the year, BRL 118 million of adjusted gross profit over BRL 106 million in 2023, or 11% difference. Let me show you now our receivables schedule compared to the debt maturity schedule. As you can observe, we have a very significant volume of receivables for 2025 of sales we have already made, BRL 473 million, as opposed to BRL 237 million of receivables. This is a year where we are going to have lots of deliveries. Six different projects that's going to generate cash. On the chart on the bottom, we can see that our debt profile is very extended. We still have got BRL 716 million in inventory to be sold, in addition to other launches that we have made in Jardim das Perdizes that's going to help us pay our debts. Here we can see our net results in the fourth quarter. We had two situations that contributed to the results. First, one land that had been just taken by the government and had generated a reimbursement. It generated an impact of BRL 20 million. But the agreement was still positive to us because it eliminated a potential risk that would be much higher than that. "Let me jump in and make a comment," says Mr. Perez. We always emphasize that accounting result is important, of course, and we have BRL 148 million there, but we should focus on profit generation. BRL 203 million in terms of backlog gross profit. If it had been immediately accounted for, we would have generated BRL 50 million in terms of really net result. BRL 203 million backlog gross profit is our number. Finally, let's get to our cash position. BRL 258 million in the end of the fourth quarter 2024. Net debt BRL 555 million. Our shareholders' equity BRL 386 million because of the results of the period. In the last chart, we have adjusted cash generation compared to the third quarter. When we purchased Cipap, cash was somewhat impacted. In the second quarter, and you see in the second and third quarter, we have generated cash with adjusted cash generation of BRL 95 million in 2024. With that, I conclude my presentation, and we are here to take your questions. Thank you. Great. Let's start our Q&A session. If you need to ask a question, please raise your hand using the Zoom option, or you can use the chat to ask your questions. Thank you. I'm just going to wait a couple of minutes for your questions to be submitted to us. Thank you. Well, if there are no further questions, we would like to thank you all for your attention. Thank you very much.