EZTEC Empreendimentos e Participações S.A. (EZTC3) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to EZTEC's Q4 2024 Earnings Conference Call. I am Pedro Lourenco in charge of the company's Investor Relations department. And for this presentation, we have Mr. Zarzur, CEO of the company. Flavio Ernesto Zarzur, Board member and Vice President, Samir El Tayar, Vice President of the Administrative Board. Marcos Zarzur, a council member, Board members. Marcos, Vice President and Sales Director; and Mr. Fugazza, IR Relations Director. Please note that this event is being recorded [Operator Instructions]. The site is ri.eztec.com.br. There, you will also find the slide deck in our download center. The information is available in BRL. Before we begin. I'd like to mention that statements made during this conference call regarding EZTEC's business prospects, projections and operational and financial goals constitute the beliefs and assumptions of the company's management as well as information currently available. Forward considerations are not performance guarantees. They involve risks, uncertainties and assumptions as they refer to future events and therefore, depend on circumstances that may or may not occur. Investors should understand that general economic conditions, such as industry conditions and other operating factors can affect EZTEC's future performance. and could lead to results that differ materially from those expressed in such forward-looking statements. Now I would like to give the floor to Mr. Emilio Fugazza, Financial and IR Director who will begin the presentation.

Thank you, Pedro. Good morning, everyone. It is a huge pleasure to be here at this event to present our results for Q4 2024. Let's start by talking about the performance in our launches. After launching 2 projects in Q4 '24 valued at BRL 262 million. We are at BRL 1.6 billion in launches, which is a 63% growth over 2023. The major highlight in launches for '24 is the average speed that we had compared to the first quarter on average. We had 44% sales in the first 3 months of each launch. This is performance that we also expect to see in 2025. Now let's look at net sale where we also had a record approximately BRL 1.7 billion, which is the result of gross sales of almost BRL 1.9 billion. This is also a record for us. In the first quarter to the fourth quarter, we saw significant development in quarterly net sales reaching a record in Q2 2024. And about some operational highlights for our deliveries. The deliveries in '24 were very timid. However, it is worth remembering that 87% of everything we delivered has already been sold. This means that we did not compose inventory at the company, which is always welcome because it gives us continuity for our launches. In 2025, we saw the largest volume of launches expected and forecast in all time, that is BRL 2.6 billion. They include projects from all sorts of income classes from low to high scale. And the vast majority has already been sold. This ensures that the amount of inventory is not going to be a significant factor for 2025. And for some operating highlights. Here, we have some upcoming launches to show you how we are doing. We began the year launching Agami Park residences. It has BRL 326 million. It is in the district of Moema in the South district of Sao Paulo with various different sizes all, considerably large. Next, we have SP 360, which is near Ibirapuera, it has a [ VGV ] of BRL 300 million. We've started assigning the transfer contract, and it's a very successful launch. They range from 24 to 35 square meters. And lastly here, we have Alt Studios by EZTEC which is the same type of building as the smart living one with BRL 108 million in [ VGV ]. Now for our financial highlights. Starting with net revenue, we had an increment of roughly 50% in our revenue comparing '24 to '23 from BRL 1 billion roughly to BRL 1.5 billion roughly, which surpassed our expectations. Largely, thanks to the Pinheiros region. With the increase of net revenue, we also see a rise in gross profit, which reached BRL 533 million. And the major highlight there is our 37% quarterly profit, which is a 6.5 percentage point increase, up from 30.9% from Q2 2024. Here, we also have the INCC, during the year 2024, we had great performance lower than the INCC, right? So the highlights for gross margin mean lower cost for the company during the year. And this is a significant factor in forming our forecast for the year 2025. Now our financial results, which is always a highlight because of how important it is in the company's bottom line. It responds for almost 40% of the company's EBITDA. We are talking about BRL 132 million that we obtained in 2025 -- 2024, pardon compared to BRL 85 million in 2023. This is also essentially the fruit of the growth in our chattel mortgage portfolio, which increased significantly over the year 2024. We also forecast similar results for '25. Half of this is financed by IGP and half by IPCA. And on average, that means 10% a year, considering inflation. But the creation of these new units is at a higher rate than the average rate in our portfolio. And this brings us closer to net profit and ROE. They were significant for the year. BRL 239 million in '23 to BRL 405 million in 2024. This is the result of BRL 127 million in net profit in Q4 without any nonrecurring effect. I'd like to remind you all that this variation in the third quarter -- apologies, unfortunately, we have lost the audio from the main floor. There is a significant amount of equity allocated to Star Towers and also in the EZTEC Corporate. The residential business is really driving our results. We've got BRL 408 million in net profit and that's approximately 14% ROE and this brings us to our capital structure. Just to clarify for everyone, this is the makeup of our debt availability. I'd like to inform everyone that in the 2024 graph, we have BRL 544 million from the holdings. This interacts with the corporate debt, which involves the corporate structure, the property security and liquidity. So EZTEC SA has BRL 244 million in net cash. And our financing, we should mention in 2024 had an average cost in the order of 8.9% per year. So this is also linked to the liquidity and availability in our SFH. This gives us net debt of BRL 366 million. And it is entirely based on production financing at much lower cost than the standard interest rate in Brazil today and to wrap this section looking at our dividends. Total dividends for 2024, we see BRL 245 million, this corresponds to close to 60% of our net profit from the year. And we should mention our next payout is going to be the fruit of the net profit we had. So BRL 30 million in dividends that will be paid out to our shareholders on March 21, 2025, and the payment date will be March 31. And just to conclude, we have 2 subsequent events that are significantly important for the company. The underwriting of the Adolpho Lindenberg company who will be controller. We will be controlling this company. We now have 46.8% of that company shares. And today, we pay approximately BRL 130 million with no cash effect only participation in the JVs that we've already worked on together. And of course, the paying up of that debt, which EZTEC has on the Adolpho Lindenberg construction companies. And we have issued our first CRI corporate debt instrument. It was BRL 375 million. We actually issued the additional batch. There were 2 series that were issued. The first were by early interest and the second one was in bullet interest. This is the CRI format. Therefore, it is exempt from interest -- from corporate interest. This has been issued with the consultancy from Itau BBA, and we thank them for their support. Before we move on to the Q&A section, I'd like to pass the floor to Mr. Silvio Ernesto Zarzur for some initial comments.

Good morning, everyone. I'd like to thank everyone for being here and listening to us. And I'd like to say that in spite of the challenging scenario, we're very confident in the company's results. Our company is very well-established increasingly more mature involved in ongoing processes with commercial advantages that are significant for selling and marketing our properties. Our sales structure supports us very well. Our financial structure for that and the administration has been working as well to improve our results for the year, and I think we're going to do that. And I think that's the key. And once again, thank you all for being here. I'll pass the floor to Flavio for him to add.

Good morning, everyone. I agree with Silvio. I have witnessed the confidence and maturity that EZTEC has. Something that is important to be made -- that should be mentioned and made very clear is our capital structure. It is extremely robust. And it makes us very comfortable from now into the future. At a time like this, this is exactly what we could hope for, and it's what we have. The properties that we own, the positioning that we adopt, they all make us very confident about the future. We will now begin the Q&A session.

All right. Thank you. So we now begin the Q&A session. We'll begin with sell-side questions following a previously established order as long as you have the raise-hand mode activated, after that, we will answer, time permitting, questions submitted through the chat. If time does not permit, please submit your questions by e-mail to the RI contact available on our site. That way, our Investor Relations team will be able to answer your question. The first question comes from Mr. Pedro Lobato from Bradesco.

Good morning, everyone. Thanks for taking the time. I have 2 questions. The first is about the product mix for the year. Now that you've announced these first launches, I'd like to understand what your mindset is when you look into the upcoming months in '25? And what is the profile of projects for low, mid- and high income? How do you see that mix for 2025. And my second question is about gross margin. When we look at the reported gross margin and the backlog, EZTEC's alone, not including the equivalency price, this is at a very similar level from what we had. So what does that indicator look like moving forward? Is there room for improvement? Are you going to replace the vintage? Do you have any strategies there you could share with us?

Thank you for your question. This is Silvio speaking. I want to speak a little bit about the launches for the year. We're going to have all sorts of launches. We have lots of products for investors. Yesterday, we submitted paperwork for [ Pinheiros ], which has already been doing very well. We are going to have studios there, which measure up to 40 square meters. And we are selling well there. We've got high income, mid-income. We've got a few of My Home, My Life projects coming out later in the year through partnerships. We have 2 partnerships that we've signed, one with [ Cooly ] and a partnership with Cyrela which is represented by Vivid. So we're going to have a very varied mix of projects. We've got My Home, My Life, and we've got apartments that cost BRL 35,000 per square meter. So we've got very upscale and very affordable properties as well and others yet that are in partnership with Lindenberg. I want to mention something. When we talk about margins, you mentioned prices. And I'm going to talk about the reduction in G&A. When we look at the increase in margin that we saw, this is not only linked to increases in price. It is also linked to reducing the G&A. This allowed us to have a lower percentage cost when we start playing at a higher level and it does involve some price gains. This is going to be an instrument that we're going to use. But our grade of expansion in margin is going to be by improving our G&A number. So higher sales lead to better G&A numbers which lead to better margins. I want to remind everyone that accelerating inflation in our calculations is going to have a positive influence on the company's prior results. You may have seen that we didn't have a significant show gain in 2024 -- sorry, we did have -- and this is likely to be repeated -- we're going to have expressive significant financial gains over the coming year.

Thank you, Silvio. Pedro, when you talk about the gross margin and the backlog, as you mentioned, this is linked to the growth that we have been obtaining quarter after quarter. In Q4, it was 38%, we're now at 40.4%. This growth is linked to the INCC, yes. And when the INCC starts shaping into the level that it currently is at. This gives us an important fact on our portfolio. It's not just about the cost of each venture, let's say, 30% to 40% over the lifetime of each venture. However, 100% of that portfolio is being corrected by the INCC and the margin response to that. Another important fact is that our engineering is increasingly gaining structure. This is the purpose when these restructurings were done a little over a year ago, and we are now reaping the fruits and I think the fruits of the engineering work is that they will continue to be reaped over the year 2025. So we don't give any guidance, but our gross margin is encouraging us, and that is what we believe. Our gross margin is transforming gradually into our backlog margin over the developing quarters. Does that answer your question?

Yes, it did. Thank you, Silvio. Thank you, Emilio.

Our next question comes from Elvis Credendio from BTG Pactual. You may proceed, sir.

We have 2 questions. First, about the deliveries which you did mention in the release, this is one of the challenges you have for the year. I'd like to understand what you see as the biggest challenges on the site is that the worsening real estate credit rates of late. And what about the aspect of passing that forward or actually incorporating those changes into the company and the company's resources. And secondly, also linked to the chattel mortgage portfolio. We've been seeing companies in the sector selling these portfolios and I'd like to hear your opinion about this topic, do you see any possibilities for selling portfolios in your opinion, or should you not tell a portfolio? And if so, why not? What can be done vis-a-vis that capital? I want to mention, this scenario is apparently a challenge, a challenging scenario.

Let me start again. Elvis, thank you for your question. We have a challenging scenario when it comes to interest rates. We have lemons, and we want to make lemonade. So when we propose our financing at 12% plus IGP, which is the financing that is being offered to the final takers. This gives us a good profit margin. We believe we're going to have significant volume of those products. I'd rather not mention specifics but we estimate that this type of financing is going to consume part of the company's cash. In our radar, we also have the option to do securitization, if necessary. If the numbers are not what we wish. Well, working at 12% plus IGPM with the property guarantee does not seem like a bad proposition for me. We can do -- we can use that money for better things. And if that does become true. If we can, in fact, use it for better things, then we will shift that money around. I also want to highlight that we have a great relationship with bank. And we are currently -- the company is currently at its best time ever. So the ease and strength that we have to help with the transfers really depends on how willing the banks are -- and they are our allies here. Conversely, the company is very well prepared to advise and contribute to clients so that they can effectively make those payments. Like I mentioned, we have lemons and we're going to make lemonade. I think we're going to do very well with those transfers. I don't think we'll run into any operational challenges for us. I'm very comfortable here to be very clear. Just to add from the perspective of sales made for deliveries in 2025. The sales have been very well made. These are clients whose average payment is higher than 30%, to all clients that do have some kind of a problem are brought to the termination department. So the portfolio is very, very safe. The only issue is the rate the banks offer. And depending on the rate, the banks may not be able to offer all the credit that the client requires. And that's where the power of our chattel mortgage portfolio comes in. And that's why we believe that there is going to be a significant improvement by having that portfolio. Elvis, did we clarify that for you?

Yes, you did. Thank you, Emilio. Thank you, Silvio. Have a good day.

Our next question comes from Mr. Kiepher Kennedy from Citibank. Mr Kennedy, you may proceed.

Good morning, everyone. Good morning, EZTEC team. I'd like to explore the gross margin in the context of the sell-through rate. You saw that there was a valuation in the last year which was super positive. I understand that this margin is composed over time. So I'd like to understand, I'll refer to as the trade-offs, the speed that you have in mind for 2025 and for accelerating sales because naturally, a margin that has been there for longer tends to improve. So how do you envisage this situation, accelerating sales and making up the margin over time. And my second question pertains to the performed inventory. There was a significant investment in this quarter, which I do also think is positive. So I wonder if there are any numbers that the company is waiting for or forecasting or expecting with regard to selling that inventory and that acceleration by quarter was whether it was done for a specific reason. I'd really like to hear your take on those performed inventories in your portfolio.

inventory is very well positioned. They are very well built and they have been delivered. And the ones that have not yet been delivered are in the late last final stages of construction. We had also a very strong remaining campaign, remaining units campaign. So we're going to continue to have significantly accelerated inventory sell rates. Just like last year, and we were able to reduce our overall inventory. So we are very confident that we are going to sell finished and nearly finished products. I believe we're going to continue to perform very well. I want to remind you that we've got the -- there's a cost for products, and these products have low product costs, they were accounted for many years ago. Our chattel mortgage portfolio supports us in that inventory sale. We've got strong support from the bank who will help us with financials. And this campaign that Marcelo mentioned is very aggressive. We've been investing heavily on that, which got, [ Mariana Vikar ], who is running our campaign. So I'm confident that our performance will be at the levels that we expect.

Just to add, Kiepher on the topic of inventory. We sold BRL 458 million, which means roughly 75% of our inventory have been performed. We now closed the year with BRL 600 million. So this inventory will shift with the new deliveries but we do not really expect to dilute a significant portion of that inventory because these things stay time. We need to wait for enough time for the transfers and payments to go through. These properties really gained a lot of traction, and we'll continue to do so through the future. Looking at the gross margin with regard to margins, there is a terrible component which ABP over 2024, that rate was extremely high because the rates for Brazilian instruments were very high. And our ABP is built with the NTN B rate as its basis. So this gives us a gross margin for sales that we performed regarding to our launches at a lower rate than we expected. We expect to see 2 effects. Over time, this will -- this trend will reverse and give us access to that gross margin that is currently held back. And the INCC as well, which is something we are going to start working with. So more sales will mean higher net margin because we will be further diluting and the INCC will help us to improve the gross margin. I think we've answered your question. Do you agree?

Yes. That was very clear. Thank you.

Thank you, Kiepher. Moving on now. We've got a question from Mr. Igor Machado from Goldman Sachs.

I'd like to better understand how the company is considering the aspect of leverage. You paid out that extraordinary dividend and the company has always had a low leverage, and that did go up recently. I'd like to better understand the return to shareholders. What are your thoughts and -- what do you think about that return -- those returns?

[Interpreted] Well, let me explain Igor. You mentioned leveraging. A significant portion of those funds come from the BRL 110 million increase in chattel mortgage portfolio. Our portfolio is going to increase this year. It's a multiple of what we had last year. So this leverage is relevant and also, we need to be careful and need to be wise and decide whether we're going to keep our leveraging or if we're going to pass on a little bit of that expanded portfolio. We could have done that and kept our leverage, but we decided not to do that. So we chose to use that as guarantees. But our structure is now healthier than it would have been otherwise. So if I had to do say something in the medium term, I'd say we are going to keep our leverage at that level currently. This could be done by increasing the dividend distribution methods or through some other methods that we will implement when we consider the interest rates that we have moving forward. So we like this new leveraging positioning, and I hope we will be able to use it in more cases for the company. This improves our ROE. And it also makes us feel more profitable, not just deal, it makes us more profitable if you look at the return over the portfolio. Did we answer your question, Pedro?

Yes, very clear. Thank you.

Our next question comes from Luiz Capistrano from Itau BBA.

Good morning, everyone. Thanks for the time. I'd like to get the company's take on the HSI and HMP discussion that we've been seeing in Sao Paulo. This week, we had an important piece of news in favor of those benefits. The public -- the government became more flexible. And you say that you're going to continue to sell very well this year for investors. But I'd like to get your perspectives about this as a whole. And to what extent do you already use the new legislation already?

Good morning, this is Flavio. We are very comfortable with our current exposure to HIS. All of our sales were done through the inflation numbers. So we want a share of solidarity that, in some cases, is significant. And it always needs to be done according to the provisions laid out in law. So of course, some people are a little bit more exposed than others a little bit less. But I don't see any reason for us to make a change. I understand that this is within our scope. Let me give you an example. We sold an HIS venture in Q4, [ DS1 ]. It's a fully HIS venture, but it was entirely passed on through to cash. And it meets the CHQ requirements set forth by Brazilian law. This is no accident. This is the reason why our sales speed for our social ventures -- such as My Home, My Life. It is lower. And sometimes people ask us, "Oh, why don't you have sales that you see in classes A and B, upper and upper middle class. Well, because making them fully able to be passed forward involves a dynamic and at the end of the day, you will be able to end with confidence, including legal confidence. That is our take on HIS.

I'd just like to add that we've been working on 2 enormous ventures -- does not look at too closely at numbers, but it's approximately BRL 1 billion per venture. If you look at all the rates, some are a little bit higher or lower but we are looking essentially at [indiscernible] here as an example. So it will take roughly a year before we launch them, but they are also based on HIS. They are also part of the Caixa Econômica Federal. And I think we're going to be able to obtain higher sales speeds for that venture. So again, we're going to have the confidence of being able to fully trust Caixa Econômica Federal and we're also going to have the income rates that we handle through HBC.

All right. Thank you, Emilio. Thank you, everyone. Our next question comes from Mr. Rafael Rehder from Safra. Rafael, you may proceed.

Good morning, everyone. Thanks for taking this time I have 2 questions. First, I'd like to really get more context about what you see for this first quarter. Could you mention the number of clients coming to the event? Do you see anything that may be repeated from 2024? And I'd like to talk about Star Towers. Please correct me if I'm wrong. But I think there one of the towers going to be delivered in this first half of the year. What you see about, for instance, the rent per square meter or the drop in numbers that we've seen over the past couple of months?

[Foreign Language]

Good morning, everyone. I actually have 2 points. I would ask, what drove the improvement in [ Vintage ] from '21 to '22? Is it just improvement in price or the products in those [ vintages ]? And second, what is the decision-making process to move forward with the [ Astra ] property? And is there a positioning for that project already in case you do not participate?

Well, that [ Astra ] property is nearing the end of the acquisition process. I'd like to remind you that this is a contingent acquisition. It is not mandatory. We're very excited. We are going to move forward with it, but it is contingent. There are certain conditions that are involved. So I should mention that we've got a project that has been created. This is going to occur after we incorporated the project. It is fully, fully contingent. And we are positioned a little bit lower than our direct competition which is to sell approximately 15 to 16. And our product mix there would allow us to sell much more. So if I had a need to do that, we got something like 25% less than our direct competitors. So we're very comfortable in that position. It is very large venture as well, it surpasses BRL 3 billion. And we're working to really -- to really get the -- make the most of those numbers. But currently, we need to wait and see how things develop.

Silvio, thank you. Antonio, you asked about the '21 and '22 vintages. In their venture, they have ventures that are going to be delivered in '25 and some in '26. But those ventures from '21 or '22, we have Unique Green, these are all examples of strongly established ventures by EZTEC. And this current administration knows what it's doing. The engineering department is able to skillfully find optimizations. So the improved margin is precisely matching that vintage. And now I believe we will continue to reap fruits in 2025. Antonio, did we answer your question?

[Interpreted] Yes, you did. That was very clear. And congratulations on your report.

Our next question comes from Ms. Ana Julia from UBS.

We have 2 questions. The first is about cash and dividend generation. Thinking about that BRL 2.6 billion in delivery, if you could share with us, please. What does the company currently think about cash generation and dividend over the coming years? And can we expect to see any kind of acceleration or extraordinary dividend. And second question is -- what do you think about the purchase of properties and competition in Sao Paulo thus far in this year. And what are the property purchase process like and that involves cash as well and trades as well?

[Interpreted] All right. Let's talk about cash generation and dividends that you mentioned, specifically with regard to '25. Specifically, when we look at the numbers, we're at BRL 2.6 billion and what we're selling is approximately BRL 1.9 billion. And so for that to work, we have the following math. Approximately 40% of that has already been paid for by our clients to us. There's also approximately the BRL 500 million to BRL 600 million in financing for production to be paid off with regard to those ventures -- those properties. And that's where what you mentioned comes in, we're going to create chattel mortgages because this is the major challenge for the deliveries in '25. Now the question is what percentage of our clients will obtain financing from these traditional banks. And what percentage of clients will obtain financing from us. So clearly, starting in July and August, the math will be very well positioned to find out how much cash will be less. So within that math that I set out, you could have an idea that we're going to have stronger net cash generation. But roughly 40% will be generation of chattel mortgage portfolio by reducing net cash and the administrative Board will decide what to do, whether that's reinvestment or repurchase or something else. That will be discussed over the year.

Just to add because Emilio was very apt when he made his comments. So everything should start pointing to us paying for the [ Esra ] property. It is a significant property, say it's an expensive property. And depending on what happens, we will direct our funds whether that's through chattel mortgages or we'll transfer those payments, whether whatever we decide to do, it will all be considered calmly and rationally over the years. With regard to purchasing properties, we continue to receive many offers of good real estate, and that includes both the transfers and financial payments. And we are looking at the transfers, we always look at our land bank because we don't want to increase our land bank excessively. So first, we do look at the land bank, but we always keep in mind that when we reduce the land bank, we have the option to quickly purchase real estate at great prices with positive margins. And with regard to the competition that you mentioned. Yes, competition is fierce, but it is fiercer in certain regions, specific ones. And I have no doubt that let's say, in a region where competition is very clear, there's a lot of real estate being bought up for high rates and then that has to be resold later on. So we're not always focused on competition because we want to buy competitive and viable real estate. So when you go somewhere that doesn't have so much competition, of course, you were going to have fewer launches and therefore, fewer opportunities to make good sales. It's not always easy, but we are very accustomed to working in this way. So we have shifted our sites a little bit away from the competition. Now that's one aspect. But when we look at the exchanges, this is something that makes sense easier for us. Can you imagine that a buyer when they want to make a transfer most of the large companies like us, they prefer to focus on credibility just as we do. So this is an option that we do use when it is strategic.

All right. Thank you. You answered my questions perfectly.

Our next question comes from Mr. Jonathan Koutras from JPMorgan.

Good morning Flavio, Emilio and the team. Congrats on your results for Q4. My question is about the last mile costs. As Emilio mentioned, we expect the INCC rates to remain stable in the short term. And so are you operating in line with those rates and what about the low income properties, where do you see the needle shifting?

Hi Jonathan. Good morning. Thank you for your question. As Emilio has mentioned, we are securing development of our venture lower than INCC rate. Yes, we are concerned with the scarcity of labor. We're looking for opportunities for improvement and improved building and construction practices, whereby you can guarantee the execution cost of a given project. We're developing our systems. But we are already very confident that we have already moved into that new phase. Now moving forward, My Home, My Life and saving in the My Home, My Life program are initially supported by our partners. But yes, there are other conditions, and we are developing in-house projects to work on that internally. That's the second process. And I have no doubt that this next phase of engineering is going to be a resounding hit as it was in the past. And when we talk about processes that we're implementing in the engineering department, they are significantly linked to industrialization. So to give you one example. And this is not something that is exclusive to us. We're studying the option to build in ready-made bathrooms. This will reduce the amount of time needed on each construction. We're also investing in our own equipment which also reduces the need for labor and guarantees quality in the construction. Jonathan, were we able to shed some light on your question.

Yes, you did. Thank you, Marcelo, Emilio, Flavio.

Thank you very much, Jonathan. Have a great day. Moving on. And apparently, this is our last question from Mr. Ruan Argenton from XP Investments.

Congratulations on the results. There is one point I want to explore with regard to the competitive nature of launches. You recently made an important acquisition in some real estate in Sao Caetano. And historically, you've always explored the metropolitan Sao Paulo region more broadly. And we've seen that at least in the last year, that seems to have dropped slightly. Do you see that exploration of the Greater Sao Paulo region, metropolitan region as a way for finding better opportunities. That's one question. And the second question is, what is your product perspective for the second half of the year, we see that we are potentially moving toward an economic deceleration. And this will, if happen, will be particularly important and impactful for the medium income brackets. So what do you think in that sense?

Hi Ruan, thank you for your question. I'd like to say a few words about the Sao Caetano property. I supported the Board in purchasing that property. We believe that this property is able to stand out in terms of competitiveness because when we move into a newer region, we've done some amazing ventures such as in Osasco and Guarulhos and I have no doubt that Sao Caetano is going to reproduce those major investments, it's a huge city after all. And so we start in phases -- in phased sales. So I'm very confident.

To add to your answer. We're going to be extremely aggressive this year at a quarter-by-quarter rate. So in this Q1, we want to launch 3 ventures. In Q2, we again want to launch 3 ventures. But this is all going to be forecastable for each end of quarter. And we will revise our strategy quarter-by-quarter. So we have a very aggressive quarter-by-quarter strategy and also a strategy that is very efficient. Over the past 12 months, we've also been selling better than the previous quarter, each and every time. So if some kind of an issue occurs, then we are fully able to take a pause and plan for the future. In the metropolitan region, we once again are launching in Osasco, a very significant venture. We have 3 launches planned for Osasco. They're not all this year, but during this year and the first semester of next year, we're selling over BRL 1 billion or launching over BRL 1 billion, I should say. So we've got a very significant product mix. So we have lots of different investor products, middle class products, upper class products. We have products in partnership with Lindenberg. When Lindenberg launches, EZTEC is a partner, and so we also launched. These ventures are worked on jointly. So we have breadth of products that allows us to test strategies for each category. So this aggressive strategy that Marcelo mentioned will work as follows. When we get to the end of the quarter, then we will go back and measure, we can't think -- we can't plan without seeing what the results are first. And we don't want to lose out on any opportunities. We're not going to do business by looking by speculating. We're going to do business by looking at concrete numbers. Does that answer your question?

Yes, that was very, very clear. Thank you.

Thank you very much, Ruan. We now conclude our -- oh, there is a question that was asked in the chat but it was very similar to a question that Julia asked. So [ Mateus ], I believe your question has already been answered. Therefore, we will conclude the Q&A session and now move on to final remarks.

I want to mention that the company is very optimistic. This is not a positive macro scenario. But within that context, the company is optimistic. It's also vigilant. So we run our business with an eye to what's happening. And as long as the business is performing well, and it is we know that we are very well supported by our Board, presented by Flavio. We are supported by the council as well. And so we're going to keep moving forward. We're confident we're going to have a better result this year. So I want to thank everyone for being here. I'd like to highlight Samir, who is our patriarch here today and always by our side, as are we, we are always eager to help you. We've got Pedro, we've got everyone from the IR team, always available for all of you. Have a great day, a great weekend. And God is Brazilian. And I think that says it all. The entire Board is very excited about the structured growth that we have planned for the past couple of years, headed by our President, Silvio as well as Flavio as Chairman of the Board. And with support of everyone at the Board, all the directors and C-levels at EZTEC, we haven't able to once again have a strong engineering departments committed to cost and quality and meeting our deadline. Our sales agreements are very aggressive and always looking for improving our margins and developing products while constantly being on the search for more efficiency. We always look to the market for its trends and we are supported by EZ sales, which gives us the support we need to sell everything we produce. So I'm very confident that this year, if they let us, we are going to have results that are even better than last year by keeping our merchants or even improving them compared to last year. I'd like to thank everyone. We are all together. Thank you. I'd like to conclude by thanking all the shareholders who were involved in working with us and who answered our surveys. You help us improve continuously. We are always alert to your feedback. And I'd like to invite you to observe the improvement we made to our spreadsheet, and that is in line with the feedback you provided. So thank you all for taking part in our call, and I'd like to invite our other shareholders to join us for our upcoming earnings calls. This concludes EZTEC's earnings conference call. As I mentioned, all the materials are available on our website. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]