Helbor Empreendimentos S.A. (HBOR3) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and thank you for waiting. Welcome to the Helbor conference to discuss results of the third quarter 2021. We inform all participants that this webcast is being recorded and translated simultaneously. I highlight that for those who need translation, we have this tool available in the globe icon where you can read interpretation localized in the inferior part of the screen. When you select it, choose your preference language, Portuguese or English. For those listening to the video conference in English, there's the option of silencing the original audio in Portuguese, clicking on mute original audio. We also inform that participant will hear and see the webcast during the presentation of the company. And after that, we will initiate the session of Q&A. In case you wish to ask a question or you need help, we guide you to send the [ doubt ] via the icon of Q&A in the inferior button on your screen. Before we proceed, we'd like to clarify the possible related to the company's business perspectives, projections and operation and financial goals are based on beliefs and assumptions of Helbor's management and on information currently available to the company. They are not guarantee of the company's performance. They involve risks, uncertainties and assumptions because they relate to future events and therefore, depend on circumstances that may or not occur. The general economic conditions, industry conditions, other operational factors can lead to future results that may be affected and differ materially from those expressed in such forward-looking statements. Now I would like to turn the floor to Henry Borenstein. Mr. Henry Borenstein, President of the company.

Good morning to all who are accompanying this webcast. As our -- together with our Sales Director, our Financial Director Roberval Toffoli, we are here to talk about the results of the company, the third quarter 2021. I would like to initiate highlighting that even seeing a challenging scenario, we closed the quarter with positive indicator showing the continuity and the growth of the results generated by the company, which has been strengthening more and more as we launch new enterprises and we advance new projects. The sales of ready units are in rhythm that was programmed and diminishing its level of stock at every quarter. We adopted a different strategy to reduce the level of ready stock that are being developed during the year. We can highlight in this quarter the realization of the event only Helbor has, that in only 15 days was responsible for 16% of the sales of the [ period ] where we -- the ready real estate is [ outstanding ] and represent more than 90% of this total. All the measures adopted contributed for the level of leverage in the [ net debt ] on the equity. Net equity reached 48%, less level -- the smaller level in the last years. The trajectory should be maintained in the next quarters, making more and more solid fundaments of the company. And the sales continue in line with our plan. In case the conditions in the market continue favorable, we will deliver the volume of launches we've seen in our guidance. I also would like to tell you to visit the Helbor Space, localizing one of the most novel places of Avenida Faria Lima in the city of Sao Paulo. The space counts on [ the kits ] and decorated apartments and a team of sales that will allow the client to know the various enterprises. And the place also inaugurates Buteco do Jacquin, and also for the company to have greater focus on responsible and transparent management. Now Franco Gerodetti, our Director of RI; and Marcelo Bonanata, our Sales Director, will show the main operational data of Helbor.

Okay. So now let's go quickly to the highlights of this quarter. After that, we will come to talk about our operational performance. Our total gross sales reached BRL 421 million. Helbor's part totaled BRL 268 million. VSO was 14.4%, and the Helbor part 14.1%. Of total sales, 71.3% correspond to the commercialization of stock and the difference, the commercialization of launches in the period. Within this stock commercialization, a relevant number was the sale of ready units. And in the accumulated of the year, our on land had a 31% increase compared to the same period last year. The net operating revenue, an increase of -- our gross margin reached 28.1% in the third quarter, almost 10 percentage points of increase vis-a-vis the same period of last year and 2% above what was registered in the second semester of 2021. Our gross margin, the projects that we call the new cycle, relevant number of 33.2%. And then our net profit in the third quarter was BRL 22 million, a number that is 85% above the one of the same period in 2020, reaching ROAE consolidated annualized looking at the 12 last months of 9.6%. Now looking at our operational performance. We have to see our land bank had an increase in regards to the second quarter 2021. And this increase, basically due to new acquisitions of land and new perspective of VGV compared to land banks -- previously existing land banks. It is important always to highlight that the company today presents the land bank that is very strong, and we see it as one of the strengths of Helbor localization that is privileged in our main projects in the city of Sao Paulo. This is a slide that we have been showing. And again, we hear, very well-concentrated and what -- leaving a bit center of the graph, we are always here on access, transport or on the lines of the subway. We think this land bank from today onwards will bring more resilience to our sales. Now I want to pass the word to Marcelo and talk about our performance sales.

Thank you, Franco. Good morning to all, Henry, Roberval. Starting to talk about the launches of the third quarter. Total BRL 279 million. Helbor part, BRL 190 million -- Helbor's share is BRL 190 million. First one, LIV Pinheiros, with 73% sold. The second one was Patteo Sao Paulo, a concept [ patio ] that is consolidated by Helbor in the city of Sao Paulo with 55 -- 57% of the units sold in the zone of Freguesia do O. And the other one is Helbor B. LIV in Brooklin. We launched it on the 25th of September, and we have 18% sold. Moving forward, we're going to talk about contracted sales. With this total, I would like to highlight the accumulated of 9 months, BRL 1.2 billion against BRL 1.036 billion, an increase of 17% in regards to 2020 in the same period. I think it's a very consistent growth. And talking about the Helbor share, we have these figures, and we highlight an increase of 36% in the 9 months compared to 2020, BRL 808 million in Helbor share against BRL 705 million, a very significant increase. We here highlight our VSO with 14.1% in the third quarter. I think this VSO is very consistent, aligned with the market, as Henry said, with the planned -- everything we had planned during the year. And accumulated for the 9 months of 33.7%, an increase in regards to -- compared to 2020. Talking about our stock, the composition of our stock. We have BRL 2 billion, and this is a ready stock of BRL 876 million. I would like to underline the second quarter. We had BRL 1 billion in regards to the ready stock. We had 12.4%, only 1 quarter. We diminished our stock of ready products and it's due to all the work that was done and the work that the event only Helbor has. It was our 100th edition. We started in 2016 in the moment of the most acute crisis, and it comes in the 100th edition in the whole of Brazil. It's not any event that can be in its 100th edition, showing again the efficacy that we don't need these tremendous results -- discounts. It's just the product that is very good. This ready stock, we have the enterprises, the developments that were delivered this year here. We're talking about everything. We just delivered [ SPSH ]. Everything, we delivered in the quarter. We're talking about the composition of this BRL 876 million. And when we talk about the composition of our stock in comparison to the region, we have 93% of our stock in the southeast region, and 71% in the capital of the state of Sao Paulo -- in the City of Sao Paulo. Last year, we had more acute presence in other cities. The focus now is on the city of Sao Paulo and cities such as Campinas and Guarulhos, the largest Sao Paulo. And the city of Sao Paulo, Sao Paulo capital, 71% of our stock is concentrated here. I would like to highlight, as Henry has already said, in the third quarter, we opened a space, a Helbor Space, greatest experience of real estate sales in Brazil, one of the best addresses of Sao Paulo, perhaps the country. It was -- it's in the Avenida Faria Lima. We have [ kits ], we have decorated apartments, a team that is complete from Monday to Monday. In addition to the differentiated experience, we have one of the most renown chefs who is Erick Jacquin, who really set up his Buteco do Jacquin and other brands that add really a composition. So our clients be able to -- in addition to be able to see our products in our market and also benefit from gastronomy, from fashion, automobile, automotive, sports, everything is there. We will have [ bands ] transmission directly from our Helbor Space. We'll have people from the Formula 1, the car [indiscernible]. So in addition to our sales of real estate space and experience for our client and experience to the market that is very distinguished, we are ready for this last quarter. The other day, I was [ amusing myself ] [indiscernible], but we have too many things to do. We're working. So many things to do. So Roberval?

Thank you, Marcelo. Thank you to all. Let's see the financial results of the company. We closed the second quarter with numbers that reinforce the sustainable growth of the results. Now Slide 14, we present the evolution of the net revenue that accumulated in 9 months, totaled BRL 792 million, presenting an increase of 4% in regards to the accumulated 9 months in 2020. In the third quarter of 2021, the revenue was BRL 284 million, an increase of 6% when compared to the second quarter of '21, and a drop of 12% in comparison to the third quarter of 2020. On Slide 15, we see that the gross result has been improving gradually and registered in the third quarter of 2020, BRL 8 million, with a gross margin of 28.1%. This margin represents a tendency of improvement in results, showing the evolution of its new cycle where new projects that are being launched have robust margins while the old projects with more compressed margin narrowed and are in a process of reduction due to the efforts of sales that the company has done to bring them to 0. We can also identify the high growth of the gross margin that was 17.9% in the 9 months -- first 9 months of 2020 to 26.1% in the 9 months of 2021. And the gross margin adjusted for the third quarter was 35.4%. In Slide #16, we see the margin, the backlog margin of BRL 566 million in the third quarter '21 numbers follow -- these numbers follow pointing to the tenants -- assertive trend of the company and improvement in its margins in the projects launched in the last years. In Slide #17, we see that in the third quarter of 2021, general and administrative expenses presented a slight high of 4.6% vis-a-vis the same period in previous year and a drop of 0.6% when compared to the second quarter '21. We have to underline the inflation indexes that the last 12 months were 10.2% of IPCA and 24.9% for IGPM, both superior to the addition [ registered ] in the [ GA ] as a company. In Slide 18, we present the net profit of the control. That was BRL 22 million in the third quarter '21, an increase of 45.1% over the same period of the previous year. In comparison to the previous quarter, the second of '21, there was a drop of 27.9%. This drop register between quarters is explained by the mix of units sold, given that in this quarter the sales of units where the Helbor share is smaller, was comparatively more representative in the volume of sales. Even so, in the accumulated year, the increase of the net profit was expressed, summing BRL 79.5 million, above the same period of last year -- superior to last year's. And on Slide 19, we show the indebtment, total indebtment of the company in the third quarter. The total debt reached BRL 1.2 billion against BRL 1.6 billion registered in the same period of the previous year, representing a reduction of 22.6% of the total debt. The reduction of this indebtment compared to the third quarter versus the second quarter '21 is a result of rescaling of the debt, and this has been promoted since the end of 2019. And finally, on Slide 20, we show a generation of cash. Cash burn of BRL 10 million. Resulting from the reduction of the indebtment accumulating, cash burn in the year of BRL 94.7 million. These are the financial data. And now we are at your disposal for possible questions. Thank you very much.

[Operator Instructions] Our first question comes from [ Bruno ], Individual Investor.

Congratulations for the results. Does the company intend to slow down the launching, given the height of interest rates that we're having? How do you see future results in case it reach threshold of 12%?

This is Marcelo speaking. The company does not intend to slow down in the first moment. We are getting ready for the quarter, everything we had planned. We have enterprise of high standard. They have great perspective. And what we do is a work of warming up these products in the market. We're doing presales. We've been heating these products to respond to the demand we have. So the question -- the answer I have here, we have 4 developments for this quarter. It's a positive question. I believe that the increase in the interest rates in the threshold that is still low in regards to what we worked with already. What we see in our sector is to have quality in our enterprise, the quality of the land, location and the project, all the time that you have a good project with good expectation. The real estate is a solid market regardless interest rates with good projects. We saw this in the past. We always reach good results. I would like to compliment myself and looking at this quarter. I can highlight 2 launches in the market, the market of Sao Paulo have been waiting for a long time to land very differentiated. One on Haddock Lobo and Jardins, close to the restaurant Rodeio. It's an enterprise that for many years, Sao Paulo hasn't seen with such a quality location. And I also wanted to highlight another launch for this quarter in the zone of Itaim, which is the last land of the street, a street with main developments in Itaim are there and that street, the Leopoldo Couto de Magalhaes. We are careful about paying attention towards happening in Brazil, but focusing on good land and the areas of very high income. And during next year, we have a good land bank for next year. But certainly, we're not very worried about next year. I will say the company doesn't have to launch -- just launch -- has to launch a product to sell and have a good return. So really, with a strong eye on our strategy, and we're doing our homework.

Our next question is from Bruno Mendonca from Bradesco BBI.

About the land acquired in the quarter, do you feel any type of slowing down of prices of the land as a way to compensate the cost of construction, the higher than the previous period?

The feasibility of these new projects depend on increase, additional increase of price in the launch or paid at current levels. Majority of lands were bought before the real estate boom that we saw 1 year, 1.5 years, well-bought, such as this one that we are doing, the Leopoldo Couto de Magalhaes and Haddock Lobo. I want to highlight the land bank we have in Lapa. We're developing a complete neighborhood in Sao Paulo. To have an idea, we are able to launch a 4-bedroom apartment to be sold at BRL 11,000 per square meter. It's a good margin because we bought the land in [indiscernible]. The land bank acquired now is -- was very well-bought. Our land bank, as Franco mentioned, one of the best land banks in Sao Paulo. I can assure you this. And what we bought now were also land very well-bought. We have felt, yes, slowdown in the search for land. We have a land bank in the side of the company to form. The company is much more focused on making launches. It's more than buying land and preoccupied land bank of quality that is, well-bought. We will maintain our margins with this. And you have been seeing the issue of the company focusing on high standards. We are able to lend to our sales stable more easily. This issue of the cost of the labor, if you look at the developments that we will have in this quarter -- in the first quarter of next year, these are products where we will maintain our growth margin.

Our next question is from Elvis Credendio from BTG Pactual.

Given the more volatile macro scenario and higher interest rates, how do you think about the launching strategy for 2022, both in terms of volume and technology and segment?

I'm Marcelo, and I would like to tell you about the focus of the company on the stock. You see all the effort and the results we're obtaining to diminish the stock, diminishing legacy of stock, everything. We are also achieving on our works month-to-month and increase the price in these stocks. Very healthy. And we have been making this effort in the company so that 2022 can be continue as 2021. The continuity of its stock. In regards to launches, Henry mentioned very well, first of all, the increase in interest rates. Brazil has been experiencing all its [ lives ], we have to highlight in a moment the peak of the boom real estate. We had interest rates of 10%, 11%, 12% for clients. We have 8.5% today for interest rates. We are in a comfortable reality. In regards to launches, we will measure. As Henry said, quarter-per-quarter, we have quality products, a land bank that is high-quality, differentiated products we've been showing in time. So we are very comfortable. We're entering 2022 very ready for the market and the launches, but very careful at every moment and thinking that the great differential of Helbor will be mainly its quality land and culminating with the quality projects we're able to design.

Our next question is also from Elvis.

With the cost of constructions that are higher in the last months, how have you priced the new developments? Are the construction companies working with more flexibility than the usual to be able to operate? How do you imagine the evolution of this pricing from now on?

We work now in the new hirings and new launches. Really, the cost of the construction has -- job has really increased [ despite ] the bank -- land bank was formed when lands were cheaper. So we have this movement here as we are operating a lot in some Sao Paulo, in the best regions of Sao Paulo. We're working the best neighborhoods in a very high standard. We are able to [ on-land ] this, and the well-bought land, as I said in the beginning. I wanted also to highlight that our constructing partners, we closed the contract for the in-charge for global development. And the construction companies, they have been partners for 15, 20 years. I would like to say that these companies, together with Helbor, went through different moments of the real estate market, better or worse. In 2010, we had a crisis. There was lack of labor and lack of material, and Helbor did very well. So we are ready. The price of the jobs has changed as we have an expressive volume in our land bank. We are looking very few new things because we don't need it. But really, looking with a new prospection, with a new perspective for the prices. And it is challenging now in terms of margin and return because of the cost of the job.

Our next question is from Alex Ferraz from Itau BBA.

Could you please make a first evaluation of how the space all over performance has been and how do you think the tendency to perform given a macro scenario that is more challenged?

Alex, I'm Marcelo. In the Helbor Space, we are learning on a day-to-day that we have a return that is above the expect -- and we see it's a different experience. And we're able to have our portfolio of clients and the attractiveness that we have in this space. As a possible client, he goes for launch at [indiscernible] and he ends up knowing Helbor, and if they know it already, we've been activated very well. We have been inside the space. And we are able to bring the client -- we are being able to bring the client towards the attractiveness of the location. In terms of the high standard, we, for some years, have been dedicating ourselves to the purchase of these lands and the development of these projects. We are launching -- we just launched an undertaking, Vila Nova Conceicao, which is Casa Vila Nova, 1 apartment per floor. We've opened it a little more than a week ago and almost 50%. So it's very, very exclusive. The view is forever towards the Parque Ibirapuera. And then another one in Jardins. We are having a great demand. I wonder if we will have enough units to meet the search. We made a survey in the last 3 years and all the production in the real estate market, only 3% of the units were launched for high and very high, only 3%. Great productivity we have in the market are our more compact products. So what we see is a demand, very great demand, a search that is very thirsty of high and very high standard products. The perspectives are very good. And both for what we are launching now and what we're planning for next year. It's important to highlight that the space, Helbor Space, will concentrate all these high standard products that are in the surroundings of this location, which is Faria Lima. We have Casa Vila Nova. We started the works, and we're relaunching to see that we sell the balance of the units, we had to remove the decorated unit in the stand, we were some time out of the air because we didn't have an apartment decorated. Now we're using the Helbor Space. And the enterprise, the undertaking of Haddock Lobo, we will concentrate this volume of high standard units in the city of Sao Paulo in differentiated land pieces, lots. We have a team that is very -- our prime team is located there in the Helbor Space. And something interesting is that we receive people from the entire country. And today, an important thing in the enterprise is Jardins. Jardins is really desired by people from the north, northeast and midwest. We've been searched by people from all the country for Itaim because it becomes a poll. We're very happy with the results. And we hope we will have -- we expect having more activations with great space. I invite you all to have a different experience -- differentiated experience in the purchase of real estate.

Our next question is from [ Paolo Abreo ] from [ Pacifico Resource Asset Management ].

Congratulations. Can you detail the dynamic of margins and sales over supply if the average price of sales is increasing to compensate the new tricks, of course. And if this can impact the sales over supply from now onwards.

In regards to margins, we've been constantly showing that we're being able to increase some margins. From the end of 2019, our gross margin was about 11%. We closed last year close to 20%. So we ready to have this recoup of 20%. If we get the year 2021, we reach 26%. So we recovered 6 points -- percentage points extra. And this is due to our change in the sales mix. During all this period, I've been selling both products that have a more narrow margin, as we showed in the slide. Our legacy has a margin of about 18% and the products that we call a new cycle have a margin of about 33%. This is really the number, the quantity of the new site vis-a-vis the revenues of ready stock and of the previous cycle. So to have an idea, we have made a portrait perhaps -- in September, perhaps 66% of our revenues is coming from these new cycle products and 34% have come from the legacy. So as from when we start the sales of legacy, this percentage will grow. That's why we're so certain and so secure we'll be able to show in numbers for the margin. This is the path and its direction is correct, and it has been -- we're seeing this every month, month per month. According to the speed of sales, we have to see this, and we're very -- so we're feeling very secure, and we will retake the margin Helbor had for many years. And talking about sales over supply. We can also go to the past and see 2 years ago, we had sales oversupply of about 7%. And today, it's about 14%, really went back to a threshold that was common to Helbor before with the production and launching this oxygenation that is very much focused on diminishing the stocks of ready products and also achieving good results, as Henry was saying. Now he's only launching to really -- and he goes and make you happy. We really have to launch, to sell and perform. This is what we have been doing in our launches. Speed in sales that is very effective. In regards to prices, we have been seeing an improvement in the prices in the city of Sao Paulo during this mark. The markets live off launches. We live on launches. The launches really oxygenate the market. All this oxygenation of the market improves the prices not necessarily to be able to cover the increase of cost of the jobs, but really an effective improvement of the price of sale. And we have been seeing this. As Henry said, most of our lands were bought in the past. So we had this established. We were able to bring this in time, and this improvement has been translated in the margin. We end up having lands that were very well-bought and prices that are very good even if we had an increase in labor during this period. In addition to the very high standard, we also have some developments Caminhos da Lapa, which is a new area, a new neighborhood in Sao Paulo. We're able to have a partnership with Tegra and we have a beautiful piece of land with urban development and we're having a planned neighborhood with a price that is very competitive in regards to Lapa or to the Lapa and Vila Romana. And in addition to giving our client a quality of living, a very high-quality of living, we are able to reach investors and give this client a potential for gain in the future. We're very well-based with the sales over supply.

Paolo -- and Henry, I want to contribute. One thing important in the company we achieved in the years, Helbor today has a plurality of products. It's not a company, for example, focused only on the segment of compact apartment [ studios ]. We have everything. We have the studio with great location, close to the subway station and then the strategy and the partnerships we have with HBR, it brings us a differential in the sale of our studio. Every studio of Helbor has a closeness to subway and has the convenience in the ground floor. So apartments of 2, 3, 4 bedrooms, high standard, you don't see a concentration of products in the company. We're present in the main neighborhoods of Sao Paulo, and as Marcelo said, you have known Helbor for a long time. With the hard period we crossed, we did not close the company. We overcame all our problems. We were able to buy very well, to buy the land at a very good price. This will help us maintain our margins. No doubt. And I have 2 more things to add for cities around Sao Paulo, such as Sao Bernardo, Guarulhos and Mogi. Of course, we're not focused on high end, very high standard for these cities, but we have products that have great liquidity, as the presale we're doing in Sao Bernardo. We have a development that we had more than 200 visits. But the product is different product. The Sao Bernardo has never seen 2 or 3 bedrooms. And practically, a shopping mall in the condominium where the people are going to live, I wanted to underline this as well. I think the company has great focus, good project, good land and good products. Obviously, we are worried with next year. It's a very challenging year. But this is Brazil. All the highs and lows. Marcelo said things very well. Next year is not launching for launching. We have to launch undertakings that have a good margin next year. Good speed of sales is not selling in the second day to sell the 30%, 40% until the beginning of the works because the strategy of the company is to maintain the margin and maintain the return for us and our investors. I don't know if I'm sad or happy if there was a great sale on a weekend. We have to focus on the planning that we have in the company, and the planning of our feasibilities to start with 30%, 40% sold. I don't want to be repetitive. The land bank that Sao Paulo managed to build in Sao Paulo, they're really differentiated lands.

Paolo, I'm Roberval. Just complementing to close the answer in terms of margin, which is a very important indicator for us in the sector. An important data is to look at the margins and the backlog margins showing where the margin -- if we want to accelerate with ready stock and works ongoing and the new projects that have more robust margins, the tendency of the company is to converge to this margin of 36%. We have [ 128 ]. And with this evolution of works, certainly, we will converge to this 36% margin that is already registered -- recorded in our backlog margin. The idea is really to sell the stock ready in 2018, 2019. We had a stock of the famous legacy with about BRL 1.8 billion today in the same base, the same stock. We're talking about 600,000 units. It was the work the company -- just for the sake of curiosity, we had BRL 50 million. Now we have a number of BRL 80 million and going down. We're selling really stock and we are deleveraging. So the idea is that next year, really, the first 6 months will be important to sell the stock. Although the scenario is much more challenging, I want to highlight 2018 when the market restarted, the interest rate for the buyer of real estate was 10% to 11%. And the market was reacting very well. So today, our land back is this, led by at a percentage of 8% because it's going to go up. And Helbor has products on the shelf. Good products. And we're being able to sell. So we should have a new strategy by the end of the year and also do some more -- some other event to accelerate the sales of stock even more. I think the company is in a very good moment. Next year is a challenging year. It's not only for Helbor, it's for the entire industry. What I want to highlight is, well, let's see how next year will be. I think it will be very different from the past. We didn't have regulations and new authorization. We didn't have this regulation. People give up. Nobody is going to flip an apartment to pay 50% of it paid. This is something good. Another good thing is that companies, in general, the balance sheets are good. They have -- they're performing well. They're liquid and have good performance, good results. I don't see a reduction of price of sale to sell stock as we saw in the past. This really disturbs the sector as a whole. And in general, the projects and the launches are better. I think they're more concentrated in Sao Paulo, in regions -- better regions.

Well, we have one last question from [ Paolo Morales ], an individual investor.

Could you update us on the project regarding Fazenda Rodeio?

Paolo, as we have already said, the Fazenda Rodeio project is being developed -- has been developed for many years. We're working on this land for more than 10 years. This year, still in the first semester, we had the final approvals. And the first lot we can bring to the market is the one referring to, really, to the allotment. The first phase of allotment, we will have 714 lots. This value, in terms of VGV, is about BRL 380 million. It brings a great differentiation content with nature. I don't think we have -- we don't have any similar undertaking in Brazil. We'll have a natural reserve to be protected by the [ Eco Future Institute ], which is from Suzano. This is a project, a partnership of Helbor with [ IPME ], which is the holding of the shareholders of Suzano's shareholders. We have great expectations in this first phase. We probably will launch between the first and second quarter of next year. And right after that, we have a second buy, which is about the same size that we're talking in terms of VGV of these first 2 phases, something around BRL 700 million, BRL 800 million. I would like to -- in addition to the magnitude of this enterprise, it's worth saying that Mogi today is a city of 500,000 inhabitants. It has only 2 high-standard undertakings. And there is an enormous expectation in the city. The phone doesn't stop ringing. Our phone is -- and the region of high Tiete comprehends about 2 million inhabitants. And Mogi geographic is very well-situated and has, in terms of margin fund, it has 15% of each enterprise is from outside of Sao Paulo. The east [ zone ] migrating to Sao Paulo with more quality of life. Something we have to underline is that in this -- during the pandemic, people went in search of quality of life. We have other enterprises like [ Baronesa ], [indiscernible] de San Lorenzo, where people went to search more quality of life. No doubt, we have an expectation that is very high. And this development in our land bank from my team, we don't even include it too much because it will be a great phenomenon. It is becoming a very rich marvelous project, in addition to all the nature farm, and there's an enormous demand. We will have -- again, we had a great surprise in this past when we launched the first enterprise, that area of 1,200 lots, really, there was an enormous demand that we couldn't see at the time. And I'm certain now, absolutely certain it's another icon. And this Fazenda Rodeio is coming in a moment -- at the moment that people are really looking at this type of product, which is this project ended up being approved in this phase at a very spectacular moment. The idea is to launch the enterprise in the first quarter of next year. We would have liked to have launched it this year, but we're doing all the marketing that market understands. But I think it is a project that it's different -- less of the same, different from the competition. I think it's going to be a great success and a very good moment for this type of problem.

Thank you, Henry. Thank you, Marcelo. Ladies and gentlemen, we reached the end of the presentation of our results for the third quarter 2020. Thank you for the participation of all. And I pass the floor to Henry.

I would like to use this moment to talk about our house. How many, 5 years that we founded our house, our sales team. Today, we count on about 600 brokers working in our sales stands and our partners, our house and the great part of our sales over supply and a great part of our stock because our house works very much focused on the stock. So the sales come from there. Today, we have a very good team, and I want to say that in these last 5 years, the pillars of our house or [ director ] board, we never lost a manager, we never lost a director. All the sales force has increased because of our land bank. The company has good lands and good brokers. So I want to thank again for your participation and say that we are at your disposal, as usual, for possible questions. Thank you very much to all, and have a great weekend. [Statements in English on this transcript were spoken by an interpreter present on the live call.]