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

Good morning, ladies and gentlemen. Welcome to Helbor's conference call to discuss the results for the second quarter of 2026. This conference is being recorded, and a replay will be available on the company's Investor Relations website. And the presentation will also be available for download. [Operator Instructions] Before proceeding, I would like to remind you that the forward-looking statements are based on beliefs and assumptions of Helbor's management and on information currently available to the company. These statements may involve risks and uncertainties as they relate to future events and therefore depend on circumstances that may or may not occur. Investors, analysts and journalists should bear in mind that events related to the macroeconomic environment, the industry and other factors may cause actual results to differ materially from those expressed in the respective forward-looking statements. Joining us are Mr. Henry Borenstein, CEO; Roberval Toffoli, CFO; and Marcelo Bonanata, Chief Commercial Officer of the company. I would like to turn the floor to Mr. Henry, who will begin the presentation. Please, Mr. Borenstein, you may proceed.

Welcome to Helbor's earnings conference for the second quarter of 2026. It's a pleasure to be here with you. Joining me today, I have our CFO, Roberval Toffoli; and the Chief Commercial Officer, Marcelo Bonanata, who will be participating in today's presentation, will join us for the Q&A session at the end of the call. I will begin the presentation by highlighting the key developments of the quarter. First, the gross total sales of the first -- the second quarter reached BRL 339 million, a reduction of 27% of the same period. And this reduction can be explained by the absence of launches in the quarter and the participation of Helbor in this volume was 73%. Now in the year-to-date, the gross sales totaled BRL 759 million, 30% less than the first half and the Helbor's corresponded to 28%. The SoS of the second quarter reached 11.3% in the second Q '26. And in the total SoS reached in relation to the percentage points in the comparison of the second quarter '25. So in the second quarter, it was impacted by the performance of the sales in the second quarter of 2025. In this semester, it reached 22%, a 12.4% reduction for the same period of the previous year. Helbor's SSo (sic) [ SoS ] stood at 21.2% (sic) [ 21.1% ], a decrease of 10.1 percentage points compared with the first half '25. And the company did not launch any projects during the quarter. However, it's worth recalling the launches carried out in the first Q '26, which include -- are included in the first half figures. Two projects were launched in Nova Vivere in Sao Paulo and Parque Clube Ipoema in Mogi das Cruzes with a combined net PSV of BRL 470 million, of which Helbor share was 33%. At the end of the second Q '26, the company's landbank represent a potential gross PSV (sic) [ GDV ] of BRL 11.6 billion, 74% of which corresponded to Helbor share. The total mortgage transfer reached BRL 205 million in the quarter with Helbor accounting for 62%. Year-to-date, mortgage transfer totaled BRL 482 million with Helbor shares at 65%.

Finally, I would like to comment, and I would like to invite Marcelo Bonanata to provide his, and we will be available at the end of the Q&A session.

Thank you, Roberval. On the first screen, we have Helbor's landbank and is strategically well positioned. We have a total landbank of BRL 11.6 billion, 74% Helbor's stake. I think that we always talk about the landbank, and this is the greatest asset the company has. Its landbank is raw material. And we can see in the highlight that in addition to the quality of the land lots or the location, we can also have a very well-distributed landbank as regards the income. We have the ultra-high, medium-high and the economic standard too. So this is the greatest wealth we have in the same company, a very robust landbank and very well positioned. Now in terms of launches in the second quarter, we did not have any new launch. We had 2 in the first quarter, which was the Nova Vivere. It's -- we are involved since 2016 at Lapa, and we always like to highlight this project. And this is something very important. We have been developed to have over 2,000 units delivered and with a high potential of growth and appreciation in the region. And so we have another phase and also at Parque Clube Ipoema in Mogi das Cruzes in the metropolitan region, we operate in ABC, Mogi das Cruzes, Guarulhos and Campinas. And we also like to spread and Mogi is our city, and we have a very large SoS where we can develop new neighborhoods. And just to give you an idea, in the first quarter, we have over 50% of the units. So highlighting the medium standard in Sao Paulo. This is very important. We have talked a lot. So it's a city close to the capital city and with a high potential of appreciation and value and at a lower price where we have a great migration, Mogi and also the ABC, and we should also highlight that the higher sales, we had a total of BRL 339 million in the second quarter. We had a drop concerning the second quarter '25 of about 27%. And in the semester, we had a drop of 30%. And Henry highlighted that we had no launches in the second Q '26. And due to our strategies, we had a very important event, the World Cup, and we have sometimes expectation that this does not affect the sales, but it does, and we waited a little -- we decided to wait a little longer, and we are going to do that in the second half. In the next one, we talk of VSO and the total VSO had a decline last year in the second Q, we started with 18% in the first Q this year, 12.4%, and in the second quarter 11.3%. And the VSO of this semester last year, we had 35%. We went to 22% at the Helbor's VSO last year we had 18%, in the first Q 10.9%. And we had an increase of 11.3% in the second quarter of this year and the Helbor's share in the semester from 31% to 21%. In the total inventory, we have BRL 2.9 billion, 99% concentrated in the Southeastern region. Helbor's share is BRL 1.7 billion. And it's distributed, as I mentioned, in our landbank and our inventory, we have in the upper, medium and we have a flexibility, not only in the capital in the metropolitan region of Sao Paulo and also in some other regions. So we do not concentrate the same typology, both in our inventory and landbank, we can scatter that around, and we can work at different standards and classes. In the next slide, we talk about the completed units, and it's always very important was the Legacy, the period from 2015 where the termination contracts crisis and the market was very well affected. And last year, we had from BRL 24 million to over BRL 50 million inventory of the Legacy, in '23 we had only BRL 2 million. We are at the end of it. But it's important to highlight that our completed units last year, we have BRL 509 million. And today, we have BRL 549 million. And the completed units below 20%, a very healthy position. It's worth mentioning that our completed is below 20% of the total. In our -- in the completed units, we have 2 projects. One is Figueira Leopoldo and the W Residences. So we are talking about 2 projects with concentration of over 70% of the VGV, the PSV. The ready units inventory is very healthy, and we are working hard to sell both the completed units and under construction. Talking about the lending due to the deliveries. So this year, we have a smaller amount of deliveries. So we had a drop of the on lending or the [ swift ]. So we closed the second half of BRL 240 million. In the semester, we have BRL 482 million. So in the next slide, we distribute the projects that will be delivered. So we have 3 projects to be delivered. One is the Vila Nova in [indiscernible] and our land lot, closing land lot in [indiscernible]. So they are -- it correspond to 80% of the units sold, all of them very well. So the majority of them, we are already in the transfer phase and we are going to deliver these 3. And in 2027, we have 4 projects, vis-a-vis BRL 896 million and well sold about 78% -- 77%. In 2028, we have 7 projects to be delivered, BRL 1.2 billion deliveries to be made and 55% of the total units sold, and we should reach for '28 in the sales and deliveries. And in '29, we have 3 projects with 65% sold units, and we have just launched it. In 2030, we have one project, which is Nova Vivere. So we are monitoring closely this inventory, both the under construction and completed units, so we can have the lowest inventory possible. Now I'm going to give the floor to Roberval, who will give you the financial information.

Okay. Let's move on to the financial results of Helbor. On Slide 14, on the net earnings in the second half, we have BRL [ 213 ] million, a reduction of 25.5% as compared to second quarter '25 and 38% in the comparison with the first quarter of '26. This performance reflects the lower sales volume between the periods combined with changes in the sales mix. During the quarter, 70% of sales consisted of units under construction, 18% of completed units and 12% of units from projects launched during the first half of the year compared with 68%, 25% and 7%, respectively, in the second Q '25. In the first half '26, net operating revenue totaled BRL 559.3 million, representing a 4.4% decrease compared with the first half '25. This change was primarily driven by the shift in the sales mix over the period. During the first half, the sales mix consists of 62% units under construction, 22% completed units and 17% launches, compared with 50%, 25% and 25%, respectively, in the first half '25. Moving to the right-hand side of the slide, we have a gross profit and gross margin. In the second Q '26, gross profit totaled BRL 65.8 million, down 28% from the second Q '25 when it reached BRL 91.4 million. Compared with the first Q '26, gross profit decreased by 34%. Gross margin stood at 30.9% in the second Q '26, therefore, stable. In the first half of 2026, gross profit totaled BRL 165.5 million, representing a 10.9% decrease compared with the same period of 2025, also reflecting the lower volume of sales recognized during the period. Gross margin for the first half stood at 29.6%. Moving on to the next slide. So we have the results to be recognized that will represent the recognition of sold projects that are still under construction and whose results will be recognized in the company's income statement as construction progress. The gross revenue to be recognized totaled BRL 786.5 million at the end of the second Q '26, an increase of 62.4% compared with the second Q '25. The largest amounts of revenue to be recognized related to the following projects: Alegria Patteo Mogilar launched in the fourth Q '24, Neo Concept launched in the fourth Q '25, Patteo Vila Mariana with the first phase launched in the second Q '24 and the second phase in 4Q '24. Open Mind launched in the second Q '23. And Collage Bela Vista launched in the second Q '25. Together, these projects account for 78% of revenue to be recognized from units sold. Gross margin to be recognized stood at 28.3% in the second Q '26. Moving now to Slide 16 and looking at expenses in the second Q '26. General and administrative expenses, excluding depreciation and amortization, totaled BRL 21.7 million, down 22.9% from the second Q '25. This performance mainly reflects lower personnel expenses as a result of a leaner organization structure in 2026 as well as lower professional services and legal expenses. In the first half '26, G&A expenses, excluding depreciation and amortization, totaled BRL 46.2 million, representing a 16.9% decrease compared with the first half '25. The decrease recorded in the first half was driven by the same factors observed in the quarter. On the right-hand side of the slide, we present selling expenses. In the second Q '26, selling expenses totaled BRL 7.0 million, down 39.6% from the second Q '25 and 16.6% compared with the first Q '26. This decrease was mainly due to the lower advertising and sales commission expenses, reflecting the absence of project launches during the quarter and the lower sales volume. In the first half of the year, selling expenses totaled BRL 37.4 million, representing a 30.1% decrease compared with the first half '25. And on Slide 17 and the consolidated net income for the second Q '26 was BRL 5.3 million. Net income attributed to the parent company amounted to BRL 0.6 million. In the first half '26, consolidated net income reached BRL 29.5 million, of which BRL 2.5 million was attributed to the parent company. Now on Slide 18, we are going to talk about the debt profile. At the end of the second quarter '26, consolidated gross debt totaled BRL 2.011 billion, 51% of which was self-liquidating, representing an increase of 7.9% compared with the year-end '25 and 2.8% compared with the end of the first Q '26. This increase was mainly driven by the new borrowings of BRL 150.8 million in the Plano Empresario real estate development financing program during the quarter, particularly for the Clube Patteo Sao Bernardo, BRK, and Alegria projects. This effect was partially offset by a higher volume of repayments of real estate development financing by the repayment of working capital installments contracted with Bradesco that matured during this period. Cash and cash equivalents at the end of the second Q '26 totaled BRL 238.5 million, resulting in a net debt of BRL 1.773 billion, equivalent to 62.6% of the consolidated shareholders' equity. And finally, I would like to highlight that we are at the end of this partnership between Helbor and Cyrela for the development of the old Semp Toshiba that for sure will have an impact in the leverage for the second half. Now moving on to Slide 19. We present the cash generation. In the second Q '26, consolidated operations recorded cash consumption of BRL 104.4 million, mainly reflecting the new real estate development financing raised during the period and the payment of financial expenses, and the lower volume of mortgage transfers during the period due to the absence of project deliveries in the quarter. Cash consumption by nonconsolidated SPEs totaled BRL 19.6 million in the second Q '26, mainly driven by the raising of construction financing for the Nova Vivere and Garden Design projects. Considering both consolidated and nonconsolidated companies, the second Q '26 ended with a total cash consumption of BRL 123.9 million. And to conclude the presentation, moving on to the last slide. I would like to reiterate our priorities for the second semester half of this year. Maintaining the focus on active sales management and the effective management of our landbank. For the second half, we have 3 projects totaling BRL 782 million in PSV. And we also conduct strategic project launches in the Greater Sao Paulo and Mogi das Cruzes aligned with the most attractive market opportunities. And finally, we remain firmly committed to cost management discipline and reducing leverage, ensuring profitability and sustainability. And I conclude the presentation, and I would like to open for Q&A.

[Operator Instructions] I am going to begin with the first question from [ Mariana Islachipat ].