LPS Brasil - Consultoria de Imóveis S.A. (LPSB3) Earnings Call Transcript & Summary

Good afternoon, everyone, and thank you for waiting. Welcome to the earnings webinar of LPS Brasil to Discuss the Results Quarter Of 2025. This event is being recorded. [Operator Instructions] Before proceeding, we would like to clarify that any statements that may be made during this webinar regarding the business prospects of LPS, projections, operating and financial goals constitute the beliefs and assumptions of the company's management. Forward-looking statements are not a guarantee of performance and involve risks, uncertainties and assumptions as they refer to future events and therefore, depend on circumstances that may or may not occur. Investors and analysts should understand that general conditions, industry conditions and other operating factors may affect the future results of the company and lead to results that differ materially from those expressed in such forward-looking statements. First, Mr. Marcos Lopes will make the introduction and present the operating results, followed by Mr. Francisco Lopes, who will present the results of CrediPronto. And then Mr. Cyro Naufel will talk about the financial results. After that, we'll start the Q&A session. Now I would like to turn the floor to Mr. Marcos Lopes.

Good afternoon, everyone. I would like to thank you for participating in one more LPS Brasil conference call in which we'll present the results for the first quarter of 2025. Taking part in this presentation are our Vice President, Francisco Lopes Neto; our Investor Relations Officer, Institutional Officer, Cyro Naufel; and our CFO, Robson Paim. At the beginning of this year, the real estate market remained in solid demand. In the intermediation part, Minha Casa, Minha Vida, social housing program gained new momentum with the inclusion of Bracket 4 in the program aimed at families at a monthly income range of up to BRL 12,000 and properties worth up to BRL 500,000, increasing the target audience for the program. We also noticed a strong demand for high-end properties, especially in Sao Paulo and Rio de Janeiro. Regarding the current level of interest rates, we remain attentive to the consequences that it may have on the granting of loans and sales in general. Regarding the company's highlights indicated on Slide 4, Lopes operations participated in 30 projects in this first quarter, totaling BRL 4.2 billion in launched volume, a number 26% higher than the first quarter of 2024. Transactions closed GSV brokered totaled BRL 2.8 billion in the period, a volume 10% higher when compared to the same period of the previous year. CrediPronto's volume originated BRL 1.3 billion in the contracts in the first 3 months of the year, an increase of 172% compared to the first quarter of 2024. The real estate financing market grew 32% in the same period, showing a gain in market share by the joint venture. The portfolio volume reached BRL 17.3 billion at the end of the quarter. Regarding financial results, the company's net revenue was BRL 48.2 million in the first quarter of the year, 28% higher than the same period in 2024, reflecting the higher volume of sales in real estate [indiscernible] and of transactions in real estate financing. The parent company's net income before IFRS recorded a 74% increase in the first quarter of 2025, totaling BRL 5.7 million compared to the same period of last year. On Slide #5, we will comment on Lopes' launches in this first quarter, which totaled BRL 4.2 billion in the period, 23% higher than the first quarter of 2024. Sao Paulo's operations continue to have the highest volume of launches, totaling BRL 2.0 billion, while the state of Rio de Janeiro launched BRL 1.5 billion. The map on the side shows the operations that were launched in the first quarter of the year. Continuing the presentation on Slide 6, we see the result of transactions closed. Lopes brokered BRL 2.8 billion in the first quarter of 2025, 10% more year-on-year. The company is currently present in [indiscernible] with a total of 177 stores. On the next slide, #7, we present the intermediation of Lopes by geographic region of Brazil. The State of Sao Paulo brokered 45% of the quarter's volume, totaling BRL 1.2 billion, followed by Rio de Janeiro with 31%, equivalent to BRL 851 million. The other regions combined accounted for 25%, totaling BRL 687 million with emphasis on operations in Paraná and Ceará states. On the next slide, #8, we present the division of Lopes intermediation broken down by primary and secondary markets. In the primary market represents the majority of the company's intermediations with 71% of the GSV intermediated in the quarter and 68% ticket for the quarter in the primary market was BRL 853,000 and in the secondary market, BRL 743,000. On Slide 9, we have the indicators related to Lopes Portal. In the upper chart, we can see the organic [indiscernible] to the portal, which reached 11 million visits in terms of last 12 months in the first quarter of 2025, in line with the same period of last year. Regarding leads from organic searches generated by Portal Lopes totaled 177,000 in the last 12 months view. Those were my remarks regarding the operating results. Now I turn the floor over to Francisco, who will speak about CrediPronto and then Cyro will present the company's financial results. Thank you.

Good afternoon, everyone. It's a pleasure to be here with you to present the results of CrediPronto. We start on Slide #10. We can see the significant growth in origination in the first quarter when compared to the first quarter of '24. We originated BRL 1.28 billion. And in the lower part of the slide, we see the growth in the portfolio, which reached the amount of almost BRL 17.28 billion in the first quarter of BRL 26 million. And this is the purpose of the -- to grow and make efforts to create a very robust portfolio. We've seen that real estate loans and credit have its dynamic impacted by SBPE funds. And on the other hand, it's a very solid system with low default rates. There is the habit of prepayment. The duration is somewhat extended but the -- it's a very healthy dynamics -- has a very dynamic in this system due to the fact that people take loans that are proportional to the income, and there is a constant payments -- repayment method. So we've seen a very important loan or credit facility for all those who have this portfolio. On Slide 11, we can see that there were almost 3,000 new contracts signed with LTV average of 62% and an average month of 363 months. Our part is BRL 8 million profit sharing with the commissioning of BRL 12.9 million, totaling BRL 20.9 million of total revenue. The revenue development from the first -- to the first quarter of '25 is doubled from BRL 11 million to BRL 20.9 million. So on Slide 12, we see our summarized profit and loss statement, and we see the revenue line with a profit recognized in the period. Remembering that it includes January, February and March -- or December, January and February -- I'm sorry, and March is not included in the period that audit works with. So presented but the earnings for the balance sheet in the first quarter is -- are the months of December, January and February. But March was a strong month with almost BRL 4 million. So these were my observations about CrediPronto. We remain very confident in our positioning and in the line of business of the company and in our capacity of originating and our penetration capacity in this market that's very important for the industry as a whole, the credit facility market. So thank you, and we'll be open for questions after the presentation. I take -- now turn the floor to Naufel, our IRO, Institutional Officer. Thank you.

Thank you, Francisco. Good morning, everyone. Good afternoon. Let's move on to Slide 13, we can see the net revenue of the company, which totaled BRL 48.2 million in the first quarter of 2025 with a revenue increase in every -- and a total increase of 28% when compared to the first quarter of last year. Now moving to Slide 15, the operating expenses of the company with an increase of 47%, reaching BRL 35.3 million. This increase was mostly driven by bank transfers caused by the growth in loan volumes as shown by Francisco in CrediPronto presentation. In the lower chart of -- the lower part of the chart, we see expenses showing the efficiency of the company that maintained expenses at the lowest level of expenses per 1,000 transactions. On Slide 16, we can see the EBITDA and EBITDA margin development, which reached the amount of BRL 63 million and 31.4%, respectively, in the first quarter of '25, showing that the company maintains its focus on operational efficiency. On Slide 17, we see the impacts of IFRS on the company's earnings. They refer to amortization of intangible assets and gains and losses with call and put options of controlled companies. These are noncash effects. That's why we suggest that the company's results be analyzed without taking into account these effects for a better understanding. On Slide 18, the evolution of cash flow, cash balance and cash flow generated from operating activities, BRL 55.9 million generated in cash in the first quarter of '25, causing the total cash balance at [ BRL 55 ] with a growth of 84% when compared to cash and cash equivalents in the first quarter of '24. If you add up BRL 28 million in investment -- financial investments, we have a total cash and financial investments after FI with BRL 76.7 million, 9% higher than in the first quarter of '24. And we have 10.3 million shares in the -- from the buyback program in treasury. We -- these were my financial remarks, and we remain available for any questions you may have. Thank you.

[Operator Instructions]

There's a question here regarding the performance of the credit market by [ Tomas Vinctour. ]

Thank you Tomas for participating. Tomas, we see with a realistic optimism of launches, and I'll give you 2 main reasons for that. The main one is that, as you know, there is the low-income segment of MCMV that's very solid that accounts for 55% of new launches, not only in Sao Paulo but throughout Brazil. And the approval of Bracket 4 in MCMV social housing program that allows properties of up to BRL 500,000 in income of BRL 12,000 per month, we will boost the access to properties from the low-income segment of the market. The other end of the market is also responding well. And we have to be very attentive to the middle, middle income, upper middle and lower middle also income levels, which is the population that has -- is more affected to the -- by the interest rates and exchange rates and the economic performance. But we believe that market will be very active in terms of new launches.

We received another question about CrediPronto. I'm going to read it and turn the floor over to Francisco. The question is we've seen origination CrediPronto very strong in the first quarter despite the increase in rates. What could we expect for the rest of the year?

Thank you, Gabriel. The question is from a shareholder, an individual shareholder and we'll answer. We cannot give guidance about the future or make any forecasts. But if we look at the behavior of the portfolio in the last 12 months, there was a volume that went from BRL 15.2 billion 12 months ago to BRL 17.4 billion with a growth of 15%, that is in addition to the efficiency of the company because we consider our efficiency to be a benchmark but that's also related to the economic performance. So we see the full funds of SBPE around BRL 730 billion in January '24. Then this amount grew due to amortizations and the dynamics of payments and withdrawals and also the improvement of the overall values, it reached BRL 757 billion. However, the balance between deposits and withdrawals in the first months of 2025 from January until was almost BRL 39 billion compared to BRL 22 billion in the same period of last year. So there was a higher volume of withdrawals from savings. So this impacted the year but we are not sure because last year, the same happened, but it was a smaller difference when compared to this year. So -- if we look into this in order to make projections, we do know that this is a significant amount of funds. Today's value balance of BRL 750 billion is very significant. Amortizations or repayments are because previous months were very -- there were some periods in which was 8%, 9%, 10%. So people tend not to prepay but Brazilians like to prepay their loans whenever they have some extra income and this has happened historically. But we cannot make predictions about the Selic interest rates but focus bulletin predicts lower levels than 14.75% year rate that we have today. So the funding volumes should become stable and possibly even grow. During the pandemic, the funding volume was BRL 670 billion. So like I said, this is a very healthy industry. So it's a lot of work. We have to become more and more efficient. We're real estate credit house with a very specialized and strong team, and we want to distinguish ourselves in the market more and more, make more originations even if we have a stricter credit analysis. And although funds cannot be as high in volume as in previous years. But I can't give you a precise figure of how much will be reached.

We've received another question regarding the franchise model of the company. I would like to understand a bit better the drop in the number of shops and franchises of the company.

We've addressed this in previous calls. This indicator is part of the strategy of the company to do an efficiency analysis within the operations that are capped within the company. That's no -- that doesn't reflect any change in our strategy or lack of funds of the company. It's just an analysis of the financial feasibility of the companies and the return we have in each operation. And we decided to keep only those that are profitable to the company. So this is a strategy that has been implemented in the last 3 or 4 years. We continue to do this every year. It's a constant work to maintain the more profitable ones. And those that are not considered profitable, we prefer to close.

That's it in terms of questions. I would like to thank you for your presence. And I'll turn the floor over to Mr. Francisco Lopes to -- for the final remarks.

Thank you all for attending this call. We delivered very good results in this first quarter. We'll also make efforts to provide very good results that are the result of our work. We trust our team. We have a very good team here, and we're working in this market considering its dynamics. As you all know, it has its own dynamics in terms of credit, launches and the secondary market and the impact of high interest rates is something we have to deal with because this is what the market is like, and we make an effort together to attain our results. Let's continue. And thank you all, and see you on the next conference call.

The webinar of LPS Brasil has now ended. Thank you all for attending, and have a good afternoon.