LPS Brasil - Consultoria de Imóveis S.A. (LPSB3) Q2 FY2025 Earnings Call Transcript & Summary

Good afternoon, everyone, and thank you for waiting. Welcome to the earnings webinar of LPS Brasil to discuss the results for the second quarter of 2025. This event is being recorded. [Operator Instructions] Before proceeding, I 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 could lead to results that differ materially from those expressed in such forward-looking statements. First, I'll turn the floor to Mr. Cyro Naufel to start the conference. Mr. Cyro, you may begin.

Good afternoon, everyone. I would like to thank you for one more conference of LPS Brasil in which we'll present the results for 2025. We'll have Francisco Lopes Neto, our VP; and our CFO, Robson Paim. Before starting the presentation, I would like to share a message from our CEO, Marcos Lopes. Good afternoon, everyone. I would like to thank you for participating in one more conference call of LPS Brasil in which we'll present the results for the second quarter of 2025. In the second quarter, the Brazilian real estate market remained booming with emphasis on high-end properties and those covered by Minha Casa, Minha Vida housing program. Despite the positive demand scenario, the volume of real estate financing declined during the period according to data from ABECIP. This decline is directly related to the reduced availability of funding, which limited the capacity to grant credit, a movement that occurs in a macroeconomic context marked by high interest rates. Recently, the scenario has become even more complex due to the trade policies adopted by United States, which may have an impact on the domestic economy of Brazil. The company remains attentive to economic developments and credit conditions, focusing on preserving its financial performance and anticipating strategic adjustments that ensure the sustainability of results. I will now hand the floor over to Cyro, who will begin a more detailed presentation of the quarter's results. Thank you. So starting the presentation, I will start with the highlights on Slide #4. The total transactions closed totaled BRL 3.2 billion in the second quarter of '25, which is 7% lower than the same period of 2024. CrediPronto ended the quarter with BRL 17.4 billion, in the end of the second quarter and the funded volume was BRL 855 million, stable when compared to the previous same period of '24. Net revenue for the company amounted to BRL 51.2 million in the second Q '25, 13% higher than the second Q '24. The EBITDA of the company reached BRL 19.6 million in the second quarter of '25, 12% higher than the same period of last year. In the quarter, the EBITDA margin was 38.5%. The net income of the controlling shareholder ex IFRS increased by 63% in the second quarter of '25, totaling BRL 11.3 million when compared to the second quarter of '25 -- '24. Moving on to Slide 5, we see Lopes launches. They totaled BRL 4.9 billion in the period, 14% less when compared to the second quarter of '24. Operations in São Paulo had the highest volume of launches, while in Rio de Janeiro launched BRL 1.1 billion. On the map on the side, we see the states whose operations and launches in the first half of the year. On Slide #6, we see Lopes intermediation reserves. Lopes intermediated BRL 3.2 billion in the second quarter of '25, 7% less in the year-on-year. Currently, the company is present in 19 states with total of 171 stores. On Slide 7, we see Lopes intermediation by geographic region of Brazil. The state of São Paulo intermediated 33% of the volume totaling BRL 1.4 billion, followed by Rio de Janeiro with 29% and BRL 1.1 billion. The other regions added amounted for 34%, BRL 1.3 billion with highlights of the operations of Paraná and Ceará in which 2 plots of land were intermediated. On Slide 8, we see the division of intermediation between primary and secondary markets. The primary market accounts for most of the company's intermediations, 65% of the GSV intermediated in the quarter and 72% of the units sold. The average ticket was in the secondary was [BRL 666,000]. Moving to Slide #9, we see the indicators regarding Lopes Labs. First, we see the organic visits to the portal, 10.4 million visits in the last 12 months view. The leads from organic search generated by Lopes Portal totaled 169,000 in the last 12 months. These were my comments about operational results. And now I turn the floor to Francisco, who will talk about CrediPronto. And then we'll talk about the financial results of the company later.

Thank you, Cyro. Good morning, everyone. It's a pleasure to be here again presenting the results of CrediPronto in this conference call for the results of the second quarter of 2025. On Slide 10, it's interesting to note the volume of origins originated volume in the first half, BRL 2.139 billion, whereas the total last year was [BRL 4 billion]. So this was a positive 6 months. and we maintain the operations very efficient and trying to have a good penetration in the market to improve the results that the company seeks. And in order to improve results, we have grown our portfolio by BRL 630 million in the quarter. If we compare to how it ended in 2024, so this continuous growth is very important because that is what will generate the profit sharing results, which will enable us to have revenues from bank correspondence and the profit itself. And we see on Page 11, the total revenue in the second quarter of BRL 21.6 million, which is composed of BRL 8.9 million of origination revenue from banking correspondents and commissions and 12.6%, it's a significant figure of profit sharing in the second quarter of 2025. The highlights are shown on the same slide, and we see the volume of new contracts signed that has grown. The demand has been very interesting because the market is seeking credit because it's a very efficient consolidated solution, well regulated both in terms of getting back the property in case it's needed and as well as legal certainty. So we're going through a very good moment in terms of operations and credit structure. It's always good to bear in mind that it's likely to be the most important part of the efficient property funding in real estate credit that Brazil has that allows us to make so many launches. On Page 12, we provide more details about this profit sharing composition, showing more stability. I won't say that this will remain completely stable all the time. But it shows that at this level of BRL 4 million as we see here for 4 months in a row, we are already reporting the profit for June. But the months to be included in this quarters are March, April and May. But June is already at BRL 4.2 million. So this is the information I had to share with you. For CrediPronto, the growth is within what's expected for the industry. It's a very good brand, and it has been very efficient in providing credit in a seamless journey that is praised by our partners and customers. So thank you all very much, and we hope to see you all again in the next conference call. Now I turn the floor back to Cyro Naufe to continue the presentation.

Thank you, Francisco. Now let's talk about the financial results of the company. Starting on Slide #13. We see that the net revenue in the second quarter of '25 was BRL 51.2 million, 13% above the second quarter of '24. While for the first half of '25, it reached BRL 99.5 million, 20% above the same period in '24. Slide 14, we see the operating expenses increased by 14% when comparing the second quarter of '25 and second quarter of '24, reaching BRL 20.4 million -- BRL 31.6 million, while operating expenses were BRL 66.9 million, which is 29% above the first half of '24. Most of that was due to transfer to banking correspondent due to the higher volume funded by CrediPronto in the quarter. On Slide 15, we see EBITDA and EBITDA margin, BRL 65 million and 31.5% in the second quarter of '25 in the LTM view, maintaining the company's focus on our operational efficiency. On Slide 16, we see the results of the second segment -- second quarter by segment. Before IFRS effect, we see the gross profit and the profit attributed to shareholders of BRL 11.3 million. On Slide 17, we see consolidated results regarding the first half of '25 also by segment. In that column, we see the net income before IFRS of BRL 20.2 million, whereas attributed BRL 17 million. On Slide 18, we see the impact of IFRS impacts on the company's results and they refer to repayment of intangible assets, gains and losses with [inn-cash] net effect. And the IFRS effects are noncash effects. So for a better understanding of the company's performance, I suggest you do not take into account such effects. Finally, on Slide 19, we can see the development of the cash flow of the company and cash equivalents. In the second quarter, we generated BRL 12.4 million in cash and cash and cash equivalents balance reached [BRL 50.4 million], which together with financial investments amounts to BRL 70.6 million. This is the information we had to share. We remain available for any questions you may...

[Operator Instructions] We are Starting to receive some questions. The first is what are the reasons for closing 14 stores in the last 2 quarters? And what are the prospects for future growth? The basic reason is the focus of the company for greater operational efficiency and the performance adjustments in the network stores. The focus is not on the number of brokers or real estate stores, but rather how well they work. So that's what causes us to constantly review the franchises. And the second is the improvement in the margins of the first quarter of '25. Is it due to when compared to the first quarter of '25 or due to some seasonality? No, it's there due to a better results of CrediPronto as well as to the fact that we always seek better efficiency in costs of the company. These are the reasons for the improved results.

I would like to thank you all for your presence in attending one more conference call for LPS Brasil. I reinforce the company's effort to always reduce costs and improve the operation. And we hope you can all attend the next webinar. Thank you all very much, and have a good day.

The LPS earnings conference call for the second quarter '25 has now ended. Thank you all, have a good afternoon. [Statements in English on this transcript were spoken by an interpreter present on the live call.]