Melnick Desenvolvimento Imobiliário S.A. ($MELK3)

Good morning, and thank you for holding. Welcome to Melnick's earnings call concerning the results of the first quarter of 2026. [Operator Instructions] We would like to inform you that this event is being recorded and will be made available on the company's website ri.melnick.com.br, where the complete material concerning this earnings call will be available. It is also possible to download this presentation by way of chat in both Portuguese and English. [Operator Instructions] We would like to clarify that any statements that might be made during this teleconference regarding Melnick's business prospects as well as its operating and financial projections and goals are based on the beliefs and assumptions held by the company's management and information currently available. Forward-looking considerations are not a guarantee of performance and involve risks, uncertainties and assumptions since they refer to future events and therefore, depend on circumstances that may or may not happen. Investors should understand that general economic conditions, industry conditions and other operating factors may affect Melnick's future outcomes and may lead to results that materially differ from those expressed in these future considerations. Here with us today are the Chief Executives of the company; Mr. Leandro Melnick, CEO; Mr. Juliano Melnick, CFO and Investor Relations Director; and Mr. Joelson Boeira, Administrative and Investor Relations Director. I will now give the floor to Mr. Juliano Melnick.

Good morning. I'd like to thank you all for attending Melnick earnings call for the first quarter of 2026. Let us begin by going over the highlights for the quarter in Slide 3 of this presentation. In the box on the left-hand side of this slide, we show you the BRL 213 million in net launches in the quarter. In the next box, we highlight the BRL 300 million in net sales in the quarter as well as the reduction of 14% in the finished inventory when compared with the previous quarter. In the box on the right-hand side of the slide, we highlight the gross margin ex-financing of 28.5% in the quarter and the net income of BRL 25 million, which is an increase of 86% when compared with the first quarter of 2025. Moving on to Slide 4. We can see the BRL 249 million in gross PSV launched in the quarter and BRL 213 million net 2 launches in Porto Alegre, Canoas/RS and Phase 2 of Open Bosque in the Minha Casa, Minha Vida segment. In Slide 5, we present Seen Três Figueiras, an upper middle-income project that has 57 units with 3 and suites and complete infrastructure, which is currently 56% sold. Also, Open Bosque Phase 2, a project in Minha Casa, Minha Vida segment, where 51% of the units have already been sold. Let us now move on to Slide 6, where we discuss the company's net sales. In the graph on the left-hand side, we can see that SOS of launches in the quarter was 38%, whereas the SOS of inventory was 15%, which means an average SOS of 18% in the quarter. We had BRL 300 million in net sales, of which BRL 218 million was inventory sales and BRL 82 million was sales of launches. In the pie chart on the upper right-hand corner of this slide, we break down sales by business unit, where 85% of sales were concentrated in the import Porto Alegre unit. Finally, in the bar chart on the bottom right-hand corner of this slide, when we look at the projects to be delivered this year, 86% of their units have already been sold, which gives us the whole year to sell the remaining 14%. In the next Slide #7, in the graph on the left-hand side, we can see the company's deliveries. In the first quarter of this year, it amounted to only BRL 23 million of PV. On the right-hand side of the slide, we bring some information concerning our operating capacity. Currently, we have 20 active construction sites, of which 14 are in Incorporadora, 4 in Urbanizadora and 2 in open, amounting to over 4,500 units under construction. In the eighth slide, we show you the only delivery of the quarter, which is 84% sold on average. It is the third phase of the Garden, a high-end residential development in the city of Panos. In Slide 9, we break down the company's inventory by year of conclusion. To facilitate the understanding of the company's finished inventory, the box on the left-hand side of the slide highlighting the doughnut graph, the inventory of launches prior to 2020, the pre-IPO. It consists mostly of commercial properties amounting 88% of inventory and it's worth BRL 118 million. The bar graph in the same box shows that currently, we have BRL 1.258 billion in inventory, excluding the inventory launched prior to 2020. Out of the total inventory, only 5% or BRL 76 million corresponds to finished inventory after 2020. Out of the remaining inventory, BRL 115 million will be finished by the end of 2026. The graph in the upper right-hand corner breaks down the composition of our finished inventory worth BRL 194 million. Only BRL 22 million of it is at Urbanizadora, BRL 64 million is residential. of which BRL 4 million is leased. The oldest leased liquid inventory, the commercial units, which include office space, stores and hotels add up to BRL 180 million and BRL 39 million of which is leased or referred to hotel units. Here, I want to draw your attention to the 14% reduction in the finished inventory in the quarter. At the bottom of this slide, we show the reduction of finished inventory in these past years, which at one point was 31% of total inventory now represents 14%, mainly as a result of our reversal lease strategy. In the next slide, number 10, we discuss our land bank. In the bottom left-hand side of the slide, you can see that currently, we have BRL 4.4 billion in total PSP of which BRL 3.2 billion is Melnick share, comprising 26 lots or phases. Roughly 20% of it has already been approved. In the next box, we show the composition of our land bank, where 62% is with Incorporadora. Moving on to Slide 11, where we show the company's financial indicators. We observed that in the graph on the upper left-hand corner, the net revenue in the quarter was BRL 320 million. The graph on the right-hand side shows that the gross profit in the quarter was BRL 78 million and the gross margin, excluding financial production of 28.5%. At the bottom of the slide, we show our net income of BRL 25 million in the quarter and net margin before minority interest of 11.2%. In Slide 12, our capital structure is shown in the chart on the left-hand side. We ended the quarter with a net debt of BRL 452 million, a gross debt of BRL 702 million, mainly to finance our projects under construction and total cash position of BRL 250 million. At present, our shareholders' equity is approximately BRL 1.237 billion, and our capital structure represents a net debt-to-equity ratio of 36.6%. The box at the bottom highlights the consolidated cash position of BRL 250 million and the profile of our debt, which consists approximately of 78% of financing production. In the quarter, the company burned operating cash to the amount of BRL 33.8 million, of which approximately BRL 22 million was used to purchase land. Besides, we carried out a stock buyback to the amount of BRL 10.5 million. Thank you all for your attention. I would like now to give the floor to Leandro Melnick, the company's CEO, for his final remarks, and then we will take your questions.

Good morning. We ended the first quarter of 2026 with good operating numbers. Considering the country's current macroeconomic scenario, our figures when compared with the same period of the previous year represents a significant improvement. The company's results increased 86% when compared with the first quarter of '25, reaching BRL 25 million. Our sales reached BRL 300 million in this quarter, surpassing by much the result in the same quarter of the previous year, which was BRL 130 million. Additionally, we had some launches in this first quarter, which didn't happen in the same period of last year. We'll have a year with many deliveries of projects that have sold -- have been selling very well, projects that demonstrate that Porto Alegre's market has been absorbing our products. The products that Melnick has been developing, building and delivering have consistent differentiating factors in relation to what the market has been able to deliver for the most part. And this leads us to the understanding that we are going to have a very positive year, a year of evolution compared with the results we had in the previous year. And this is part of the company's strategic plan.

[Operator Instructions] Our question comes from Gustavo from BTG Pactual.

I have 2 questions here. The first, I even see some news about this, about the new zoning for Porto Alegre. I would like to have an update regarding what you see this will have for Melnick, what it means for you in terms of purchasing land, the kind of products, even launches in the year. So, what this new master plan can change for the company? And the second question is the sales of inventory. You commented that you sold a lot of inventory. And I would like to understand how you see this demand at the end? What kind of strategies you have been using to sell these units if you have to give some discounts. So, this is what I'd like to know.

I will answer your first question. Considering the master plan for Porto Alegre, it was consolidated yesterday. The council of the city, it's a relevant master plan with many significant changes. We're in a more strategic vision for the city. It increases the density for the city, releasing some parts, changing the way that the buildings will be laid out. It will increase the density, the population density of the city, leading to a more appropriate use of the space. And this evolution will have an impact in the mid-term to our operation. Probably, we're going to have bigger buildings, smaller buildings in land. Today, we have in the same land, the smaller buildings. And our land bank is a significant, the part that we have purchased and the part we have swapped. So, in the mid- and long-term, we see a potential to improve the project in this land. And we have been following the crisis, the real estate crisis in the city has been going through. A decrease in the price of land, which is different from what's happening in other cities. Our real estate market has been suffering the result of the high interest rates. So, this has been affecting price and it changed the conditions for purchasing this land. So, adding these 2 factors, land bank in the mid- and long-term, we see an interesting view. And we are going through a moment that is increasing the attractiveness of this land. And now with this new master plan, we're going to see land that can deliver a higher potential. So, we have been analyzing this case by case in terms of the land bank we have and the pipeline we have, but our evaluation is a very positive one for coming years.

Juliano here. Thank you for your question. I'm going to answer your second question regarding inventory -- finished inventory. In this first quarter of the year was a very good quarter for sales of inventory. We had a Melnick Day, an event that happened in the first quarter this year. Last year, it happened in the second quarter. So, we were able to speed up the sale of inventory. So last year, it represented more than 30% of the sales of the company. Today, it's below 15%. So, we have been reducing the size of this inventory, especially because it's an older inventory, which is basically commercial inventory that was created when there was more demand for this kind of product. So, we have been using our reversible lease strategy where we lease these commercial units and then sell them in time. And now we see the results. So, the finished inventory reduced from 80% to 14% now. So, in terms of margin, we are always updating our values using the real values. So, we are always close to reality. So, it's natural that this finished inventory had some slightly lower margins. So, because it brings the margins a little lower. But it has been moving along very well in terms of moving this inventory. And for the next quarters, we believe we'll be able to sell this inventory well. So, in the future, we'll get to the position that we have always imagined. To a position that will be between 10% and 15%, close to 10%, but we still have a few months to keep doing this. When we separate this older commercial inventory from the projects that we have delivered more recently that are 80%, 90% sold, this finished inventory in the past few years, we have always been lower than 10%, 6%, 7%. So, it's a very healthy inventory that has been coming, the newer one.

Our next question comes from Juliana Vega from Itau BBA.

I have 2 questions here. The first one is concerning the margins. When we look at the accounting margin, we see an increase in the accounting margin in relation to the backlog margin, which dropped a little bit in this first quarter. I would like you to explain the motivation for this dynamic. And also, if we had seen a one-off effect in these margins and how you see these margins going forward? The second question is regarding cash generation. I'd like to understand a little bit more about how you are generating cash this year and how this affects the dividend payout.

Thank you for your question. Regarding margins, we have a plan. We have been analyzing previous quarters. We have seen an increase in these margins. When you look at the quarter readings, we have to take into consideration the seasonality. And we also have the Melnick Day, which is a very important factor because it increases the volume of sales in the quarter. In previous years, we also saw this phenomenon. The quarter in which the Melnick Day event happens, we have some noise, let's put it that way, that increases the margins. So, the company's margin is stable. And looking forward, we see an increase because we have been able to transfer part of these costs to the price, and it has been absorbed very well. So, we have been 90% to 95% sold, but the composition, the recovery of this price is slow. We have been recovering the margins. But in this quarter, we have had this Melnick Day noise because it concentrates a lot of sales of inventory. And this year, the event, when it comes to inventory, refers to projects that will be delivered and the finished inventory is selling very well. So, we're going to concentrate the event on these best-selling projects, so the margin becomes a little more negative. But the reading that we make is a stability in these margins, the accounting margin, the REF backlog margin. Concerning cash, our cash position, we have a dividend payout policy that's very clear. We are a company that focuses on cash generation and dividend payout. Of course, the real estate market, which adds to the macroeconomics of Brazil, we manage the year and the moment according to circumstances. So, we see in this year some relative stability of future facts that are significant due to our national political questions as well as international questions, wars, for example. So, we have been more conservative this year. So, we are not following the previous policies of paying out dividends quarter-to-quarter. So, we're going to wait to see how the year progresses to understand if we are going to keep the policy of more frequent dividend payout or if we're going to retain the cash in the company because of the macroeconomic effects, national and foreign. So, we're going to wait for the next quarters to have a clearer view of Brazil and the world to understand how we will behave in relation to dividend payout.

Our next question comes from João Pedro Rodrigues.

I have 2 questions. The first one is regarding provisioning for contingencies and cancellations. I'd like to see how these 2 lines are evolving in terms of operating expenses. What's your motivation for the behavior of these 2 lines? And the second question, I would like you to talk a little bit more, if you can, about what you will announce regarding the partnership with the real estate fund. I would like to understand a little bit more the scope of this partnership and if you think your area of partnerships will be able to create more solutions for you.

Thank you for your question. Let me answer first about cancellations. For now, cancellations are in line. And nowadays, we have in our portfolio cancellations that are very well aligned with what we expect. Of course, after the floods that we had in the past, it was a special moment, but we have been dealing with this well. We have seen a slight increase in part of our portfolio. It's a part of the portfolio that we began with negotiations after the floods that happened, which was our way of trying to deal with that crisis. So, we were more strict in the negotiation. We had a slight oscillation. But within the whole portfolio, we barely noticed it. By the end of the year, we have been working with cancellations that are in line, and we do not expect any news, any improvement or any worsening of this situation. And I'd like to take advantage to also think about strategically which is the partnership with [indiscernible] fund. But as I commented before, we see a decrease in the high end, upper middle income, a decrease in this market in Porto Alegre regarding the volume that the market can absorb. But we see a percentage of selling that's very good. So, we started more active with Open, which is Minha Casa, Minha Vida. So, it's been performing very well. Very, very well. As we see this in Brazil, too in other companies in this segment, affordable segment. And the companies that operate in the Level 3, the publicly traded companies have not entered in our market. So, we see this with very optimistic that the city of Porto Alegre, we see very few construction sites in this segment. In the future, this will improve our results in the way we structure this segment. And the other activity that we have been increasing is the partnership, which is different from other Brazilian companies. And this is a branch of the company that makes real estate investments in other developers. We already investing in 9 developers and 4 of them are companies that in Porto Alegre operating in smaller projects and the other ones are in Santa Catarina and Sao Paulo. In this project, we have great expectations about this project and its ability to add value to these companies. And also, especially in Sao Paulo to enable us to buy some land, which we know is a challenge in Sao Paulo. So, especially good companies of -- midsized good companies. So, this partnership with this fund, the Green Fund, it's a project -- it's a long-term project, and we believe we have a significant volume to raise funds in the swaps. So, we do not have an operation in Sao Paulo, traditionally speaking in a vertical way. So, we operate by allocating capital in other projects. And with VE, we built a fund that in partnership with other developers, we purchase land. So, this fund swaps. And occasionally, Melnick can participate in part of this development project. And this is a way of us allocating capital. So, we see this very positively because we have been able to participate in these projects. That bring very positive in very good areas of Sao Paulo, very good neighborhoods. So, these are very well-located projects. And thanks to my experience when I was at [indiscernible]. And this fund gives us this tool of acquiring land that do not use company's cash and gives us the possibility of having partnerships with very good companies like Uni. We also have some projects with even in [Novaconó] neighborhoods. We're going to bring more details in the future. But we're very happy with this strategy. It gives us a very ample and diversified view for now, getting away from the concentration of Porto Alegre, but we do this responsibly in terms of cash and productive -- production capacity.

[Operator Instructions] Our next question comes from Mateus [indiscernible] investor. Congratulate you on your results and asks concerning dividends, what we can expect.

Thank you, Mateus. I have already commented on this, but it's important to reinforce this that our strategy is to be a company -- of a company that has low cash burn and high dividend payout. This is still our strategy, but we signal this quarter-by-quarter, year-by-year, considering the circumstances of the moment. We are going through a very turbulent moment now which makes it difficult to understand the mid- and long-term, especially in Brazil. We have some important political questions here and also international questions like wars. So, we have been more conservative of not paying out dividends every quarter, but we are going to wait a little bit more to see ahead what the scenario will be in Brazil. Another factor that has to do with a company like ours, which is intensive, capital-intensive. We have the moment -- consider the opportunities. Usually, big opportunities come where capital is more scarce, is more expensive like the current moment. So, we have been able to take advantage of these very interesting opportunities concerning the purchase of land. So, these are opportunities that we are taking advantage of. When the crisis allows us to make some investments in terms of purchasing land. So, considering these factors, we are going to have a year that will mean more analysis, especially in the next 2 quarters to understand if by the end of the year, we are going to do our usual dividend payout policy, which is in term of the percentage of this payout.

Our next question is [indiscernible].

What are the partnerships with other companies like, especially in Santa Catarina and São Paulo states? Are we going to have new launches in this year from these partnerships?

The first part of your question is more ample. Our partnerships have been performing very well. We have been able to get the moment right. The real estate market in Santa Catarina is booming. And Sao Paulo has a strength of its own. So in Sao Paulo, we have some difficulty of landing of purchasing land. So in Santa Catarina, they want to work with companies that are more structured. So we were able to close partnerships that are very interesting, involving very good land. And this in the future will bring us very good results. And this is improving our figures. And in São Paulo, we are going to have 2 launches this year. And in Santa Catarina, in relation to São Paulo, we have a 1-year delay. Our partnerships are very important, but where launches will increase naturally, probably in the second quarter. But in the coming years, it will increase. Thank you for your question.

We have one more question from Gustavo Cambauva, BTG.

Just another point I would like to make here regarding Minha Casa, Minha Vida, you signaled feeling more comfortable in growing with Open units. And my question is how you see the scenario of supply and demand for this segment in the city. So a broader view of Minha Casa, Minha Vida in Porto Alegreand how open it will benefit from the new master plan in the city.

Thank you for your question. It helps us to share with everyone a vision for this region for the city that's not so clear, so obvious. It's a very particular situation, and we think it's very interesting to give it some context. The affordable segment, as we know, it has grown a lot in the past few years. And in Porto Alegre, this growth didn't happen for some circumstances, especially the geographic circumstances. We did not have land that was suitable for this affordable segment. And second, because national companies, domestic companies did not come to Rio Grande do Sul, and the flooding that happened made Brazilian companies look at this region with more caution, and this created a vacuum for Rio Grande do Sul. So even with the positive circumstances all around Brazil and with Rio Grande do Sul having a high income, this didn't happen in the state because of this crisis. So, we see this opportunity. We have been working on this for 6 years. Slowly, we have launched and delivered some projects in this segment, but within Melnick. So, this was us following the learning curve, and we were able to build a very interesting land bank because the crisis in the middle-income segment allowed us to buy land in Porto Alegre, probably 60% lower than it used to be. So, we're able to build a very significant land bank in Porto Alegre, 4 projects in the affordable segment of Minha Casa and Minha Vida, in regions that never had this kind of project. But we have been very conservative in analyzing the risks involved in this. So, these are a few construction sites within the city of Porto Alegre. These are not several construction sites spread out. So, we understand now, last year, we were at the moment after 4.5 years of operating this segment to build a company exclusively for this segment. The launches have been happening, and they have been happening in a way that makes us very enthusiastic because we have been able to preserve the average price, and we are operating just in the highest of the Level 3 and the beginning of Level 4, which is a segment in the affordable that is closer to our average income. And with this operation, we have been increasing our land bank through swaps, very strategic lots, so our expectations are high. So, we do not imagine a very fast growth in this segment because we are very conservative. We are working to understand the operating issues, not just commercial issues, but operating issues that may cause a problem. So, we understand the Melnick future view. We see Open as something that will gain relevance in our figures, but not an exponential growth, which is not part of our strategy. It's not how we understand the real estate market.

[Operator Instructions] The Q&A session is now closed. Melnick's earnings call concerning the results of the first quarter of 2026 is now concluded. The Investor Relations department is at your disposal to answer any further questions you may have. Thank you all for attending this earnings call, and we wish you a good day.