Moura Dubeux Engenharia S.A. (MDNE3) Earnings Call Transcript & Summary

Welcome. I'm Alan Aquino and to present the results we have Diego Villar, the CEO of the company; Diego Wanderley and Diogo Barral, the Investor Relations Officer. [Operator Instructions] We would also like to remind you all that possible statements that could be done during the conferrence are based on assumptions of the Moura Dubeux officers. The future statements are not an assurance of performance as they involve risks and uncertainties and rely on factors that could or not occur. Having performed this disclaimer, Villar, the floor is yours.

Thank you, Alan, and good morning, everyone. One more presentation at Moura Dubeux and we have the closure of 2024. First, we are presenting very important results because we are closing a cycle of 5 years ever since we went public and February, we're finishing the cycle and this is an important milestone because the average of the full cycle of real estate development in Moura Dubeux and so if you understand ever since the moment we're prospecting approval, developing and launching and commercializing as well as the construction and company transfer and the incorporation, the average cycle happens in the same period of time. So when you look at the numbers and the evolution of these numbers throughout time, really demonstrates how Moura Dubeux has evolved and really tried to fulfill what we had presented by the end of 2019 and the first years of 2020 as an expectation for the next 5 years when we had our IPO. So when we look at the numbers, I'm going to show you the launches you will from BRL 662 million per year. We ended the year '24 with BRL 2.543 billion, and we have an average growth throughout the year of 39%. This demonstrates that we've had a positioning strategically in the Northeast. It's very singular, very unique. In regards to who's exploiting this single market or almost 2 because the second biggest real estate market in Brazil. And we can phase -- you see that the last 5 years, Brazil went through many phases. The pandemic and then this major cycle a drop in interest rates and increase in interest rates up and down, the government changing its economic policy, constantly political guidance from the government as well. So Brazil is what it is, a country of many instabilities. But even despite this, we've been able to grow and expand to more markets, expand different product lines and diversify the risks of the company's operation. So we were able to do this at an average of almost 40% a year. But as we start with this journey, we have another point that's also very important which is really having a product that is well accepted and commercialized. So we go from BRL 542 million of sales to BRL 2,400, this is a growth of 35% in sales, it is not the same as a growth of launches because sometimes these don't happen in the first days of the year, they happen during the year. It's off, but we have the seasonal effect of this mismatch between 1 day and another. I'm going to go down here to VSO because then we can demonstrate how they were really well accepted. We navigated with an average VSO between 45% and 50%. And in 2024, we had 54.3% one of the best in the sector. And actually, according to the VSO, we've always mentioned that the company doesn't operate according to the limits of the market in our products, the market demands more start anchor for launches and sales is really at our financial paradigm. We don't want to be a company that's high leverage. But even so, we can't consider less than BRL 100 million of payments and dividends per year. So that's what makes the company be very careful with this product mix as well as the business unit in condominium and corporation with being very cautious about this. So actually, the market has the capacity to absorb more and VSO is responsible for part of this, but we did the recent researching and in the last 10 years, the stock positioning, and the capitals we operate in was never this small. So we ended '24 with the lowest number in the historical series and so the number of months also commercializing these products we keep the speed in sales in 2012 is going to be really the lowest in Brazil. So this is super important to demonstrate how Moura Dubeux has the capacity for growth even in the adverse scenario of the interest rate currently. So getting back to the point here on the net revenue before we wrap up with this talk and return net equity, we went from BRL 513 million to BRL 1.570 billion. That's an average growth per year of 32%. As you know here, we have [ BOC ] effect that reflects of the launches and sales, which happened continuing a slight delay, 1 to 2 years, so that by 2025 and 2026 the growth of Moura Dubeux is very robust, considering the performance last year. Now what most calls our attention here, and that's what we've been trying to highlight, we don't want to be the biggest incorporation, we want to be the most profitable or the biggest developer. So we've already reversed a series of losses the company has had. We went from minus BRL 104 million and to BRL 251 million in profits in 2024, so an average growth of 44% and that's what we're focusing on, improving this even better. So the percentage of growth per year is greater than the operational data and the actual revenue and that's normal. We've been gaining efficiencies. And the expenses at Moura Dubeux really control the [ DNA ] over revenue is one of the best in the market, and we've been improving every quarter, every year. As we grow, we are able to dilute our commercial expenses even more. So we expect an improvement in margins because of this. And that's in the volume of profits and also the net income. But here in the bottom you can see our stock despite the fact that we launched more, the performance in sales was very good, and we were able to end the year of '24 with BRL 2.200 billion but with the lowest rate of coverage in regards to 2023, so 11 months where we've been keeping up with this sales volume and speed. So we consider our stock to be really comfortable and we'll be able to show you how the ready stock is really slow, actually quite relevant, but it's been very healthy in its commercialization cure. That's why the [ VCO ] is so high. The average return on equity is about reversing almost 20% negative to 17.5%. And our target is at least 20%. We're on this path. Soon we'll be able to send -- we'll be heading towards these levels. And then of course, the fact that we're a deleveraged company so either with the payment of dividends, we reached the end of '24 with 7% net debt to EBITDA and if you extract the dividends, you'll see the last 3 quarters consecutively we were able to generate cash and Wanderley will talk about this up ahead, but just to reinforce the land bank despite the cycle launches is pretty high still, almost [ 9 million ] and we've been able to replace or substitute these and ever since we went public, we delivered over BRL 2.7 billion in B2B, so our leverage is still low, and that's going to continue to be low. Our average return on equity continues to be expanding. And from November last year every quarter, we're going to have the recurrence of the payment, and that's how we're planning this for the company as a whole. So when we talk about the next 5 years and compare with the last 5 years, you see the last 5 years we concentrated Moura Dubeux with higher income models, and we expanded our model to almost all the cities we're operating, including the Beach Class product lines, which is basically in all of the touristic beaches in the Northeast and condominiums and also a condominium model that's high-end and present in all states. So 2 years ago, we presented Moura Dubeux with a focus on average income when we had the first delivery [indiscernible], we have 8 products we've already launched and when we look at the beginning of 2025, these are projects that have had excellent sales performance, products that are really loyal to their feasibility sales, speed and we can still grow even more. We believe that here we can go from BRL 1 billion to BRL 1.4 billion per year in launches. Of course, we can accelerate this a bit more. The government published the intention of sending out about BRL 50 million to be able to advance out of [indiscernible] servicing families with medium income and mood is really included in this segment. Then last year, after having evolved a lot in the mood projects, we had these industrial projects, and we were able to understand and develop this and if we could get the mood project and simplify it or simplify it also when you consider the leisure attributes, then we would be able to fit this into Level 3 of Minha Casa Minha Vida. So we decided to create another company, a third company, and from 2025 onwards so that we can have launches. So we'll also be able to operate with Minha Casa Minha Vida from this year onwards. So basically, when we sum these 3, we leave the current level of BRL 2.5 billion to BRL 3.5 billion and we expect to have at least BRL 500 million in net income and at least 20% return on equity. And that way, we'll be able to consolidate activities in this level to think about the next leap in growth as long as we're achieving our purpose. Customers are surprised with the quality of the product. And we have shareholders that are happy with the profitability, low leverage and a return on equity that is consistent. So we're very concerned with the consistency of our margins and stability and the consistency of what we promised you, and that's what we believe we'll be able to build during the next 5 years at Moura Dubeux. With this, I'm ending my participation here, I'll get back at the end of the Q&A and I'll pass the floor on to Barral. So he can talk about the operational highlights in the company.

Thank you, Villar. Good morning, everyone. I'll get into details now about our operational performance. And starting off with the launches on the left side graph, the company launched BRL 460 million in the fourth quarter, representing an increase of 2.6% compared to the fourth quarter of 2023 and a reduction of 58% in regards to the third quarter of 2024, it's important to mention that -- that's when the company reached its record when it comes to launches and sales. So on the graph on the right side, you can see our annual delivery, our annual vision, we ended 2024 BRL 2.5 billion in launches, an increase of 57.8% in regards to 2023. And what's interesting here is that another -- for another year, the company has been growing its operation in this condo model from BRL 1.1 billion and this really reflects an improvement with lower cash exposure and better returns. Moving on, on the fourth quarter, we commercialized BRL 521 million, an increase of 31% in regards to the fourth quarter of '23 and a reduction of 48% compared to the third quarter. And on the right side, once again, the year vision, we end 2024 commercializing BRL 2.4 billion and a growth above 60% compared to the year of 2023. Then you have this composition of our sales when we access our sales development,condos and the close sales. We have a total gross sales of BRL 576 million, and we reduced these deductions, we have a net sales of BRL 521 million. On the bottom, you can see some graphs showing the behavior of this indicator and we can see it's been around 10% of the sales for quite a while. We closed the fourth quarter with 9.6% of the gross sales. And once again, we performed an adjustment of BRL 55 million in that period, and we were able to break this down and show how the BRL 55 million behaved. And we can also see that, that's where we eliminate these adjustments both migration of the unit and the shift in ownership and these amounts then become -- they take on a level that's really healthy, representing less than 3% of our gross sales. Moving on with our VSO as we mentioned. Once again, we have a VSO that's consistent and resilient. In this photograph, we can see 5 quarters. And if we were to break this down a little more, we would see that the company has been navigating with the VSO NDM above 45% for longer and we end 2024 with 54% in the last 12 months and 20% in the quarter. Below you can see the same graph, but a focus now more on launches, VSO with UDM above 58% and in the quarter, 37%. You have the stock. I think it's worth getting into details. We have 2 information the company ends 2024, with the PSV of BRL 2.200 billion and we reached BRL 2.5 billion with an index of the covered sales and stock coverage which is keeping up with this sales rhythm in less than a year, we would be eliminating our current stock. And what's important is that ready stock only represents 5% of our PSV. So on this slide, you can see 2 pizza graphs one shows the breakdown for regions where we can notice that there is concentration in our main markets over operating Pernambuco, Ceara and Bahia. And below we have this breakdown per business format or model which is basically we have had with the incorporation representing 52% and condominiums complementing this. The land bank we have 56 land -- bits of land and BRL 9.1 billion in potential PSV and once again, here, it just demonstrates the company's capacity to quickly re-establish it's land bank. During the whole year, we navigated to this amount of BRL 9 billion even with significant growth on the launches we were able to keep up with this level of BRL 9.1 billion. And then below, we had this breakdown in regards to the acquisition method, you have 60% acquired through physical acquisitions, 20% through financial acquisitions and 20% in cash. We have some projects, we are 58% underway. And 22 of them are in incorporation development regime and 36 as a condominium. And then in regards to our current construction projects, we end the year with 48 construction projects underway. So to wrap up with the operational side, we always bring in some behaviors and how the deliverables have been taking place in 2024. The company completed 8 projects, and we have this graph here showing this breakdown year-over-year in the long term as we plan here for our deliverables in 2025, publishing in '29. Looking at the short term in the year 2025, we have 20 projects to complete. And then in the beginning of the year, we had completed 4 developments. So I'm going to pass this on to Wanderley as he gets into the financial highlights.

Good morning. I'm going to cover the financial highlights here starting up with the net revenue. In the fourth quarter, we delivered BRL 368 million in revenues, 30% above the fourth quarter of '23 and a reduction of 26.7% in regards to the third quarter of '24. It's important to highlight what the third quarter of '24 was. We had a positive impact at the launch of the [indiscernible]. And we had a property that was recognized in that quarter and also the sales of BRL 1 billion that we had in the third quarter, that contributed to this greater revenue above average for Moura Dubeux and then throughout the cumulative in the year, we reached BRL 1.600 in revenue, 36% above the year '23 and it's important to highlight the growth in the revenues in the incorporation segment, development segment and also condo segments. On the right side, you can remember the growth of the revenue ever since our IPO, Diego has already mentioned this and in 2020 level of BRL 230 million (sic) [ BRL 513 million ] and now in '24, 3x more, BRL 1.570 billion, that demonstrates the growth of the company in the last few years. Moving on to the gross profit, we always have the adjusted amount in the fourth quarter, we delivered BRL 125 million, a growth of 16% in regards to the fourth quarter of '23 and a drop in regards to the fourth quarter of '24. And here you have the same explanations with the gross profit when we get into the margin in the quarter that's in line with the third quarter and below the fourth quarter of '23. And here, it's important to remember also that when we recognize a land that has a cash acquisition that affects the condo margins and however it doesn't affect the nominal profit of the condominium. That's what happened in the third and fourth quarter and so we have this reduction in the consolidated margin due to the impact in the condominium in '24, we reached BRL 557 million in gross profit, 31% above the year of '23 and the consolidated margins 35.5% and we can see that the development takes on a bit more share and the results of 48% and condos of 52% and the margins at 30.6% and condominiums, 41.6%. On the right side, you can see the evolution as well as in the revenue, the gross profit grew exponentially going from BRL 139 million in 2020 to BRL 527 million in 2024. Moving on to the commercial expenses and administrative expenses, on the left side you can see our commercial expense demonstrating dilution in these expenses in regards to the volumes. So we delivered BRL 144 million commercial expenses in the year, the percentage dropped to 5.5%. So a lower sales effort in regards to the volumes sold. The administrative expenses also showed an important dilution. We ended the year with BRL 102 million and when we look at this from the share of the net revenues, 7.6% in '23, and that dropped to 6.5% now in 2024. And then from 5.3% to 3.9%, a relevant dilution of our expenses. Moving on to our EBITDA, which ended the fourth quarter with BRL 53 million, we accumulated BRL 288 million in 2024, a growth of 42% in regards to 2023 and an operational gain from 16.6% to 18.4% really due to the operational leverage, as I mentioned with the dilution of the expenses and so we've already been reporting this and so that demonstrates what the growth in the operation really has been bringing to our results. And so we delivered BRL 45 million in the fourth quarter, we accumulated BRL 271 million (sic) [ BRL 251 million ] which is a company record, and a growth of 61% versus the year of 2023. Our net margin also had a growth of 2.5% and a return on equity at almost 14%. So at 17.5% returns compared to 12.4% in 2023. That reinforces our strategy in the last few years. And we've been able to work in the condominium stronger and we always notice that the condominium and mood also use less capital than high end developments. And so these results as you can see here in our P&L, provide an improvement in the returns, and we still expect return gain, especially when the results start appearing in a more significant manner at our P&L level. Then moving on to the contracted results as you can see of the results of the development, which ended in '24 with nominal value and 32.6% and very close to the margins that we've been present in our results. And then in the condos, we have the sales close with a growth of 75% and also a margin in line and so in the administration rates growth of 20%. We have BRL 20 million of the rates to be recognized as we have the advances in the condominium construction works. The highlights you have the generation cash consumption and our debt and so we generated -- we consider the payment of dividends of BRL 55 million. We have an impact of BRL 42 million in our net debt and we end with BRL 107 million, which represents 7% of our equity. We always bring our perspective in regards to the debt levels. And we believe that there's a healthy percentage to operate in the company to operate better would be about 15%, 20% of our equity. And we're still not at this level. But with the growth of the operation, we should reach this level between 15% and 20% and this has allowed the company to grow [indiscernible] important growth leap in '24 because of the expansion in our cash position and we were able to see that it was already a moment where we had the capital structuring capacity to take on this growth leap that we took on in '24. And looking ahead, we can see that with these dividends, BRL 100 million a year we can operate between 15% to 20% of our equity and deliver important return rate. So in our results, we've also disclosed the distribution of BRL 50 million in the second quarter, and that's half of what we have foreseen in this year we have BRL 50 million now in regards to the period last year, and we have a forecast that in our model, we should be delivering another BRL 50 million in [indiscernible]. With this, we want to highlight these financial expenses -- highlights and get into the Q&A session.

Now we're going to start the Q&A session. [Operator Instructions] Going to start off with [ Juana Gent at XP ]. There's 2 questions actually. He want to understand the perspective of the launches in 2025 and the relevant expected for the condos in the year and the second question he has is he would like to understand the vision on the news about potential expansion with Minha Casa Minha Vida, the creation of the fourth range and the program for customers that make up to BRL 12,000 monthly income and if it makes sense to accelerate the growth of Mood if these measures are approved.

So I can answer this one. Thank you for this question. Initially, our plan in 2025 is really built in a similar way as 2024, we have a big focus on the closed condominium model. And we've been growing a bit more with Mood and we have 1 or 2 Unika projects so just as Mood, we are very cautious and we expand our performance in Unica, getting to know customers, the idea of fraction or breakdowns, which is what we're already performing at Mood but what this would represent in totality but it is always very prudent to closely analyze the market and get to know it better. So you can notice that the condominium had a significant relevance and a moment where you had high interest rates, low leverage in the company as a perspective. And we have good products to offer in the market, and we talked about this. We bought a 5,000 square meter property last year in Ceara and we have the [indiscernible] project, an iconic project we launched here this year. And we have the continuity of the new [ Novokres ] project with BRL 1 billion in PSV and that's where we're going to concentrate in [indiscernible] already had a launch this year. So this is kind of what you can expect similar to what it was in 2024. But I think I talked about this also in my presentation. We saw this with a lot of optimism. This idea that the government has with creating like a Level 4 in the program. And what I read is that it should be an interest rate of 8% per year with families that have up to BRL 12,000 as income, and it's really fitting into a product line we have inside Mood. So if this happens, there's a restrained demand that's very significant in this market in the Northeast 5 years with a market under supplied. As you can see with the speed of sales that Mood has, it's almost 12%, dropping to 8%. And then you have this accountability and how this fits into the income is also significant. So 3 percentage points already fits 200,000 families just in this product. So an income that is positive, low unemployment level of confidence it's positive. So there's a mismatch with the fiscal issues and the government assessments, considering real-life employment income and these people in this range. And what doesn't fit in is that the interests are really high. So if this occurs, we're going to expand Mood even more and occupy more of this market as well.

So we have another focus here, and you would like to know more about UNIQA and what we present as experience with Vivex, former brand to this new company and if the launch mix is going to change with the UNIQA presence?

Well, thank you for this question. And we used to have this brand many years ago, Vivex. It worked pretty well with MMV. Ever since the construction model that MMV still had with the construction model where they had concrete block structures used. It's completely different to what MRV produces currently. We also went through this phase as well where we had 3 or 4 floors buildings, and we learned how to hire the funding, the construction model as well, and we were able to build this. But this know-how ever since the director that's still in the company. And we were actually very successful with Mood. Mood has something similar. It's a Level 3 product that's a lot more qualified. There's more specification architecture and simplifying this and fitting it into Level 3 seems a lot more simple, right? Because we had this drop in customers and not a drop in constructive processes. So we're really confident that we'll be capable of developing a product. Actually, development is already done, but that will be capable of performing this product even better than what we've been doing and more efficiently. And so we believe that in the next 5 years, UNIQA should be around BRL 1.2 billion. And considering the current conditions, of course, if this grows and the program changes its limit, BRL 350 -- BRL 350,000 sorry. And if we see that the demand is greater than what we expected, we will grow. It's a model we already simulated that's very close, low capital investments, high -- sorry, low leverage. And so the Northeast has really high demands and no major developers are exploring this market. Of course, we have MRV of [indiscernible] each of them has strategies that are different than what we're expecting. And we want to consolidate this even more in this segment.

Well, we have 3 questions here from [indiscernible]. I think the first one is about the mix and condominium has already been answered. But we have another 2 here that they would like to know about, which is related to the speed in sales in the beginning of the year, if they already feel some slowdown. And the third is if -- is how we're seeing this scenario of hiring contractors, right, if we already see an increase in the interest rates and how that's impacting it?

Well, I think Wanderley can answer both of these.

Well, [indiscernible] thank you for your question. And well, basically, about the rates for contractors, we have increased -- we've seen that there's been an increase in interest rates overall. All the banks had an increase in rates, but also for contractors to the actual construction of these developments and what we've seen, we think that our portfolio is really healthy. We've really gone in through this. We have an LTV that's less than 60%. And with this, the portfolio is really healthy in regards to the volume that customers can fund. So in regards to the increase in the interest rates, considering the credit analysis, we work on that's pretty rigorous when you bring customers in-house. We simulated this once again with the increase in interest rates with all of the customers we have in our portfolio, and we're still at a very healthy position. So we understood that this increase in the interest rates actually for individuals could maybe impact sales. But to give you some data here, we launched in the first quarter some mood developments, and this has been performing very well in our sales. We've been reaching very good performance. So in January and February, we sold more than what we had in the first quarter of '24. So that's kind of like counterintuitive considering the interest rate peak. But it reinforces our thesis about when we decided to join the mid-income market with Mood, and we didn't have any operators in this region in large scale. But you see demand is still very strong. We have a lot of confidence from buyers. And so unemployment is low in the region and the demand remains high. So we should end the first quarter of '25, very close to what we sold in the fourth quarter of '24, which was a level of sales that was very significant. So addressing your question, we had an increase in interest rates. This is not impacting our sales, and it's not going to impact the feasibility because we operate with interest rates that are a lot higher than what we expect for the economy in the spread, but also in CDI. So we wouldn't expect that there would be an impact considering the interest rate increase.

We have 3 more questions here from Victor Kietzmann from the SmallCaps portal. And he wants to talk about the ROI return on equity between the companies breaking down by development, Minha Casa Minha Vida condominiums and understanding the expected gross margin for the revenue expected for condominiums. And the third one was about sales. I think it was already answered, No.

Victor, thanks for the question. Just to give you a target, the ROI development we see, we imagine about 16%. And this has considering developments and the more associated you can fit this in. This increases the ROI of 16%. In the Minha Casa Minha Vida, this ROI is already over 25%, and that's why we consider that when UNIQA starts taking on part of our results, our return should increase considerably and the condominium ROI is about 30%. When you have more condominiums and you have a higher through a swap agreement, then the ROI is higher. When you have cash, it's a little lower, but on average, it's 30%. And about your second question on the margins higher for the condominiums. Condominiums are going to operate between 40% and 50%. There's going to be quarters like this one where we will have an average of 40% and 50%. And that's what you can notice here in the first quarter now where we should have a margin above 40% at most.

Well, we have 3 here from Antonio Castrucci from Santander. And the first one is what's the percentage of properties for incorporation with the price up to BRL 450,000 in the company. And he also wants to know about what led to an increase in the margin for developments here in the fourth quarter? And if we are seeing anything relevant in the cost front.

Antonio, thanks for the question. Considering the Mood properties where you have this percentage up to BRL 450,000, Mood has [ 2/4 and 3/4 ] and they'll be operating between BRL 250,000 to BRL 500,000 on average, but we have some numbers actually that some Mood buildings that have volumes that are higher. But to answer your question about half of the Mood properties are going to be in these ranges of 450,000. And if the program really becomes a reality for the Minha Casa Minha Vida income level, we have a potential for growth that is really relevant when it comes to demand. So about the incorporation and development margin, we were talking about how it would be natural to have growth but we had also been exchanging the batches of high-end developments to Mood developments. Mood has better margins than the high-end development. So then we were able to reach that margin, and that's what already happened now in the fourth quarter. So now we would expect the maintenance of this margin. We're not seeing any short-term considerable improvement in this margin of 30%. Of course, when we launch UNIQA, we should have an increment in the margin, but that's considering the dynamic that should happen in a more gradual manner. And when it comes to costs, they continue to follow the same dynamic with the INCC. And so our internal costs concern us a bit with the labor rates. But we still have material kind of offsetting this, and we're really in line with the INCC. In the last quarters, actually, we've been showing this margin growth and this impact of the inflation. We're keeping up with this, and it's important to have this on our radar always, especially with the dollar changes and other aspects that could impact the inflation, especially with material. But at the moment, nothing beyond what was already discussed. We have a concern of labor and materials kind of offset our budgets overall.

We have a question here from [indiscernible]. She would like to have a qualitative demand for market and how we see the land bank formation?

[ Luiza ], the market, as I mentioned initially, we just updated the research of the capitals we operate and we ended '24 with a lower stock compared to the 10-year series. So it's better than 2019, where we're saying it was the lowest level on the shelf stock in the Northeast. We already explained the reason for this during these last 5 years since there was low competition. Moura Dubeux is 25%. Since the market is very fragmented, they weren't capable of launching enough products for the demand that was not induced. Just the demand that comes from organic growth, right, without any stimulus. So that considers our VSO when we launched BRL 1 billion, we launched BRL 1 billion and so on. So in February, we closed a sales level that was even higher than the first quarter of '24. And we're still confident about this, the stimulus of the social benefits already applied to the Northeast, and that provides a dynamic, right? On one side, you have a labor issue because people sometimes just want to stay receiving the government benefits and they don't search for the formal job employment market. But on the other hand, there's income, but the company reached 7,200 employees already, over 1,200 adds in the last 12 months. So we've been able to meet the need, but we've had a big challenge. But economically, that's good. When Brazil grows, the Northeast grows more than Brazil. Because of this migration or redistribution that the federal government normally works on in our region. So yes, that leads to a dynamic. Of course, with SELIC at 15% will bring a trend to a slower economy and high interest rates will maybe make a lot of families not fit into some of our products, but we've seen less of an appetite for launches from the other developers. And we saw that this would happen when banks decide they're going to be more restrictive with credit granting, they're just going to choose their developers better that they're going to approve funding for land banks, et cetera. So we've taken advantage of this moment. We have more land available. And while the VSO is doing pretty well, delinquency is very low and cancellations are also very low. And we monitor this very close with the portfolio approvals. And I look at this, for example, once or twice a month slowly, and we closely look at all of this. And so we're very confident, but we started the year very well, and that's what I can summarize with everything I said now.

We have a question from [indiscernible]. With the creation of UNIQA, is the company interested in operating in cities in the interior of the Northeast?

Actually, no, initially, that's not our idea. We're already operating once again. We have more demand than what we've had at actual products. So would it make sense to create new structures, to set up teams and construction sites, et cetera. We have to develop suppliers and everything. And there's no point that if we saw demand in the places, we already occupied very well. And so our focus is to concentrate even more where we already have leadership and expand in this market.

Well, we have no other questions at the moment. And so now we'll just pass it on to you for your final remarks Villar.

I want to thank you for the confidence that the market has always developed and deposited in Moura Dubeux and the consistency of our results. I want to guarantee that we continue to work even more in the next 5 years, and we've been really focusing on this. And we really want to talk about this commitment. We're really convinced that this is possible. If you look at what was done in 2020 and 2024, you can see the leap was a lot greater than what we expect because it's more about consolidating what we do and grow naturally than actually build new markets and develop new products and expand a model that's already expanded and consolidated. So the company already has the infrastructure of 7,200 employees, and we took on some important leaps and we're really well accommodated in this new process with development of structures and everything we need to have a great journey throughout the next 5 years. And so we want to reinforce our commitment and availability also to clarify any questions. IR is always available. I've always been available. And so we are already closing the first quarter, and now we're going to head to the more accelerated processes. The second and third quarter of the year tend to have more demand, more work, more development, and we have a lot of deliverables in 2025, which is great. And so we're really committed to this with our customer and to our investors. So have a nice day. Bye and take care. [Statements in English on this transcript were spoken by an interpreter present on the live call.]