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

Good morning to everyone. Please forgive us for the late beginning, and now on to make the presentation results for the first quarter of 2025 of Moura Dubeux. I'm Alan Aquino, and we'll have our presenters today, will be Diego Villar, our CEO; Diego Wanderley, our CFO; Diogo Barral, Director of Relations with Investors. [Operator Instructions] I would like to also remind you that any declarations that may be made during this conference -- the results conference are based on premises of the management of Moura Dubeux. Any future considerations are not guarantees of performance as they involve risks, uncertainties and depend on future facts which may or may not happen. Having made this disclaimer, Villar, please go ahead.

Thank you, Alan. Good morning to everyone. One more presentation of results from Moura Dubeux. This one especially is our best first quarter since we opened our company, in the history of the company both from the operational side as well as in the financial side. We bring for you a presentation which was filed yesterday with robust numbers. Also, I'd like to be able to talk about for the rest of the year is I'm certain that the next quarters, including this one in which we are currently operating, will be better yet than the current quarter. And I'm going to explain why in a summary during the presentation before Diogo talks about our operational facts and Wanderley after our results for the first quarter and also to clarify for anyone in the question-and-answer session or in meetings -- in individual meetings, which you may care to mark with our team. Before talking about the status, we started the year being cautious. We always are. I think everybody -- all of our -- all builders are optimistic about our products and their authorization, but we always had a point of caution. We always begin the year in caution and focus more on selling and execution of our projects. In Moura Dubeux, our mentality of execution has always been very strong. In many years, we thought more about an engineering company rather than a developer. The name of the company was Moura Dubeux Engineering. We are very much concerned with execution so at the beginning of the year, we started that way. And we had also, during 2024, told you that with the success, we would have two other big projects to launch which would be able to improve our results. One was in Recife, the Novo Cais project, and also in Fortaleza, which is the Fort Ceara, which started this quarter. We've been able to anticipate the development of these projects as we did also in the Othon complex in Salvador last year. And as foreseen, these are being a huge success. This brings by itself with absolute certainty to help us to revisit any analysis which you are making about the company for 2025. I always try to surprise. And so if I had to talk about the numbers, which will be looking at the best projections of analysts of not more than 20%, this should be conservative. When we talk about the -- we're going to talk about the stats and then look at these projects. We launched BRL 402 million in the first quarter. And for a while, we've seen that we have been talking about how much we hope to sell. When we sold BRL 500 million and now it's the other way around. Now we launched BRL 400 million and sold BRL 550 million sales. So it shows the strength of our brand in our market, and even though we have been compromised, we're not focused on size but on profitability because we could even be selling more. But we're cautious in relation to leverage and our exposure of the company in execution and financial exposure. We make the same photo that I just mentioned year-on-year over the last 12 months. We are launching BRL 2.56 billion and sell BRL 2.6 billion. In terms of launches, BRL 2.5 billion of this were -- BRL 1.6 billion was in condominiums and BRL 1 billion in incorporation. Here with the Selic, we owe and will be positioned in the condominium market exposing as much as possible in the large projects in the condominium will not be exposed to multiple job sites, which we have been doing since last year. And that is to focus on Mood and we call the Mood, the lower-level Mood with 60% of our units are fit into the Level 4 and one that is 100% in Level 3. These are the two environments in which we navigate. In 2024, it was that. 2025 will also be that, and we launched BRL 1.1 billion in the last 12 months in development, basically in the Mood brand market. Our sales were BRL 4.7 billion, BRL 1.7 billion condominium has a sales velocity which is faster. And of course, it also has the effect of the Infinity, which was done in the third quarter of last year in this photo. We arrived at a revenue of BRL 439 million for the first quarter with a gross margin -- adjusted gross margin of 36%. We could have even worked with margins that are higher. But remembering also that the recent condominiums, we want them buying the land instead of doing a swap, which helped us -- which hurt us a little bit because of the methodology that we use when -- as it comes in as a cost factor, which our margins are a little bit lower. But in the photo of the year, BRL 1.7 billion of net revenue in the last 12 months, and 44% from condominiums and 56% from development naturally, so we have BRL 2 billion in launches but not -- doesn't mean revenue of BRL 2 billion. But it's important that this year, without a doubt, we will break the barrier of BRL 2 billion in revenue. We get to the third quarter of -- the first quarter of '25 with BRL 70 million in net profit with 16% margin -- net margin. This could nominally be the lowest profit for the year. When we look at the 12 months, the BRL 279 million of profit in the last 12 months, the best projection looks at BRL 280 million in 12 months for the year 2025. We're already delivering this at this rate. It was the best first quarter in the history of the company, but it will not be the best quarter for the year of 2025. BRL 36 million of cash generation in the last 12 months without -- not including dividends. We are now focused on recurring dividend payments. At the end of May, we're going to pay BRL 50 million, and in the second half, we're going to pay another BRL 50 million. What are the pillars of Moura Dubeux? 19% return on equity. We're going to get close to 20%. 8% of net debt. We are promised to make a low-leverage company with recurring dividend payments. Another photo, which is something that I've never done here, saying that you are not projecting the company within what will be the year of 2025 because we're already seeing what's going to happen. And I have no doubt that this is the developer that's the cheapest developer on the market today. The results that we're delivering and what we're going to deliver in 2025. And what makes -- what gives me this certainty? Next slide, please. First project. We have been able to legalize and approve and close the development of its entire complex. The new port, the biggest project in the northeast should be among the three or four largest in Brazil. We have delivery of these 3 towers on the left, which are the new port. And we launched on Wednesday these 2 towers in the middle here as condominiums, the highest condominium price that we've ever practiced. Both projects will be a mark, an architectural project in Recife. There's no -- we sold everything. We sold out and we had a huge success of sales, ran out of stock, which gave us the interest in opening also these Cais Avenida projects as condominiums, so high demand. Project is also very well reserved. Probably we'll be launching it in the third quarter. This by itself will also already bring us to have a record sales for the year. So the projections have to be relooked at because of this performance. Beyond that, we have very little to -- we also have these 2 buildings here on the right, which is a business building and also a beach class thing which were not foreseen for this year. I'm not promising these neither. But in these projections, these are still probably that we will launch them. There's a probability that we'll launch them but we're not promising. All of this complex can come up to BRL 3 billion in PSV. Following, just to understand how sophisticated, we have Lucena Plaza, two towers on the left, one unit per floor, 400 meters per unit. We were planning with two per floor with separate entrances. No more, it's going to be 100% sold out, no more units for sale. Next one. This is a project -- a very iconic project called the Ceara project in Fortaleza. This is the dimension of the product in relation to the cities. This is a photo montage. Beyond it, there will be another tower also in Beira-Mar, which we're going to be launching in the second half of the year on the beach also with a huge demand. We're doing all of the pre-reservations right now. Before passing over to Diogo Barral to talk about the operational stats, I'm going to tell you that we have begun the first quarter strong. Sales have come along very well, and the second quarter is showing itself to be even better, much better. And the projections for the year due to these projects which are anticipated and performing already very well in condominiums, which does not create any leverage for us, are doing very well. Those which have been launched such as the [ Colina Montazeau ], are also very successful. We already have more Moods to sell. We're present in every capital in the northeast. Not we will -- we have eight presentations, results, that we talk about the results -- the Mood results, but it's already reached more than BRL 1 billion. It's already present in every capital city in the northeast from Salvador to Fortaleza. And in some, we have more than three or four Moods under construction, some -- we have more to deliver this year. And this year, we're already launching at least two projects per year, which will make us the largest developer in the northeast in every segment, one of the biggest in Brazil, but our mind is to be set on being the most profitable. And we're heading towards the best results of any developer and Moura Dubeux, which we'll certainly be. So Barral, please go ahead with the operational numbers, and I'll be back at the end for question and answer.

Thank you, Villar. I'm going to detail a little more our operational numbers. This year with the launches, we closed the first quarter with BRL 412 million, BRL 129 million in the condominium model, and BRL 293 million in 2 projects of the Mood line. This number of BRL 402 million (sic) [ BRL 412 million ] was an advance of 15% compared to the first quarter of last year and 12.7% compared to the fourth quarter of last year. Next to that, we show the vision of the last 12 months. We get to BRL 2.6 billion in launches, BRL 1 billion in condominiums and BRL 1 billion in corporation with a lot of this being from our Mood company. And this volume represents 2% more than in 2024 for the full year. On the graph in the upper left-hand corner, only 50% sold, and the fourth quarter in 6%. On the right-hand side, we see the vision of the accumulated for the last 12 months. We get to BRL 2,569,000,000, showing a 7.5% increase in relation to the full year of 2024. So on the screen, we have two more operational indicators that are important, which gives us the certainty that our business will be doing very well during 2025. I'm talking about the PSV and cancellations on the upper right-hand corner. We see that cancellations are below 10% of our gross sales. The red line reflects the real cancellations when we take out the exchange of 1 unit for another or the change in ownership in the name of owners in the same unit. And there's only 3% of sales of the company. Below our PSV for the last 12 months getting to 57.7%, our highest level of the last 3 years. In the quarter, we had 21.4%. And on the right-hand side, we always bring the PSV of launches in the last 12 months, and we looked at 61% of everything that we offered, in the quarter, 37.5%. Looking at more relevant indicators -- operational indicators, we bring our stock numbers, which is 1 more quarter in which we sold volume above what we launched. So the stock goes from BRL 200 billion to BRL 225 billion. And more relevant points, the indicator of coverage of stock falls from 11 to 10 months. And in the -- only 6% for 2025 are finished units. In our landbank, we closed the quarter with 55 -- 59 plots with relevance in the participation in the market, which has been developing very quickly. We closed a period with 59, equivalent to BRL 9.6 billion. And with this amount, we have accrued 81% through swap and 19% in cash. Projects underway, 56 projects underway, 20 of which in the incorporation model and 54 in the condominium model. To close here with the operational data, the provision of delivery in the first quarter were five projects delivered, five in condominiums. When we look at the rest of the year, we still have 15 more projects to be delivered, five of them in the incorporation development model and 10 in the condominium model. I'll pass it over to Wanderley, who's going to give you the financial numbers and accounting numbers of the company.

Good morning. Starting here with the net revenue. We delivered the first quarter BRL 439 million in net revenue, 42% larger in the first quarter '24 and 20% higher than the fourth quarter of last year. We have a development revenue with BRL 284 million and condominium with BRL 155 million, both growing in relation to the previous quarters. When I look at the last 12 months accumulated, we reached BRL 1.7 billion in revenue, 8% higher than what we had in the full year of 2024. So we continue to grow our revenue. We start to participate more -- Mood is participating more fully in our revenue. And as we mentioned -- just mentioned, we'll probably reach past BRL 2 billion during the year, during the 12 months. And for the full year, we will pass the BRL 2 billion for the year, absolutely for the full year. Looking at gross profit, we've closed at BRL 156 million with a capitalized interest 45% higher than in the first quarter of '24 and 25% higher than the fourth quarter of '24. Gross margin was in line with 26.7% and an improvement in relation to the fourth quarter, which was led by the condominium segment. The condominium which we recognize the land in this quarter had more swaps than cash. So we have this volatility in relation to the condominium margin, which had a positive impact on our margin for the quarter. We look at the accumulated for the 12 months, BRL 65 million, 8% above the full year of 2024. And the maintenance of our margin in the development, it was 55% of results. And in the condominium market, with 50%, a margin of 40.7%. And at the expenses line, it was an important quarter for us. We've been able to have dilution in every one of our major expense items. On the left-hand side, our selling expenses, which came to BRL 28 million, the same level as in the previous quarter. However, this represented 5.9%, below the 6.9% of the previous quarter. Then our administrative expenses, we had a reduction of BRL 26 million compared to BRL 29 million in the final quarter and also a dilution both from the standpoint of revenue, going for 6% of revenue from the standpoint of sales, where it went down to 4.3% of sales. Here we always mention that our operational leverage that the company has, the size of the operation is gross, revenue gross. As a consequence, we are -- we see this dilution over the quarters. We closed the quarter an EBITDA margin of 20.3% and for the accumulated, only 19% of our EBITDA margin, higher than the margin of the closed for the full year of '24, which is a nominal growth of 20%. Both the growth of revenue as well as the gains in the dilution of expenses, bringing here an improvement in our EBITDA. Looking at the net profit, we're delivering BRL 70 million, as was mentioned previously, the best first quarter in the history of the company. When compared to the other quarters, we've been performing at this level and above BRL 70 million. We also delivered a net margin of 16%. And the accumulated for the last 12 months, we had BRL 280 million, a net margin of 16.4%, higher than in the previous year. And what was most important for us, a return on our equity, which is close to 19%. We always anticipated that we would arrive at this level, arrived there and in fact, above 18% with the entire operation running. And what we're planning now and what we'll see in our model that we're going to make this hit 20% as we have previously mentioned. That's what you can expect for the next quarters. Following the results to appropriating the incorporation, which grew by 14%, closing at a level of BRL 314 million with the retention of the margin. Here, the important thing is that we brought growth in revenue for the quarter and also brought growth of results appropriated for the development area. We are leveraging the size of the company. We're now stabilized and we expect more results in every quarter, and we expect that this revenue will continue to grow and will become part of our results and be higher proportionally. In the condominium model, in the middle, we have closed sales in the maintenance of the appropriated profit, BRL 42 million. The margin grew, gone up to 28% to appropriate and the administration fees, BRL 287 million of fees to recognize. And then following to close the financial results, we bring our generation of cash and the level of indebtedness of the company. In the first quarter, we had a cash burn of approximately BRL 20 million. With that, we have a net debt of BRL 126 million. In the last 12 months, we had BRL 36 million in operating cash altered with the payment of dividends, the one that had a cash burn over the last 12 months, and we closed with a level of 7.8% of net over equity, which is a very high level. We're very comfortable in continuing with this level of indebtedness. In our models, we always anticipated that we could run the company between 15% and 20% of net debt over equity. It happened during the year, but it has not happened in practice because things have been happening well above what was foreseen in the model. Sales have been performing much better than our model. And the behavior of the portfolio, which we project a table of 35 to 65 between development and condominium, this has been much higher due to the preferences of our clients. And to remind, we announced the payment of dividends. In the end of this month, we're paying BRL 50 million in dividends. And in the second half, we will pay another BRL 50 million in dividends. So those are the highlights, the financial highlights, and we'll continue now with the Q&A.

I'll start our session of questions and answers. [Operator Instructions] First question comes from Matheus Meloni from Santander.

First of all, congratulations on the results. On our side, we'd like to understand a little bit of the question, the operation of the fourth -- Level 4 for the government, and how does that -- and how that will affect the growth of this area. And what do you expect in benefits with these plans? And if you are already seeing any type of origination of clients starting from this change in government policy and see how this will affect Mood, the Level 4?

First of all, thank you for the question. I'm going to skip this with Wanderley. When we look at all of the numbers that we've launched and we look at that portfolio, 60% is in this new program. So what we're seeing today, almost of the Mood that we launched, we contract with the Caixa Econômica, understanding that we have two price lists, one that fits in the pass-through in the traditional, which is 35%, 40% of the construction is re-passed through, the program costs were about 60%. It's still not so -- 10% is not so attractive. It's better than the levels of interest that are offering to clients outside of the old Band 3 and now Band 4, but it's a stimulus. Prior to being offered, Wanderley's team has been able to make the pass-through of these units, even when we arrived at dilutions from the Caixa Econômica of [ Opasa Plus ], savings plus where the rates that were close to this. If the program takes off, and in fact, it has a performance that is expected in terms of attractiveness, especially in this environment of 15% Selic interest rates, which will affect more outside the program, we're going to certainly -- we see an improvement in the level of indebtedness in the company and consequently in our leverage. This is expected because we're going to mix quite a bit today going forward with Band 3 with the United band, which is to take the Mood products and simplify it even more. So that both in the specifications of materials as well as in the recreation equipment and garage space, nothing huge to be able to offer these products. So then we get to another level of competitiveness. We look at the next -- we look at the level of the minimum like Mood, which benefits in this way. Imagine if this company, if it adds together condominiums, which reach another level, we're talking about BRL 400 million and BRL 1.5 billion. Now we're talking about BRL 2 billion, we're talking about more than BRL 2 billion in condominium sales going very well with prices that we've never practiced previously, all with big products with less risk and execution associated with Mood, which is 60% of which fits already reality. It's not a promise, which fits right into Band 4. And in the United demand, it's much easier to realize than the Mood projects themselves because it takes the best for Mood. It simplifies it, and there's more demand, and we run this model for the company. That's why I'm telling you this year, we'll be having -- we'll see different results. I'm not sure if I answered any of your questions or if Wanderley wants to add anything.

That's it. I think the fourth -- Band 4 has this possibility of generating more demand for our products. However, we haven't thought -- we didn't plan Mood based on that, and it does -- and it's still not dependent on this program. We're able to pass through our projects we already delivered. It's already being passed through outside of the Band 4, and it's a product for the middle class in that income level. We have the Savings Plus which is very close to the level of interest rate of Band 4, does -- it is the Caixa and Itaú. And I think that it will have an impact. But we're not seeing that this could be bringing more than what we've already seen in terms of pass-throughs. What we can do is bring in some families who are ready at the limit and now are able to be fitting into this with a few percentage points cheaper in the Band 4. So far, we have seen a good demand in line with what we had -- which hadn't been practiced. The Band 4 has not really brought a big increase in sales. It could happen but Mood does not depend on that. It's running very well even outside of the Band 4 financing.

Next question is from Ruan Argenton of XP.

I think that there are two things that I would like to mention. First, about the launches in general, Villar mentioned a great deal about potential, the size of the segment -- of condominium segment. And I wanted to exploit a little more what is the effective size that you expect of condominiums this year, very close to BRL 2 billion? If that's -- if we see this as a recurring number, this level of execution for condominiums? And effectively, what would be the upsides of projects that you see for condominiums this year, definitively in the Novo Cais area in the development in long term? But we also see that you're seeing the opportunities to anticipate some of these projects. And maybe you can tell us a little bit about these upsides for this and what do you think is the volume that the company might reach? My second question is a little more regarding gross margins, especially in the development side. We've seen that margins have grown sequentially. And you even mentioned a little bit in your release that Mood has cooperated to effectively, with this margin -- development margins increasing. With the margins that you see in Mood, how does this help in the growth of the margin going forward? And what you expect in the scenario of gross margins going forward, especially in 2025?

Ruan, thank you. Thank you for your question. I'm going to answer the first one and just give you a little bit of color for the second and let Wanderley answer the rest. Let's think a little bit on Moura Dubeux, stabilized. We are now talking no less than BRL 4 billion, BRL 2 billion in condominiums, BRL 1 billion in Mood and BRL 1 billion in unified. We shouldn't be less than this. This is a model that we can look at for the next 5 years without high leverage and without affecting dividends, not less than 20% growth. This year, we're going to do more than BRL 2 billion in condominiums. We're going to continue the rhythm. We're going to probably easily cross BRL 3,200,000,000 in launches, largely in condominiums in this model. And obviously, I would like that we could accelerate this to the moment, but we're being very cautious instead of talking about numbers. So it's not this year that we're going to get to BRL 4 billion in this format. We could get close to BRL 4 billion. I'm not promising. I'm saying more than BRL 3,200,000,000, BRL 3,400,000,000. But with a strong presence of condominiums and for atypical projects such as the Novo Cais, this one of the Ceara with Infinity right after it and then a project in Salvador, which I cannot mention yet which is also planned for the final quarter of the year, which is also a project financed as a closed condominium. The Moura Dubeux plan for the next 5 years, even though we believe that the Selic will not go below 10%, it's probably reached its maximum, right? And then it should be on a trajectory of reduction -- reducing going forward. But it shouldn't ever go -- shouldn't go much below 10% for the next 5 years. This is the ideal model for the -- to maximize profitability, and we've shown that there is a market for this. We've seen that Moura is able to do this plan. Guys, what's the next project? What's the upside for condominiums? Okay, we finished one and we started another. In the Cais, you see the size of the PSV. We're not launching it all this year. There's still products to launch all along next year to maintain the same level of this year of PSV. Beyond that, we have the other cities. We talked about beaches and condominiums. We'll be more cautious this year. But we see that there is a market. And next year, of course, for sure, we'll be presenting other beach-class products as condominiums. As far as your second question about margin, you see our gross margin improving. It hasn't been easy to make our gross margin in development in a high-income segment which we have not been launching. We've been cautious in looking at and prospecting these products for development for high levels. We've been focusing this on condominiums and the luxury market in condominiums. And the development is only in Mood, where the margins are higher than what we're delivering today. And as you mentioned, the mix, trying to counterbalance the traditional products for incorporation, which is delivering lower margins because, in fact, it is the family, it's a project which is more affected, rate goes up close to 7%. And their income because of the high income -- the high interest rates, it's not a healthy combination. If we, as a developer, look at the cost of interest and focused on medium and above the level of Mood, we'll be reporting lower margins. We had seen this in the past. We had already foreseen this that this could happen. And you can see it over the last 2 years, we're not exposed to this market. We focused on Mood, where we saw growth in the condominium market as well. So because of that, our margins have improved and should improve even more. Wanderley now, go ahead.

Basically, that's it. The margin of development has been growing during 2024. At the beginning of the year, we signaled that by the end, it would reach 30% and, in fact, exactly what happened. We have been maintaining these margins of 30% in the first quarter, the margin for development. When we look at the year 2025, it should maintain in line with this 30% level, perhaps a little bit above that. When we look at the medium to long term and also with the unique model becoming part of this gross margin in the future, we have potential to add 2% -- another 2% in this margin, in the developer margin. So for this year, we should navigate somewhere between 30% and 31%. And in the medium to long term, this will be something to surprise, both in Mood as well as unique.

The next question comes from Pedro Lobato from Bradesco.

I wanted to understand what would be the risk for these BRL 3 billion of launches during the year. What makes you more -- when you think about it you're more optimistic, and I think that it makes sense, the demand is very strong. But we're talking about a scenario for this second half of the year. Want to make changes to this level of launches that you've been looking at? And secondly, I think you talked very clearly about what would be the principal that can we continue improving this data, which is certainly this change in the mix. These new projects are principally in the lower income line. We see that continuing and improving your margins. Is that correct?

It could be in line with what we have been saying but lower now. First, look at -- in the first quarter, about BRL 2 billion in launches, 2/3 is already guaranteed, already done. And what's more important is a strong PSV. The products which are ready to launch are already launched, and it's going to improve the PSV of the company. So if we don't understand how well it's going. So for the entire quarter, we don't see looking at that. Our commitment is not with size. Our commitment -- we never promised you size. We're already surprised -- actually surprised but we have always promised profitability and we've been delivering profitability. If we had the PSO -- if the PSV falls with our cancellations or anything, we're going to hit the brakes in launches for sure. Nobody is going to do a BRL 4 billion in launch plan if we have cancellations at 20%. There are people doing PSV. We're not going to do that in Moura Dubeux. Our quality is sales quality, speed of sales and profitability with low leverage. This is the company's commitment. From the standpoint of commitment to execution of the launches plan, I guarantee you, I'm not going to come here and say -- in October and say, "Oh, we're going to revisit our plan because some projects took longer than we thought." I may come back and say that we're going to stop at BRL 3 billion -- and look at BRL 2.5 billion or BRL 3 billion because the second quarter was a tragedy. I don't see that's going to happen. In fact, it's the second quarter which is more challenging than that of today. Yes, probably it will be. Brazil will end the year of 2025 in a recession? Very, very highly improbable. This will affect the income and the unemployment this year? Very, very improbable. I don't believe that we're going to go back to the level of unemployment this year which is concerning, not at the basis on which we are. While unemployment is low and the income is not being corrupted, which is now what's happening, the inflation data are showing today below what we looked at several months ago. Having said that, the confidence of the company in the property continues. And here's the proof. In the condominium market, we suffer much less the influence of the loss of income and the cancellations in the other models because the high-income client who is benefiting from this moment of high interest rates in Brazil, he's taking the decision to migrate to a better home in the Ceara -- in the state of Ceara because he has more money in this high interest rate climate in Brazil. But this year, I'm not concerned about the execution of our launch plan, neither with sales. I'm very much convinced that it's going to happen in a way that I'm telling you right here. And that's I've always done. I don't remember having ever said that. The point about margin, it's very simple. We're in a cycle of strong deliveries, products which were launched in '21 and '22 of development, which were not Mood. We still have Moods to deliver. We have one more to deliver this year. And these products at the end of their life are not -- they don't have the same margins of Mood, which will be -- now be launched or initiated. So as we see the sales of Mood and the launches coming, the mix of margin improves compared to the traditional developments, which are not Mood, which are at the final phase of delivery. It's as simple as that.

Next question comes from Olavo Fleming from Safra.

Congratulations on results. In relation to the generation of cash, you said there was an anticipation of these new launches. Will this change the perspective of the generation of cash? The second question relates to sales. In April and May, have you seen any changes in relation to recent months?

By the way, I can answer the second question and I'll answer the first one. Olavo, first of all, good morning. Thank you for the question. In April and May will be the two best months in our history of sales. This is the dynamic. There's no fall-off. On the contrary, it increased. We're going to close the month of May soon with a number which if the quarter ended now, it will be very strong. It'll be historical -- it will be historically highest sales number in history. And we still have June to go in this quarter. It will be a quarter there which will throw our sales way up and we'll also see this for June.

Thank you, Olavo. About the cash -- related to cash generation, nothing changes. This has been accelerating due to these launches, which we're anticipating just in the -- even in just the condominium model, the new port, Novo Cais projects, a lot of them is already based on swaps. One part is swaps so it doesn't consume cash. We don't have relevant payments to make for these anticipations. What we said previously is that we are going to run the company between 15% and 20% of net debt. And today, we're only at 8%. We should be getting closer to 15% in the next quarter between the second and third quarter. And we will run the company at this level, even still paying dividends, so that's what you can expect. Nothing will change with this anticipation, especially because they were in the condominium model, which does not consume cash.

Next question is from Mariangela Castro of Itaú BBA.

My questions are, I have 2 questions. I want to get a little more of the panorama when the Unique will start to operate? And what are the principal challenges to start to enter into the Minha Casa Minha Vida market? And from an operational standpoint, if you could share that with us. The second is how you see the evolution of sales in the condominium segment during the rest of the year. At least here in São Paulo, the developers have passed their feedback that with interest rates at 15%, it has been more difficult to sell because the people have been saving their money. And in the segment of condominiums, they have -- they see less cash in sales if you're being affected by the current interest rates. How are you being affected by the current interest rates?

Well, Mariangela, it's good to talk to you. Say hi to Gasparete. To your question, the second question is about the dynamic of sales, it's very strong, very strong dynamics. We have a big project undergoing in Brazil, yes, interest rates are high. However, we don't have a lot of projects on the shelf. We have luxury products which we're very scarce. In Fortaleza, it's a super premium address, large apartments with high prices, selling very well. And I'm sure that the excellent localization with the good products in São Paulo are also selling at this level of income is because either the price is wrong or the localization isn't so premium. Here, the dynamic is working in that way. If the location is premium and the project is well done, there is no high income buyer who is losing money in this Brazil at 15% interest rates because the migration of variable income to rent -- to fixed income, and they're making a lot of money. This wealthy standard is very high. So yes, there's a market. The market is performing well. And I'm telling you, our PSV has been very strong. The second quarter is very strong. I've said this a few times, I'm going to give you a preview -- operational previews we've seen. And we see -- we've never had -- we always try to be realistic. We never try to boast. But your first question was about the Unique and the principal challenge is to start to operate in that program. In the second half, we believe that by September or October, we'll be presenting the first project. It's very well underway already. It's the same strategy as Mood. We have no difficulties. We don't see any difficulty in launching this program. We have no problems in Mood. We do very well with Caixa Econômica. We do pass-throughs on the projects under construction at lower interest rates. It's a dynamic of selling which we already know well, a bank with whom we already operate. So outside of that, we are following all the other difficulties and risks that's directing this to any other -- at the end of the year, the agency, all the difficulties and discussions, which every year we have and the government always fixes the moment and comes up with the money and we close the plan. And it keeps growing year after year because it's a program, not only electoral problem but it's also fundamental in Brazil because it does reach where there is a huge need. We don't see any problem. Another interesting thing is that it's not a program -- it's not a government program, it's a state program. Whether the government could change from left to right, it can change its name but the program is there, it works. And we think there's logic, a financial logic and social logic and engineering logic, which is very efficient. So we think there's a market for it and we think there's consistency.

We have another question from Victor Kietzmann from SmallCaps. He congratulates for the results. And he asks if the year surprises and what's relation to generation of cash, if you would consider an extraordinary dividend payment?

BRL 100 million is what we're promising, obviously, if things are more -- even better than we projected, but it wouldn't be better if we can pay extra dividend. I don't think anyone will complain. But we're going to commit with BRL 100 million, which is already foreseen. The cash is the last thing that I've everything -- we're going to launch. We're going to sell well, we're going to execute well, we're going to deliver well. And then as a result of that, with this cash, we'll make an improved distribution. The growth, when I'm talking to them is what Wanderley said, it doesn't change anything in our level of cash. We'll be able to grow the company and maintain all of our obligations of cash effects that we have done. The normal would be to say, yes, okay, look, we're going to reduce this distribution because we're growing, but no, we're not going to have any increase in debt nor -- neither reduction of dividends. But if we have better results than we expect, we could distribute more.

There's a question from [ Melissa Hoch ]. She asks about Mood Aurora, which sold only 20% by the first quarter. And she wants to know how was the strategy of sales. Have you identified any error in the public or localization of that project?

Melissa, good morning. You're into the company's details. No, we use the same strategy that we use all of the Mood products. There was no differentiation. We look at the entire -- we have Mood stores with the sales team, the models of the buildings, everything the same. What we see that made a mistake, the sales velocity is not the same as the others is because we were not counting on two projects, which are not ours from another developer, which probably operate with margins that are different from ours. When we try to get away from the fight of products against products with others -- with smaller family-owned companies with lower margins because their numbers are different, it's because we want to put ourselves in that situation. The price of their products and their cannibalism in the same neighborhood as ours is lower, and so we sell more slowly. If you say, are you concerned about this? No. These are projects which are not very large. It's a project which we are not practicing margins below our expected margins and which we still have time to sell. So as said, it has very little positive or negative effect on the business or the company. These things happen, who launches at the level at which we launch, always has one or another project, which does not follow along with the super performance of the others. I'm also attentive to that, it's a message that I can pass with -- also Colina, we sold more or less. We've done research to understand what's happening, but I'm not going to lower the price of my product to the price of the others to -- and burn our margin just because we're anxious about -- to have the same sales performance as the other. The other point that happens, we've had more Mood sales performing above the margins. We put all together, it's already passed -- we're going to the 15th Mood project to be launched in this quarter. And we see that the gross margin of all of them together are very good. We don't have any in this promise that we're going to hit every project. No, we have the commitment and the obligation much more to hit -- to get things right more than wrong. And so if we have any errors, it will be in the smaller project. That's what we've done over the last 5 years.

Next question is from Lucas Costa. He has two questions and he says he wants to know, in relation to the gross margin of condominiums, what generated the fall compared to the fourth quarter of '24? I'd also like to know what is the ROAE for Mood, projected for Mood?

Lucas, thank you for your question. Answering your first question in relation to the margins for condominiums, the dynamic is that we commented earlier. As you acquired properties for cash, you build revenue. And when it's a swap, you have only that what is net of revenue. So even though the profits are similar, the margin affects by the volume in the base of our revenue. So the first quarter of last year, we had almost only swaps. The margins were well above the average of what we normally do. And in this quarter, we had a margin that was closer to the average because of a mix with people buying -- with land purchased for cash with a lower percentage of swaps. In relation to Mood, you talked about the ROAE. The ROAE should run in a stabilized close to 18% which is close to the same ROAE which we see today. What pushes our numbers down a little bit in our results is the development of high-level developments we launched in 2022, which are at the end of their cycle. And with this ROAE lower, that comes out into our results and a higher level of Mood of 18%, depending on the price as high as 20%, we can even get to 20% and the volume were running above that, we'll be able to improve ROAE in the quarter. When we look at it going forward, so we see going forward this growth even more in our ROAE.

Another question from Jose Avila. He asks if you could update him on the Florata, 50% sold, 100% of the construction funded?

Same thing. As I mentioned about our products, the development of products, of high level product, which we run from them today, we don't do those projects today. This is the effect -- the real effect of the Selic at 15%. It's a class of families which pressures their income and pulls some outside of this market. It's the type of product that we no longer have on our shelf. If we hadn't done this 3 years ago and we were able to be able to focus on Mood, we wouldn't be going through this project. And this is the type of project, as we explained previously, we were talking about margins that went in -- I believe, Moura Dubeux is going to improve our margins as we're going to only deliver these Uniques and Moods. This is the type of product from Fortaleza to Manaus, this type of projects doesn't work at the current interest rates. In the northeast, it's considered high income, but not luxury. It's a Class A project but not a premium project. So it has this difficulty. It's a project that was done over the last 18 months. It's sold well at the outset. It just doesn't feel we haven't made sales that when the sell -- when the credit is not approved. Again, it's a product which is not huge, that's 50% sold and we're going to do the pass-through now. And the 50% is going to the business, and we're going to adjust our stock in accordance. We have to have a little more patience on that project with a product like that. We have no other projects like that today underway, I would say, compared to -- that are comparable to this product. We have one in Salvador, which is called Vivant Caminhos das Arvores, a niche that was so good at the same -- at that time, they were both launched at the same time but it's sold completely. We have none and the portfolio is very good. We have a lot of anticipation. But it's performing well, but we don't make this type of products at the moment, not in the Brazil at these interest rates. When we bought this prop project, Brazil was running with interest rates of about 5%. We didn't expect to get to 15%. There was no provision. That was the effect of that.

We have one more question from João Saldanha.

Congratulations for all you've done. It was super good to hear all of this. I've never heard so much optimism over these recent years and it's not for no reason. Diego, the reason that -- the route that you're going of a company which could reach -- even reach BRL 3 billion, we know that Mood is less capital-intensive and less needs of capital. It has a shorter cycle. We know the condominiums is even less capital-intensive. The question that I ask and Wanderley also gave a little bit of the question, that you see space for leverage of land going up a little bit, how much of the company's equity do you need to be able to exploit all of these opportunities that you see, especially now the level -- exchange of level, the size of the company? What's the question -- the key question is this, Victor had made earlier. But the other side of this question is that what size of PL do you see this bigger company that you're seeing over the next periods?

But first of all, I'm going to -- I'm not going to look at the -- the cash that interferes in this. If we're improving our profitability, this first quarter was very good but it will be the lowest net profit of the next quarters in 2025. When I look at the cash, it's the last part of optimism that we have. It's all this perspective of the model. If we look at, we don't have much optimism in the model. We're talking about cash, it's the part that we have the least conservative premise. It's always very pessimistic, but we'd have to increase the distribution of profits as this is growing. And we're very, very, very cautious with that. We have a model with -- we use a model with slow sales with a portfolio below what we have. We go with a model where the correction is below the correction of the portfolio. We make provisions for construction, future expenses, a very, very conservative modeling. So we have to see -- as things start to deliver and the cash comes in above what was foreseen, and if I see more cash, I'm going to distribute more. And this is not a speech that I adopted and tell you about, even knowing that many times that we're going to perform better in terms of cash. But I don't do that. When I bring an optimistic tone to you, it's good that it's like this. When the market is going up and everybody is optimistic and we're cautious. When the -- when everybody is afraid, we have a tone of optimism because we see that the data is more positive for us and the fact that we have the belief and it is still going to go deeper into the positioning of Moura Dubeux in the northeast. And my optimism is not being with something that generates leverage. So having said that, which is a concept which we have, I'm going to let Wanderley go with the data. Thank you.

The size of our P&L, yes -- no, you have to look at it in a stabilized way, launching BRL 4 billion every year for 3 years. We should have 70% of this PSV in P&L, about BRL 3 billion or maybe a little less. Next year, we could do BRL 4 billion. And we're not going to be even close to this P&L, which will be a cost of 2 or 3 years of operation until we get to the level -- stabilized level. However, the model is today at a point that we would need in this mix to have the majority of condominium and Mood and BRL 1 billion in Unique as well, something in the development, which did also have this level of P&L.

Very well. And one last question, you guys are going to be delivering development in 2025. How do you see the question of the pass-throughs from that -- from those projects?

It's going very well. We passed through about BRL 100 million in the first quarter. We have something close to that ready for the second quarter, and we have more than BRL 250 million or BRL 300 million in the second half. Going very well. The cancellations, as he mentioned, is very well -- is under control. We're not having this movement. We expect that we might have the increase in interest rates. We did a study of our portfolio and our portfolio is very well. It fits very well. When we look at the average payment, which the client pays and he can still work on future financing, he's 130% above what he would have to qualify for this type of financing. So this gives us comfort. And what can happen is that the new sales are being impacted. When we look at the sale, when we do a credit analysis whether he's going to finance or not, this could be impacted but it's not. We launched in the first quarter, and the sales were also very strong. There's a lot of clients -- Mood clients who do direct plans, who don't take our financing, which also helps us, the portfolio of the projects. So we're very, very comfortable currently with the level of pass-throughs that we're having. We have to be accompanying this constantly and understand how this will happen going forward. But looking at a photograph today, where we're very comfortable.

So I have no more questions so I'm going to pass it back over for you for -- Villar to make your final comments to everyone.

We are very optimistic with the results. We're optimistic by nature. But in the execution of our strategy, caution has always and continues to be our way of thinking and to commit. I guarantee that we are giving our best and our commitment is higher and higher. We're reading what's happening and what we expect to happen because part of what's happening today, we're already realizing at this current time. For us, when we look at the model in a more optimistic way, the numbers have come better than we thought. And due to this is what I'm telling you, Level 3 and Level 4, the Band 3 and Band 4 have a very high -- and this program benefits quite a bit, even though the Selic interest rates leaving the Brazil market in panic, their fiscal debit -- the fiscal deficit also continues very strong, especially here in the north where the real economy, where there aren't many competitors in the real estate market, the stocks are not high. We have very low stock. This is our -- what benefits us. And we strengthened the brand of the company. When you have projects, iconic ones, which is those which we presented recently to the market, it's natural that the margins come higher and the project is able to perform very well in terms of sales and its execution phases. These are, in fact, projects which are simpler than those which we mentioned of high class with lots of finishing materials and so forth. Many of these people are delivering shells of apartments where they have with -- the purchaser has to do all the work later. So with that, I see you in the second quarter. We have our road show set up for the end of the month. Barral and all his team is coordinating that, but we'll be seeing you with the present in the second quarter. We'll come very well than to what we're presenting right now. Thank you all very much. Have a great weekend. And remember us saying, even though the -- even though things are -- even though the stock has been rising lately, it's still the cheapest stock on the market. [Statements in English on this transcript were spoken by an interpreter present on the live call.]