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

Good morning, everyone. I'm going to start the presentation of the Results of the Third Quarter of 2025 of Moura Dubeux. I am Alan Aquino, and [ I'm ] presenting the results is Diego Villar, CEO of the company; Diego Wanderley, CFO; and Diogo Barral, Director of Investor Relations. [Operator Instructions] I like to remind all of you that any declarations that may be made during this conference are based on premises of the management of Moura Dubeux. The future considerations are not guarantees of performance as they involve risks and uncertainties, which depend on factors which may or may not occur. After this disclaimer, I pass it over to Villar. Villar, please go ahead.

Good morning to everyone. A pleasure to be here again with all of you. Now the third quarter of 2025, but we still have lots of year. We're in the middle of November, but the company still has lots of work to do, lots to deliver. I'm going to show you what we call at the new beginning of the year as the new level. And these are the numbers that I want to bring a few highlights. We're closing the third quarter with launches of BRL 1.3 billion in launches. I said that this would be the new standard of the company on average, it's what we hoped to try to guide the guidance for you and the market at the beginning of the year that you could expect this new dynamic of the size and depth of demand here. When we look at the last 12 months, based on the data that we see in September, we see BRL 4.1 billion, which is exactly the goal, the target that we had shared with the IR folks and our CFO, Diogo Barral (sic) [ Diego Wanderley ], had said to explain to the market, which was the level at which the company should be analyzed and projected for coming years. Interesting is that BRL 3 billion of this BRL 4.1 billion or 73% came from the regime of condominiums, the condominium model going forward, when we look at this, could be BRL 2 billion. I will explain about that. BRL 1.1 billion or 27% came from the model of incorporation or development to a significant part, which is Mood product. Over time, we're going to see this taking -- going towards BRL 2 billion with the development of our business plan for Ún1ca. So BRL 2 billion of Moura Dubeux in condominiums and BRL 1 billion in Mood and BRL 1 billion in Ún1ca. This is the rationale that we are establishing. Since it's a business model of low leverage and cash generation, a model which Moura Dubeux has been running very well, if the market year-by-year is able to behave in a dynamic work condominiums, and it makes sense -- it doesn't make sense for us to not occupy that demand. And we've shown that it is a business -- a winning model, a model which differentiates Moura Dubeux, we have no doubts in the sixth cycle of this business cycle, but it has been bringing the performance and with the financial earnings for the company, as you see, and it's a highlight that we have been occupying little by little in the -- of the listed companies. In the last 12 months, we see we've been moving very well in our business model, and this is our strength. This is what highlights us from -- differentiates from the other high-level companies in this area. BRL 1.1 billion has a performance should have been even bigger than what they have been in the last 12 months in the case of – in the house of 12% -- 60% of launches in the quarter, BRL 1.1 billion in sales. We've sold almost everything that we launched. The dynamic here is more based on our paradigm in relation to the operational capacity of generating products with its cost control and ensuring the satisfaction of the client with low leverage as we've seen in this quarter, with more with demand, which has been with the sales accompanying this level. When we look at these 12 months, we accumulated BRL 3.3 billion in sales and net sales I don't -- it's not reached the BRL 4.1 billion because the dynamic of launches was not every month, we don't even -- also didn't start from 0. But quarter-by-quarter, we have been improving this new level of net sales for next year will go up more. And during the rest of this year, we will accumulate more than that when we close the year -- by the time we close the year. BRL 2.2 billion or 65% came from the condominium model, very close to what our business plan was for '24 and BRL 1.1 billion exactly what came from development. The condominium is longer, but the PSV is not as strong and it has a shorter cycle like Mood. So the stronger one wins and the condominium continues to sell more is following its own dynamic. Wanderley is going to talk a little bit more about this, but we reached a level in the quarter of BRL 548 million of net revenue. And I'm going to jump over to this side to get over to the gross margin, which brings the company of the level of BRL 2 billion for net revenue for the last 12 months. And again, it's growing. We've been improving and adding revenue to the company. BRL 1 billion of this revenue comes from the condominiums, BRL 1 billion comes from development. It's never -- remembering everyone that we're never going to have the equal revenue, what we consider the launches of the condominium because the revenue comes in from the land sale, from the administration fees, the adhesion fees and also the closing of the sales. So it never adds up to the exact [ vis a vis ]of the launch. However, the most important thing is that we have grown revenue and gross margins grew up by 43%. The letter from the administration, which I make Wanderley read, I spoke clearly about the chronology of a dynamic of a sport of an athlete. The game isn't here, isn't here for who does the most volume. It who does the best performance. So our objective is that very clearly for any collaborator, any in the company, any one of our activities. enchant the client with our client, with our products, be the company that generates the best return for our stockholders. These are the 2 principal dynamics that guarantee our perpetuity, 43% of gross margin adjusted, which is another moment that we're living, delivering more volume and more profitability. We get to BRL 118 million in net revenue in the third quarter, very recently, that was the profit of our whole year, but now we're earning that in just 1 quarter. Last 12 months, we've accumulated BRL 353 million in net revenue with this new level, growing quarter-by-quarter, and we closed the year -- we've already done more than we did last year. And just in all 12 months, this will be a record profit year. The highlight, which are the most important numbers in this presentation are the operational and financial, 21% of net margin and 21% of average return on equity. We're guiding the company to a level of 25% quarter-by-quarter. We've been raising our return on equity. And in one way, we have been surprising the market with these levels of margin. We believe that we have nominally more than we expected, but I believe that we can deliver even more than what we have been promising. Distribution of dividends, close to BRL 51 million. We're going to distribute right now in November, BRL 0.60 per share. Looking at the question of the tax question, not today, but initiating going to show what we're thinking about doing due to this tax reform question. We're looking at the details about that. Guaranteeing that we're going to do what we promised, not less than BRL 100 million in dividends paid this year. So we've already reached this level -- the level that we've committed with you. On the next slide, we're going to look at the highlights. We -- what we've seen, we are confident with our demand for the region, with the capacity of the company to produce new launches, new sales performance and add even more to our results. There's nothing on our radar in the short term that shows a change in direction. We should be moving towards a third quarter, which is similar in terms of financial performance. Operational, I believe will be the same as the [ last 2 levels ]. However, obviously, it will be a few more days, we'll have a good closing in October, and we're doing well in November. And again, we're also with the cycle of launches that is closing. So we don't have lots of new projects to present right now. We're more focused right now on selling the stock that we have, and this is going very well for the company. For next year, what I said to you, the level of launches, level of sales, and we expect great efficiency so that we can add to the net revenue of the company. I'll pass over to the next slide. The highlights of Mood. I want to give a little more visibility. In 2022, we started with this business. In '23, we in mass. And in '24, we grew and now we have products delivered Parque Das Dunas, clients living in these buildings now we have an NPS of satisfaction very high. So we're going to be delivering the Miraflor in Ceara. We also have Mood Aurora, Mood Parque Do Cocó, Mood Candelária, COSTA Azul, [indiscernible] Colina, Farol, Epitácio, and this year, we're going to be presenting Mood Club in Salvador, which is almost 400 ready to go.13 projects launched, 2 ready to delivered, BRL 1.2 billion just in Mood sales, 62% of VSO and BRL 2.1 billion is our land bank for this product. This business didn't exist when we opened our capital. We started up a new business inside the company, which the scenario of next year with a reduction of interest rate reduction of interest rates beyond what the government has been practicing in the Level 4, the use of savings for the middle class property will create a huge space for Mood. And it's a model we're very, very assertive in periods of delivery and costs and has good margins, always improving every quarter. Mood is a, is a vehicle which in very little time, 2 years, 3 years, we have transformed it into a reality of this size, and we're going to see what we can do for the next 4 years, just with this company, which we have inside the company. Besides Ún1ca, which we've talked a lot about and we've talked a lot about Ún1ca joint venture we set up with the Directional. We're very optimistic, and we have a lot of things in-house already to launch next year. And the financial results is still [ timid ] for 2026, but the operation will come, showing the strength of this market in the Northeast. And in '27 and '28, we're going to be able to see this on the balance of the company both on our side as well as in Directional balance sheet. Here is the launch we've already done in the fourth quarter, is up to push our sales of October, BRL 382 million in PSV -- net PSV. One more hotel, which we purchased, which was very -- in the best spot on [ Bobyaz ] Avenue. It's the old Recife Palace, we purchased it. It's the biggest price per square meter for condominium that we have in our history, more than BRL 26,000 per square meter. People that know the condominium model, condominium us is 80% of the price of a development or a 20% discount. The product, which is going very well, has been selling very well, something that has only been launched 30 days ago and has already helped to bring good sales to Recife as well as Fortaleza, where we have done very well with the launches there, the other cities. But this is the major highlight of our launches in the fourth quarter, already -- which is already underway. We have other launches as well, Fortaleza with Casa Macedos, and we have also the beach club. And here, Casa Macedos, a closed condominium standard -- high standard building in Fortaleza, BRL 382 million PSV. The first month, more than 20 apartments have already been sold, not a little because these are big apartments, 2 per store – 2 per floor, a tall building, and it shows our capacity to continue operating in the condominium market and a high standard condominium market in the Northeast, which has a deep market, as we've shown to you, BRL 4.3 million -- BRL 4.3 billion, BRL 700 million. And as I said a little earlier, we're heading towards BRL 4 billion. And if we had demand, we're going to continue putting these products out there. We're going to continue to do this type of development. Of this movement that we're here doing more than that. one more. And here, I'm going to pass the word over to Diogo Barral. We're going to talk about the highlights and Wanderley about the financial highlights, and I'll come back to you at the end for Q&A. Thank you all, and I'll see you at the end of the presentation.

Thank you, Villar. Good morning to everyone. I'm going to go through the operational details, starting with our launches of the company. We launched BRL 1.3 billion in the third quarter, several products, 5 projects, always in -- all of them in condominium model. This presented an advance of 22% in relation to the third quarter of last year and a reduction of 28% in relation to the second quarter of this year, basically because we had already had this in our planning a higher volume of launches in the second quarter. Look at the cumulative for the first 9 months of the year, we did BRL 3.6 billion in launches, an increase of 73% compared to the same period of last year. On this screen here, a summary of the sales, cancellations and VSO. On the left-hand side, we have the sales. The company sold a little more than BRL 1 billion in the third quarter, an advance of more than 6% compared to the third quarter of last year and a fall 10% in relation to the second quarter, basically because of what I mentioned earlier, but a higher level of launches in the second quarter. Looking at the year-to-date, the company sold BRL 2.8 billion an expressive advance more than 50% higher than in the first 9 months of '24. On the right-hand side, in the upper right-hand corner, we have the cancellation. What is important to mention here is that when we look at the evolution over this year of 2025, indicators have shown a fall quarter-by-quarter, and we're closing the third quarter with cancellations reaching only 5% of our gross sales, a very healthy level. And when we look at this number -- the adjusted number, eliminating the exchange of ownership or changes in units, the indicator goes to half that becomes only 2.5% of cancellations of our sales. Below that is our [ BSO ] on the left-hand side, the consolidated [ BSO ] of the company, it's a trace that we've seen in the last 12 months. Also very interesting because we have a vision of 5 quarters, the company has been presenting in a resilient way this PSV above the level of 50%, very much due to what we say, the dynamic of the real estate market in the region and our leadership has a low level of competition compared to what we're able to do with this velocity, and we're moving very forward strongly in this cycle of sales. In the lower left-hand -- lower right-hand corner, the launches in the last 12 months, which was very close to 60%. And when we look at the quarter, the company sold almost 52% of everything that we launched in the third quarter. The next slide, we have a stock and land bank projects underway. On the stock, we have 2 important points for us to comment. First, we have been able to maintain an indicator of coverage very healthy. We go through the third quarter with 11 months of coverage. And the other point in relation to our stock of ready to sell goes from BRL 150 million in the second quarter to BRL 140 million in the third quarter, representing a 4.5% of our total PSV in stock -- unsold stock. About our landbank today, it has 56 sites, 9.7 in potential PSV. And once again, our leadership talks about that. We have been launching strongly every quarter, and we've been able to recompose the stock very quickly, considering this BRL 9.7 billion, almost 70% was acquired through swaps and 30% by cash. We closed the third quarter of this year with 60 projects underway, 20 of them in [ dam of incorporation ] and 20 in the condominium model. to close operational part of the presentation, we also bring the projection of the deliveries during this year. During the year, we're going to delivered 12 projects and to close this last few months of the year, we have a projection of 8 projects, 2 of them in incorporation in the development and 6 in condominium model. I'm going to pass it over to Wanderley to give you the numbers, our accounting numbers.

Good morning, everyone. Starting here with the financial results beginning with revenue, we delivered approximately BRL 550 million in the second quarter -- in the third quarter, a growth of 9.3% in relation to the third quarter of last year and a reduction of 37.5% compared to the second quarter. We can see that the revenue of development, which is very much in line with the last quarter and the variation of revenue, the lowering of this revenue the condominium segment, we always remember that the revenue is not -- a condominium is not as linear as a development revenue. It depends on the number of land that we have sold in a quarter and how we acquired that land. In this case, in the third quarter, the majority of our land were purchased principally through physical swaps. We have a revenue -- a nominal revenue, which is smaller, but a higher margin, which we're going to see in the sequence in the second quarter, when we purchased more land in cash, and therefore, we have a higher revenue with a margin a little bit lower. When we look at the year-to-date for 2025, we're at BRL 1.6 billion of net revenue. This represents 37.5% above what we had in 2024 with both segments growing in revenue. when we look at the size of the operation of the company that we've been running, as Villar said, about BRL 4 billion of PSV per year. We see that even though the year has not ended that we're still not close to the stabilization of the amount of revenue which we should be because of the size of the operation that we're running. We expect that with the pass of these next few quarters, especially with the projects of Mood that this revenue will go above BRL 3 billion per year, BRL 3.5 billion as we see here, and that's what we have an increase in future revenue. And looking at the gross revenue, we delivered BRL [ 333 ] million, which is what we acquired with interest -- capitalized interest, a margin of 43%. This gross profit was a growth of 37% compared to last year and very much in line with the second quarter of this year. The revenue falls, but the margin goes up and the nominal gross doesn't change. It's the dynamic of the -- depending on the way the land was acquired. Look at the year-to-date, we delivered BRL 660 million growth of -- compared to last year from the IPO it's basically what the company has been growing quarter-by-quarter between 40% and 45% a year. And the important thing is that the gross margin has grown up 2 percentage points when we compare to 2024. And looking at the adjusted EBITDA, we delivered BRL 130 million, very close to the second quarter. The margin was even a little bit better, 23.7%. We look at the BRL 405 million that we reached a margin of 20% and we look at the year of 2025, it's a growth of 50% in relation to last year, BRL 325 million, we reached a margin of 21%, a gain of almost 2 percentage points, very relevant to the operation growing each quarter. Following -- looking at the net profit, we delivered BRL 138 million in the quarter with a margin of and we accumulated in the last 12 months, BRL 323 million of profit with a net margin of 17.5%. And the most important thing is the return which is above reaching 21% and is the principal indicator when we look at our results. It's part of the strategy of the company. If the company -- a company which operates without leverage, bringing the biggest possible revenue to our stockholders, to our shareholders, and we have been receiving the fruits of these results and the strategy that was taken not in this quarter, but not -- but at the end of 2022 and beginning of '23 and accelerate our launches and that the business -- the model would consume less cash and that we've been able to grow the operation and have a low level of leverage under control. Natural that the ROAE has been growing, and we see space for still further improvements when we change our model going forward. And for the year-to-date, BRL 308 million, which is 50% above what it was last year, and we're going strongly to deliver BRL 400 million that we understand is the model of the company ready to generate a net margin of almost 19% net margin. Looking at the expenses in this quarter, both commercial as well as administrative expenses had increases. On the commercial expenses, we released BRL 66 million. And in the revenue, we also had a growth of 5.8%. It's good to mention that we did lots of launches in the end of the second quarter and during the third quarter when these launches, it is natural that the investment in commercialization increases, which leaves us comfortable with the indicator that in all the viability that we look at, we look at 7% for this line. 4% for commission and 3% for marketing and expenses. And that's we've been running at a level well below that. So it's logical that we're not happy to be below. We always want to be more or less optimized, but it's natural that with more launches, this line would grow to be expected. On the administrative side, the growth was less. We did BRL 33 million, a little bit above the second quarter. The percentage of revenue grew a little bit due to the dynamic of the variation of revenue that I mentioned [ earlier ], but this amount also grew due to the company following to deliver its best results in the history of the company -- of any year in the history of the company. And with that, naturally, the team bonuses will be overcome. The goals will be reached -- and we've already provisioned during the year, the bonus, which will be paid next year. So this generates an impact on our G&A, but nothing that wasn't foreseen if the company were to overcome all of its goals. Looking at the results, the appropriate results, there was no variation. The same BRL 378 million for the last quarter, also with a gain of margins of almost 1 percentage point. It's important to see that the innovation with the launch to bring improvements in results in the future. It's all an expectation based on the analysis of today. We always accompany this closely and the fact that we're always correcting our projects, which makes our margin very stable. An important thing, I'd like to be very transparent that this is the margin with which we're very comfortable with the current. In the condominium, there was no variation. The margin was very much in line with the amount of BRL 40 million to be recognized in the results. And the administrative fees went up by 14%, reaching BRL 400 million as the condominiums are delivered. We have lots of condominiums and this brings more fees to be recognized as these -- as the construction progresses. And then to close the financial numbers, we have -- we look at debt. We grew by BRL 35 million. We accumulated BRL 246 million in net debt, which is only 13.6% of our net equity. The trajectory, we accelerated the growth starting from 2023. And with that, we expected that with burning this cash that we'd be running the company between 15% and 20% of net debt. This has been happening. However, it's going faster than we thought. We look at our model at the end of last year. And what we expected for this time this year, we should be a little more leveraged than we are basically because the company has been running very strongly. We're still flying at the same rate. We're having -- going to burn some cash in this quarter, in the fourth quarter, in the first quarter of '26, and in the second quarter of '26 and the third quarter is when we will start to stabilize and begin to generate cash. We also announced, as Villar said a few minutes ago, BRL 50 million in dividends, which we're going to pay now in the fourth quarter, and this is already in our account of debt. With that, we close the financial highlights, and we're going to continue with the Q&A. Thank you all.

[Operator Instructions] Our first question from Gustavo Cambauva from BTG.

I just want to make 2 questions. First, if you could comment a bit on the opening, Villar spoke about the projects for the fourth quarter. If you could comment how is the pipeline of 2026 a ramp-up of the [ Mehaasminha Vida ] condominium model, you have very solid results. But I want to understand a little bit what do you see eventually and how much you think you can grow in launch in the Ún1ca and eventually in Mood as well for 2026. My second question is in relation to the gross margin. You presented a very high margin in the third quarter. To understand a little bit what happened there. Are there any nonrecurring factors, something that we should or something that could be repeated in the third -- in the fourth quarter with a high volume of condominiums being coming online? And how do you see this gross margin evolving in the next quarters?

Thank you for your questions. I'm going to explain here your first, and Wanderley will take care of the second one. The first about launches. We have guided to BRL 4 billion it's probable that we will do a little bit more than that because the condominium, we have not had any signs of deceleration. Over the year, we've been perceiving this -- mention this dynamic. So we're going to try to do a little bit less than we did this year, but above BRL 2 billion. As far as Mood, that's it. We're guiding for BRL 1 billion. I don't believe in a significant short-term lowering of [ this ]. So this is the level that Mood [ will ] operate. As far as Ún1ca, is where with this deposit my greatest optimism. We have a market which has a demand, which is not being attended by our research has been 5 years differently from Sao Paulo. The demand and the offer, supply and demand are very close. In the last 5 years, this is what happened and with high prices going up. But that's not what we see here in our region, especially in the Level 3, where we decided that Ún1ca would position itself. So we have a business plan, the land that is relatively used for Ún1ca. And over the year, we're going to be guiding you. However, we should not do less than BRL 1 billion for Ún1ca. So I think that's where we can come surprises, positive surprises. condominium should be above BRL 2 billion. Mood shouldn't be above BRL 1 billion and Ún1ca should be at least BRL 1 billion but we believe that it could be even more than that. So in summary, that gives the BRL 4 billion that you're working with. However, I believe that if the dynamic macro dynamic continues as it is and the demand continues to correspond positively, we could surprise positively both in the condominiums of Moura Dubeux and the Mood and Ún1ca delivering more than it was foreseen. I'm going to -- as I did this year, we get to the beginning of the second quarter, we'll guide you if this level is coming in higher than what we expected. And we will show you how the rest of the year should be as we did this year, the dispositioning. We wait to see how the humor of the company, how the demand is corresponding. The size is not our biggest objective. As I said, the highlights, we're interested in margins as Wanderley will answer you. I would rather wait and have a more specificity. And it's an election year, a year in which -- as I said, we're very optimistic, but it's a cautious optimism. So that's what we're going to go forward. Wanderley please go ahead.

Okay. Thank you for your question. I think I commented a bit about the margin in the third quarter. We had the land that was recognized and a lot of swaps in these negotiations and the cost of the swap doesn't show up in our results and the gross margin is higher than in the other quarters. When we look at the stabilized numbers, we hope that this margin will come back to the levels that we have been presenting in the last quarters and that will come back to the normality and the consolidated between 34% and 35%. This was more an effect of properties, almost all in swaps. We have good land, some of them are in swaps. So for several quarters, we're going to have a little bit of growth in our margins. When we look at the average in the fourth quarter, addressing your question, we expect that the margin will come back to what it has been in recent quarters. And where the most important is the profitability.

Next question is from Herman Lee from Bradesco BBI.

Two questions from our side. First is about the PSV, which has a very high level, very healthy level in the last months. So we look at this number, it came seasonality for launches in a little more detail. The second question is about the level of condominiums. I want to understand a little bit more about the growth that we've seen in the recent quarters. More on the investors, which is not doing as well as another. And how has this been this model? And we having explain -- as you explained frequently, it's not surprising the volume. So if you could give us a little more information about this dynamic.

Thank you for your questions. The falloff in PSV in quarter-to-quarter, I understand that the market is anxious to see results quarter-by-quarter. We talk about a marathon in our administration, last 5 kilometers slower than the previous 5, just a little bit more slow. It's irrelevant on the end of the day in the cycle of a long journey, normal. There's no reason -- no explicit reason justifies this. In fact, we had good sales level of launches versus sales. The gap was smaller, 1.3 of launches and 1.3 of sales when last year, the delta was a little different. We have products that explode and sell very quickly. We have other products that follow our viability plans in terms of sales perspectives. The truth is when Moura Dubeux has for a long time was the strongest in the medium to high level of sales that we go to the viability, people ask questions. There's nothing -- absolutely nothing to worry about. Why we led 80 projects since the open of capital, one or another may have a dynamic which is a little slower than some which were very huge success. I don't see anything to worry about in this point of view. As far as demand for condominiums, the level at which the company is performing, an explanation, which is a little long, but it's simple to understand what happens today, Brazil, and I'm going to look at this from the point of view of higher income. In 2021, we performed economic growth combined with 3.5 years of a cycle of very high interest rates. And it's a paradox, Central Bank performing these very high interest rates of 10% and Brazil with low unemployment, explain that to me. I [indiscernible] I research bank explain it to a [ grin go ] that you can understand. But this combination generates an important favorable wins, which favor the market of high-income market. The business, basically high income is associated with liberal with business people and professionals. That's good for lowering unemployment growth in the country, certain level of economic confidence and a real life economical with a dynamic of commerce and industry, which is positive and service provision. So the business is doing well. The majority of the developers see this paradoxical situation. However, 15% interest rates never been so easy for anybody that has money to make profit on that. It's no way to lose the public papers that are performing at demand every day higher than the other, which has favored a greater accumulation of wealth. However, there has been a change in our age pyramid, looking at the geometric pyramid so that we can have an inclusion of the population in the age of 35 to 45 years of age, which combines with the second time they exchange their real estate. There's no deficit. There are new attributes to better localization, which favors this exchange. So this is the second pillar, adding to the first one, which favors segment. The third and last specific to the Northeast. For many years, we have lots of years of demand, not many competitive players. It generated a huge demand for the segment, and we're taking advantage. And looking at the condominium specifically is that normally here in the Northeast and in Sao Paulo as well, you can look at any company that has results, look at the dynamic of their portfolio of the high level -- high luxury trade at the price of financing is low. Let me give you a number. I know this because he says [indiscernible] he said the 7.2 years is the average period of time in a portfolio of real estate and Santander works in all segments. The high-income client finances 30%, 40%, 50% of his much of it during the construction condominium is 80% of our incorporation. We usually -- people are able to -- it's not 36, it's 42, 48, 54 months on average, it's even easier for the high-income individual fits inside of his budget and the same project is the same as the incorporation product. We took advantage of all this combination, which favor us and also the expansion for other models of business such as the [ Bachpesteach ] and the expansion in the Northeast. We're not just in Recife but also in Salvador and Fortaleza. That's why I'm very, very optimistic with a minimum size of BRL 2 billion. But if these conditions perpetuate, and I'm not sure exactly how much of this demand has been attended. We need a longer cycle to have this information. The dynamic of high interest rates combining with the growth. I'm not an economist, but to be able to know how much this is going to still perpetuate in Brazil. This has favored this change in the age pyramid of purchasers. There won't be so many young people, and that's going to see B2B more people -- older people entering the market. And this will give us depth to the market. I said it was a longer explanation, but it's easy to understand. It's very simple to understand. It's a long explanation.

Next question is from Ygor Altero of XP.

I want to understand a little bit with these changes in the program. What do you think could help you both income as well as increase in subsidies. What's your position of [ Mood ] in low income you look at the lower income levels, this will have an impact is the first question. And afterwards, I'll come back with the second question.

Listen, we're not going to operate in Level 2. We're not looking at it that way. This alteration of -- we always see apartment in the Level 3 was not being announced, but we have the expectation that it won't be a change in the level, which will favor even more Ún1ca. We have some properties from Mood might even be in that type of financing. For the 12% for savings, [ SO ] 62% -- it hasn't been easy to convince clients leave a portfolio in the case of Mood's subsidized interest rates to go from a 7% to go connected with the bank at 12%. I understand that it's better to wait in Brazil for a reduction in interest rates and migrate to 11% or 12% going forward. But that means -- doesn't mean we'll stop. We're not going to sit here and wait to happen. We're doing an active migration in the Mood and has been successful. A [ Flores ] had irrelevant cancellations pass to the economic. Looking at Ún1ca, we're not exposed. We're going to be exposed starting next month. We have a portfolio for the product. I think it will be a successive sales Ún1ca [ being fica ] which already has direction now with us a product which is going to be sold on the project just as they do on the Level 3, exactly because we're doing it together. And I'm very optimistic that during the year of mid ‘26, there will be lots of space for 2 reasons. One, because the demand is very clear. A percentage of between demand and supply compared to any other region in Brazil, we have the biggest space, the biggest possibility to grow. Second is because the federal government and election year is going to stimulate even more this program. whether it be increasing the level for Level 3, more subsidies, this should also favor us. And third, the change in the exemption of income tax, informal income will start to become formal because they won't have to pay income tax, and this will facilitate the provision of credit in some way. If you get 10,000, 11,000 with this increase as it will take this income out of the informality in our region, we have a lot of informal income. I believe this also favors. The second part of your question is in relation to the ROE, what are the principal levers that you see to extract more value in terms of ROE looking forward. I'm going to divide this with Wanderley. First, I'm going to answer and which is [indiscernible] model. It will tend to be a business model of low -- with low equity and strong cash generation. We're going to be doing this in a society with Directional. It's not what we see in this project. It doesn't make sense for us society to deliver lower results that direction performs in the third -- 3 than the Level 3. And this business model is what you can expect. That's one way forward to increase our business. The second is the natural dynamic, the payment of dividend, LPL. We're going to be paying on our equity. With that, we're going to be able to increase the profitability of the company. We hope next year, which will bring an increase in ROE, and we should stabilize somewhere around 25%, but Wanderley can also add on.