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

Good morning, everyone. We will now start our presentation of our results for the second quarter of 2026 of MDNE. I am Alan Aquino, and I'm presenting the results today with Diego Villar, the CEO of the company; Diego Wanderley, the CFO; and Diogo de Barral Araujo, the Director of Investor Relations. [Operator Instructions] We'd also like to remind you all that any declarations that can be made during the conference are based on premises of the directors of MDNE. Future considerations are not guarantees of support of results as they involve results, risks and factors that may or may not occur. Having made the disclaimer, Villar, please go ahead.

Hi, Alan. It's a pleasure to be here with you for the quarter for most of us -- the majority of I know I'm going to mention 1 of the principal operational indicators and financial indicators. On my letter from the administration, the message that we sent to you, we mentioned the record of net profit of the company. But what the most important thing is in our perspective, less than the record itself is that at the beginning of last year, we said that the potential had a potential -- the company had a potential to change to a level to reach operating numbers that will shortly be reflected in the financial numbers of the company. And then we would like to realign these expectations with you. What makes me satisfied is to know that during this quarter and since the first quarter of 2025, we are delivering results that we have signaled to the market. We did -- we have done this with a great deal of discipline. And at the same time, we grew the company, bringing to you performance results and financial results, which are better than those which we have been delivered up until the end of 2024 and the beginning of 2025. Those who follow the real estate market know that it's not easy to be improving the indicators of financial results. We've been able to do that with a huge amount of discipline in our cash management and the development of products and the commercialization of this and more important is the actual execution of these projects, the construction work, which is we are watching our margins, bringing more to a company extremely predictable with much less in the importance of the size is the capacity to be trustworthy and deliver results, which place us on a level among the best developers in Brazil. So that's what I think the most important thing and what we've been seeking for is the confidence and credibility and predictability for you that what we bring as a signal is what we will perform. Looking at the principal points, we've launched approximately BRL 1 billion in the second quarter of '26. When we look at the 12 months -- the year-to-date 12 months, we look at the BRL 4.6 billion in the last 12 months. 82% came from the condominium market, approximately BRL 3.8 billion and 18% in the development model, which is basically is liquid of BRL 855 million. Since the beginning of this year, we've been signaling a range from between BRL 4.5 billion and BRL 5.5 billion of launches and sales per year. When we look at BRL 5.5 billion, we brought the Ún1ca with BRL 2.5 billion, Mood with BRL 1 billion and the rest being complemented by the closed condominium model with the Moura Dubeux brand. We still don't have this configuration. We started this year to present these projects for Ún1ca, but this show itself to be in a balanced way starting next year. However, we're following exactly when I opened the presentation, disciplined and very, very confident that which we have been telling you and sharing with you what we've been delivering. As far as Moura Dubeux is concerned, what we're able to administer and the limitations and our limitations is that we're able to do that better than what we -- than the expectations that we would be the market demand and the conditions that -- which is not managed by us, we've always had a scenario which was more challenging for the country, and we've been able to navigate well with this caution when we look at the macroeconomic demands for labor and that which is put in the results, and which is not on our direct manage. When we look at the sales level, we sold exactly what we launched, BRL 1 billion in sales, contracted just during the second quarter of '26. And we look at the last 12 months, including this quarter, we reached the level of BRL 3.8 billion, BRL 2.7 billion in the model of condominium and 72% and a little more than BRL 1 billion, 28% in the development model. More importantly, I would say than these openings in this mix is the quality of our VSO. We've been going for 5 straight quarters performing between 51% and 56% of VSO and reinforcing again more important than the level of sales and launches is how much we -- the quality that we have. We maintain a strong VSO. We have started the third quarter in the month of July, isolated way, which is better than general between January and April, comparing it to the previous months, the quarters immediately before the second quarter. And it was July is the best beginning of the third quarter, which doesn't remove from us our caution or our concern of which we have with demand, the quality of our sales. We try not to make any type of discount in our mix of products. We even may open if it's something we haven't seen yet and something of sales velocity do not hurt our margins. However, the VSO up until this point in time as a comparison is moving at the same rate and the same level, which is more -- for us, is more important than the number of products or the VGV that's launched. What's most important is that the margins that we have been able to reach. The revenue, Rand is going to talk in more detail. I'll bring a few highlights. We reached BRL 731 million net revenue just in the second quarter. And more than that volume is the gross margin hitting 39% we adjust when we adjust that, it becomes over 40%. And that's what I've been saying since opening the meeting here. The quality of the financial indicators of the company which we guided in the beginning of this year, growing and improving our performance. This is a very extensive work that we do in the product mix and regional diversification, but more important than that is the reflection of our brand, the same quality and our engineering, able to produce all of that and still maintain the performance within the predictability that we see. We closed the deal, launch a new one and continue with you. For the year, we reached BRL 2.6 billion in revenue for the year in the last 12 months. In the last 12 months, it's BRL 2.6 billion, BRL 1.6 billion from condominiums and BRL 37 billion, almost BRL 1 billion from Mood, hardly anything from Ún1ca here yet, but we should see a participation of Ún1ca, a small participation going forward. Net revenue of BRL 174 million just in the second quarter was a record for us. It's good that we've been able to reach this level, but I also highlight that the company which is still prepared and protected than it was 18 months ago or 24 months ago due to the capacity we've had for diversification, the strength of our land of our brands in the 17 markets in which we operate and the product mix that we have been able to balance correctly. And with the introduction of Ún1ca was the Mood brand, which we hope to move in the next quarter. And we've been able to have a company that's more stable when we look at the medium to long term due to the risk factors based on product lines. This is the most important. We have a net margin of 24% net profit in the last 12 months of BRL 559 million. We've been giving guidance or something close to BRL 600 million of net profit for 2026. And last year, when we talked about that, we changed that level. We spoke about BRL 400 million for 2026, high BRL 400 million. Now we're talking about BRL 600 million or BRL 500 million or BRL 600 million. Here, most showing that this is a performance that the company is doing well with great discipline, very focus on what we have proposed to do. And this year, we're doing very well. The average return on equity is 28%. It's probably among the highest in the upper class market. So it's a way for us -- the correct way for us to look at the capital looking inside with this level of profitability, almost double of the average interest rate of the country today. We have cash generation of BRL 27 million in the second quarter. as a company basically unleveraged only 2.5% of net debt compared to net equity. It's important -- this is important in times of high interest rates as we see this. We consider this always our plan to be the company that has low debt, low leverage and shows how much we have the freedom to make the best decisions in the allocation of the company's capital and in the strategic decisions. In this line, this is where we continue guiding the company. Here, looking just a little bit more in the third quarter. We've already launched in the third quarter the end of July, a Beach Class in Macêdo in the Aldeota capital, a product of close condominium, almost. We launched the Infinity new with the of BRL 277 million, a project which closes the cycle of launches of the Novaes, the Newport project since last year, we have gone back to Lucena Plaza, Beach Class Novo Cais in Moura Dubeux Corporate and closed this year consolidating all of these launches between 2030 and 2032, all of that entire neighborhood, which everybody has seen here in [ Bahia ], which we show in the model that we have here which will be a model and a new -- a whole new neighborhood that we're building in. The construction is underway. The only 1 that's not under construction is what we just launched. However, due to the sales performance, we should probably already be building it this year, starting on the construction. So we've concluded our cycle of launches in the region, showing in fact, our capacity for real estate development. In Fortaleza, we had a picture last year of the Macêdo in the heart of [indiscernible], launching a beach class in the Plaza Macêdo. And today, looking at this, it's called VERT Macêdo, a project of closed condominium, 4 launches, all enclosed condominium model. And we also have projects that are prepared Mood, Ún1ca. And during the year, we'll probably have -- we feel very comfortable from the standpoint of legalizations and products that we can launch what we have been guiding you of approximately BRL 5 billion if the market is as it was in the first 6 months, we could probably even get a little bit above that. But more important than the size of that is the quality -- we've been showing the market products by product. The month of July closed, and there's no thought -- nothing that leads us to believe otherwise, as I have been talking with you over the year. But in any event, we need to have the maturity. We can't be naive. We have to maintain the lessons. And there are certain uncertainties that help us to be cautious, but it's no different than what we've seen and guided you during -- about this subject. BRL 3.2 billion is what we reached in launches up until the 31st of July for the year. And if you add this to the projection of the year, it will give that BRL 5.5 billion. It's not a formal commitment. It depends on the market. However, we are very well prepared and confident for that number. I'm going to pass it now over to Diego, who's going to talk about our financial numbers, and I'll come back at the end for any questions you might have. Good morning, everyone. Thank you for your participation in our call. I'm going to quickly pass through a few operational indicators that we consider relevant and have in a certain way passed this security for the administration that Villar has mentioned that we continue strongly with our plan for 2026. So starting with the launches. In the second quarter, we launched BRL 1.2 billion, a fall of 46% when we look at it year-on-year and a reduction of 22.6% in relation to the previous quarter. In the graph on the right, we see a vision of the accumulated for the first 6 months. So the company launched BRL 2.3 billion, grew 2.5% in relation to the first half of last year. the same vision of sales, we sold BRL 1 billion, a fall of almost 15% in relation to the year-on-year, in line with what we projected for sales in the first quarter of this year. The vision in the first 6 months of the year, the company accumulated BRL 2.32 billion and grew 7% in relation to the first semester of '25 -- and as I mentioned, these are operational indicators that we have observed closely. The first, we talk about cancellations, which is at a very high level, very healthy level, representing only 6.7% of our gross sales. We also explained a number, eliminating from that number, the exchange of ownership or migration to a different type of unit. This indicator falls even more and with cancellations goes down is 3.6% of our gross sales. And that's what we understand, in fact, true cancellations of the company experience, and now we talk about the VSO, 51%. It's worth mentioning and reinforcing here a lot of resilience in our sales and the quality of our sales. This is the eighth quarter in a consecutive quarter in which we present a VSO over the last 12 months above 50%. And we look at this indicator focused on the launches, it's still higher. The VSO of these launches is in 55.7%. So I think that we have a very healthy cancellation, a VSO that's resilient and to complement we bring our stock, our inventory of another indicator which we have looked at carefully -- the company closed the second quarter with BRL 4 billion in market value of stock. However, an important point is we've been able to reduce our volume of ready to move in stock went down BRL 100 million in the first quarter in the second quarter. Even with the company doing its chronogram of deliveries, we're able to see that deliveries are -- have been selling very well, close to 100%. And so our stock of ready to move in is only 2.7% of our total inventory. This indicators of 3.5% at the end of the first quarter. We're always looking at our indicator of stock coverage. If we stopped launching anything today in setting our sales during the last 12 months, within 12 months, we would be completely wiping out our stock of apartments. We also closed the quarter with 60 plots with BRL 11.8 billion in potential sale. We show here that only in this region, our position of leadership contributes greatly, so that we're able to get the best properties, which will bring good returns down the road. This BRL 11.8 billion, we always seek to be working with whenever -- it's not always possible, but we always try to work with the acquisition of these properties via swap. And of the 11.8%, 77% were signed up via swaps and only 23% in money, cash. 69%, 9 products are in [ ARN ], and 28 are in the incorporation development model. And so we have -- and to close our chronicling of deliveries here. And the year-to-date, we have delivered 6 projects, 2 more in the second quarter. We accumulated totaling 6. We started the third quarter with the delivery. We have already done 2 deliveries this month in July and August. And with that, we have 8 more projects to be delivered during 2026. I'm going to close the operational part and leave it with Wanderley, who's going to talk about our accounting -- our accounting numbers.

Good morning, everyone. Let's start with the highlights, the financial highlights with the net revenue. We delivered in the second quarter BRL 731 million, growth of 10% in relation to the second quarter -- first quarter and of the first quarter of '26. When we look at the cumulative year-to-date, the first half, we delivered BRL 360 million, 26% above the first quarter of '26. So the biggest participation in the condominium and the operation has been growing. The adhesion has been growing, the sign-up fees that have been growing and the land that we have been recognizing have brought this result of revenue higher when we look at it year-on-year. We know that it's still not a level of revenue that is stable. This revenue will grow and they have important growth when we talk about from 1 year to the next. Looking at the gross revenue, we delivered BRL 294 million here adjusted by capitalized interest in the second quarter and almost 30% growth. And when compared to the last quarter, a growth of almost 12%. Gross margin was 40.2% for the first quarter and a little bit below the margin in the first quarter due to the mix of revenues, which we found out in this -- which we have discovered in this quarter. We have BRL 67 million, approximately 41% higher than in the important growth in the profitability, which came also from the due to the gross margins, which reached adjusted by capitalized interest, 41%, gaining 6 percentage points in relation to 2025. 60% of this revenue comes from condominiums, 31% came from incorporation from the gross margin is 36% and adjusted the condominium model is of 46.9%. Looking at the commercial expenses and administrative expenses. On the left side, commercial expenses, selling expenses, we delivered BRL 62 million in the quarter, very much in line with the last 3 quarters. However, as a percentage of sales, we reached 5.7%, which is still a low percentage what we report in viability, which is 7%. So we continue to be very competitive. definitely from the commercial expenses, we've been able to deliver a representative below what we have budgeted. As far as administrative expenses, we delivered a growth in BRL 42 million in the quarter. This is 3.8% of sales and 5.7% of revenue. We started the provision in this quarter as well provisioned in the last AG which brings an increase in administrative expenses, which has an effect on the results, but the cash effect will only be at the end of the program, which is a 5-year program. So up until then, we'll be provisioning these payments, which will be in shares. And with that, we'll have an increase over the course of the -- over the next 2 years. The number is still very low when we look at it compared to the size of the revenue of the company. We're talking about a low level of 6%. And again, it's below that, which we consider reasonable. We budget 6.5% in our viability studies. So we still have space here in our expenses. Following to the EBITDA, adjusted EBITDA, we delivered BRL 179 million in the quarter. We accumulated in the last 12 months, BRL 615 million in operational revenue. When we look at just 2026, BRL 326 million, 56% above that in the first half of '26. And again, a gain -- an important gain in the EBITDA margin with the leveraging of the company operationally translating into results, meaning 5.5 points -- percentage points. The EBITDA margin wound up at 56.5%. And all of that resulted in net revenue in the quarter of BRL 150 million -- BRL 174 million. In the last 12 months, we have BRL 559 million, BRL 560 million for the year at a level of BRL 329 million for the year, 73% growth in relation to the previous year, important growth, which for us is even more important, the indicators of net margin and return on capital grew by almost 7%. We delivered 24.2% in the accumulated of the year and the return went to the level of 28%. And as we see, all of this added to a low level of leverage, and we've been able to differentiate and deliver returns -- differential returns for our stockholders, remembering that we still have the level of operations, which the results should grow. We have space here for this to run near 30%, which is what we're looking at the moment. On the left-hand side, in corporation, we had a slight increase, 7.5% approximately. We closed with BRL 468 million of profit and the margin also grew 0.5% to 0.5%, which shows an increase of the Ún1ca and the Mood brands into our results. So this is very positive for us because a large part of our future results are already contracted. On the right-hand side, on the condominium side, we had a small fall of 10%, a small reduction. We closed the quarter with BRL 36 million, and the margin is in line at 28.9% and the administration fees grew 7.7%, totaling BRL 476 million -- BRL 67 million with the recognition of the condominium growth which has come from the operation, which has been growing. And to close the financial numbers, we're going to bring the cash and debt levels. For the quarter, we had a generation of cash of BRL 27 million. We closed the second quarter with BRL 56 million in net debt, which is 2.5% of our equity. It's important that we -- in the second quarter, we did an anticipation of receivables from the portfolio. We had access to this portfolio to have this generation of approximately BRL 150 million. With that, we close the financial numbers, and I'll pass it back over to Alan for the -- any questions and answers that you might have.

Thank you all. We will now start our question-and-answer session. [Operator Instructions] The first question comes from Gustavo from BTG.

I wanted to touch on 2 subjects. The first, the monetization of the receivables from the TA. If we look at accounts receivable, we see there's almost BRL 1.5 billion of receivables the sale of land on the balance. But I want to know how you evaluate these for sales? And what do you -- what rhythm do you expect to monetize this mountain is still on the balance sheet? Secondly, when we will have the option of this change of the estimate to change you between 10% and 15% of net debt to EBITDA, net debt to equity, if you could. The second question is if you could give us a general overview of the 3 principal market in the Northeast in which you operate Salvador, Fortaleza, and Recife. More from the high level, the high luxury market, how do you see this evolve the dynamic in these 3 markets in terms of demand and offer supply and demand, stock and availability of property, if there's any preference on the part of the company in these 3 principal markets. Just these questions.

Let's look at this 1 at a time. First, about the torna, I don't want to -- it's a technical term, which we use in the market. It's an anticipation. In my vision, it's not an anticipation, and I explained why I give you some context of our strategy in relation to that subject. The asset, the torna asset is a lot of land, which is sold by Moura Dubeux to the condominium. It's an asset that has already performed. There's no return to be done. We put a payment period in fixed payments in the contracts of the condominium owners. So in the flow of their quotas includes the payment of the land, the building and our administration fee. But the contractual structure, I am the manager of the cash of the -- cash account of the condominium. And I'm also the decision-maker of who will be paid first so that the project in that period of time, 5 years, 4 years, each 1 has a deadline will be delivered on time. Remembering that late payments do not bring any financial only habitation because the condominium should go -- should live on its own cash flow. Moreover it guarantees the delivery dates and so forth. However, the rigor -- the contractual rigor, I can use 100% of these initial assets for the payment of this property, even so the first payments will not be enough to pay for the entire property. the sale with almost 0 risk of nonpayment I'm the manager who makes the decision of who pays first. And at the same time, we can utilize these resources to always prioritize the payment of this land. So it's clear that what we -- since there's no possibility of paying this in cash, we sell it in payments to finance it to the condominium owners. It goes into the receivables of an asset which is performed. no longer brings me any expenses on my balance sheet and the profit is already passed on my balance sheet. And the person buying it has no risk. Why is it important to explain this? My desire and my ideal would be that I have at 1 end, the market which is educated to purchase this receivable and a level of discount that is so low the guarantee that exists that the land, the receivable has a very low probability of not performing. So that when the profit comes into our financial statement, the cash comes along with it, and we do the operation. We sold property and we received the money with no liability that needs to be performed. The first thing that we did, as [indiscernible] and his team had the competence to set up had a discount, which I'm not -- I don't want to retreat that as a recurrence for all of our tornas. And then we add to this cost and opportunity cost for the company, which justifies, and we do. However, having done, first of all, educated the market. There's the second exercise, which I'm also involved directly, which is to have anyone who purchased or does this financial structure to understand this so they generate this recurring -- this constant recurrence. I do not have this yet. We do not yet have in a conservative way. We haven't foreseen any anticipation of for this year. my desire that is in the medium to long term we do things that way. We're going to do this. It's going to depend greatly on what I just mentioned to you, how the -- and if there will be any type of discount to do this, if anybody wants to stay with the correction, this is something which is maturing, and I have no premise close to be able to pass to you. The fact is that it's an asset which has performed, it's passed through the financial statement in the short term and very high. The second point which you pointed out to me about the performance in the different cities, I can also give you the vision up until today. A company like ours to go forward and make the right decisions going forward, even more in an election year, and we don't even have a certainty what are the possibilities of the economic policy which will be running the country. Up until 31st of July, we performed very well. Products have had excellent acceptance. The VSO of the company has been maintained. Cancellation is at the same levels that they have been historically based on the performance -- recent performance of changing our perspective. And it's very linear city by city. And I'm saying this in the medium to higher level properties, the luxury properties. Salvador this year has a performance which is above Recife and Fortaleza. But it's not that Recife and Fortaleza fell, it's because Salvador grew. We made the following launches timing in. We had the Beach at the beginning of the year. We had the M also at the beginning of the year. So over the last 2 months, they have been able to have a sales performance, which is above 80% in a very short period of time. And the Salvador 220 which we know as the Pista, which the market has been working with for a long time. We had launched it due to a judicial question, which we have been given some visibility to and that favored that place better than Fortaleza, the [ clock ]. Every week, every month, they have the same consistent sales performance. Recife, were very strongly impacted -- positively impacted by the Novo Cais, which in the recent -- in the last 18 months has been responsible for excellent results here. and whenever we did our homework and closed good properties to be able to have this performance. So I would say that the dynamic of these 3 capitals, it's a market whose performance is very similar to what it was a year ago. We have no product which at the moment brings us any points of attention or concern. But again, we're monitoring the market, the political issues, the indicators which could lead us to any type of concerns. And as our IR, we have constant contact with you. Whenever this changes, the winds change, you'll be the first to be informed. Basically, we are going to hold -- we could hold up any launches if that happens. It's not on our radar now. We're working right now and we'll be in conversations with you, but the caution is always part of our dynamic here. And this comes from your concern as well. If you look at the -- and very interesting bit of data here, we did a follow-on in what, February? In the end of January, we did a follow-on and the price of the share was BRL 25. At the time of the allocation, my cell phone never stopped ringing of everybody want an allocation. Now it must be around high BRL 23, 24, I'm not watching the screen right now. Where is it? Everybody wanted to allocation at BRL 25 this dynamic, this negative dynamic, which has come a little bit from Faria Lima due to the coverage that you had to give forward. But we've been very optimistic to understand that our market has a dynamic.

Thank you, Villar. Next question comes from Matheus de Meloni from Santander.

On my side, I have 2 questions. First, you've set up a portfolio very iconic in Salvador and more recently, the acquisition of the site of the [indiscernible]. I want to understand how do you see the strategy, the post office building? How do you see the strategy going forward because it's better than other cities, other markets or more specific about Salvador? Or can you give us any more detail what you're thinking about the projects on this property of the old post office building? And the second question, which I think is connected to that, to understand a little bit the question, the trade-off between doing a retrofit of a property like that or starting a new project starting from 0, looking at the complexity of the construction and the times of execution and delivery. And at the end of the day, what is the viability if it's positive to do this type of retrofit? Or is it a question that's specific of a certain property that you have purchased? In this case, the question of the post office. So those are my questions.

Thank you, Mattheus. Thank you. Okay. Let's go. Salvador, you said very well. We had the shortly, we had the Beach Class Salvador and then the Pista, which became the Oceano. And Recife, also, we have had the Lucena. We have the Infinity. Fortaleza, we also had buildings, similar buildings. I don't have 1 product that's better than the other. They're very similar in each 1 of the capitals in which we operate, especially in the 3 largest capitals. Talking about this dynamic of Salvador. In Recife, we have a new port, and we have a property that's very well located in to be able to do these launches shortly. I spoke a little bit about the launch of The VERT, closing that window. It's very well located, better located than now in 2 pieces of property on the beach in Lucena, almost BRL 12 billion in land bank. I think over time, we have shown that our development team, our real estate development team is more than competent to prepare not only to prospect, but to develop products, which have a good performance for commercialization and margin, but also reinforce the brand of the company as that does projects. unique projects in the Northeast. This is not my concern right now, having seen the performance of the company and what we're working on in the next 3 years in the company. So I don't have this. In relation to the case of Salvador specifically, the building that we purchased from the post office, we treat it as a 35,000 square foot square meter property, almost BRL 2 billion of PSV. It's not a decision for retrofit. That building will be imploded on a Sunday with all the safety that is required. We're studying and get extensive list of approvals all the way to the Army to get approval. And that property, we have a development of 4 or 5 new developments. What decides if we do a retrofit or in a case like this or an implosion or demolition as in the case of the Mansão Seara in Fortaleza, where we bought a hotel in operations and had not been abandoned, and we're demolishing it 1 step at a time, a mechanized solution and the construction potential of each city. In the case of Infinity and Recife and Lucena of the [indiscernible] case of the Pista, we had limitations, urban or environmental limitations, which the demolition would not help us to build the same potential with the maintenance of the current asset. So then we make the decision to retrofit it or some type of -- as in the case of [indiscernible] do a refund. Always prior to the acquisition, a study is done, this guides us it will be a retrofit, it will be a mechanized demolition, it will be inclusion what is the potential to exploit that property in terms of private area and also in terms of environmental approvals, historic approvals and at the same time, the quality of the product for our clients. It could actually happen that there would be a reduction in the construction potential with the demolition, but the product would add so much to the price that it still doesn't make sense. So it's an exact science. have always been the same way to make decisions. It's exact science in the variables, which take us to the end of the equation with the best decision for our clients and for our stockholders.

The next question is from Mariangela Castro from Itaú.

On my side, the 2 slides, I want to explain a little bit the margins of incorporation. And how do you see the difference in the gross margin of the projects of Ún1ca and Mood? What's your perspective regarding that? And the second question is we noticed an increase in the closed sales in the condominium in this quarter. I want to understand if this is opportunistic or if this size of type of sale is becoming more advantageous for the consumers in the region.

Thank you, Maria Angela. I'm going to answer your first -- the second part, and by the way, can answer the first part. As far as the increase of closed sales, it's natural. We've had a mix -- a higher mix of condominiums in our portfolio. And at a certain point in time, there's an evolution of the project, it's easier for some clients to adhere to the closed sale, even paying a higher total with the accumulated numbers rather than in the pure condominium product. It's important to mention here that we placed in our viability studies that a condominium project should be sold in condominium in 70% or 80% and in closed sales, 20% to 30%, depending on each case. And on average, even considering what you just told me, we're below half of that. So that means that minimizes the exposition of cash of the company nominally. The possibility of profitability is smaller, but this favors really the VPL of that project, and that's why we're putting less than half of the capital that was foreseen in the viability study. So it's not a concern. It's a natural tendency that it would run in the orbit of closer to what we put in the viability because of the phases that are simultaneously happening as the things start to get close to being ready as the margin of Mood. And I'm going to let [ Mark ] answer that while I take.