RNI Negócios Imobiliários S.A. (RDNI3) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for waiting. Welcome to the conference call regarding RNI real estate development for the discussion of the second quarter 2022 earnings results. We have with us the CEO and IRO, Mr. Carlos Bianconi and Mr. Henrique Ravazzi, IR Relations Manager. [Operator Instructions] Before we begin, we should mention that eventual forward-looking statements and information related to the expectations of the company and its management regarding its performance business and future events are forward-looking statements of RNI as well as information that is currently available to the company. Forward-looking statements are not assurance of performance and are subject to risks and uncertainties since they are related to future events that depend on circumstances that might or might not occur. Investors should bear in mind that the economic scenario, industry scenario and operating factors may affect the company's results and conduct to results that differ materially from these forward-looking statements. I would now like to turn the call over to Mr. Carlos Bianconi. Please, you may proceed, sir.

Thank you and good morning to all. Welcome to our earnings release. We're going to talk about RNI real estate development results in the second quarter of 2022 and the consolidation of the first half of 2022. I would now like to ask Ravazzi to move to the highlights. And here, we have the highlights of the company. The key points that guided the company's performance, I would like to highlight the first point, the net sales, we had record net sales higher than the past 8 years, totaling BRL 381 million in the first quarter, reporting 50% higher results over the first quarter of '21. The net sales in the second quarter '22 totaled BRL 210 million, and we also reported 23% growth, up 23% from first quarter 2022, a 23% growth over the past semester and also another 20% from second quarter '21. So this growth has actually been shifting our net sales levels at RNI. And we also have our sales speed, the SOS levels, reaching 20% in the second quarter of '22. And this 20% actually represent a 4.1 percentage point higher than the first quarter in 2022. 8 years, totaling BRL 381 million in the first quarter, reporting of 50% higher results over the first quarter of '21, the net sales in the second quarter '22 totaled BRL 210 million, and we also reported 23% growth, up 23% from first quarter 2022, a 23% growth over the past semester and also another 20% from second quarter '21. So this growth has actually been shifting our net sales levels at RNI. And we also have our sales speed, the SOS levels reaching 20% in the second quarter of '22. And this 20% actually represent a 4.1 percentage point higher than the first quarter in 2022. This is a substantial growth. And we should also report a 1.1 percent point growth higher than the second quarter in 2021. So our net sales have grown, and we have also had an increase in our speed, our sales speed. In the third point, we have reached a record number of units financed, consolidating this area over the past 8 years, totaling BRL 227 million in the first half 2022, increasing 185% in relation to the first half '21. And in the second quarter 2022, the volume of units financed totaled BRL 126 million, up 24% from the first quarter in '22 and 153% from the second quarter in '21, therefore, monetized the sales, and this has been a continuous trend that will be maintained. And the loans, the financing records, have also presented good results in line with our expectations in landbank. Landbank totaled BRL 7.2 billion. And we're now back to 7 -- to -- 7, roughly, growing 6% from 1Q '22 and 15% from 2Q '21. Also looking at, of course, landbank key feature, which is 100% actually financial exchange, seeking not to express the profitability of projects without creating emergency needs in the launch of new products. Therefore, having us reach the ideal moment in actually having our financial exchange without pressure to launch new projects. We also had a record in net revenue also higher than the last 8 years totaling BRL 320 million in the first half of 2022, 75% higher than the first half of 2021. The net revenue in quarter '22 totaled BRL 187 million, up 40% from 1Q '22, 40% growth over the first half, 100% higher from second quarter '21. And therefore, this indicates we have reached important growth levels and the net revenue also has grown our record EBIT higher than the past 8 years as well, totaling BRL 15 million in the first half '22, up 120% from the first half in 2021. The EBIT in 2Q '22 totaled BRL 8 million, up 32% from 1Q '22 and 29% from 2Q '21, consistent growth once again from the company's EBIT. And of course, looking at the bottom line, our net income record, we have also had an important growth higher than the past 8 years in terms of longevity totaling amounting to BRL 10 million in the first half 2022 -- BRL 10.3 million or specifically in this first half, up 24% from the first half '21. And in the second quarter 2022, the net income amounted to BRL 7 million, up 141% from 1Q '22, an important growth from the first quarter, 144% from 2Q '21. And in terms of backlog revenue, we've also reached BRL 506 million in second quarter '22, up 9% from 1Q '22 and 29% from second quarter '21. This backlog revenue, the sold units that are to be reported and REF 29.4%. There is a clear recovery resulting from the offers and the inflation in the industry, and therefore, 29.4%, once again, back up to the 31 percent point from 1Q '22 also reporting growth in our backlog revenue and 1.9 percentage points from 2Q '21. Therefore, our backlog revenue has once again driven growth and quality to our margins and clearly indicates, well, the sales values and the costs that were budgeted that were considered, reporting once again, the economy is now picking up and this backlog revenue shall go back to the 30% levels. These were the highlights regarding the performance of the company in the second quarter and the first half of 2022 that will actually guide us going forward. And I'll turn it over to Ravazzi now for further presentation. Over to you, Ravazzi.

Thank you, Bianconi. Good morning to all the participants once again. And I would now like to proceed with the presentation on the next slide. We will see some more highlights that indicate an evolution, an expressive evolution, in this first half on higher levels -- reaching higher levels than the past 8 years as recorded by the company. And now looking at the breakdown, in terms of our operating and financial results, looking first at the current strategy of the company, the products in the Casa Verde e Amarela and SBPE horizontal products, we have had launches in the first semester totaling BRL 371 million, and these launches are in line with our plan. The company plans starting in the second half of 2022 to increase the number of launches, and naturally, there will be more launches in the second half of 2022. The second quarter of 2022 amounted to BRL 164 million of PSV (sic) [ VGV ] launched. It is important to note in launches, the average price of units that also increased compared to the first half of 2021. We had a 7% increase in average price of launch units. And looking at the VGV RNI launch, the company also had a relevant increase compared to second quarter '21 year-to-date of 12% and totaling BRL 691 million in PSV (sic) [ VGV ] %RNI launched in the last 12 months. And these were the projects that were launched in the second quarter Reserva Casa de Retenção project in the Casa Verde e Amarela program. And here, our PSV totaled BRL 371 million. 316 units will be offered. In the second project with the second phase of RNI region totaling 92.5% million and PSV with 274 units. This is the SBPE horizontal project -- development project. And now we're going to look at our strategic land bank that has reached new volumes this quarter and closing the second quarter '22 was BRL 6.8 billion. This amount responds to a 21% growth compared to the second quarter '21 and 9% higher versus 2021 landbank. Our sales and inventory for the PCVA and SBPE horizontal project, while this first half, we've amounted to BRL 361 million net sales, a 15% over the first half of 2021. In the second quarter alone, in 2022, the company has reached BRL 200 million net sales, that is 22% of our backlog revenue. The company has sold more and has grown. The growth is up to par with the sales growth. The year-over-year is 20% in net sales and the net [indiscernible] is 4% growth when compared to the first quarter 2022. Our market value, the stock had a decrease, a 2% decrease, in total units under construction, well, we have 100%, totaling BRL 720 million in PCVA 3,293 units in construction. And now looking at our financial indicators, our net revenue has totaled in second quarter '22, BRL 158 million, a 73% growth over 2Q '21. Our adjusted gross profit and adjusted gross margin also grew with BRL 45 million and 64% growth over 2Q '21, and the adjusted gross margin is maintained. Our sale -- selling expenses also grew, which is in line with the volumes the company has at the moment, which is expressively higher than back into 2021. So naturally, this indicator is on the rise and the net income with the new strategy is also in line in 2Q '22 with the results into 2Q '21, BRL 9 million. And now looking at the SBPE Vertical and urban planning indicators. The company did not actually have launches for this particular product over the past 3, 4 quarters, and net sales had similar levels to the first quarter 2022, BRL 10 million in net sales with 7% result and now growth -- 11% growth compared to the first quarter in 2021, closing the first half with BRL 20 million net sales. In the market value, we also had a decrease -- a decline compared to the previous half and for the legacy. The off-market products, we have BRL 142 million closing. From this amount 43% are actually included inventory and off-market inventory, 57% in construction -- from the construction, and 87% with the Recanto das Emas condominium. The landbank of the company for legacy products actually also had a decline in the second quarter. The company sold one of the areas, which is no longer part of the strategy of the company for launches, and there was a decline compared to second quarter '21 and the first quarter '22. And now looking at the financial indicators, SBPE Vertical and Urbanismo. Our net revenue is also increasing compared to 2Q '21. The adjusted gross profit is also now on the rise in 2Q '22, BRL 5 million, and the growth margin had a distortion compared to 2Q '21, but still increasing in terms of adjusted gross profit. And selling expenses now also had a new decline compared to 2Q '21. This indicator has -- well, the company has had a decline for some time, and 2Q '22 closed with BRL 2 million. Net income also had a relevant decline over 2Q '21 of 78% in 2Q '22. And looking at the consolidated results, we have in net cash and debt, second quarter, we have BRL 73 million in net cash and debt, BRL 601 million, from which 71% is production debt, the business core. And we consider the net debt, taking out the production debt. There's a new decline over the first quarter in '22 with 3.6 percentage points. This quarter, we would like to highlight the evolution of our on lending and off-plan properties transfer and off-plan properties. This company registered BRL 227 million in transfers and off-plan properties, the highest levels in the past 8 years. In the second quarter, the company, well, actually totaled 331 million units that were transferred, 24% above the first quarter '22, 153 higher from the second quarter in '21. This is an expressive indicator and expressive volume. And in consolidated net debt this quarter, we had BRL 7.3 million in result, 141% above the first quarter in 2022 and 141% above the second quarter in '21. And year-to-date, we're reporting BRL 10.3 million in net income with 24% higher over the first half '21. The EBIT was also a relevant growth, 32% over the first quarter in '22 and 29% over second quarter '21. The company registered actually growth in most indicators, as mentioned by Bianconi, and the highlights are net revenue is closing with BRL 320 million, 75% growth and the gross profit now in second quarter '22 was BRL 75.5 million, 50% above the first half '21. And -- well, this is what we wanted to share for our earnings release and second quarter 2022. Before moving on to the closing remarks, I would like to open for questions. And Bianconi will make the closing remarks in the end. Thank you.

[Operator Instructions] No questions over the phone so far. Feel free to read the questions that are coming in through the chat.

Bianconi, there's a question from Luis from [indiscernible]. He asks the following: could you give us more colors on the payments of pre-off balance?

Thank you, Luis, for your question. The pre-off balance is related to receivables of the legacy sales -- legacy area sales. This pre was actually created for monetizing the legacy assets in areas where we have plots of land. And this was set up with a minimum value of the operations, not the total or the global amount. The cash rip precisely the payment of the developer that acquired this area and will settle -- will therefore settle it. It does not comprise funds from our own cash in the company but rather the acquirer, the new developer. If there are further questions, feel free to continue.

Since there are no further questions. We will now give the floor to our speakers for the closing remarks.

Thank you. We would like to thank all of the participants for joining us today. As mentioned, our second quarter in 2022 ended with a positive outlook. We're working hard, focusing on our strategies in the macro regions where the company has designed its business plan and developed its product with Casa Verde e Amarela and SBPE units. There are also in our program units from customers that are seeking for higher performance, high-end customers -- higher-end customers, we will pursue our strategy. And as mentioned, our backlog revenue has grown quarter-over-quarter, and our sales and the costs have been maintained under control. We have been paying close attention to the projects that are in the pipeline that will be launched in the next quarter in upcoming years with a balanced profitability -- balanced revenues to have sound projects -- to maintain sound projects in the Brazilian economic scenario. We will focus on development of projects and our revenues and our sales. As Ravazzi mentioned, our company will continue pursuing 0 inventory costs, and therefore, seeking to have a sound, healthy operation. Thank you all once again for joining us, and see you next time.

The RNI Negócios Imobiliários earnings release is now adjourned. Thank you all for joining, and we wish you an excellent day.