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

Thank you for holding. Welcome to RNI Negócios Imobiliários S.A. earnings conference call in '22. Today, we have here with us Mr. Carlos Bianconi, CEO and IR Director; and Enrique Rabo... [ Operator Instructions ]. Before proceeding, let me make... prospects, projections and operating and financial targets are based on beliefs and premises of the company's management... Future considerations are no guarantee of performance. They involve risks, uncertainties and premises, and they refer to future... [ Investors ] should understand that general economic conditions, industry conditions and other operating factors may affect the future results... of the forward-looking statements. Now I would like to turn the conference over to Mr. Carlos Bianconi. Mr. Bianconi, you may...

Thank you very much. Good morning. Good morning, everyone. Good morning. Thank you for participating in our call, 2022. So please, ], can you... as usual, we will first go over the quarter highlights, the main pillars that guided the company's performance in quarter 3. So I would like to start with our record-breaking net sales. We reached a level that is higher than BRL 179 million in the first 9 months of '22. And we are reporting a 20%... compared with quarter 3 last year. So year-over-year, net sales were up BRL 198 million. Our sales speed, we were able to maintain our sales speed at the level of 20% year-over-year. One observation point is that this sales speed is perfectly reasonable for this moment of the market, considering inflation and the price increase. So this 20% leaves us room to better capture the price increase and to accommodate the NCC and cost increase that is now slowing down, and we should start seeing some decreases looking, forward. Record number of units financed, so here, we also reached a level that is the highest of the last 8 years, reaching BRL 379 million in the first 9 months of '22, and we reported a 197% increase compared with the first 9 months of '21. In quarter 3, we also had 218% increase in our mortgage financing of units year-over-year. Now moving on to our record net revenue. We also had record-breaking net revenue. This is the highest level of the last 8 years for a total of BRL 491 million in the first 9 months of '22, a 62% increase compared with the first 9 months of '21. And specifically in quarter 3, '22, our net revenue was BRL 170 million, a 42% increase year-over-year. Now the next point is our record-breaking adjusted gross income, also the highest level of the last 8 years for a total of BRL 140 million in the first 9 months of '22, up 61% compared with the first 9 months of '21. In quarter 3, the gross fee income was BRL 51 million, a 3% increase quarter-over-quarter and a 64% increase year-over-year. And here, an important point is that the adjusted gross margin for the quarter reached 30%. So we went back to the level of 30% in quarter 3, '22, a 4 percentage point increase year-over-year. This is one of the outputs, one of the effects that we are seeing in the company, a very positive effect, which is the monthly exercise of cost and prices. So that's why this very high sales speed would help us capture this opportunity. And this is something that we have been doing very effectively in the markets that we are exploring in Brazil. Now moving on to our EBIT. Our EBIT level was also the highest of the last 8 years, a total of BRL 28 million in the first 9 months of '22. Here, also a strong increase of 192% compared with the first 9 months of '21. And specifically for quarter 3 '22, the total EBIT was BRL 13 million -- 365% increase year-over-year. So we have been able to take the company from a certain level, we're reaching higher levels now. So this is the line of action that we adopted, strong, consistent growth, and we will be raising then bar, we will be raising the level of the company. Our net income, we also had record net income, the best result of the last 8 years, BRL 21 million in the first 9 months of '22. And here, we had an increase of 85% compared with the first 9 months of '21. In quarter 3, the net -- total net income was almost BRL 10 million, up 47% quarter-over-quarter and 253% year-over-year. And here, we also have a disruption point if I can call it, the disruption point, the net income, and we are now staying at much higher levels. Our ,our backlog revenue reached... in the backlog margin was 31%, 1.6 percentage points.. and attest to our consolidated exercise of being constantly capturing price growth. It's not about tables. We have more than -- our margin is now -- our backlog margin now is over 31%. So these were the... products that are at the ceiling of the Casa Verde e Amarela program and also economic programs right after the ceiling of the Casa Verde e Amarela program because this product has a detachment characteristic. This ends up improving the profitability and helping us recover the losses due to... always focusing on these regions. This has been very resilient. The market has been resilient and will continue to be in the coming years.

Now I turn it over to... so let's continue our presentation. I'm going to give you more details about the our EBIT and our net income. Now when we look at the operational... and it's BRL 474 million, and we project an 18% increase compared with the same period last year. Regarding the accumulated [ VGV ] of the past last month -- the past 12 quarters, 3... BRL 446 million of PSV in approved projects. These BRL 446 million... are proud to launch these products in the market. This was the launch that we had in quarter 3. It is the horizontal [ SPP ] project... to, the total PSV is EUR 104 million, and we will offer 304 units. Now looking at our... year, the 9 first months of '21. And compared with last quarter, the increase was on...and let's not forget that our land bank is 100% purchased through financial exchanges. Now for the current strategy products. The company reached BRL 551 million in net sales accumulated for 2022, a 24% increase compared with the same period last year. And specifically, in quarter 3, the company sold... BRL 190 million, a 44% increase year-over-year. Our speed of sales continues to grow. We closed quarter 3 at 23%. And projecting... well, in the quarter -- in the year-over-year comparison, we saw a 4% inventory... market value closed the quarter at BRL 655 million. And of these BRL 655 million, 99% are under construction, 646 under construction. And this represents 2,873 units under construction. Quarter-over-quarter, there was a decrease in the company's inventory at market value. We strengthened our sales, so we were able to [ decrease ] our inventory by 9%, the inventory that we reported in quarter 2 this year. Now going to our financial indicators. Our net revenue was up 64% in quarter 3 '22. This is year-over-year. Our adjusted gross profit and adjusted gross margin have also reached a very interesting level with an 84% increase year-over-year. And our adjusted net margin is at 31%, with expressive growth compared to quarter 3 last year. Our EBIT also shows strong growth, 62% year-over-year. And finally, our net income with our current strategy and our net margin, reaching BRL 20 million in quarter 3, a 100... and also the net margin levels that the company is seeking is between 11% and 12%, and we are right now in quarter 3 at 11.8. Now let's talk about our legacy indicators. These are products that are losing relevance within our portfolio. The company is no longer performing any launches focused on this segment. So in terms of launches, we didn't have any launches in quarter 3. Our net sales are also maintaining a similar level, a similar pace to what we saw in quarter 2 2022. We closed quarter 3 at BRL 8 million in net sales, and the sales of speed is also maintained at 6%. Our inventory and market value for legacy products finished the quarter at BRL 141 million quarter-over-quarter, a 1% decrease. And of these BRL 141 million, 47% is already completed. And of the 47% completed, 82% refers to the project ] with a partner, and 62% is under construction. The land bank is decreasing -- still decreasing compared with last year. The company is striving to monetize this land bank. We do not wish to continue with these products, so we want to monetize the land bank that we have left. So we had a decrease of 30% in our land bank year-over-year and the accumulated for the 9 first months, 47% compared with the land bank that we had in 2020. The financial indicators, they also start losing relevance. The company is no longer performing any launches focusing on this segment... decreased by 109%. There was a decrease in the volume that we had in quarter 3 last year. Our adjusted gross profit also showed a decrease year-over-year. Selling expenses, we have yet another quarter where we report a decrease year-over-year. And specifically in quarter 3, we are reporting a 64% decrease year-over-year. And the net income is also practically dropping at the same volume that we had in quarter 3 '21. Now let's move on to our consolidated results. Debt and receivable, the company closes quarter 3 with BRL 63 million in net cash and a BRL 605 million debt, you see that there was... of our total debt is for construction financing. And one interesting point here is the performance in the cycle of these transfers, and we were able to record in the accumulated for 2022, 379, a 21% increase quarter-over-quarter and 218% year-over-year. Here are our client months of '21, totaled BRL 21 million. This amount is already... of the entire year of 2021. And when we compare year after year, the increase is 85... 47% quarter-over-quarter and 253% year-over-year... 192% higher than what was reported in 2021... 3.4 percentage points higher quarter-over-quarter and 4 percentage points, the horizontal SBPE, the Origem VG, the second phase located in Várzea Grande in the state of Mato Grosso. We... this was our presentation of the quarter 3 results. And now I hand it back over to Bianconi to see if you have any additional comments or otherwise.

We will now open the floor for questions. [Operator Instructions]. Thank you. Since we have no questions, we will close... to everyone participating today. Since we have no questions, so I thank you all for attending our conference call... developments are located in those regions. We are all over the state of Sao Paulo, the inner cities of the state of Sao Paulo. We are in the... business perimeter in Brazil with cereals, swine. We reiterate that our company resumed its operations in 2017.. the Casa Verde e Amarela program and economic products, low-cost products, which are the products that come right after the Casa Verde e Amarela program. Our focus on these economic social classes, so these are the income classes where we operate. And we have been finding, consolidate the numbers with the good results that we have so far. We have a lot of launches in our pipeline. As you heard from Ravazzi and myself, we right now, we want to launch in a consistent and timely manner. And we have an SOS, which is high... we have horizontal products, houses, all of them in big communities. And I would like to highlight that cash economic... has been great for us. And for all the SBPE low-cost products, we also have other bank partners, and this has been -- we will always be available to share this information with you. Thank you very much. Thank you. Have a great day.