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

Ladies and gentlemen, thank you for standing by. Welcome everyone to RNI's Negócios Imobiliários presentation to discuss results relative to Q4 2022. Here with us today are Mr. Carlos Bianconi, CEO and IRO; and Henrique Ravazzi, IR Manager. [Operator Instructions] Before moving on, we'd like to say that forward-looking statements made during this call concerning the company's business outlook, financial and operating targets and projections are based on beliefs and assumptions on the part of the company's management and also on information currently available for the company. Forward-looking statements are no guarantee of performance. They involve risks, uncertainties and assumptions as they refer to future events and, therefore, depend on circumstances that may or may not materialize. Investors should have in mind that general economic conditions, industry conditions and other operating factors might affect the company's future results and thus lead to numbers that will differ materially from those expressed in these forward-looking statements. I'd like to turn the conference over to Mr. Bianconi. Please, Mr. Bianconi, you may carry on.

Thank you. Good morning, everyone. Good morning, and welcome to our earnings call to discuss numbers for Q4 2022. We're going to be going through the main highlights that guided the company's performance. I'm also going to a bit more in detail about our operations and more information so that we can have a very straightforward review of our numbers of our businesses across the different regions where we operate. So if we could go straight to the highlights. Here on the slide, we have all the main points that have, as I said, guided the company's performance, and I'd like to start by highlighting record launches. We saw a record performance in terms of launches, one of the highest numbers in the past years. We have reached in 2022 BRL 776 million, up 2% when compared to 2021. And those projects as usual, as we have been doing according or as per the company's strategy, 100% were launched in regions dedicated to agriculture, Agribusiness. So this is to ratify the company's strategic planning, which is to continue presence in areas where Agribusiness is driving in Brazil. Also record net sales, also the record to the tune of BRL 740 million, 100% of our launches, as I said, in 2022, 15% higher than the numbers posted in 2021. Net sales in Q4 led to BRL 161 million, in line with Q4 in 2021. The average price increase, once again, ratifying our strategy in terms of pricing vis-a-vis costs, PCVA products Minha Casa, Minha Vida once again, back on the table, that saw an increase of 11% in 2022 when compared to 2021. When we look specifically in terms of average ticket, we moved from BRL 175,000 to BRL 194,000 on average. Have also hit a record in terms of units finance, BRL 525 million in 2022. So once again, an increase of 124% when compared to 2021. And also in Q4, we came to BRL 145 million in terms of units finance, once again, a significant growth of 36% when compared to Q4 2021. Real estate financing played an important role here for these numbers. Our partner banks, Caixa Economica and private banks as well are supporting and that has allowed us to have a very strong dynamics in terms of sales and transfers in a very economic and efficient way. Here, we also saw a record in net revenue to the tune of BRL 667 million in '22, 41% up from what we had in 2021. Net revenue for Q4 came at BRL 177 million, up 4% when compared to Q4 2021. As for our adjusted gross profit, yet another record was broken, BRL 194 million in '22, an increase of 45% when compared to 2021. Specifically in Q4, we totaled BRL 53 million, an increase of 15% when compared to Q4 '21 and 5% compared to Q3. The gross margin increased by 30% when compared to the previous year. So we managed to not only offset, but go beyond in terms of growth of gross margins, 3.1 percentage points above what we had in Q4 2021. In terms of -- this was, of course, made possible by a disciplined cost pricing approach. So we are monitoring closely those indicators. So pricing and cost need to be well monitored. Cost needs to be below INCC and price above by INCC, and we do that exercise. We're able to do that because we operate in regions where Agribusiness, as I said, is driving where income is resilient. So this is an exercise you have to do on a constant basis and has prudently very positive for the company. Moving on to EBIT, another record here for BRL 49 million in 2022, 150% higher than that posted in 2021. In Q4, EBIT was BRL 21 million, an increase of 62% on Q3 2022 and 109% above what we had in Q4 2021. All that led to a record net income growth of -- sorry, rephrasing, the net income came at BRL 32 million in 2022, an increase of 113% when compared to 2021. In Q4, specifically, net income was BRL 10 million, 207% above that of Q4 2021. Total consolidated net income, which is more than the combined numbers for 2019, 2020, 2021, we closed at BRL 500 million, here once again looking at the company's future results, the future of what we're building now and selling now, 16% above higher our backlog revenue. So we've been growing also in our backlog revenue ratifying our cost vis-a-vis price exercise, 3.2 percentage points higher than Q4 2021. So here, we have all the pillars of the company duly consolidated, which are based our financial and operational growth and which have guided the performance, as I mentioned earlier, in 2022 and this, of course, sets the stage for a very positive 2023. We're just starting the year, but we can see that already happening. I'd like now to call Ravazzi to go into more detail around our numbers. Thank you all. Ravazzi, over to you.

Thank you, Bianconi. Good morning, everyone. We will see a bit more detail of the numbers moving forward, broken down by all the segments where we operate. Those highlights you see now. They illustrate what Bianconi has just mentioned. We see a chart on the slide that shows the company's main indicators during 2022. Going through our -- the company's current strategy, a detail of how those products performed in 2022 -- in the last quarter of 2022. Starting by our launches on Slide #8, the company closed the year 2022 launching BRL 776 million PSV for those products. That represents a growth of 14% when compared to launched product in 2021 year-on-year. In the last quarter in 2022, the company launched BRL 301 million, 3 properties. I'll show that later, and that represented a growth of 7% year-on-year or quarter-on-quarter Q4 2021. Year-to-date, PSV percentage RNI, we have a year-to-date number, BRL 729 million, a growth of 19% when compared to the year-to-date numbers of Q4 2021. It's also worth mentioning that the company closed the year 2022 with over BRL 0.5 billion in projects already approved and ready to be launched throughout 2023. So those were the 3 main launches we made in the last quarter of 2022. We launched in Rondonópolis, the Moradas Jardins Vicente Bissoni here on the left. The total PSV here is BRL 95 million, and we'll be offering 413 houses -- homes. In Pelotas, the company also launched RNI Origem Pelotas with a PSV of BRL 104 million and 354 units to be offered or homes. And lastly, Moradas da Serra, in the state of Ceará, within the Casa Verde e Amarela program, a horizontal project, with a total PSV BRL 102 million and 594 units. The 3 launches are horizontal projects, 2 of which are Origem and 1 geared towards the program on Casa Verde e Amarela, which will become now Minha Casa, Minha Vida once again. Our strategic land bank has maintained a positive performance throughout 2022, even with the company launching an expressive number of units above '21, we grew in terms of land bank, in spite of that closing in the last quarter of 2022 with approximately BRL 6.6 billion, a growth of 5% when compared to Q4 2021. Important to highlight also, our geographical footprint is focused on Agribusinesses areas in Brazil. So all our land bank is acquired through financial swap, as we call it, and that, of course, strengthens our strategy across those regions where we operate. Our net sales for strategic products closed the year '21 totaling BRL 701 million. The amount implies 18% of increase when compared to 2021. In Q4 2022, we had BRL 150 million in net sales, in line with what we had in Q4 2021. We had a drop in terms of DSO here that has to do with the 3 launches that we made in the last quarter. And if we exclude those launches, our net sales, we closed the year at an increase of 22%. Our market value inventory closes the year with BRL 856 million in PSV, 98% of that inventory at market value is under construction, which accounts for 3,578 units. And lastly, our financial indicators for our strategic products, they saw a very favorable performance. We closed Q4 2022 reporting a growth in net revenue of 20% when compared to Q4 2021. Our adjusted gross margin for those products also saw an increase at relevant levels. Net income or gross profit reached BRL 54 million, a growth of 34% when compared to Q4 2021, adjusted gross profit. And our net income, net margins also closes the year at around 30%, GP. As for the EBIT, saw a growth of 62% when compared to Q4 2021. And our net income and net margin for strategic products also saw a growth of 61% and net income came at 26% -- BRL 26 million and 14.6%, 3.5x as high as we had in Q4 2021, significant increases. So those were the operating and financial indicators for our strategic products. I'm going to move on now to our legacy products. So here -- the trend here for these indicators, as you can see, is that they will drop somewhat because those are products which are no longer in our portfolio. So we haven't launched those products in some time. So it's only natural that the remaining indicators see a drop. So the company has not launched for those products, SBPE and Urbanismo, since 2021. And our net sales saw a growth of 7% when compared to Q4 2021, BRL 11 million and a DSO of 8%. Market value inventory also saw a drop when compared to Q3 2022, 6%, as you can see on the left-hand side of the slide. And when we compare year-on-year, 2021, 2022, a decrease of 13%. Of the total of our land bank in market value, 50% is concluded and 50% is under construction. Out of the concluded portion, 92% has do with our Recanto das Emas product. In the state of Goiás, the capital city of Goiânia MS for the land bank, on the right-hand side, also saw a drop when compared to Q4 '21, 37%. Financial indicators, as seen just now, they saw a drop when compared to Q4 2021. Net revenue, adjusted gross profit, selling expenses also saw a drop, a relevant decrease. In every quarter last year, we announced that drop in terms of selling expenses and it wasn't any different in the last quarter of 2022. The net income of legacy products closed the year flat in Q4 when compared to Q4 2021. Our consolidated numbers, debt and receivables, the company closes Q4 2022 with a balance of BRL 75 million, above that what we had in Q4 '21. In terms of net cash, as for debt, BRL 650 million, 72% of which is focused on production debt. That's the core of the business. So it's only natural debt. Most of the debt is concentrated on that. To finance production, it sees variations throughout the year. Up and down is only natural. Our corporate debt remained in line as saw a slight growth. And lastly, we also have a drop in terms of our net debt, excluding production, 1.2% when compared to Q4 2022. As for our consolidated results, our indicators, I have mentioned them before. Just a highlight to the growth in our net revenue, closing the year 2022 at 41% increase when compared to 2021. Our adjusted gross profit and our gross margin also saw a growth when compared to 2021. And we also saw in this quarter a preservation of our margins. We have increased a couple of launches when we compare to previous quarters. Our EBIT closes the year 2022 at BRL 49 million, that accounts a growth of 150% when compared to EBIT in 2021. And as mentioned by Bianconi, our net financial income for 2022 already exceeds the combination of the net results for the 3 past years of the company, 2019, 2020 and 2021, coming at BRL 32 million of net income in the final of Q4 2022. And that accounts for a growth of about 113% when we compare the net income for 2021. And lastly, those were the 3 projects that the company delivered in the last quarter, 2 of them vertical and 1 horizontal, both totaling BRL 187 million PSV, accounting for 1,045 units delivered. So that's what we had in terms of presentation and numbers and results for Q4 2022 and consolidated for the whole year 2022. I now would like to turn the floor over to Q&A. Thank you. Anything else to say, Bianconi, I apologize? No. It's all good. Let's go to the quick Q&A. Thank you.

We'll now start the Q&A session. [Operator Instructions] Magically, there are no questions via the telephone.

Okay. Thank you, Nato. Bianconi, we have no questions on the chat box. So Bianconi, if you have your final remarks or complement, what I said, please, over to you.

All right. Well, thank you, everyone, for participating in our call. It's very important for us to announce our numbers to the market. Once again, the company stresses the consistency that our operating model expresses, a model which has been defined for some time and we are now working on executing it well with no changes whatsoever. In terms of markets, regions and geographies, audiences, public -- target public, no changes around those pillars and the idea is to preserve our profitability levels. If you look at the company's numbers, we launched -- the same thing we launched in 2021, or slightly more, but we have increased profitability. That's an exercise we constantly to do more with less. In other words, increasing the profits of our amount of production, and we have room for cost to produce even more. We've closed 2022, the year more than BRL 500 million in approved projects and ready to be launched. In 2023, we will carry on and unfold that looking for timely launches and timely opportunities so that we can have the chance to launch each one of those projects and others, which are in our pipeline with a guarantee of the best possible profitability levels. We are a company which is focused on the countryside of Brazil. We have grown in the countryside of Brazil, and we will continue to explore those regions in Brazil. Thank you once again. And we remain available, of course, for comments or questions you may have offline. All our channels are ready to serve you, Henrique Ravazzi, myself, our IR channel as usual. Thank you very much. Have a nice day, everyone. RNI's conference call is now over. We'd like to thank you all for participating, and have a nice day, everyone.