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

Ladies and gentlemen, thank you for waiting. We bid you welcome to RNI videoconference to discuss the results for the first quarter of 2024. We have here Mr. Gustavo Felix, CEO; Fabiano Valese, CFO and IRO; Henrique Ravazzi, IR Manager. [Operator Instructions]. Before proceeding, I would like to clarify that some forward-looking statements are subject to risks and uncertainties and future results may differ materially from the projected results. There are also base information currently available for the company. Future considerations are not guarantee of performance. They include risks, uncertainties and premises. Since they refer to future events, therefore, they depend on circumstances that may or may not occur. Investors must understand that economical conditions, industrial conditions and other operational factors can affect the future results of the company and may lead to results that differ materially from those you are expressed. Now I'd like to give the floor to Mr. Gustavo Felix. Please, you may proceed.

Good morning. Thank you all for being here. We are here to present our earnings statement for first Q '24. First, I'm going to be talking about highlights. And then Valese will talk about the other data that are operational, financial performance and also DRE. First, highlights. We did one more operation, one more monetizing of non-core assets. So we have an asset which is an allotment in Sao Jose do Rio Preto, which is project Jardim dos Buritis. This transaction was of BRL 66 million. One more important operation for RNI to follow our strategy pathway on non-core assets monetization. Also, the average price of My Home My Life, we reached BRL 222,000 in the first Q. It's important to remember that RNA -- RNI works with middle class market. So we're not in the biggest cities. One or the other like Goiania. And I think it's a considerable price. We consider quite interesting. And we have seen an increase of 80% against first Q '23. In the graph, you can see that this has been constant. Constant growth of the price indicator of this segment My Home My Life. Another information that's quite interesting, which is the price gain as compared to construction cost. Currently, when we assess launches since 2020, we see a relation of price gain that is much higher than the cost correction. We're talking about BRL 181 million in GV in cost BRL 125 million. And this BRL 125 million is below INCC, around 75% of INCC. So talking operationally, we're quite enthusiastic when we evaluate this indicator. And on the right, you can see the progression throughout the years. So this progress, we reached this first Q, this difference of BRL 181 million of price gain against BRL 125 million cost. Gross sales, we totaled BRL 213 million, 8% increase against 4Q '23. Gross Inventory Turnover VSO reached 28%. It's the best historically speaking, of the last year. So we'll go into further retail later. A 5 p.p's growth and 7 p.p's growth against first Q '23, reinforcing that sales is something that we are quite comfortable with our indicators regarding the commercial area, and net income reached BRL 149 million, 13% growth compared to first Q '23 and backlog revenue, BRL 549 million. I cannot see the detail here, but it has been flat. Compared to 4Q '23, 29%. These are the highlights. I'm going to give it to Valese, who is going to give you more -- who's going to go deeper in the operational results.

Good morning, everybody. So going into the details of what was mentioned. Talking about this operation that was mentioned that we did on non-strategic assets, once again, reinforcing we are removing assets that are no longer part of our focus in generating cash with them. This asset, as was mentioned, is called Jardim dos Buritis, 510 units. The value negotiated was through a report by a market company that's called CBRE Brasil. So we have that report and we defined in this operation was done [ in over ] BRL 66 million and repaid it on April 29 -- it's in April already. When we look here, we can see in this graph the evolution of cash balance and debt. When we look at cash, we see an increase in cash for the last half. And this last one, very much aligned with the last one, last quarter. In December, we did that operation that contributed for the progress of our cash. And also, we reduced debt. When you look at the debt, we had a growing debt until third Q '23. And in 4Q '23, we reduced this debt. And now in first Q '24, we reduced again, reinforcing that Buritis operations is not part of this evaluation. It's going to be in the next quarter. Now looking at our Landbank. Our Landbank regarding the last quarter is excellent. In the last quarter, we see that there was a drop. We have mentioned that. We have revitalizing -- have been revitalized in this Landbank in first Q '24, it was flat. We did not have any launches. The last launch was in first Q '23. When we compare our Landbank in the first Q '23 against '24, we had a 20% drop because of what I commented, we are focusing in revitalization. Gross sales concerning the previous quarter, we increased 80% -- 8% and also an increase in SoS. It's the best SoS we had in this period. When we look at the gross sales, comparing the first Q '23 to first Q '24, it's lower because we're not launching in this period. We have been with no new launches for 1 year. Hence, the gross sales have gone down. In cancellations also a drop when we compare to 4Q '23, 50% drop. In the previous one, we made an adjustment in our cancellation policies. So we had a movement higher than what we expected. And now we brought this value to the average of what was happening. It's the lowest value historically speaking. So we had an improvement regarding cancellations. When we compare first Q '23 to '24, we had 10% decrease. Net sales regarding the previous quarter improved a lot, much focused in cancellations. We had a volume of cancellations in the last quarter. So we have this difference. When we look at the historical series, it was the best figures we had regarding net sales. Regarding REF, we has mentioned, we have a REF that is resilient, considering all the changes we did in policies in the last quarter, it reached 29.2% in the last quarter and now -- a slight increase to 29.4%. Now talking about our results, our DRE. We have here My Home My Life and the consolidated. And My Home My Life and the other one, the result was minus 8.9%. And what's important here, it's very much related to POC of construction progresses. In this period, we had seasonality regarding the rains and also because of the contractors that stop at the end of the year. So these 2 factors, the jobs do not progress as we would like. And then our net profit was negative. When we look at Y-o-Y. Besides the POC that was mentioned for My Home My Life, we had 2 movements that influence our results. When you look at finances, we had a discount on receivables. We sold [ Ligado ] at the end of last year, parts at site and part installments. So we discounted this receivables, and we had the depreciation of BRL 20 million in this discount. Besides that, we also had Cancellations from this segment, but mostly in the subdivision Jardim dos Buritis that were around BRL 17 million of results -- negative results of cancellations. So the discounts that were too and more important, as I have explained, BRL 20 million in anticipation of receivables and cancellations [indiscernible] , they impacted in the financial results with the negative result along with POC that I have mentioned. So to summarize, this is the result that we have in our [ diary ] and the projection we have for the coming quarters is that the construction progress runs normally. Okay. I think now we can go to the questions. So we're going to open Q&A.

[Operator Instructions] Since there are no further questions, we give the floor back to the speakers for their final words.

To close about the results to wrap up. We have had, let's say, problems -- losses because of financial expenses. And that justifies the strategy of assets monetization more than BRL 230 million on asset monetization. We have something equivalent to monetize, thinking about reducing this leverage in cash generation. This is our strategy and we intend to maintain that. We are putting much focus on that. In parallel, governance reviews have been well succeeded in the sense of organizing processes, actions and look for the preservation of results, thinking about the new strategy. And we are quite optimistic regarding cost and price. So the operational aspect of the company really cheers us up, thinking about resuming launching for the quarters to come, especially in my house -- My Home My Life. I thank you all for being here. I thank everybody for participating, and may you have a good day.

This conference is now adjourned. We thank you for your participation, and have a nice day. [Statements in English on this transcript were spoken by an interpreter present on the live call.]