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

Ladies and gentlemen, thank you for standing by. Welcome to the video conference of RNI Negócios Imobiliários S.A. to discuss Q2 2024 earnings results. With us today are Mr. Fabiano Valese, CFO and IRO; and Mr. Henrique Ravazzi, IR Manager. [Operator Instructions] Before we proceed, we'd like to clarify that any statements that may be made during this call regarding the company's business outlook, projection and operational and financial goals are based on the beliefs and assumptions of RNI's management team and on information currently available to the company. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions because they relate to future event and therefore, depend on circumstances that may or may not occur. Investors should be aware that general economic conditions, industry conditions and other operating factors may affect the company's future results and could cause results should differ materially from those expressed in such forward-looking statements. Now I'd like to hand it over to Mr. Fabiano Valese. Please, Mr. Valese, go ahead.

Good morning. First and foremost, I'd like to welcome all of you for joining us to discuss Q2 2024 results. We will discuss our company's financial performance for this quarter and then we will open for your questions. That's very important to all of us, so that we can clarify any questions you may have about our results. Unfortunately, our CEO, cannot join us today but he asked me to thank you all for joining us. So let's start. We will discuss the highlights, then we will go over our cash balance and gross debt, moving then to operating performance and then our net result for Q2 2024. So highlight, let's start with gross sales. It totaled BRL 200 million this quarter, remaining in line with the first quarter 2024. But as you can see, our inventory turnover ratio for this quarter was 32%, up 3.5 percentage points compared to the first quarter of 2024 and 8.2 percentage points year-over-year. When we go over the chart, you can see here and if we compare, you can see that it's aligned but you can see inventory turnover ratio is increasing. It's very interesting to note that we are also been successful in increasing the price of our products. So for my life -- my house my life (sic) My Home My Life, you can see average price was BRL 233,000 this quarter, 5% up compared to the first quarter of 2024 and 11% year-over-year. So we are still gaining in price. As for transfer, this quarter, it was BRL 102 million, a 25% growth compared to the first quarter of 2024, 21% year-over-year. For the first half transfers totaled BRL 184 million. That means that we are also being successful regarding transfer and we are also going to strengthen that. As for our debt, you can see we were able to decrease our gross debt and net debt, achieving the lowest levels recorded in the last 12 months. And also, I'd like to highlight that this quarter, the second quarter of 2024, BRL 70 million (sic) [ BRL 75 million ] of our corporate debt was repaid. Moving forward, when we go over our debt -- gross debt. You can see here, the very beginning, how this debt increased starting the third quarter of '22, reaching the highest at third quarter of 2023, then we were able to deleverage and decrease our debt. So we are closing the second quarter with this number and the idea is to keep on deleveraging and also increasing our cash and also renegotiating our debt. So we are working in doing that in order to decrease the cost of our debt. As for our cash compared to the third quarter of 2023, it's aligned. You can see there was an increase in the fourth quarter. And here, you see a decrease in that because we repaid our debt, as I mentioned. As for operating results, I'd like to turn it over to Mr. Ravazzi.

Perfect. Valese, thank you very much. I'd like to also start by thanking you all for joining us this morning. So let me talk to you about our operating result, starting with our land bank. So we are closing with -- you can see, we are closing with the same volume of the first quarter, BRL 5.2 billion as land bank. So we review that in the fourth quarter of 2023 and since then, it's being aligned to our strategy. Every single launch project is considered within this strategic land bank. And it's part of the areas where we operate on. So as for our inventory at market value, you can see we closed the second quarter with BRL 517 million. And this number decreased but it meets our sales growth, the increase in our inventory turnover ratio.

Ravazzi, I'd like just to mention one point as we are talking about land bank. So let me talk to you a little bit about launches. Right now, we are working on the parts of land in order to launch new project. We have more than BRL 1 billion in future projects. And our goal is that in the second half of this year, we can resume and present new launches.

Perfect, Valese. Okay. So let's continue gross sales. Just as mentioned by Valese, so it's also aligned to the first quarter. Our -- then inventory ratio is above the last 12 months, achieving 32%. So you can see the company is aligned to what we achieved in the first quarter of 2024 and slightly above the last quarter of 2023. And as for cancellations, we had a peak in the fourth quarter of 2023 and that happened because of our review of our policies. And in 2024, you can see we have already achieved the lowest level for the last 12 months. So the first quarter, BRL 73 million. And now for the second quarter of 2024, BRL 66 million. I'd like to highlight the volume of SBPE cancellations as mentioned by Valese and he will go over that again. If we just follow this line here for my house my life (sic) My Home My Life, you can see that this number is going down and it really is aligned to other market reports. Very important point talking about cancellations is the price gain when reselling cancellations. So we see this gain. And since 2023, second quarter of 2023, we have been reporting that and that has strengthened. And now for the second quarter of 2024, we resold BRL 33 million of cancellations, and we gained 9% in resales price. If we go over the last 12 months, you can see that total units was BRL 185 million and 9% price gain. As for net sales, we also achieved a level similar to the first quarter, closing with BRL 134 million and also inventory turnover ratio, achieving 21%, the highest level. So you can see net sales is also presenting a very good result. If we now go over our price and against our cost for my house my life (sic) [ My Home My Life ] and SBPE product, if we go over our history, we can see this increase in price gain and also a cost increase but the company is now focusing on price gain. And we are strengthening that policy and you can see that in this chart. During the second quarter, we closed with BRL 271.5 million against a cost of BRL 183.4 million. And finally, our average price for my house my life (sic) [ My Home My Life ] program. So once again, we are growing and we have our sales team also focusing on that. So the average price of my house my life (sic) [ My Home My Life ] closed at BRL 233,000, so 11% growth compared to the second quarter of 2023. And when we go over the history since second quarter of 2020, you can see that, that number went up by 42%, my house my life (sic) [ My Home My Life]. And just for closing our financial results, I'd like to turn it over to Valese once again.

So let's talk about the results. So if we go over the consolidated numbers, we closed with a negative of BRL 24.8 million, a negative number. But if we compare to the first quarter, we will see that we improved by 50%. And also when we compare to the end of 2023, we have been able to decrease that but we still face some challenges. I'd like to highlight the major challenges that affected our results. So construction progress was lower but mainly because of the climate and the rainy season in the southern region. So construction progress decreased. This is a [ crazy ] outcome because we know that we will be able to improve on that. In the last month, we already saw an increase in construction progress. As for cancellations, we have already seen and I'd like to just highlight that for the third quarter of 2023, we revealed our cancellation policy. And we have SBPE developments that are very close to being delivered. And that really revitalize our portfolio but we also saw that we resale cancellations with a price gain of 9% or 10%. And as for sales volume, that was below our expectations because of decreased inventory but it was a price gain. And despite our inventory turnover ratio being lower, we gained in price. And as for financial cost of our debt, we saw a decrease in the leverage of our debt but we also understand that we have opportunities and we want to decrease our debt as well as financial costs of our current debts. I'd say that these are the main factors that affected our result. I think that we can now open for your questions and we hope we can clarify any of the questions you may have. Thank you.

[Operator Instructions] Well, if there are no questions, we'd like to turn it over to the company's managers, please.

Well, once again, I'd like to thank you all for joining us for this earnings call. This interaction is very important and it's very important that you all understand our performance of financial results and the next steps that we will take. I'd like to thank our shareholders for believing in us. And if you have any questions after the call, our IR channel is open to answer any questions you may have. And see you in our next call. Thank you very much. Have a great day.

With that, we conclude RNI Negócios Imobiliários S.A. conference call. Thank you for joining us today. Have a good day. Thank you. [Statements in English on this transcript were spoken by an interpreter present on the live call.]