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

Ladies and gentlemen, thank you for holding. Welcome to RNI Negocios Imobiliarios' earnings call to review our results for the third quarter of 2025. Joining us today are Mr. Gustavo Felix, our CEO and Head of Investor Relations; and Mr. Henrique Ravazzi, our Investor Relations Manager. [Operator Instructions] Before we begin, we'd like to remind you that any forward-looking statements made on this call reflect the beliefs and assumptions of RNI's management as well as the information currently available to the company. These forward-looking statements are no guarantee of future performance. They involve risks, uncertainties and assumptions as they relate to future events and therefore, depend on the factors that may or may not materialize. Investors should be aware that macroeconomic conditions, industry dynamics and operational factors may affect the company's future results and could lead to outcomes that differ materially from those indicated in these statements. I'll now turn the call over to Mr. Gustavo Felix. Please go ahead, sir.

Thank you. Good morning, everyone. It's great to be here to discuss Q3 results. This was yet another important quarter. We have made significant progress as far as our strategy is concerned. We have maintained our focus on excellence, financial discipline and operational excellence. We have reduced our debt level. The number of cancellations and prices have been favorable, and we are going to dive into further detail shortly. I'll turn it over to Mr. Henrique Ravazzi, and I'll come back for my closing remarks.

Thank you, Gustavo. Good morning, everyone. I would like to thank you all for attending. We'll be focusing on 4 areas: the highlights for Q3 2025, operating results, financial results and then the statement of income, the net results. Let me start with the highlights for the quarter. This was a positive quarter as far as cash generation is concerned. We generated BRL 36 million for the quarter. We have been keeping that record in 2025. Year-to-date, the total is BRL 79 million, reflecting an important increase compared to the same period of last year. Average price gains also stood out. The average ticket was BRL 247,000 for the My House My Life program, 4.1% increase quarter or year-on-year. And price gains are 37.8% since Q3 2021. Let me break that down on cash generation and the gross debt. As I said, Q3 usually brings positive generation, and that has to do with the sale of a land bank plot that we finalized in Q3. And we anticipated receivables. We sold quotas back in 2020. This was a long-term receivables, and we've anticipated that to Q3, which contributed to cash generation. Gross debt has an interesting performance. We've amortized production debt worth BRL 61 million, reducing our debt by 14.4% compared to the previous quarter. And we ended the quarter at BRL 488 million. most volume is concentrated in production debt, which is the core business of the company. Let me point out the conclusion of 2 important projects for the quarter. One of them was concluded in Pacatuba, Moradas Da Serra. PSV, BRL 102 million. This is, again, it's a My House My Life program project. The other one was RNI Origem Versalhes in the city called Bady Bassit. PSV, BRL 104 million, 304 units. This is an SBPE, the Brazilian housing system project. They amounted to BRL 206 million in PSV and 898 units. Let me address our operating results. Let me address the landbank that was down by 30% when compared to the previous quarter, Q2. Those 30% came from the discontinuation of 4 areas, 4 plots. We did not choose to build there, and we sold 1 plot. Today, the company's landbank is at BRL 1.9 billion. And that reduction that we had projected between the year-to-date in Q1 when compared to last year's numbers. This is also focused on strategic areas that were discontinued. So a 64% decrease, therefore. Market value of our inventory ended the quarter at BRL 299 million. Let me point out something about the inventory. 81% of that inventory would fit the My House My Life program. 54% of those products were originally launched under the Brazilian housing finance system. As we reported starting in the first quarter of 2025, the company has been considering and analyzing moving some projects from the Brazilian finance housing system to My House My Life, aiming for the Level 4 of My House My Life program. So that would be beneficial in terms of sales and transfers. That's a positive move. We did not launch any new projects for the year. So the inventory is only natural that it will come down slightly. When compared to last year, we have a 26% reduction in that sense. Moving on to still operating results, gross sales. There are some highlights I would like to point out. Our DSO is somewhat stronger. Our performance has been driven by 2 projects accounting for almost 50% of what was sold in Q3. These are from products that migrated from the Brazilian housing finance system to My House My Life program. So we ended the quarter at BRL 72 million, a little above when compared to Q2 DSO was at 25%. Cancellations remained above Q2. BRL 72 million were concentrated in 2 projects accounting for 42% of that total. And what are those 2 projects? One is the Versa. We have just concluded in Q3. It's an SBPE, Brazilian housing finance system. It's only natural that the transfer volume for that project increases. So the discussion with that portfolio is somewhat more aggressive in terms of cancellations and transferring the customers. Those that are able will make that transfer. So when you conclude that Brazil's housing finance system project, so it would be a little higher. The other product, again, the same thing, migrated from the SBPE system to the My House My Life program. They've been ranked or these 2 projects contributed to bringing that level a little higher than Q2. Year-to-date, we have a 16% drop in cancellations. Moving on to net sales. They remained almost flat given the growth sales volumes and the level of cancellations at BRL 2 million for My House My Life. It's only natural that this number would remain flat for the quarter. Year-to-date, we are at BRL 90 million in net sales. Moving on to financial results. Let me point out the performance of Q3 net revenue, the largest revenue in the year 2025, BRL 123 million and this 105% growth quarter-on-quarter, it is linked to the reduction in the provision for cancellations that we made in this quarter. So cancellations for the quarter was substantial. But nonetheless, it didn't impact results all that much because those provisions were conducted in previous quarters. In Q2, we had the largest amount of provisions. So despite this large volume of cancellation in Q3, that did not impact net revenue. There was also something else positive that contributed, which was the sale of a plot. We are at BRL 276 million in year-to-date for net revenue. Gross profit is just a reflection of that. In Q3, we had the highest for the year at BRL 25 million, 20.2% margin and BRL 51 million for the whole year -- rather, for the first 9 months of the year. Well, on to our income statement now. Revenue is at BRL 123 million, the largest for the year up until now. Gross profit, along the same lines, BRL 25 million, 20% is gross margin and adjusted gross margin of 25%. Operating expenses, they are moving sideways, slightly higher than Q2. And when we look at the returns, the daily returns we've had for the quarter. And finally, the loss in Q3 along the same lines of what we reported in Q2. Our net income is somewhat impacted by the higher interest rates, which was at 15% in the quarter. As a consequence, that will impact financial costs, our debt despite being smaller than in previous quarters, we're still having that impact in the bottom line of the company. Well, this was the presentation. I will turn it over to Felix, whether he wants to make a comment or not. Otherwise, we will move on to the Q&A. All right. I think we can move on to the Q&A.

All right. Great. I think we can get started with the Q&A.

[Operator Instructions]

I think we can conclude the call, Rodolfo.

I think we can turn it over to Gustavo Felix for his closing remarks. You may go ahead, sir.

Well, I think Henrique made a great presentation. Well, despite the challenging environment, this was yet another quarter of cash generation. That has been our focus. Operational efficiency. This was yet again another quarter of reducing our gross debt, BRL 61 million. When we look at the 2-year cycle, we had BRL 800 million worth in debt. We are at BRL 488 million. This is an indication of what management has been doing, has been focusing on, which is to reduce our debt level. We have been taking the necessary measures to adjust the structure of the company, which remains our focus, too, and we're making the hard decisions, but we want to go through that cycle with the necessary responsibility that the company needs. Well, thank you so much for attending. Thank you, Ravazzi, for his presentation, and have a great day. Thank you.

Thank you.

This concludes RNI Negocios Imobiliarios earnings call. Thank you all for joining us today, and have a great day.