Tecnisa S.A. (TCSA3.SA) Earnings Call Transcript & Summary

[Audio Gap] Today with us, we have Mr. Fernando Perez, Chief Executive Officer; and Mr. Anderson Hiraoka, our CFO and Investor Relations Officer. I'm Victor Miranda, Investor Relations Specialist. We inform you that the recording of this event will be available on the company's IR website. As usual, we'll start with the presentation by the executives and then move on to the Q&A session. [Operator Instructions] Now I'd like to turn the floor over to Mr. Fernando Perez, who will start the presentation. Please. Mr. Perez, you can proceed.

Thank you, Victor. Good morning, everyone. As Victor said, we're here to update you about the results of the third quarter. So let's get started. Can we go to the next page, please? Great. As we always do, I'll talk a bit about the strategy. Then Anderson, our CFO, will be talking about the operating performance and the financial economic performance as well. We have here some points to highlight. First, I mean, one deal negotiation with Cyrela was long, very fair, very correct, and that was highlighted from the beginning, but ended up through the process of negotiation. As we've already communicated before, it lost its objectiveness and some of the facts came up in terms of some new points arised at the point of which the purpose of the proposal changed and we decided according to our shareholders not to carry on with the negotiation. And we took other paths, for instance, restructuring our debt. We were able with [indiscernible] have a loan of BRL 178 million that will be taken to pay off other creditors. In that way, we restructured our debt, and we'll just have 2 creditors now and extended for a 6-year debt, and this gives the company greater tranquility to carry on with our projects. And later on, Anderson will explain this furthermore. And also, we have also the launches. We in 2025 stopped the launches because of the negotiations, we'll be back launching them. We have a PSV to be launched of BRL 4 billion, of which BRL 2.1 billion is Tecnisa's. We have a solid land bank in Jardim das Perdizes and it's BRL 7.5 billion, being BRL 2.6 billion Tecnisa's. Our focus is still commercial and marketing. And I should already say in terms of results, we have the sales goal already reached for 2025, which will be presented here soon. And carrying on, we followed with reducing and controlling administrative expenses. We had a 14% reduction compared to the third quarter of 2024. And the profitability of the operation show that we ended a backlog gross profit totaling BRL 191 million. Next page, please. Okay. Talking about the land bank. As I already mentioned, we have BRL 4.7 billion, being BRL 2.6 billion Tecnisa's shares. When we compare the second with the third quarter, we have there a slight reduction, essentially because of the launches and some adjusted made. And we have projects that have been approved of BRL 1.8 billion that's important to be highlighted. So talking a bit Tencasa, we carried on in July 2025, Zait Chácara Santo Antônio of a PSV of BRL 90 million. Our stake is of 30%. It's a project that we have with CP Residential located in the neighborhood, Chácara Santo Antônio in the city of São Paulo. We're talking about 315 new units with typology from 28 to 37 square meters. And right here, we can see what we had in the third quarter of 2024 compared to the one in 2025. So we have the gray for 2024 and the red is 2025, showing how we have evolved in terms of gross sales, which reached BRL 132 million. Here, we show the administrative expense. I showed that we reduced BRL 12 million when compared to the third quarter of 2024. And that is essential so that we can improve our profitability. Right here, talking about the profitability of the operation. So we closed the third quarter with BRL 191 million of backlog gross profit and the gross margins of 40%, increase of 5% compared to the previous year. And right on the bottom, you can see there Jardim das Perdizes where we have the greatest margin where we are at 46%. And we believe that we will still have some increase for the other projects that we have completed the lower margin. That's why we have a total of 40% there. But I should say that Jardim das Perdizes had already a margin of 46%, which shows a possibility of even growth there. Here, talking about the backlog gross margin, we show Jardim das Perdizes highlighting 46.1% and a curve of growth, as I just mentioned. Naara is one project that we are partnered with. It's an initiative of our VP and he has this operation, and we're a partner of it. And we have 10% in this first investment, which has been a new concept and definitely one that is here to stay as an investment in our country and that we will adhere to other projects as well. So Naara is a PSV of BRL 111 million, and our participation is of 10%, 32 units of 94, 245 square meters (sic) [ 145 square meters ] located in the neighborhood Higienópolis. And it will count on concierge service, valet service, and offering a thorough facility with restaurants, sauna, jacuzzi, spa, outpatient clinic, nursing, a different modern concept that has been very much accepted. We just launched in November, and it has been very much visited and accepted by the audience in general. Okay. Great. So that's what we have for strategy. I pass the floor to our CFO, Anderson. And later on, I'll be back to answer some potential questions you might have. So Anderson, I pass the floor to you.

Thank you, Fernando. Good morning, everyone. And just going through here the operating performance. We show here the sales performance on the third quarter of 2025. We reached BRL 83 million of gross sales for Tecnisa and BRL 73 million for net sales. So when we see here compared to the quarter -- third quarter of 2024, we have here the comparison in sales over supply, we have 12.2% in the third quarter of 2025, an increase of 3.4% compared to the previous quarter of 2024, showing that we've been quite effective when it comes to our commercial strategy. Getting into our next slide here, we should highlight the inventory and market value, totaling BRL 514 million for Tecnisa's [indiscernible] and only 8% of the inventory refers to concluded units. So that shows that most of our inventory is still ongoing projects. When we look at geographic distribution, 98% is in the city of São Paulo. This is where we're at or in the state of São Paulo. Right there, we have the status breakdown of 92% under construction. And on the left, we show here the inventory evolution that we went from BRL 83 million, BRL 10 million and we have BRL 9 million of adjustments. So we got BRL 514 million. Next slide, we have here the delivery we had, which is Astral Saúde for the quarter located in the neighborhood of Saúde in the city of São Paulo, which has a PSV of BRL 107 million, 91 units, 39 studios and 1 store and showing already the understanding of how this can generate cash to the company. And getting into the financial economic performance. We highlight here the net revenue that we returned BRL 51 million for the third quarter, quite an improvement compared to that of second quarter of 2025 and thinking about what we had in terms of BRL 476 million to BRL 354 million when it comes to the comparison when we see the darker gray, we had BRL 335 million, BRL 160 million, but we had many deliveries that have been consolidated, [indiscernible] projects that we deliver, and they are no longer contributing to the revenue. But on the other hand, we have projects of [indiscernible] that have been increasing the contribution. So we have from BRL 141 million to BRL 199 million or BRL 194 million. So we see an adjusted favorable margin. So when we see that on the third quarter of 2025, we reached BRL 57 million, and adjusted of 34%. And when we look at the year-over-year, we go from 75% to 94%. There is also an adjustment there that you can see representing improvement of profitability of the company. Going to financial economic performance related to the receivables and debt, when we add the receivables from 2025 to 2026, and we here reporting in the third quarter of 2025, we have BRL 342 million receivable contracted. And on the other hand, we have a total receivable that would be BRL 331 million. So we have enough to be able to compare to that. And when we think about the next few years, we still have BRL 340 million that we'll be able to contribute. So we can work with all these new contracts. And here, I should highlight, as Fernando mentioned, as we talked about an important work of restructuring the debt in December, and we had specifically releasing the BRL 138 million for a 6-year tenure. So we have a grace period of 6 years, and we have another 2 payment, and this gives us a good timing to have this already for the seventh year, we will reach that amount. So we have quite an advance there. And this shows us that we will have a way good moment when we are talking about the strategy that the market has been demanding. Getting on to the next slide. We have here the backlog gross profit, reaching BRL 191 million, as Fernando mentioned. And the net income, we have a BRL 10 million loss, which is significantly better compared to the previous quarters and the reference ones. And now getting to financial economic performance. We have a cash of BRL 161 million in the third quarter of 2025. So stable compared to the second quarter of 2025, a net debt where it closed BRL 606 million and the equity with the loss we had reached BRL 316 million. So we had adjusted cash generation of BRL 28 million. And we have under construction that will definitely demand some cash use.

Anderson, can I just add there, please?

Sure.