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

Good morning. Welcome to Tecnisa's Second Quarter of 2026 Earnings Conference Call. Today, we have Mr. Fernando Perez, Chief Executive Officer; and Mr. Anderson Hiraoka, CFO and Investor Relations Officer of the company. And 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 a presentation by the executives and then move on to the Q&A session. If you need support, please send a message via chat box. Now I would like to turn the floor over to Mr. Fernando Perez. Please, sir?

Good morning, everyone. Thank you for attending and for your attention. We are here reporting to you the results from the second quarter. As usual, I'm going to conduct a short presentation on our strategy and our pathways, and then my colleague, Anderson, will get into the detailed financial and accounting information. In our agenda, we start with the strategy and then financial performance with our CFO, who will be reporting the information to you. First, I'd like to talk about the sales of stakes in Jardim das Perdizes. We completed the operation in June. I will be providing you with more information about this. We continue to launch other enterprises in Jardim das Perdizes. We still have BRL 4.4 billion to be launched in PSV, and on account of the sales of our -- part of our stakes in Jardim das Perdizes, our part is equivalent to BRL 1.2 billion. Our land bank to conduct business plan contains BRL 5 billion. We are focused on commercial and marketing strategy as it must be. We will address that later on. And one thing that I am very mindful of, as well as my colleagues, is controlling administrative expenses, which allowed us to reduce them by 8% compared to the same quarter last year. And in terms of profitability of the operation, we continue to profit from our operations, and our backlog gross profit totaled BRL 79 million. Very well. Now talking about the business -- the deal we have made with BTG. We are very happy with the deal. It was completed on June 1. Before that, our previous participation was 52.50%, as you remember. And what BTG did was purchasing half our stakes and 100% of [ Hines ] shares. And the proposal value, it's not proposal anymore. It's the deal that was BRL 260.9 million, and our participation became 26.41%. And when we consider the Tecnisa Group, we have 32%, and BTG holds 68%. Of course, this operation was a strategic move we've made in order to work on our leverage, and we have obtained substantial results, as you will see in the following slides. We are satisfied and proud of having BTG as partners now whose reputation doesn't require any description given its history and their expertise. They are very focused on sales. And when we combine that with the beauty of Jardim das Perdizes enterprise, we are convinced that what was good will become even better. Now talking about land bank, as I've mentioned earlier, it's BRL 5 billion, BRL 4.4 billion is within Jardim das Perdizes. And other than that, we have BRL 2.2 billion in approved projects. Here, I'd like to show you the progress we have made with our sales. Today, we have these 4 enterprises. And when we look at the second quarter of 2025, it was virtually completely sold Kalea, and now it's 100%. Recanto Oliveiras was at 57% last year, now 73%, Cerejeiras, we used to have 43%, now 73% as well and Flamboyant used to be 56% last year and now 76%. Our gross sales in the quarter reached BRL 111 million. When we talk about administrative expenses, as I had mentioned earlier, they have totaled BRL 11 million in the second quarter, which represents a reduction of 8% in comparison to the second quarter of last year. If we compare the first to the second quarter, the reduction is even greater than 8%. Now I'd like to offer you more detailed information. Backlog gross profit totaled BRL 79 million in the second quarter, and this is how our businesses operated. Our gross margin reached 38%. And Jardim das Perdizes, our margin is still very interesting. As you can see in the chart, from 46% in the second quarter of '25, in the first quarter of '26. Now in the second quarter of '26, we have reached 47%. In the other enterprises, the margins are smaller, and therefore, our gross margin is 38% combining them. And the reduction comes obviously from -- it comes largely due to the reduction in the company's interest in Jardim das Perdizes with the sales of our stakes. This was the initial information I had to report to you. Now I yield the floor to Mr. Anderson Hiraoka, our CFO, and I'll be here for any clarification.

Thank you, Fernando. Good morning, everyone. Moving on with operating performance. We look at gross sales with a smaller participation of Tecnisa. In the second quarter, we had BRL 49 million in gross sales. And this also has to do with the sales of our stakes in Jardim das Perdizes. That's why our representation is smaller. And as we sell inventory, we will proportionately have fewer sales, and we didn't have any new launches in the last quarter which has an impact on gross sales, BRL 130 million in comparison to BRL 191 million last year. In terms of net contracted sales, our situation is similar. We have BRL 115 million over the year, but the volume of sales is smaller. Gross sales over supply was 12% in the second quarter of 2026. So we understand the scenario is very healthy, even though the market is, as you all know, quite challenging with high interest rates, which interferes in our businesses. Now moving to inventory. We concluded the quarter with BRL 214 million, leaving from BRL 404 million in the first quarter. We have managed to sell our stakes. We so -- we had some dissolution of contracts, but we have this inventory in Sao Paulo, basically 96% in Sao Paulo, and 73% is under construction. And as we make progress with construction, these will become results, financially speaking. Now talking about financial and economic performance. Our net revenue in the second quarter is BRL 73 million, which also has an impact from the reduction of stakes in Jardim das Perdizes. But over the year, our volume is actually superior to the same quarter of last year. And what's even more appealing is adjusted gross profit. In spite of a slight reduction in the second quarter of '26, our margin is improved, moving to 37% over the year. That's a substantial improvement in our results. Now talking about receivables schedule. Naturally, with the BTG operation, our biggest goal was to reduce indebtedness. So we can observe now that in terms of receivables, we have BRL 188 million in receivables contracted until 2027 and BRL 101 million in debt maturing over the same period, which means we are in a healthy position, and we still have sales to be made. And as of 2029, other than the receivables, we have results coming from new launches, which will contribute to make these payments, which are way further down the road up to 2029 and onwards. Now our result was BRL 111 million, which is much smaller than the second quarter of 2025 and the first quarter of 2026. And as you know, our gross -- backlog gross profit is still quite interesting. There is a reduction because of the stakes sold in Jardim das Perdizes, but we still have 38% of backlog gross profit margin. In terms of cash position, we've completed the quarter with BRL 77 million, which is also impacted by the reduction in stakes in Jardim das Perdizes. On the other hand, we've obtained a significant reduction of net corporate debt by almost half from BRL 503 million to BRL 271 million. Equity, BRL 253 million in the second quarter of '26, and the net debt resulted in BRL 315 million, a significant reduction in comparison to BRL 579 million in the first quarter of '26. This concludes my presentation, and now I yield the floor to Victor for our Q&A session.

[Operator Instructions] Well, as we have no further questions, I would like to thank you very much, and I yield the floor back to Mr. Fernando Perez.

Well, I would like to thank you for attending. We are open for conversations as usual. And I'd like to emphasize how we have been working hard on improving our financial health and paying off our debt. We have taken major steps towards that direction, and we remain at our shareholders' disposal if you should want to ask any questions. [Statements in English on this transcript were spoken by an interpreter present on the live call.]