Release Date: August 02, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- EZ TEC Empreendimentos e Participacoes SA (BSP:EZTC3, Financial) reported the second highest sales in its history, with significant sales success in the Villares Parada Inglesa project.
- The company achieved a substantial increase in gross sales, more than doubling compared to the fourth quarter of 2023.
- Contract cancellations were reported to be below 10%, indicating a healthy operational performance.
- The company has a robust land bank valued at BRL9.3 billion, with potential to increase to BRL14 billion by the end of the year.
- EZ TEC Empreendimentos e Participacoes SA (BSP:EZTC3) announced a dividend payment of BRL21 million, reflecting a strong financial position.
Negative Points
- Gross margins have decreased from 34% to 31%, indicating pressure on profitability.
- The volume of deliveries has been lower than in 2023, with a significant portion tied to the Minha Casa, Minha Vida segment.
- The company is experiencing a transition from net cash to net debt due to real estate funding for construction.
- There is uncertainty regarding the future performance of the company's inventory, despite current sales success.
- The company faces challenges in maintaining high sales volumes and margins amidst competitive market conditions.
Q & A Highlights
Q: Can you explain the strategy behind the recent high sales volumes and how you plan to maintain this momentum?
A: Silvio Ernesto Zarzur, Deputy CEO, explained that the company restructured its sales area, improved online sales, and invested in partnerships with real estate developers. They also adopted commercial policies that eased credit approvals, allowing for more flexible pricing while maintaining safety levels in portfolio management.
Q: What are your expectations for gross margins in the short term?
A: Antonio Emilio Clemente Fugazza, CFO, stated that the company aims to bring gross margins closer to 37%. He noted that current margins are affected by upfront payments from clients, which reduce margins but are part of a strategy to increase sales.
Q: Do you plan to accelerate launches in the second half of the year given the current inventory levels?
A: Silvio Ernesto Zarzur mentioned that while maintaining a robust inventory is crucial for sales, the company plans a more robust pipeline for the second half of the year. They aim to balance inventory levels with market demand and sales capacity.
Q: How is the partnership with Lindenberg progressing, and what is its future potential?
A: Antonio Emilio Clemente Fugazza highlighted that the partnership with Lindenberg has been successful, with significant sales volumes and higher margins. The partnership focuses on high-income projects, and they plan to continue expanding this collaboration.
Q: What is the current state of real estate credit availability for your clients?
A: Antonio Emilio Clemente Fugazza noted that real estate credit rates are around 10.5% to 11%. The company offers its own credit options to clients, providing flexibility and competitive rates to facilitate sales.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
