Release Date: August 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Net sales reached BRL486 million, marking the highest volume in a single quarter since 2020, with a 63% increase compared to the previous year.
- Net revenue for the quarter totaled BRL923 million, representing a 78% increase year-over-year.
- The Sao Paulo operation generated a net income of BRL114 million with an annualized ROE of 26.6%, indicating strong profitability.
- The launch of the first phase of the Fiber project in Sao Paulo was successful, with 45% of the project sold, showcasing strong market demand.
- The company maintained a healthy inventory level, with finished inventory 25% lower than the previous quarter, indicating effective inventory management.
Negative Points
- The company's consolidated net income was negatively impacted by BRL13 million due to participation in Melnick.
- There was a significant impact on margins due to the sale of older inventory with lower margins and a high volume of swaps.
- The company experienced a temporary increase in leverage to 40% due to reclassification and cash burn, raising concerns about short-term financial stability.
- The approval process for new projects faced delays, affecting the launch schedule and potentially impacting future revenue.
- Concerns were raised about the potential scarcity of labor and rising costs of raw materials, which could impact future project costs.
Q & A Highlights
Q: Can you provide an update on your launch schedule and discuss the sales strategy for your inventory?
A: Marcio Moraes, CEO: We have several projects lined up for launch this year, including two from Even and two from RFM. The approval process has been slow, but we expect it to normalize soon. Regarding inventory, sales have been strong due to a lack of new launches across the market, and we are focusing on selling finished inventory.
Q: What factors impacted your margins this quarter, and how do you view your capital structure moving forward?
A: Marcelo Dzik, CFO: Margins were affected by the sale of older inventory with lower margins and a high volume of swaps. Despite this, our strategy remains unchanged, and we expect margin recovery. Regarding capital structure, we anticipate fluctuations in leverage this year but expect improvement in 2025 due to significant cash generation from deliveries.
Q: How do you see the cost of raw materials and labor affecting your operations?
A: Marcio Moraes, CEO: We have seen a slight increase in material costs due to exchange rate fluctuations, but it's within our expectations. Labor scarcity is a concern, but we are proactively managing costs and have not yet faced significant issues.
Q: What is your strategy regarding your stake in Melnick, and how does it impact your financials?
A: Marcelo Dzik, CFO: We have been gradually reducing our stake in Melnick, viewing it as an opportunity for investors to decide on their allocation. This process will continue as opportunities arise, but we still see value in Melnick.
Q: Can you elaborate on your dividend policy and its relation to your current leverage?
A: Marcelo Dzik, CFO: Our intention is to maintain a 50% payout of profits, ensuring we remain a dividend-paying company. Despite short-term leverage increases, our cash position and future cash generation support this strategy.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
