Earnings Release
2Q24
CONFERENCE CALL
With simultaneous translation
August 2, 2024
10h (Brasília Time) / 09h (NY Time)
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- A. Emílio C. Fugazza
- Pedro Tadeu T. Lourenço
- Christian de Melo
- Giovanna Bittencourt
- Thiago Burgese
Tel.: +55 (11) 5056-8313ri@eztec.com.br ri.eztec.com.br/en/
Launch 2Q21
Delivery 2Q24
EARNINGS RELEASE 2Q24
SUMMARY | |
2Q24 HIGHLIGHTS | 4 |
MANAGEMENT´S COMMENTS | 5 |
BALANCE SHEET | 7 |
INCOME STATEMENT | 8 |
FINANCIAL INDICATORS | 9 |
REVENUE, COST & GROSS PROFIT | 9 |
SELLING EXPENSES | 11 |
ADMINISTRATIVE EXPENSES | 12 |
EQUITY INCOME | 13 |
RESULTS TO BE RECOGNIZED | 14 |
FINANCIAL RESULTS | 15 |
CASH AND DEBTS | 16 |
OPERATIONAL INDICATOS | 17 |
LAUNCHES | 17 |
OPERATIONS INFORMATIONS | 18 |
SALES & CANCELLATIONS | 19 |
DIRECT RECEIVABLE PORTIFOLIO | 21 |
ESTOQUE | 22 |
LANDBANK | 23 |
EZ INC | 25 |
CAPITAL MARKETS | 26 |
ADDITIONAL VALUE | 26 |
INTERNAL CONSENSUS | 27 |
ANNEXES | 29 |
CASH FLOW | 29 |
PoC EVOLUTION | 30 |
INVENTORY BY PROJECT | 31 |
REVENUE BY PROJECT | 33 |
RESULTS FOR SHARED CONTROL PROJECTS | 35 |
EZ INC | 36 |
3
EARNINGS RELEASE 2Q24
2Q24 HIGHLIGHTS
93% sold* Villares Parada Inglesa
62% sold* Brooklin Studios by Lindenberg
Quarterly Net Income of R$89 million is 56% higher than 1Q24 and the highest in the last 1.5 years
With 93% of units sold in the quarter, Villares Parada Inglesa is the Project with the highest SOS in the last 5 years
Financial Highlights
Net Revenue (R$ k)
2Q24
415,924
1Q24
239,186
%Var
73.9%
2Q23
242,732
%Var
71.4%
1H24
655,110
1H23
493,516
%Var
32.7%
Gross Profit (R$ k) | 128,326 | 81,709 | 57.1% | 78,581 | 63.3% | 210,035 | 149,866 | 40.1% |
Gross Margin | 30.9% | 34.2% | -3.3 p.p. | 32.4% | -1.5 p.p. | 32.1% | 30.4% | 1.7 p.p. |
Net Income (R$ k) | 88,664 | 56,706 | 56.4% | 75,333 | 17.7% | 145,370 | 117,558 | 23.7% |
Net Margin | 21.3% | 23.7% | -2.4 p.p. | 31.0% | -9.7 p.p. | 22.2% | 23.8% | -1.6 p.p. |
Earnings Per Share (R$) | 0.40 | 0.26 | 53.8% | 0.35 | 14.3% | 0.66 | 0.54 | 22.2% |
Net Debt (Cash) (R$ k) | 122,729 | 84,579 | 45.1% | (98,261) | -224.9% | 122,729 | (98,261) | -224.9% |
Cash Generation (Burn) (R$ k) | (38,150) |
9,316 | -509.5% | (82,104) | -53.5% | (28,834) |
(142,890) -79.8%
Operational Highlights
# of Projects/ Phases Launched
2Q24
2
1Q24
3
%Var
-33.3%
2Q23
2
%Var
0.0%
1S24
5
1S23
3
%Var
66.7%
PSV %Eztec (R$ k) | 188,323 | 457,537 | -58.8% | 475,000 | -60.4% | 645,860 | 602,000 | 7.3% |
Gross Sales %Eztec (R$ k) | 555,955 | 322,099 | 72.6% | 486,582 | 14.3% | 878,054 | 900,532 | -2.5% |
Net Sales %Eztec (R$ k) | 508,031 | 291,323 | 74.4% | 419,092 | 21.2% | 799,354 | 785,388 | 1.8% |
Total Inventory (R$ mn) | 2,558,210 | 3,024,748 | -15.4% | 2,763,357 | -7.4% | 2,558,210 | 2,763,357 | -7.4% |
Net SoS | 16.6% | 8.8% | 7.8 p.p. | 13.2% | 3.4 p.p. | 23.8% | 22.1% | 1.7 p.p. |
# of Active Construction Sites | 16 | 17 | -5.9% | 20 | -20.0% | 16 | 20 | -20.0% |
Total Landbank (R$ mn) | 9,256,270 | 9,142,088 | 1.2% | 8,513,328 | 8.7% | 9,256,270 |
8,513,328 8.7%
São Paulo, August 1, 2024 - EZTEC S.A. (B3: EZTC3), with 45 years of existence, stands out as one of the most profitable companies in the construction and real estate development sector in Brazil. The Company announces its results for the second quarter of 2024 (2Q24). EZTEC's operational and financial information, except where otherwise indicated, is presented on a consolidated basis and in thousands of Reais (R$), prepared in accordance with the Accounting Practices Adopted in Brazil ("BR GAAP") and the International Financial Reporting Standards (IFRS) applicable to real estate development entities in Brazil, as approved by the Accounting Pronouncements Committee (CPC), the Brazilian Securities and Exchange Commission (CVM), and the Federal Accounting Council (CFC). The non-accounting and non-financial data have not been revised/audited by Independent Auditors.
4
EARNINGS RELEASE 2Q24
MANAGEMENT´S2Q24 COMMENTS
The Management of EZTEC announces the results for the second quarter of 2024. During the quarter, launches with an EZTEC % Potential Sales Value (PSV) of R$188 million, net sales of R$508 million, a gross margin of 30.9%, a net margin of 21.3%, and a quarterly net profit of R$89 million were recorded. As a result, the Company closed the first half of 2024 with R$646 million in launches, R$799 million in sales, a half-yearly gross margin of 32.1%, a net margin of 22.2%, and a period result of R$145 million.
The quarter was marked by an increase in the Company's sales, resulting in the second-best sales quarter in EZTEC's history, second only to the R$546 million in sales recorded in 4Q19. The main factors contributing to this milestone were the acceleration in the sales velocity of newly launched projects and the higher volume of ready units sold. These numbers reinforce the Company's current concern with the impact of asset turnover to generate higher returns, supported by strategies focused on the strong performance of launches and inventory reduction.
The Villares Parada Inglesa and Brooklyn Studios by Lindenberg projects were the new launches of the quarter. The first, located in the Parada Inglesa neighborhood in the North Zone, is a partnership between EZTEC (75%) and Niss (25%). Launched at the beginning of the quarter, it comprises a residential tower with 373 mid-range units, totaling an EZTEC PSV of R$138 million, and is already 93% sold. This is the best Sales Over Supply (SOS) for a launch since the Pátrio Ibirapuera launched in the second quarter of 2019, which also recorded 93% sales in its first three months. Villares benefited from its prime location in the neighborhood, close to the Parada Inglesa metro station, and the Company's expertise in identifying demand in less obvious areas of São Paulo and its ability to develop the most suitable product for these audiences. Additionally, thanks to the skills of TecVendas brokers, it was possible to achieve 60% sales within two weeks of launch. The second project, a tower of studios attached to Lindenberg Vista Brooklin, launched in 1Q24, also exceeded 50% sales and closed the quarter 60% sold.
Other highlights this quarter include (i) approximately 180% growth in the sale of ready units and (ii) the commercial opening of Lindenberg Ibirapuera Design Tower, the second tower of the project whose launch was recorded in 4Q23. With 13 units sold in the quarter, totaling more than R$80 million, the tower ended the period 33% sold. Regarding ready units, as previously announced during the 1Q24 earnings conference call, the Company initiated a price adjustment campaign that generated opportunities especially in completed products. By analyzing the specificity of each unit, the Company managed to attract new attention to some products, resulting in over R$135 million in sales of completed products in the quarter, the highest volume of ready stock sales in the Company's history.
It is important to highlight the effects these events had on the Company's financial results. Due, especially, to the sale of ready units and projects whose construction is well advanced, such as Lindenberg Ibirapuera, which has a PoC of 68%, it was possible to observe a one-time impact that caused a 74% expansion in net revenue and a 3.3 p.p. reduction in gross margin, resulting in a quarterly gross profit of R$128 million, a 57% expansion compared to the previous quarter, and a net profit of R$89 million, the highest in the last six quarters.
In terms of deliveries, the Company completed the Fit Casa Estação José Bonifácio and Fit Casa Estação Oratório projects, which together are 81% sold and total R$151 million in delivered VGV. Both projects are aimed at the Minha Casa Minha Vida (MCMV) program and, consequently, had the outstanding balances of the sold units transferred through Caixa Econômica Federal (CEF) during the construction period. Therefore, a strong cash inflow from the delivery of these projects was not expected.
Regarding the payment of quarterly dividends, the Company's Board of Directors approved the payment of dividends on quarterly profits totaling R$21 million, approximately R$0.10 (ten cents) per share, to be paid on August 30, 2024.
Finally, it is noticeable that since July 30, EZTEC has a new look. The new visual identity brings the Company's desire to modernize, without renouncing its differential, which has always been its focus. Focus on the client, focus on the São Paulo market, focus on product quality, solidity, and profitability, the focus to look where no one is looking and always be one step ahead. Therefore, EZTEC brings this focus to its new visual identity with a focal circle in the middle and the attentive look that has always accompanied the Company throughout its 45-year history.
Enjoy your reading,
THE MANAGEMENT
Arbitration Chamber. In accordance with Article 37 of EZTEC's Bylaws, the Company, its shareholders, Administrators, and members of the Fiscal Council are obligated to resolve any and all disputes or controversies that may arise between them through arbitration, before the Market Arbitration Chamber, related to or arising from, in particular, the application, validity, effectiveness, interpretation, violation, and effects of the provisions contained in the Brazilian Corporate Law, in these Bylaws, in the regulations issued by the National Monetary Council, the Central Bank of Brazil, or the CVM, as well as in other applicable regulations governing the functioning of the capital markets in general, in addition to those contained in the Novo Mercado Regulations, the Arbitration Regulations, the Sanctions Regulations, and the Novo Mercado Participation Agreement.
Relacionamento com os Auditores Independentes. In accordance with CVM Resolution No. 162/22, we inform that the independent auditors Ernst & Young Auditores Independentes S.S. did not provide other services in 2024 apart from those related to external auditing. The company's policy for hiring services from independent auditors ensures that there is no conflict of interest, loss of independence, or objectivity.
5
EARNINGS RELEASE 2Q24
BALANCE SHEET
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Period ended 30 June, 2024 | 2Q24 | 1Q24 | %Var | ||||||
In Thousand of Brazilian Reais (R$) | |||||||||
ASSETS | 6,090,504 | 5,880,726 | 3.6% | ||||||
CURRENT ASSETS | 2,614,517 | 2,482,114 | 5.3% | ||||||
Cash and Cash Equivalents | 45,034 | 38,368 | 17.4% |
2Q23
5,708,397
2,329,851
47,806
%Var
6.7%
12.2% -5.8%
Financial Investments | 783,251 | 725,666 | 7.9% | 733,611 | 6.8% | ||||||||
Trade Accounts Receivable | 355,797 | 289,524 | 22.9% | 296,091 | 20.2% | ||||||||
Provision for Doubtful Accounts | (19,500) | (19,500) | 0.0% | (16,001) | 21.9% | ||||||||
Real Estate Held for Sale | 1,414,875 | 1,416,596 | -0.1% | 1,232,062 | 14.8% | ||||||||
Recoverable Taxes | 9,201 | 9,145 | 0.6% | 9,572 | -3.9% | ||||||||
Other Receivables | 25,859 | 22,315 | 15.9% | 26,710 | -3.2% | ||||||||
NON-CURRENT ASSETS | 3,475,987 | 3,398,612 | 2.3% | 3,378,546 | 2.9% | ||||||||
Trade Accounts Receivable | 1,014,684 | 906,532 | 11.9% | 823,337 | 23.2% | ||||||||
Real Estate Held for Sale | 1,720,884 | 1,742,499 | -1.2% | 1,728,646 | -0.4% | ||||||||
Recoverable Taxes | 44,901 | 41,658 | 7.8% | 35,902 | 25.1% | ||||||||
Due To Related Parties | 86,187 | 82,277 | 4.8% | 37,747 | 128.3% | ||||||||
Notes Receivable | 5 | 5 | 0.0% | 16,727 | -100.0% | ||||||||
Other Receivables | 83,505 | 102,429 | -18.5% | 155,660 | -46.4% | ||||||||
Goodwill over Investments | 66,800 | 68,480 | -2.5% | 71,467 | -6.5% | ||||||||
Investments | 439,333 | 421,788 | 4.2% | 463,513 | -5.2% | ||||||||
Property and Equipment | 16,791 | 30,099 | -44.2% | 43,869 | -61.7% | ||||||||
Intangible | 2,897 | 2,845 | 1.8% | 1,678 | 72.6% | ||||||||
LIABILITIES | 1,251,285 | 1,118,981 | 11.8% | 1,064,771 | 17.5% | ||||||||
CURRENT LIABILITIES | 254,580 | 271,950 | -6.4% | 453,463 | -43.9% | ||||||||
Suppliers | 65,156 | 55,131 | 18.2% | 62,420 | 4.4% | ||||||||
Payroll Obligations | 10,264 | 9,048 | 13.4% | 11,829 | -13.2% | ||||||||
Tax Obligations | 22,894 | 22,897 | 0.0% | 23,140 | -1.1% | ||||||||
Loand and Financing | 12,305 | 41,558 | -70.4% | 123,744 | -90.1% | ||||||||
Debentures | 285 | 13,206 | -97.8% | 5,136 | -94.5% | ||||||||
Trade Accounts Payable | 16,849 | 15,571 | 8.2% | 36,189 | -53.4% | ||||||||
Reserve for Guarantee | 12,439 | 11,796 | 5.5% | 6,705 | 85.5% | ||||||||
Advances from Customers | 89,618 | 87,875 | 2.0% | 122,222 | -26.7% | ||||||||
Land Payable | 7,947 | 616 | 1190.1% | 47,051 | -83.1% | ||||||||
Dividends Payable | - | - | n.a | - | n.a | ||||||||
Due to Related Parties | 872 | 850 | 2.6% | 1,052 | -17.1% | ||||||||
Deferrend Taxes | 13,385 | 10,653 | 25.6% | 11,047 | 21.2% | ||||||||
Use Rights Payable | 2,566 | 2,749 | -6.7% | 2,928 | -12.4% | ||||||||
NON-CURRENT LIABILITIES | 996,705 | 847,031 | 17.7% | 611,308 | 63.0% | ||||||||
Loans and Financing | 639,874 | 493,901 | 29.6% | 254,793 | 151.1% | ||||||||
Debenture | 298,550 | 299,948 | -0.5% | 299,483 | -0.3% | ||||||||
Land Payable | - | - | n.a | - | n.a | ||||||||
Reserve for Guarantee | 6,158 | 5,640 | 9.2% | 7,496 | -17.8% | ||||||||
Reserve for Contigencies | 5,676 | 5,676 | 0.0% | 8,603 | -34.0% | ||||||||
Deferred Taxes | 41,303 | 36,210 | 14.1% | 31,737 | 30.1% | ||||||||
Other Debts to Third Parties | 388 | 388 | 0.0% | 2,389 | -83.8% | ||||||||
Use Rights Payable | 4,756 | 5,268 | -9.7% | 6,807 | -30.1% | ||||||||
SHAREHOLDERS´S EQUITY | 4,839,220 | 4,761,744 | 1.6% | 4,643,626 | 4.2% | ||||||||
CONTROLLING SHAREHOLDERS´EQUITY | 4,777,731 | 4,702,532 | 1.6% | 4,577,177 | 4.4% | ||||||||
Social Capital | 2,888,997 | 2,888,997 | 0.0% | 2,888,997 | 0.0% | ||||||||
Capital Reserve | 38,297 | 38,297 | 0.0% | 38,297 | 0.0% | ||||||||
Cost of Shares Emission | (40,754) | (40,754) | 0.0% | (40,754) | 0.0% | ||||||||
Treasury Stock | (45,181) | (45,181) | 0.0% | (45,181) | 0.0% | ||||||||
Earnings Reserves | 1,846,829 | 1,860,294 | -0.7% | 1,677,702 | 10.1% | ||||||||
Accumulated Profits | 145,370 | 56,706 | 156.4% | 107,530 | 35.2% | ||||||||
Goodwill on Transactions with Partners | (55,827) | (55,827) | 0.0% | (49,414) | 13.0% | ||||||||
NON-CONTROLLING SHAREHOLDERS´EQUITY | 61,489 | 59,212 | 3.8% | 66,449 | -7.5% |
7
EARNINGS RELEASE 2Q24
INCOME STATEMENT
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Period ended 30 June, 2024
In Thousand of Brazilian Reais (R$)
GROSS REVENUE
(+) Revenue from Sale of Real Estate
IFRS 10
2T24
454,539
449,126
1T24
268,568
262,859
%Var
69.2%
70.9%
2T23
298,311
292,420
%Var
52.4%
53.6%
1S24
723,105
711,983
1S23
580,662
569,346
%Var
24.5%
25.1%
(+) Revenue from Services and Rental | 5,413 | 5,709 | -5.2% | 5,891 | -8.1% | 11,122 | 11,316 | -1.7% | ||||||||||||||
DEDUCTIONS FROM GROSS REVENUE | (38,615) | (29,381) | 31.4% | (55,579) | -30.5% | (67,996) | (87,146) | -22.0% | ||||||||||||||
(-) Cancelled Sales | (29,150) | (23,771) | 22.6% | (48,977) | -40.5% | (52,921) | (74,522) | -29.0% | ||||||||||||||
(-) Taxes on Sales | (9,465) | (5,610) | 68.7% | (6,602) | 43.4% | (15,075) | (12,624) | 19.4% | ||||||||||||||
NET REVENUE | 415,924 | 239,187 | 73.9% | 242,732 | 71.4% | 655,110 | 493,516 | 32.7% | ||||||||||||||
COST OF REAL ESTATE SOLD, RENTALS AND | (287,598) | (157,477) | 82.6% | (164,151) | 75.2% | (445,075) | (343,650) | 29.5% | ||||||||||||||
SERVICES | ||||||||||||||||||||||
(-) Site / Land Costs | (277,310) | (152,844) | 81.4% | (159,376) | 74.0% | (430,154) | (332,075) | 29.5% | ||||||||||||||
(-) Capitalized Financial Charges | (6,678) | (2,281) | 192.8% | (2,177) | 206.8% | (8,959) | (5,600) | 60.0% | ||||||||||||||
(-) Inventory Maintenance and Collateral | (3,610) | (2,352) | 53.5% | (2,598) | 39.0% | (5,962) | (5,975) | -0.2% | ||||||||||||||
GROSS PROFIT | 128,326 | 81,710 | 57.1% | 78,581 | 63.3% | 210,035 | 149,866 | 40.1% | ||||||||||||||
(%) Gross Margin | 30.9% | 34.2% | -3.3 p.p. | 32.4% | -1.5 p.p. | 32.1% | 30.4% | 1.7 p.p. | ||||||||||||||
(EXPENSES)/ OPERATIONAL REVENUES | (55,236) | (49,742) | 11.0% | (20,380) | 171.0% | (104,978) | (62,475) | 68.0% | ||||||||||||||
(-) Selling Expenses | (37,869) | (21,251) | 78.2% | (29,868) | 26.8% | (59,120) | (54,799) | 7.9% | ||||||||||||||
(-) Administrative Expenses | (39,248) | (34,443) | 14.0% | (35,677) | 10.0% | (73,691) | (66,912) | 10.1% | ||||||||||||||
(-) Tax Expenses | (2,978) | (2,845) | 4.7% | (2,165) | 37.6% | (5,823) | (4,963) | 17.3% | ||||||||||||||
(+) Equity Income | 22,941 | 11,110 | 106.5% | 49,992 | -54.1% | 34,051 | 67,325 | -49.4% | ||||||||||||||
(+) Other Expenses / Operational Revenues | 1,918 | (2,313) | -182.9% | (2,662) | -172.1% | (395) | (3,126) | -87.4% | ||||||||||||||
EBIT | 73,090 | 31,968 | 128.6% | 58,201 | 25.6% | 105,057 | 87,391 | 20.2% | ||||||||||||||
FINANCIAL RESULT | 28,747 | 30,864 | -6.9% | 23,096 | 24.5% | 59,611 | 47,418 | 25.7% | ||||||||||||||
(+) Financial Revenue | 40,910 | 42,805 | -4.4% | 35,383 | 15.6% | 83,715 | 72,046 | 16.2% | ||||||||||||||
(-) Financial Expenses | (12,163) | (11,941) | 1.9% | (12,287) | -1.0% | (24,104) | (24,628) | -2.1% | ||||||||||||||
EARNINGS BEFORE INCOME TAX AND SOCIAL | 101,837 | 62,832 | 62.1% | 81,297 | 25.3% | 164,668 | 134,809 | 22.1% | ||||||||||||||
CONTRIBUTION | ||||||||||||||||||||||
INCOME TAX AND SOCIAL CONTRIBUTION | (9,513) | (6,584) | 44.5% | (5,785) | 64.4% | (16,097) | (13,267) | 21.3% | ||||||||||||||
(-) Current | (5,799) | (6,786) | -14.5% | (5,915) | -2.0% | (12,585) | (12,978) | -3.0% | ||||||||||||||
(-) Deferred | (3,714) | 202 | -1938.6% | 130 | -2956.9% | (3,512) | (289) | 1115.2% | ||||||||||||||
ATTRIBUTABLE TO NON-CONTROLLING | (3,660) | 459 | -897.4% | (179) | 1944.7% | (3,201) | (3,984) | -19.7% | ||||||||||||||
NET INCOME (ATTRIBUTABLE TO CONTROLLING SHAREHOLDERS) | 88,664 | 56,706 | 56.4% | 75,333 | 17.7% | 145,370 | 117,558 | 23.7% | ||||||||||||||
(%) Net Margin | 21.3% | 23.7% | -2.4 p.p. | 31.0% | -9.7 p.p. | 22.2% | 23.8% | -1.6 p.p. | ||||||||||||||
8
EARNINGS RELEASE 2Q24
FINANCIAL INDICATORS
REVENUE, COST & GROSS PROFIT
30.9%
2nd Quarter
- 3,31 p.p. vs 1Q24
32.1%
Year-to-date
Revenue increases by 74% due to specific factors such as the expansion of ready unit sales and the revenue recognition from Villares Parada Inglesa. Through commercial efforts to sell ready stock, the Company managed to nearly triple the volume sold of this type of product, jumping from R$49 million in 1Q24 to R$136 million in 2Q24. It is worth noting that the fact that the units have 100% PoC allows the totality of the sale to be recognized as revenue in the quarter of the sale. Additionally, the quick sale of units from Villares Parada Inglesa allowed for the overcoming of the Suspensive Clause and the start of revenue recognition in the same quarter of its launch.
Despite the reduction in margin, the quarterly gross profit of R$128 million is the highest in the last 2.5 years. This quarter, the Company started sales of the Lindenberg Design Tower and initiated a price adjustment campaign, creating opportunities in products, specially completed ones. These actions, despite slowing the steady margin recovery trajectory the Company had been achieving, drove an improvement in the SOS, resulting in a significant increase in net revenue, which consequently increased the net profit for this quarter.
Expansion of Gross Profit by 57% compared to 1Q23
Quarterly evolution of gross profit and gross margin
percentageand | 32% | 32% | |
millionR$ | |||
81 | |||
79 | |||
34% | |
33% | |
128 | |
113 | 31% |
82 |
2Q233Q234Q231Q242Q24
The weight of projects launched before 2019 has been losing relevance as they have been delivered
Net Revenue and Gross Margin by Year of Launch
2024 | 2023 | 2022 | 2021 | 2020 | <= 2019 | EZ INC | FIT CASA | ||||||||
1H24
1H23
25R$mi | 35%MB | R$ | 89 mi | R$ 116 mi | R$ 235 mi | |||||||||||
32% | MB | 33% MB | 34% MB | |||||||||||||
R$ 20 mi | R$ 54 mi | 34% MB | R$ 110 mi | |||||||||||||
38% MB | 33% MB | |||||||||||||||
0% | 10% | 20% | 30% | 40% | 50% | 60% |
R$ 53 mi | R$ 87 | 6R$mi | 94%MB | 46R$mi 32%MB | ||||
mi 31% | ||||||||
33% MB | ||||||||
MB | ||||||||
R$ 13 | mi | R$ 23 mi | 4R$mi | 88%MB | 17R$mi 32%MB | |||
38% | MB | 27% MB | ||||||
70% | 80% | 90% | 100% |
9
EARNINGS RELEASE 2Q24
Costs remained proportionate to revenue compared to the previous quarter
Quarterly Evolution of Costs
288
225
164 | 170 | 157 |
R$ million
2Q23 | 3Q23 | 4Q23 | 1Q24 | 2Q24 |
Construction & Land Cost
96.4%
Of the quarter´s costs
An average EZTEC project is much larger than the average project built in Brazil. As expected, the larger the project, the greater the weight of steel, cement, aluminum, among other inputs in its cost basket. Such projects may be common in the São Paulo market but do not reflect the national average. The INCC, the reference index for construction inflation in Brazil, had its calculation model recently revised by FGV and, starting from July 2023, new parameters were adopted, possibly more aligned with the Company's cost dynamics.
Capitalized Financial Charges
2.3%
Of the quarter´s costs
Low volume of SFH debts. In the real estate market, accounting-wise, construction financing interest is capitalized to the cost of the product, rather than considered a financial expense, since it arises from the production process. However, this interest becomes an expense under the line of Interest and Passive Monetary Variations once the project is delivered.
Maintenance & Collateral
1.3%
Of the quarter´s costs
The Company includes maintenance and warranty clauses in its contracts for its projects for up to 5 years after the delivery of the keys. The provisions aim to anticipate the financial effects of the guarantees provided by the Company on its projects. After the 5-year period has elapsed, the unutilized portion of this provision will be reversed.
10