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    DIRR3   BRDIRRACNOR0

DIRECIONAL ENGENHARIA S.A.

(DIRR3)
  Report
End-of-day quote. End-of-day quote Bolsa de Valores de Sao Paulo - 12/01
10.29 BRL   +1.08%
11/22DIRECIONAL ENGENHARIA S A : Dados Econômico-Financeiros
PU
11/22DIRECIONAL ENGENHARIA S A : 3Q21 Financial Statements
PU
11/093Q21 Earnings Presentation
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SummaryMost relevantAll NewsOther languagesPress ReleasesOfficial PublicationsSector news

Direcional Engenharia S A : 3Q21 Operating Preview

10/14/2021 | 05:22pm EST

OPERATING PREVIEW

3Q21

Belo Horizonte, October 14, 2021 - A Direcional Engenharia S.A., one of the largest homebuilders and real estate development companies in Brazil, focused on the development of low-income and medium-income projects and operating in several regions of the Brazilian Territory, discloses here its operating statements for the third quarter of 2021 (3Q21). Unless otherwise expressed, the information in this document is expressed in the national currency (Brazilian Reais - R$ or BRL) and the Potential Sales Value ("PSV") demonstrates the value consolidated (100%).

NOTICE TO THE MARKET

3Q21 OPERATING PREVIEW

    • RECORD-BREAKINGIN LAUNCHES IN 3Q21 (BRL 1.1 BILLION), GROWING 88% OVER 3Q20;
      • NET SALES RECORD IN 3Q21 (BRL 643 MILLION), A 40% INCREASE VERSUS 3Q20;
  • RIVA GREW 281% YoY IN NET SALES IN 3Q20, ACCOUNTING FOR 37% OF GRUPO DIRECIONAL.

HIGHLIGHTS

  • Record-highin Launches for the second quarter in a row, +37%over 2Q21.
  • Volume launched in the year to September period (9M21) grew 129%in comparison with 9M20, totaling BRL 2.4 billion.
  • Net Sales again at the highest level in Direcional's history: 5th record in the last 6 quarters, totaling BRL 643 million.
  • In 9M21, Net Sales reached BRL 1.8 billion, a growth rate of 53%versus 9M20.
  • Net Sales Speed ratio (VSO) of 17%in the quarter.

RIVA

  • Riva's Launches reached BRL 621 millionin 3Q21, the highest level in segment's history.
  • 281%growth in Net Sales in comparison with 3Q20 and 33%growth versus 2Q21.
  • In 3Q21, Riva's Net Sales accounted for 37%of the total sales by Grupo Direcional.
  • Riva's VSO reached 21%in the quarter.

1

OPERATING PREVIEW

3Q21

LAUNCHES

In 3Q21, Direcional launched 10 new projects/phases, totaling a PSV of BRL 1.1 billion (BRL 927 million % Company), an 88% increase versus 3Q20 and a 37% increase over 2Q21, which had been the highest level ever recorded by the Company. Thus,

Direcional hits another record in terms of Launches in a single quarter.

In 9M21, there was a 3-digit growth in comparison with 9M20. The 129% growth in the period contributed to the achievement of a PSV of BRL 2.4 billion in the year to date.

Considering the last twelve months (3T21 LTM), Launches totaled BRL 3.1 billion.

Launches

Launches Track Record

(PSV 100% - BRL million)

(PSV 100% - BRL million)

+129%

3,142

2,445

+88%

935

1,905

1,946

1,763

1,081

1,066

1,109

787

45

574

+37%

832

621

1,509

188

502

45

1,021

599

530

459

3Q20

2Q21

3Q21

9M20

9M21

2015

2016

2017

2018

2019

2020

3Q21

LTM

Riva

Direcional

Table below provides further information on projects launched in 3Q21 and 9M21:

3Q21

2Q21

Q3T20

%

%

Launches

(a)

(b)

(c)

(a/b)

(a/c)

PSV Launched - 100% (BRL '000)

1,080,620

786,923

574,480

37.3%

88.1%

Direcional

459,356

599,155

529,743

-23.3%

-13.3%

Riva

621,265

187,768

44,737

230.9%

1288.7%

PSV Launched - % Company (BRL '000)

927,228

662,361

458,127

40.0%

102.4%

Direcional

459,356

474,593

435,758

-3.2%

5.4%

Riva

467,872

187,768

22,368

149.2%

1991.7%

Launched Units

3,764

4,153

3,358

-9.4%

12.1%

Direcional

1,800

3,385

3,142

-46.8%

-42.7%

Riva

1,964

768

216

155.7%

809.3%

Average % Company

85.8%

84.2%

79.7%

2 p.p.

6 p.p.

Average Price (BRL/unit)

287,094

189,483

171,078

51.5%

67.8%

Direcional

255,198

177,003

168,601

44.2%

51.4%

Riva

316,326

244,490

207,115

29.4%

52.7%

9M21

9M20

%

(d)

(e)

(d/e)

2,444,603

1,065,543

129.4%

1,509,373

1,020,807

47.9%

935,230

44,737

1990.5%

2,043,818

876,337

133.2%

1,261,981

853,969

47.8%

781,837

22,368

3395.3%

10,388

6,342

63.8%

7,194

6,126

17.4%

3,194

216

1378.7%

83.6%

82.2%

1 p.p.

235,330

168,014

40.1%

209,810

166,635

25.9%

292,808

207,115

41.4%

2

OPERATING PREVIEW

3Q21

CONTRACTED NET SALES

Contracted Net Sales reached a PSV of BRL 643 million (BRL 525 million % Company) in 3Q21, a growth rate of 40% when compared to 3Q20, and 5% when compared to 2Q21. Once again, Direcional set its best quarter in terms of Net Sales - the 5th record in the last 6 quarters.

As has been happening in recent quarters, Riva's relevant role in sales volume stands out. In 3Q21, it accounted for 37% of the total sold by Grupo Direcional.

In 9M21, Net Sales totaled BRL 1.8 billion, a 53% growth in comparison with the total amount of 9M20.

Net Sales

Net Sales Track Record

(PSV 100% - BRL million)

(PSV 100% - BRL million)

+53%

1,772

614

643

14

537

523

515

1,158

458

184 7

+40%

386

401

336

371

614

643

326

298

271

287

3

+5%

458

178 3

1,221

236

966

62

3

393

433

403

3Q20

2Q21

3Q21

9M20

9M21

3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21

Old Harvest

Riva

Direcional

Table below consolidates the information on contracted Net Sales in 3Q21 and 9M21:

Contracted Net Sales

PSV Contracted Net Sales - 100% (BRL '000)

3Q21

2Q21

3Q20

%

(a)

(b)

(c)

(a/b)

642,716

614,496

458,407

4.6%

%

9M21

9M20

%

(a/c)

(d)

(e)

(d/e)

40.2%

1,772,176

1,157,552

53.1%

Direcional

402,842

433,406

393,027

-7.1%

2.5%

1,221,317

966,195

26.4%

Riva

236,459

178,387

62,133

32.6%

280.6%

536,996

184,105

191.7%

Old Harvest1

3,414

2,703

3,247

26.3%

5.2%

13,864

7,252

91.2%

PSV Contracted Net Sales - % Company (BRL '000)

525,002

515,665

368,944

1.8%

42.3%

1,479,611

961,015

54.0%

Direcional

342,509

364,201

312,154

-6.0%

9.7%

1,030,178

791,516

30.2%

Riva

180,159

149,183

55,234

20.8%

226.2%

439,359

165,920

164.8%

Old Harvest

2,334

2,281

1,556

2.3%

50.1%

10,074

3,579

181.5%

Contracted Units

3,211

3,168

2,457

1.4%

30.7%

9,081

6,312

43.9%

Direcional

2,370

2,491

2,224

-4.9%

6.6%

7,111

5,568

27.7%

Riva

831

668

215

24.4%

286.5%

1,929

719

168.3%

Old Harvest

10

9

18

11.1%

-44.4%

41

25

64.0%

VSO in PSV

17%

18%

16%

-1 p.p.

1 p.p.

36%

33%

3 p.p.

Direcional

16%

17%

18%

-1 p.p.

-2 p.p.

36%

35%

1 p.p.

Riva

21%

26%

15%

-5 p.p.

6 p.p.

38%

33%

4 p.p.

Old Harvest

3%

2%

2%

1 p.p.

1 p.p.

9%

4%

5 p.p.

1 Old Harvest: Comprises projects of the middle income, upper-middle income and commercial segments, developed in the former model.

3

OPERATING PREVIEW

3Q21

NET SALES SPEED (VSO)

Net Sales Speed, measured by the VSO index (sales-over-supply ratio), reached 17% in 3Q21. The VSO of projects at Direcional, excluding Old Harvest segment, reached 17% in the quarter. The VSO of Riva segment reached 21% in the same period.

Net Sales and VSO

(PSV 100% - BRL million)

26%

18%

20%

18%

21%

18%

17%

17%

17%

16%

17%

17%

16%

16%

15%

9%

5%

3%

2%

2%

643

Old Harvest Sales

614

Riva Sales

3

523

3

515

458

Direcional Sales

178

236

16

8

62

3

95

122

Direcional VSO

Consolidated VSO

393

412

385

433

403

Riva VSO

Old Harvest VSO

3Q20

4Q20

1Q21

2Q21

3Q21

INVENTORY

Direcional ended 3Q21 with 14,573 units in Inventory, totaling a PSV of BRL 3.2 billion (BRL 2.7 billion % Company).

Table below shows the Inventory at market value, detailed by stage of construction and by type of product. It is worth mentioning that there are only BRL 9 million in PSV of Direcional (ex-Old Harvest) completed units, representing less than 1% of total Inventory.

PSV Total

PSV % Company

Breakdown of Inventory at

Direcional

Riva

Old Harvest

Total

Direcional

Riva

Old Harvest

Total

Market Value

In progress (BRL million)

2,157

891

1

3,049

1,890

694

1

2,585

% Total

68%

28%

0%

96%

70%

26%

0%

96%

Completed (BRL million)

9

5

116

129

8

4

89

102

% Total

0%

0%

4%

4%

0%

0%

3%

4%

Total (BRL million)

2,166

896

116

3,178

1,898

698

90

2,686

% Total

68%

28%

4%

100%

71%

26%

3%

100%

Total Units

11,128

3,124

321

14,573

11,128

3,124

321

14,573

% Total Units

76%

21%

2%

100%

76%

21%

2%

100%

4

OPERATING PREVIEW

3Q21

LANDBANK

In 3Q21, 13 plots of lands were acquired, with a construction potential of 7,831 units and a PSV of BRL 1.7 billion (BRL 1.7 billion % Company).

The average cost of acquisition was equivalent to 13% of PSV, and 69% of the payment shall be made via swaps, which causes a reduced impact on the Company's cash position in the short term. It is important to mention that approximately BRL 627 million of the landbank acquired in 3Q21 is intended to Riva projects.

In 9M21, land acquisitions totaled a PSV of BRL 4.8 billion (BRL 4.6 billion % Company), with an average cost of 13% of the PSV, and with 72% of the payment to be made through swaps.

Direcional landbank ended 3Q21 with a development potential of 151 thousand units and a PSV of BRL 27 billion (BRL 25 billion % Company).

CASH GENERATION (CASH BURN) ¹

In 3Q21, there was a cash burn in the amount of BRL 23 million. In the last twelve months ended in 3Q21, there was a total cash generation of BRL 26 million.

It should be noted that the cash burn observed is due to the significant operational growth that the Company has been reporting, leading to a considerable expansion in the volume of launches, which more than doubled in 9M21 in comparison with 9M20.

In addition, we also highlight the importance of the strategy of anticipating the purchase of inputs before price increases, with the objective of mitigating most of the effects of the inflationary pressure that has been occurring in the country in recent quarters. This decision was crucial for maintaining the resilience of the Gross Margin that the Company has reported in the period.

Cash Generation by Quarter

Cash Generation by Year

(R$ million)

(R$ million)

63

362

15

76

158

167

146

-29

-23

53

38

26

-71

4Q20

1Q21

2Q21

3Q21

2013

2014

2015

2016

2017

2018

2019

2020

3Q21

LTM

1 Cash Generation (Cash Burn): variation in net debt adjusted by payment of dividends, repurchase of shares and the variation in the balance of interest swap operation agreements. Prior unaudited information.

5

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

Direcional Engenharia SA published this content on 14 October 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 October 2021 21:21:09 UTC.


ę Publicnow 2021
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Sales 2021 1 793 M 315 M 315 M
Net income 2021 175 M 30,8 M 30,8 M
Net Debt 2021 226 M 39,7 M 39,7 M
P/E ratio 2021 8,79x
Yield 2021 6,82%
Capitalization 1 508 M 268 M 265 M
EV / Sales 2021 0,97x
EV / Sales 2022 0,76x
Nbr of Employees -
Free-Float 61,2%
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