EZTEC EMPREENDIMENTOS E PARTICIPAÇÕES S.A. EARNINGS RELEASE 4Q23
CONFERENCE CALL
With simultaneous translation
March 15, 2024
10h (Brasília Time) / 09h (NY Time)
Zoom:
Click hereor access via QR Code 856 9775 5396
Contact IR
- 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 1Q20
Delivery 4Q23
EARNINGS RELEASE 4Q23
SUMMARY | |
ADMINISTRATIVE EXPENSES | 11 |
EQUITY INCOME | 12 |
RESULTS TO BE RECOGNIZED | 13 |
FINANCIAL RESULTS | 14 |
CASH AND DEBTS | 15 |
OPERATIONAL INDICATORS | 16 |
LAUNCHES | 16 |
OPERATIONS INFORMATIONS | 17 |
SALES & CANCELLATIONS | 18 |
DIRECT RECEIVABLES PORTFOLIO | 20 |
INVENTORY | 21 |
LANDBANK | 22 |
EZ INC | 24 |
CAPITAL MARKETS | 25 |
ADDITIONAL VALUE | 25 |
INTERNAL CONSENSUS | 26 |
ANnEXeS | 28 |
CASH FLOW | 28 |
PoC EVOLUTION | 29 |
INVENTORY BY PROJECT | 30 |
REVENUE BY PROJECT | 32 |
RESULTS FOR SHARED CONTROL PROJECTS | 34 |
EZ INC | 35 |
3
EARNINGS RELEASE
EARNINGS RELEASE 4Q23
4Q23 HIGHLIGHTS
20% sold *Considering the private area sold
Lindenberg Ibirapuera
(Art & Design Tower)
Quarterly Net Profit of R$83 million is 163% higher than that recorded in 4Q22 and 112% higher than 3Q23
With R$1.5 billion in sales, 2023 is the 2nd best year in history and the best since the start of the pandemic.
Financial Highlights
Net Revenue (R$ k)
4Q23
337,929
3Q23
251,727
%Var
34.2%
4Q22
310,897
%Var
8.7%
2023
1,083,172
2022
1,121,260
%Var
-3.4%
Gross Profit (R$ k) | 112,508 | 81,325 | 38.3% | 76,990 | 46.1% | 343,699 | 384,229 | -10.5% |
Gross Margin | 33.3% | 32.3% | 1 p.p | 24.8% | 8.5 p.p | 31.7% | 34.3% | -2.5 p.p |
Net Income (R$ k) | 82,798 | 39,111 | 111.7% | 31,511 | 162.8% | 239,467 | 324,707 | -26.3% |
Net Margin | 24.5% | 15.5% | 9 p.p | 10.1% | 14.4 p.p | 22.1% | 29.0% | -6.9 p.p |
Earnings per Share (R$) | 0.36 | 0.18 | 100.0% | 0.15 | 140.0% | 1.08 | 1.47 | -26.5% |
Net Debt (Cash) (R$ k) | 93,895 | 18,513 | 407.2% | (241,151) | -138.9% | 93,895 | (241,151) | -138.9% |
Cash Generation (Burn) (R$ k) | (75,382) | (116,774) | -35.4% | (170,801) | -55.9% | (335,046) | (627,180) | -46.6% |
Operational Highlights
4Q23
3Q23
%Var
4Q22
%Var
2023
2022
%Var
# of Projects/Phases Launched | 1 | 1 | 0.0% | 3 | -66.7% | 5 | 9 | -44.4% |
PSV %EZTEC (R$ k) | 300,000 | 85,000 | 252.9% | 468,446,0 | -36.0% | 987,000 | 1,783,446 | -44.7% |
Gross Sales %EZTEC (R$ k) | 254,883 | 343,560 | -25.8% | 345,780 | -26.3% | 1,498,974 | 1,434,945 | 4.5% |
Net Sales %EZTEC (R$ k) | 205,914 | 278,507 | -26.1% | 304,335 | -32.3% | 1,269,809 | 1,255,002 | 1.2% |
Total Inventory (R$ mn) | 2,664,480 | 2,664,074 | 0.0% | 2,843,490 | -6.3% | 2,664,480 | 2,843,490 | -6.3% |
Net SoS | 7.2% | 9.5% | -2.3 p.p | 9.7% | -2.5 p.p | 32.3% | 30.6% | 1.7 p.p |
# of Active Construction Sites | 19 | 21 | -9.5% | 20 | -5.0% | 19 | 20 | -5.0% |
Total Landbank (R$ mn) | 9,366,178 | 8,850,722 | 5.8% | 8,630,000 | 8.5% | 9,366,178 | 8,630,000 | 8.5% |
São Paulo, March 14, 2024 - EZTEC S.A. (B3: EZTC3), with 45 years of existence, stands out as one of the most profitable companies in the construction and development sector in Brazil. The Company announces its results for the fourth quarter of 2023 (4Q23). EZTEC's operational and financial information, except where otherwise indicated, is presented based on consolidated figures and in thousands of Reais (R$), prepared in accordance with 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 Securities and Exchange Commission (CVM) and the Federal Accounting Council (CFC). Non-accounting and non-financial data were not audited by Independent Auditors.
4
EARNINGS RELEASE 4Q23
MANAGEMENT'S 2023 COMMENTS
EZTEC's Management announces the consolidated results for the year 2023. Having already announced the results of previous quarters and having the last quarter of the year recorded quarterly gross margins of 33.3%, net margin of 24.5% and a quarterly net profit of R$83 million, the Company ends the 2023 financial year with an annual gross margin of 31.7%, a net margin of 22.1% and an annual result of R$239 million.
Throughout the year, the Company chose to postpone its launches while focusing on the sale of its inventory, especially those projects under construction whose delivery period is scheduled to occur until 2025. This cautious stance resulted from the observation of a very uncertain economic scenario, especially regarding the trajectory and speed at which interest rates would be reduced (which only started to occur in August), access to credit for customers, and the concern with the formation of ready stock resulting from harvests to be delivered in the coming years.
During the year, four projects were launched whose General Sales Value (PSV) in the EZTEC part totaled R$987 million. Highlights include the high- income projects launched through a joint venture signed the previous year with Construtora Adolpho Lindenberg. In total, there were three projects:
- Jota by Lindenberg (1Q23), R$127 million in PSV %EZ; (ii) Lindenberg Ibirapuera (2Q23 and 4Q23), R$600 million PSV %EZ and; (iii) Lindenberg Alto de Pinheiros (3Q23), R$85 million PSV %EZ. In addition to these, the Company chose to launch East Blue Tatuapé (2Q23) with R$175 million in PSV aimed at the middle-income public in the East Zone, a project with typical characteristics of the Company's history.
Even with a 44.6% lower volume of launches, this year's sales exceeded those of 2022 by 4.5%, reaching R$1.5 billion. Although this strategy may have had some effect on sales over supply (VSO), it surpassed the 2022 speed by 2.4 p.p., reaching 36%. The operational highlight came from net sales of units under construction, which in 2023 was R$750 million, 70% higher than the R$440 million in 2022.
This feat was only possible thanks to (i) a reduction in the volume of launches that mobilized the sales force to negotiate the goods in stock; (ii) the strong commercial campaign dedicated to encouraging the sale of stocks under construction and performed through Homes Stores and; (iii) the financing campaign, Estilo EZTEC, which offered credit for post-key financing starting at 7.99% p.a. + IPCA or IGP-DI. Thus, deliveries scheduled for 2023, 2024 and 2025, which started the year at 75%, 42% and 41% sold, respectively, ended the year at 84%, 75% and 70%. Considerably reducing the risk of building ready stock for the coming years.
In 2023, the Company delivered R$1.8 billion in PSV, 2.4x more than 2022. In total, nine projects were completed, which together result in the largest volume delivered in one year in EZTEC's history. More than 4,600 units were delivered to customers, of which approximately 84% have been sold. The last quarter of the year accounted for 71% of the PSV delivered, approximately R$1.3 billion. In particular, the delivery of EZ Parque da Cidade took place on November 30th, which accumulated positive feedback from customers satisfied with the quality observed in the project and the payment of fines and additional expenses resulting from the delay ceased.
It is expected that the receivables linked to deliveries made in 4Q23 will be converted into cash in the coming months as bank transfers occur. The Company closed the year with a position of R$762 million in cash, a value very similar to the R$769 observed at the end of 2022. However, throughout the year production debts were contracted which increased the level of loans and financing on its balance sheet, resulting in a net debt position of R$94 million. It is worth noting that 65% of the Company's debt is linked to the Housing Financial System (SFH), mostly with interest contracted at Savings + 2.4% + TR, and that its balance is deducted from the project's receivables after delivery of the keys during bank transfer.
As for the landbank, throughout the year, the purpose conversion of the projects located on Av. Roque Petroni, Verbo Divino, Alves Guimarães, Fernandes Moreira and Pamaris from commercial to residential and, with this, the adjustment of landbank data, updating their classifications and the value of their PSVs. Furthermore, the approval of the new Strategic Master Plan for the city of São Paulo has allowed the Company to review some of its projects and, gradually, incorporate possible increases in the data disclosed with each release as they were calculated.
Finally, the Board also approved the payment of dividends on quarterly profits. The total amount will be R$19.6 million, approximately R$0.09 (nine cents) per share to be paid on March 28, 2024. In total, the results for 2023 resulted in an amount of R$56.8 million to shareholders, of which R$37.2 million has already been paid during the year.
Best regards,
THE MANAGEMENT
Arbitration Chambers: Pursuant to Article 41 from EZTEC's Bylaws, the Company, its shareholders, Management, and members of the Audit Committee are obliged to resolve each and every of dispute and controversy that may arise among them through arbitration towards The Chamber of Arbitration of the Market (Câmara de Arbitragem do Mercado), especially in regard to the application, the validity, the efficacy, interpretation, and violation of its effects, of the the Corporation Law (Lei das Sociedades por Ações), of the Company's Bylaws, of the norms edited by the National Monetary Council, by the Central Bank of Brazil or by CVM, as well as of the remaining norms applicable to the functioning of the capital market in general, and of the Novo Mercado Regulation, the Arbitration Regulation, the Sanction Regulation, and the Participation Contract in Novo Mercado.
Relationship with Independent Auditors: In compliance with CVM Resolution number 162/22 we inform that the independent auditors Ernst & Young Auditores Independentes S.S. did not provide services other than those related to external auditing in 2023. The company's policy when contracting the services of independent auditors ensures that there is no conflict of interest, loss of independence or objectivity.
5
EARNINGS RELEASE 4Q23
BALANCE SHEET
Click and access the
data in Excel
Period ended December 31, 2023 In thousand of Brazilian Reais (R$)
ASSETS
4Q23
5,879,316
3Q23
5,838,676
%Var
0.70%
4Q22
5,533,594
%Var
6.25%
CURRENT ASSETS | 2,510,852 | 2,609,601 | -3.78% | 2,337,621 | 7.41% | ||||||||
Cash and Cash Equivalents | 84,186 | 51,500 | 63.47% | 49,103 | 71.45% | ||||||||
Financial Investments | 678,090 | 736,454 | -7.93% | 719,574 | -5.77% | ||||||||
Trade Accounts Receivable | 313,016 | 284,259 | 10.12% | 336,887 | -7.09% | ||||||||
Provision for Doubtful Accounts | (16,821) | (15,997) | 5.15% | (14,389) | 16.90% | ||||||||
Real Estate Held for Sale | 1,422,577 | 1,520,718 | -6.45% | 1,209,550 | 17.61% | ||||||||
Recoverable Taxes | 8,905 | 9,132 | -2.49% | 9,348 | -4.74% | ||||||||
Other Receivables | 20,899 | 23,535 | -11.20% | 27,548 | -24.14% | ||||||||
NON-CURRENT ASSETS | 3,368,464 | 3,229,075 | 4.32% | 3,195,973 | 5.40% | ||||||||
Trade Accounts Receivable | 903,841 | 900,646 | 0.35% | 760,990 | 18.77% | ||||||||
Real Estate Held for Sale | 1,668,196 | 1,497,427 | 11.40% | 1,641,471 | 1.63% | ||||||||
Recoverable Taxes | 39,792 | 37,425 | 6.32% | 35,410 | 12.38% | ||||||||
Due To Related Parties | 79,016 | 44,294 | 78.39% | 16,890 | 367.83% | ||||||||
Notes Receivable | 103 | 2,114 | -95.13% | 16,727 | -99.38% | ||||||||
Other Receivables | 139,883 | 164,868 | -15.15% | 133,125 | 5.08% | ||||||||
Goodwill over Investments | 69,918 | 70,438 | -0.74% | 73,968 | -5.48% | ||||||||
Investments | 431,323 | 470,842 | -8.39% | 464,682 | -7.18% | ||||||||
Property and Equipment | 34,188 | 39,422 | -13.28% | 50,920 | -32.86% | ||||||||
Intangible | 2,204 | 1,599 | 37.84% | 1,790 | 23.13% | ||||||||
LIABILITIES | 1,174,252 | 1,174,301 | 0% | 994,650 | 18.06% | ||||||||
CURRENT LIABILITIES | 402,620 | 503,128 | -19.98% | 475,669 | -15.36% | ||||||||
Suppliers | 52,607 | 53,905 | -2.41% | 54,530 | -3.53% | ||||||||
Payroll Obligations | 8,071 | 12,097 | -33.28% | 9,796 | -17.61% | ||||||||
Tax Obligations | 26,102 | 21,775 | 19.87% | 24,660 | 5.85% | ||||||||
Loand and Financing | 132,246 | 180,455 | -26.72% | 58,503 | 126.05% | ||||||||
Debentures | 4,225 | 16,017 | -73.62% | 4,965 | -14.90% | ||||||||
Trade Accounts Payable | 36,329 | 36,152 | 0.49% | 36,082 | 0.68% | ||||||||
Reserve for Guarantee | 12,179 | 6,814 | 78.73% | 7,544 | 61.44% | ||||||||
Advances from Customers | 94,286 | 123,164 | -23.45% | 131,537 | -28.32% | ||||||||
Land Payable | 1,624 | 38,365 | -95.77% | 123,911 | -98.69% | ||||||||
Dividends Payable | 19,666 | - | n.a | 7,484 | 162.77% | ||||||||
Due to Related Parties | 872 | 1,012 | -13.83% | 850 | 2.59% | ||||||||
Deferrend Taxes | 11,540 | 10,505 | 9.85% | 12,753 | -9.51% | ||||||||
Use Rights Payable | 2,873 | 2,867 | 0.21% | 3,054 | -5.93% | ||||||||
NON-CURRENT LIABILITIES | 771,632 | 671,173 | 14.97% | 518,981 | 48.68% | ||||||||
Loans and Financing | 419,907 | 310,357 | 35.30% | 164,886 | 154.67% | ||||||||
Debenture | 299,793 | 299,638 | 0.05% | 299,172 | 0.21% | ||||||||
Land Payable | - | - | n.a | - | n.a | ||||||||
Reserve for Guarantee | 4,525 | 8,767 | -48.39% | 5,721 | -20.91% | ||||||||
Reserve for Contigencies | 5,676 | 8,603 | -34.02% | 10,182 | -44.25% | ||||||||
Deferred Taxes | 35,845 | 35,224 | 1.76% | 28,634 | 25.18% | ||||||||
Other Debts to Third Parties | 388 | 2,389 | -83.76% | 2,389 | -83.76% | ||||||||
Use Rights Payable | 5,498 | 6,195 | -11.25% | 7,997 | -31.25% | ||||||||
SHAREHOLDERS'S EQUITY | 4,705,064 | 4,664,375 | 0.87% | 4,538,944 | 3.66% | ||||||||
CONTROLLING SHAREHOLDERS' EQUITY | 4,645,827 | 4,598,395 | 1.03% | 4,469,647 | 3.94% | ||||||||
Social Capital | 2,888,997 | 2,888,997 | 0.00% | 2,888,997 | 0.00% | ||||||||
Capital Reserve | 38,297 | 38,297 | 0.00% | 38,297 | 0.00% | ||||||||
Cost of Shares Emission | (40,754) | (40,754) | 0.00% | (40,754) | 0.00% | ||||||||
Treasury Stock | (45,181) | (45,181) | 0.00% | (45,181) | 0.00% | ||||||||
Earnings Reserves | 1,620,828 | 1,677,702 | -3.39% | 1,352,995 | 19.80% | ||||||||
Accumulated Profits | 239,467 | 128,748 | 86.00% | 324,707 | -26.25% | ||||||||
Goodwill on Transactions with Partners | (55,827) | (49,414) | 12.98% | (49,414) | 12.98% | ||||||||
NON-CONTROLLING SHAREHOLDERS' EQUITY | 59,237 | 65,980 | -10.22% | 69,297 | -14.52% |
6
EARNINGS RELEASE 4Q23
INCOME STATEMENT | Click and access the |
data in Excel | |
Period ended December 31, 2023 In thousand of Brazilian Reais (R$)
GROSS REVENUE
(+) Revenue from Sale of Real Estate
IFRS 10
4Q23
380,118
374,266
3Q23
302,268
294,765
%Var
25.8%
27.0%
4Q22
348,257
341,947
%Var
9.1%
9.5%
2023 | 2022 |
1,263,047 1,262,043
1,238,376 1,239,286
%Var
0.1%
-0.07%
(+) Revenue from Services and Rental | 5,852 | 7,503 | -22.0% | 6,310 | -7.3% | 24,671 | 22,757 | 8.4% | |||||||||||
DEDUCTIONS FROM GROSS REVENUE | (42,189) | (50,541) | -16.5% | (37,360) | 12.9% | (179,875) | (140,783) | 27.8% | |||||||||||
(-) Cancelled Sales | (34,506) | (44,675) | -22.8% | (29,103) | 18.6% | (153,703) | (112,334) | 36.8% | |||||||||||
(-) Taxes on Sales | (7,683) | (5,866) | 31.0% | (8,257) | -7.0% | (26,172) | (28,449) | -8.0% | |||||||||||
NET REVENUE | 337,929 | 251,727 | 34.2% | 310,897 | 8.7% | 1,083,172 | 1,121,260 | -3.4% | |||||||||||
COSTS OF REAL ESTATE SOLD, RENTALS AND SERVICES | (225,421) | (170,402) | 32.3% | (233,907) | -3.6% | (739,473) | (737,031) | 0.3% | |||||||||||
(-) Site / Land Costs | (217,432) | (162,448) | 33.8% | (227,882) | -4.6% | (711,955) | (722,293) | -1.4% | |||||||||||
(-) Capitalized Financial Charges | (5,278) | (4,149) | 27.2% | (2,386) | 121.2% | (15,027) | (5,705) | 163.4% | |||||||||||
(-) Inventory Maintenance and Collateral | (2,711) | (3,805) | -28.8% | (3,639) | -25.5% | (12,491) | (9,033) | 38.3% | |||||||||||
GROSS PROFIT | 112,508 | 81,325 | 38.3% | 76,990 | 46.1% | 343,699 | 384,229 | -10.5% | |||||||||||
(%) Gross Margin | 33.2% | 32.3% | 1 p.p | 24.7% | 8.5 p.p | 31.7% | 34.2% | -2.5 p.p | |||||||||||
OPERATIONAL REVENUES / (EXPENSES)) | (42,005) | (50,139) | -16.2% | (51,757) | -18.8% | (154,619) | (144,483) | 7.0% | |||||||||||
(-) Selling Expenses | (30,510) | (28,564) | 6.8% | (29,915) | 2.0% | (113,873) | (97,068) | 17.3% | |||||||||||
(-) Administrative Expenses | (36,642) | (35,008) | 4.7% | (36,485) | 0.4% | (138,562) | (134,051) | 3.4% | |||||||||||
(-) Tax Expenses | (1,498) | (1,079) | 38.8% | (1,887) | -20.6% | (7,540) | (9,944) | -24.2% | |||||||||||
(+) Equity Income | 21,059 | 14,253 | 47.8% | 9,291 | 126.7% | 102,637 | 87,020 | 17.9% | |||||||||||
(+) Other Expenses / Operational Revenues | 5,586 | 259 | 2056.8% | 7,239 | -22.8% | 2,719 | 9,560 | -71.6% | |||||||||||
EBIT | 70,503 | 31,186 | 126.1% | 25,233 | 179.4% | 189,080 | 239,746 | -21.1% | |||||||||||
FINANCIA RESULT | 23,726 | 13,724 | 72.9% | 18,901 | 25.5% | 84,868 | 138,151 | -38.6% | |||||||||||
(+) Financial Revenue | 35,383 | 28,074 | 26.0% | 31,958 | 10.7% | 135,503 | 175,158 | -22.6% | |||||||||||
(-) Financial Expense | (11,657) | (14,350) | -18.8% | (13,057) | -10.7% | (50,635) | (37,007) | 36.8% | |||||||||||
EARNINGS BEFORE INCOME TAX AND SOCIAL CONTRIBUTION | 94,229 | 44,910 | 109.8% | 44,134 | 113.5% | 273,948 | 377,897 | -27.5% | |||||||||||
INCOME TAX AND SOCIAL CONTRIBUTION C | (8,150) | (6,435) | 26.7% | (10,100) | -19.3% | (27,852) | (35,790) | -22.2% | |||||||||||
(-) Current | (7,433) | (5,131) | 44.9% | (8,856) | -16.1% | (25,542) | (35,511) | -28.1% | |||||||||||
(-) Deferred | (717) | (1,304) | -45.0% | (1,244) | -42.4% | (2,310) | (279) | 728.0% | |||||||||||
ATTRIBUTABLE TO NON-CONTROLLING | (3,281) | 636 | -615.9% | (2,523) | 30.0% | (6,629) | (17,400) | -61.9% | |||||||||||
NET INCOME (ATTRIBUTABLE TO CONTROLLING SHAREHOLDERS) | 82,798 | 39,111 | 111.7% | 31,511 | 162.8% | 239,467 | 324,707 | -26.3% | |||||||||||
(%) Net Margin | 24.5% | 15.5% | 9 p.p | 10.1% | 14.4 p.p | 22.1% | 29.0% | -6.9 p.p | |||||||||||
7
EARNINGS RELEASE 4Q23
FINANCIAL INDICATORS
REVENUE, COST & GROSS PROFIT
Gross Margin
33.3%
4th Quarter
↑0.98 p.p. vs 3Q23
31.7%
Year-to-date
Overcoming Lindenberg Ibirapuera's suspension clause increases 4Q23 revenues by R$70 million. With its first phase announced in June 2023, the Lindenberg Ibirapuera project overcomes the suspensive clause after six months of its incorporation registration, and will have the results of its units sold incorporated into the financial results. It is worth noting that this project is 20% sold (in the consolidated of the two phases) and 61% executed, due to the construction site having been started before its launch in 2021, due to the compensation work on the parking lot for IBM.
EZ Parque da Cidade, delivered on November 30, was responsible for a decline of 2.3 p.p. in the annual gross margin. Among the deliveries made in 4Q23 is the EZ PDC and with this the effects of fines and additional expenses linked to the delay of this project come to an end. As of May/23, the project delay effectively materialized, resulting in a payment of a fine of 1% per month on the balance paid, adjusted to INCC, to each of the customers. Those who wished to waive the fine, preferring the option of canceling the unit with the right to receive full amounts paid adjusted to the INCC, were accommodated. This effect had a relevant impact on the year's financial data. It is worth noting that if we removed the results from EZ Parque da Cidade, the Company's consolidated gross margin would be 34%.
8.5 p.p. in gross margin annual comparison vs 4Q22 and 39.5% growth in gross profit vs 3Q23
Evolution of gross profit and gross margin quarterly
25% | 28% | |
and percentage | ||
millionR$ | 77 | 71 |
32% | 32% | 33% |
113
7981
' | 1Q23 | 2Q23 | 3Q23 | 4Q23 |
4Q22 |
The weight of projects launched before 2019 has been losing relevance as they were delivered
Net Revenue and Gross Margin by Year of launch
2023
2022
2023 | 2022 | 2021 | 2020 | |||||||||
R$ 95 MM | R$ 168 MM | R$ 350 MM | ||||||||||
32% GM | 31% GM | 32% GM | ||||||||||
R$ 112 MM | R$ 178 MM | R$ 195 MM | ||||||||||
32% GM | 30% GM | 32% GM | ||||||||||
2019 | <= 2018 | EZ INC | FIT CASA | |||||||
R$ 153 MM | R$ 109 MM | R$ 115 MM | MM | GM | R$ 77 MM | |||||
32% GM | 17% GM | 41% GM | R$16 | 82% | 31% GM | |||||
MM | GM | |||||||||
R$ 334 MM | R$ 173 MM | R$ 94 MM | ||||||||
27% | 37% GM | R$35 | 77% | 33% GM | ||||||
0% | 10% | 20% | 30% | 40% | 50% | 60% | 70% | 80% | 90% | 100% |
8
EARNINGS RELEASE 4Q23
Accounting recognition of Lindenberg Ibirapuera increased both revenue and costs in 4Q23
Quarterly Costs Evolution | |
234 | 225 |
179 | 164 | 170 |
R$ million
4Q22 | 1Q23 | 2Q23 | 3Q23 | 4Q23 |
Construction & Land Cost
96.5%
Of the quarter's
costs
An average EZTEC project is much larger than an average project built in Brazil. As
is expected, the larger the project, the greater the weight of steel, cement, aluminum, among other inputs in its cost basket, tends to be. Such projects may be common to the São Paulo market, but do not reflect the national average . The INCC, a reference index for construction inflation in Brazil, had its calculation model recently revised by FGV and as of July/23 new parameters began to be adopted, possibly more in line with the Company's cost dynamics.
Capitalized Financial Charges
2.3%
Of the quarter's
costs
Low volume of SFH debt. In the real estate market, in accounting, interest on construction financing is capitalized at the cost of the product, instead of being considered as a financial expense, as it arises from the production process. However, this interest becomes an expense under the Interest and Passive Monetary Variation line once the project is delivered.
Maintenance & Collateral
1.2%
Of the quarter's
costs
The Company maintains in its contracts maintenance and guarantee clauses for its
developments for up to 5 years after the keys have been handed over. The provisions seek to anticipate the financial effects of the guarantees provided by the Company on its developments. After 5 years, the unrealized portion of this provision will be reversed.
9
EARNINGS RELEASE 4Q23
SELLING EXPENSES
R$3 million with the Construction of Sales Stands for 1Q24 launches increased Selling Expenses. The Company is preparing to launch three new projects in the first quarter of 2024, namely Mooca Città Firenze and Milano, in addition to Lindenberg Vista Brooklin and Villares Parada Inglesa. Furthermore, it is worth noting that commission expenditure amounts are recognized in the same proportion as the projects' PoC. As a result, once the suspensive clause of Lindenberg Ibirapuera was overcome, which has 61% PoC, the same proportion was assessed in the recognition of expenses with commissions on units sold. Furthermore, the increase observed in the annual variation is due to the depreciation of large sales stores built by the Company that were immobilized.
Period ended December 31, 2023 | 4Q23 | 3Q23 | |||||
In thousand of Brazilian Reais (R$) | |||||||
SELLING EXPENSES | 30,510 | 28,564 | |||||
Advertising and others | 7,454 | 9,839 |
%Var
6.8%
-24.2%
Adverstising and Commissions Expenses
Spending on advertising and commissions has risen due to the campaigns aimed at selling the inventory ready for sale and under construction.
Expenses with sales stands and models
In addition to the expenses with the regular booths/decorations, this line includes depreciation and expenses for the maintenance of the mega stores.
Maintenance and Inventory
A higher volume of inventory and a higher volume of projects delivered under warranty contribute to higher maintenance costs.
4Q22 | %Var | 2023 | 2022 | %Var |
29,915 | 2.0% | 113,873 | 97,068 | 17.3% |
11,565 | -35.5% | 38,163 | 38,377 | -0.6% |
Sales stand and models | 13,571 | 10,995 | 23.4% | 9,617 | 41.1% | 38,114 | 26,939 | 41.5% |
Sales Commission | 6,319 | 4,337 | 45.7% | 5,836 | 8.3% | 23,355 | 18,943 | 23.3% |
Expenses with units in inventory | 3,166 | 3,393 | -6.7% | 2,897 | 9.3% | 14,241 | 12,809 | 11.2% |
Preparation of Stands for Future Launches increased spending on Stands and decorations in the quarter
Quarterly composition by category - 12 months
- 10 20 30 40 50
Strategy to promote the sale of performed and under- construction inventory increases commercial expenses
Annual comparision by category
- 10 20 30 40
2023
Advertising and others
Sales stand and models
Sales Commission
Expenses with units in
inventory
9 | 12 | 10 |
6 | 7 | 11 |
6 | 7 | 4 | 6 |
4 4 3 3
R$ million
7
14
1Q23
2Q23
3Q23
4Q23
Advertising and others
2022
Sales stand and models
Sales Commission
Expenses with units in
inventory
R$ million
10
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EZTec Empreendimentos e Participações SA published this content on 14 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 March 2024 20:46:53 UTC.
