RNI Negocios Imobiliarios SA

BOVESPA:RDNI3

Earnings Call Transcript

[Operator]

Ladies and gentlemen, thanks for standing by. Welcome to the video of RNI Negocios Imobiliários S.A. to discuss the results relating to Q3 2021.

Today with us is Carlos Bianconi, CEO and IRO; and Mr. Henrique Ravazzi, IR Manager. [Operator Instructions] Before proceeding, we would like to clarify that, that may be made during this conference call relating to the company's business outlook, operating and financial projections and targets are based on the beliefs and assumptions on the part of RNI's managers and on information currently available to the company. Forward-looking statements are no guarantee of performance as they involve risks, uncertainties and assumptions and have to do with future events, which depend on circumstances that may or may not materialize. Investors should understand that general economic conditions, industry conditions and other operating factors may affect the future results of the company and may conduct results which differ materially from those expressed in such forward-looking statements.

I would now like to turn the floor over to Mr. Carlos Bianconi. You may proceed, sir.

[Carlos Bianconi, executive]

Welcome to our video conference to disclose the results of Q3 2021. And we are going to talk about the performance of our company in that quarter. I now turn the floor over to Ravazzi, and we are going to talk about the highlights.

I start by saying that we had launches. We have completed BRL 418 million, 9 months year-to-date, which is [indiscernible] of BRL 79 million. We had launched BRL 401 million up to Q2, and in the third quarter, BRL 79 million. We have postponed some launches for Q4 because of the economic outlook. Gross sales totaled BRL 620 million, 9 months of 2021, which is 21% above. Specifically in Q3, we sold BRL 197 million, which is 6% above the sales of Q3 2020.

In terms of net sales, sold BRL 481 million year-to-date, which is in line with our launches. This was 26% above the 9 months of 2020. So the company has been consistently growing in terms of launches, gross sales and net sales. In Q3 2021, we totaled BRL 150 million, which was 8% above the results of Q3 2020. REF was BRL 431 million in Q3 2021, 162% above the results of Q3 2020, and also 10% above the REF of Q2 2021, with a margin of 27%. And we believe that this increase of cost is going to slow down. It has an increase in costs, which affected our gross margin.

We have been managing the costs really well, was BRL 303 million and 27% growth is to the 9 months of 2020. In Q3, net revenue totaled BRL 120 million, which is 71% 2020. Adjusted net income BRL 87 million in 9 months of 2021, 44% the net income of the 9 months of 2020. The adjusted gross margin was 28% year-to-date points above the adjusted gross margin of the 9 months of 2020. So we grew also in terms of quality, growth in the PSV in reais and also a growth in the margin -- in the adjusted margin.

Net income was BRL 11.4 million in the 9 months of 2021. And we have to compare that with the previous year when we ran a loss of BRL 10.8 million. So the inflection here was of nearly BRL 22 million in terms of improvement. That is a 205% growth. So we have been able to generate result to market is BRL 641 million in Q3, 18% percent relative to Q2 2021. We have been growing in terms of profitability in terms of PSV, and the inventory was also reduced. In this inventory, only 1% are of completed units. That is next to nothing. So what we want to highlight here is that we have held up the launches. We have postponed launches through Q4 because thanks to the Casa Amarela program. So we wanted to see an improvement.

And also, we wanted to understand the interest rate scenario as well. So the quarter was in line with Q1 and Q2. The PSV grew, sales grew, but we launched only 1 project to monetize our [indiscernible] to monetize SBPE vertical, the legacy, in 2 lines. We are selling those projects or using [indiscernible].

So this is a snapshot of our company where you can see our performance and how we have grown. In Q4, we foresee more launches, and this performance should be consistent with what you have seen in Q3.

I'll turn the floor over to Ravazzi.

[Henrique Ravazzi, executive]

Thank you, Bianconi. Good morning to [indiscernible]. And to continue the presentation, I'm going to talk about the financial and operating indicators, including the current strategy and the legacy. Having a look at the company's current strategy, the company closed 9M '20 -- 2021, sorry, with BRL 401 million launched, that is 78% above 9M '20. In the accumulated for the last 12 months, we had BRL 642 million in launches or 35% growth relative to 3T '20. In terms of our land bank, we maintained it. The company has not launched anything in Q3. Bank is worth BRL 5.7 billion for the broader new strategy, and 93% of the landbank will be directed to Programa Casa Verde e Amarela, horizontal and vertical.

Net sales totaled in 9M 2021, BRL 445 million, is a growth of BRL 132 million, 63%. Relative to Q3, it was 19%. Our inventory marked to market has been reduced from [indiscernible]. We now have BRL 560 million of PSV, and that is 3,029 units under construction.

In terms of the financial indicators, the company had a net revenue of BRL 105 million, and 86% [indiscernible] 2020, in terms of adjusted gross income at 27%, respectively, a 69% growth relative to Q3 2020. Administrative expenses are in line year-on-year, and there was a slight drop by 4% in Q3. The net income and the net margin, we have a margin between '21, we had nearly BRL 10 million of net income to Q3 2020, with a net margin of 9.5%. And think about our legacy products now, in 3T '21, we launched [indiscernible] to try and monetize our legacy. And that was a launch for BRL 79 million in Q3 2021.

In terms of net sales, in Q3, we sold BRL 18 million, and the company has a margin of 10% this year in terms of net income for legacy products. Mark-to-market was reduced relative to Q2 2021, and that drop was by 20%. We have BRL 82 million in inventory and 76% of completed units. 81% is the Recanto das Emas development. The landbank has been decreasing and there was a reduction by 22% 3T 2020. In Q3, we had a net revenue of BRL 15 million, a 17% growth. That was BRL 2.7 million with a gross margin of 18%, a growth of 373% relative to Q3 2020.

We have other operating revenues and expenses. We had an operation with a controlling share of the company in the Recanto das Emas development. So we had a high figure here, which impacted our net income in Q3 2020. We sold this to a controlling company, and we closed Q3 with a loss of BRL 6.9 million. In terms of our balance, our cash balance, we have a debt of BRL 523 million. This grew from Q2 to Q3 because of contracts or preoperating for the launches. And we are going to start the construction works in Q4.

And this totaled 72% of our debt, which has to do with production debt. The corporate debt has remained flat quarter-on-quarter, and we ended 3T '21 with a net debt over net worth of 75%, and net debt excluding the production debt of 16%. Speaking of our consolidated results, we have the highlights, but I just wanted to emphasize that in 9M '21, the company has reached levels in terms of its financial indicators, which are above what we had in the last few 6 years.

The net revenue was BRL 303 million, 27% above 9M '20. Our gross income ended 9M '21 with a significant growth of 64%, and demand -- the adjusted gross income also grew by [indiscernible] compared with 9M '20, and the adjusted gross margin grew 3.4 percentage points relative to the same period of 9M '20. In terms of EBIT, we ended 3T '21 with BRL 3 billion of net income -- BRL 3 million, sorry. And in 9M '21, we had a net income of BRL 11.4 million, which is above the 9 months of 2020 when we had a loss of practically BRL 11 million. So these indicators today reflect a growth which was above the growth we saw in the last 6 years.

And finally, before we take questions. [indiscernible] Reserva SIM, 2 horizontal developments, Moradas Flores is for BRL 114 million of 844 units. So this is what we have to present 2021, and we will now open for any questions you might have.

[Operator]

[Operator Instructions] I'll now turn the floor over to Mr. Bianconi and Mr. Ravazzi for their final remarks.

[Carlos Bianconi, executive]

Thank you very much. I would like to thank you all for participating in this video conference. Our results are in line with Q2 2021, we have been growing and taking the company up in terms of launches, profitability. And we will continue to do so despite the fluctuations in terms of costs. We will continue to develop and implement the company's strategic implement rural areas in interior of Brazil, we work with the tranche 3 of Casa Verde e Amarela. And in this tranche 3, we also have units, which are ultra economic. This allows us to offer property to clients within the program, but also this ultra economic tranche of clients is underserved.

So we have been very successful in selling these products in the regions where we operate. We operate in the interior of Brazil in regions where agri business is strong, where the income is resilient, where people have jobs, and it's a very good scenario for us to operate.

We thank you all very much for your trust, and we remain available through our IR channel. And the video will remain available for [indiscernible] and please don't hesitate to contact us should you have additional questions.

Thank you very much. Have a great week.

[Operator]

The video conference has now ended. Have a nice day.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]