EZTEC EMPREENDIMENTOS E PARTICIPAÇÕES S.A. Earnings Release
2Q23
CONFERENCE CALL
with simultaneous translation
August 11, 2023
10h (Brasília Time) / 09h (NY Time)
Zoom:
Click hereor access via QR Code 835 8840 8141
Contact IR
- A. Emílio C. Fugazza
- Pedro Tadeu T. Lourenço
- Christian Lopes de Melo
- Giovanna Bittencourt
- Guilherme R. da Costa
Tel.: +55 (11) 5056-8313ri@eztec.com.br
ri.eztec.com.br/en/
EARNINGS RELEASE 2Q23
SUMMARY | |
INCOME STATEMENT | 6 |
FINANCIAL INDICATORS | 7 |
REVENUE, COST & GROSS PROFIT | 7 |
SELLING EXPENSES | 9 |
ADMINISTRATIVE EXPENSES | 10 |
EQUITY INCOME | 11 |
RESULTS TO BE RECOGNIZED | 12 |
FINANCIAL RESULTS | 13 |
CASH AND DEBTS | 14 |
OPERATIONAL INDICATORS | 15 |
LAUNCHES | 15 |
OPERATIONS INFORMATIONS | 16 |
EZ INC | 17 |
SALES & CANCELLATIONS | 18 |
DIRECT RECEIVABLES PORTFOLIO | 20 |
INVENTORY | 21 |
LANDBANK | 22 |
CAPITAL MARKETS | 24 |
ADDITIONAL VALUE | 24 |
INTERNAL CONSENSUS | 25 |
ANNEXES | 27 |
CASH FLOW | 27 |
POC EVOLUTION | 28 |
INVENTORY BY PROJECT | 29 |
REVENUE BY PROJECT | 31 |
RESULTS FOR SHARED CONTROL PROJECTS | 33 |
EZ INC | 34 |
FIT CASA | 36 |
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EARNINGS RELEASE
EARNINGS RELEASE 2Q23
2Q23 HIGHLIGHTS
Lindenberg Ibirapuera | 34.8% | |
1st Tower - Art Tower (90% EZTEC) | Sold | |
R$ 300 million |
East Blue Tatuapé
100% EZTEC project
R$ 175 million
47.3%
Sold
Net income of R$75 million is almost double the previous quarter, an increase of 78%.
With the expressive PSV of East Blue the project overcomes the suspensive clause and accelerates the recomposition of the gross margin.
Financial Highlights
Net Revenue (R$ k)
2Q23
242,732
1Q23
250,784
%Var
-3.2%
2Q22
242,557
%Var
0.1%
1H23
493,516
1H22
529,717
%Var
-6.8%
Gross Profit (R$ k) | 78,581 | 71,285 | 10.2% | 84,099 | -6.6% | 149,866 | 196,962 | -23.9% |
Gross Margin | 32.4% | 28.4% | 4.0 p.p | 34.7% | -2.3 p.p | 30.4% | 37.2% | -6.8 p.p |
Net Income (R$ k) | 75,333 | 42,225 | 78.4% | 83,121 | -9.4% | 117,558 | 187,770 | -37.4% |
Net Margin | 31.0% | 16.8% | 14.2 p.p | 34.3% | -3.2 p.p | 23.8% | 35.5% | -11.6 p.p |
Earnings per Share (R$) | 0.35 | 0.19 | 84.2% | 0.38 | -7.9% | 0.54 | 1.90 | -71.7% |
Net Debt (Cash) (R$ k) | (98,261) | (180,365) | -45.5% | (608,918) | -83.9% | (98,261) | (608,918) | -83.9% |
Cash Generation (Burn) (R$ k) | (82,104) | (60,786) | 35.1% | (183,837) | -55.3% | (142,890) | (259,413) | -44.9% |
Operacional Highlights
2Q23
1Q23
%Var
2Q22
%Var
1H23
1H22
%Var
# of Proejcts/Phases Launched | 2 | 1 | 100.0% | 2 | 0.0% | 3 | 5 | -40.0% |
PSV %EZTEC (R$ k) | 475,000 | 127,000 | 274.0% | 414,400 | 14.6% | 602,000 | 903,800 | -33.4% |
Gross Sales %EZTEC (R$ k) | 486,582 | 413,950 | 17.5% | 266,949 | 82.3% | 900,025 | 618,685 | 45.5% |
Net Sales %EZTEC (R$ k) | 419,092 | 366,295 | 14.4% | 205,970 | 103.5% | 784,880 | 509,796 | 54.0% |
Total Inventory (R$ mn) | 2,763,360 | 2,567,118 | 7.6% | 3,404,000 | -18.8% | 2,763,360 | 3,404,000 | -18.8% |
Net SoS | 13.2% | 12.5% | 0.7 p.p | 7.0% | 6.2 p.p | 22.1% | 15.7% | 6.4 p.p |
# of Active Construction Sites | 20 | 19 | 5.3% | 20 | 0.0% | 20 | 20 | 0.0% |
Total Landbank (R$ mn) | 8,513,328 | 8,343,711 | 2.0% | 11,080,190 | -23.2% | 8,513,328 | 11,080,190 | -23.2% |
São Paulo, August 10, 2023 - EZTEC S.A. (BOVESPA: EZTC3) celebrates its 44th anniversary as one of the most profitable builders and developers in Brazil. The Company announces its results for the second quarter of 2023 (2Q23). Except where stated otherwise, EZTEC's operating and financial information is presented on a consolidated basis and in Brazilian real (R$), in accordance with Generally Accepted Accounting Principles in Brazil ("BR GAAP") and the International Financial Reporting Standards (IFRS) applicable to real estate developers in Brazil, as approved by the Accounting Pronouncement Committee (CPC), Securities and Exchange Commission of Brazil (CVM) and Federal Accounting Board (CFC). Non-accounting and non-financial data were not revised.
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EARNINGS RELEASE 2Q23
MANAGEMENT'S
COMMENTS2Q23
EZTEC's Management announces the results of the second quarter of 2023 (2Q23). The quarter ended with a quarterly gross margin of 32.4% and net margin of 31.0%, 4.0 p.p. and 14.2 p.p. higher than 1Q23, respectively, resulting in a quarterly net profit of R$75.3 million, 78.4% higher than in 1Q23. The Company notes the expansion of its financial and operating results amid a scenario with recent positive changes for real estate development in Brazil.
In the financial aspect, the Company maintains its path of recovery of the possible gross margin. As pointed out in previous disclosures, the increase in the sales volume of projects under construction, launched between 2020-2022, and still impacted by inflation should make the return to historical levels occur gradually. In this quarter three projects were recognized: (i) Chanés Street (4Q22); (ii) Park Avenue (4Q22) and Jota by Lindenberg (1Q23), however only the first one had its result incorporated into gross profit, the others are appreciated in the equity line. In a managerial analysis, if the equity-accountedprojects affected the Company's revenue and gross profit in proportion to their participation, the gross margin would have been 37.4% in this quarter.
Sales remained an important topic this quarter, reaching R$ 486.6 million in 2Q23. Thus, the first half of 2023 closes as the best start to the year in the Company's history! This effect stems from (i) the performance of launches that have reached higher VSOs than in recent years, driven by customers less pressured by inflation and with expectations of a new cycle of interest rate cuts, (ii) the strong commercial campaign dedicated to encouraging the sale of Under Construction and Performed inventories through Homes Stores and; (iii) the financing campaign, EZTEC Style, which offers credit for post-key financing from 7.99% p.a. + IPCA or IGP-DI.
This quarter also saw the announcement of the new rules of the Minha Casa Minha Vida (MCMV) Program and the approval of the Mid-Term Review of São Paulo's Strategic Master Plan, important actions for the industry. In the light of these changes, the Company is mobilizing to understand the impact that the latter may have on its landbank, aware that a positive effect may be extracted, even if minimal, and which should be appreciated in the next earnings releases. As for economic projects, the new ceiling has allowed the reassessment of the viability of projects linked to FIT CASA, which allows the Company to review its appetite for launches in this line.
Two new projects were launched in June near the end of the quarter, they are: (i) East Blue Tatuapé, a 100% EZTEC middle- high income project in Tatuapé, East Zone of São Paulo, with 123 units and 13. 459 m2 of private area, with R$175 million of PSV that ended the quarter 47% sold and the; (ii) Lindenberg Ibirapuera - Art Tower, the first tower of the project, which is a relaunch of EZ Infinity (2021), the project started to have the participation of Contrutora Adolpho Lindenberg through Joit- Venture EZCAL and today is 90% EZTEC. The high-income project located in Paraíso, South Zone of São Paulo, has 44 units, 12,964 m2 of private area, a PSV of R$ 333 million and is 35% sold.
Finally, we inform our shareholders that the Board of Directors has approved the payment of dividends under the quarterly profits. The total amount will be R$ 17.3 million, approximately R$ 0.08 (eight cents) per share to be paid on August 31, 2023. In addition, we have had in recent months the entry of a new director, approved at the EGM on July 21.
Enjoy your reading,
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 Instruction number 381/03 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.
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BALANCE SHEET
EARNINGS RELEASE 2Q23
Click and access the
data in Excel
Period ended June 30, 2023
In thousand of Brazilian Reais (R$)
ASSETS
2Q23
5,708,397
1Q23
5,601,273
%Var
1.9%
2Q22
5,388,323
%Var |
5.9% |
CURRENT ASSETS | 2,329,851 | 2,491,298 | -6.5% | 2,473,337 | -5.8% | |||||||||
Cash and Cash Equivalents | 47,806 | 36,971 | 29.3% | 64,042 | -25.4% | |||||||||
Financial Investments | 733,611 | 752,458 | -2.5% | 939,636 | -21.9% | |||||||||
Trade Accounts Receivable | 296,091 | 320,651 | -7.7% | 320,162 | -7.5% | |||||||||
Provision for Doubtful Accounts | (16,001) | (18,013) | -11.2% | (6,888) | 132.3% | |||||||||
Real Estate Held for Sale | 1,232,062 | 1,362,800 | -9.6% | 1,109,196 | 11.1% | |||||||||
Recoverable Taxes | 9,572 | 9,492 | 0.8% | 9,019 | 6.1% | |||||||||
Other Receivables | 26,710 | 26,939 | -0.9% | 38,170 | -30.0% | |||||||||
NON-CURRENT ASSETS | 3,378,546 | 3,109,975 | 8.6% | 2,914,986 | 15.9% | |||||||||
Trade Accounts Receivable | 823,337 | 774,622 | 6.3% | 714,991 | 15.2% | |||||||||
Real Estate Held for Sale | 1,728,646 | 1,535,346 | 12.6% | 1,572,546 | 9.9% | |||||||||
Recoverable Taxes | 35,902 | 32,794 | 9.5% | 29,925 | 20.0% | |||||||||
Due To Related Parties | 37,747 | 21,381 | 76.5% | 164 | 22916.5% | |||||||||
Notes Receivable | 16,727 | 16,727 | 0.0% | 18,416 | -9.2% | |||||||||
Other Receivables | 155,660 | 136,788 | 13.8% | 36,382 | 327.9% | |||||||||
Goodwill over Investments | 71,467 | 73,565 | -2.8% | 74,847 | -4.5% | |||||||||
Investments | 463,513 | 469,691 | -1.3% | 416,563 | 11.3% | |||||||||
Property and Equipment | 43,869 | 47,271 | -7.2% | 49,125 | -10.7% | |||||||||
Intangible | 1,678 | 1,790 | -6.3% | 2,027 | -17.2% | |||||||||
LIABILITIES | 1,064,771 | 1,033,538 | 3.0% | 911,874 | 16.8% | |||||||||
CURRENT LIABILITIES | 453,463 | 454,575 | -0.2% | 389,664 | 16.4% | |||||||||
Suppliers | 62,420 | 64,087 | -2.6% | 80,321 | -22.3% | |||||||||
Payroll Obligations | 11,829 | 11,921 | -0.8% | 10,025 | 18.00% | |||||||||
Tax Obligations | 23,140 | 24,105 | -4.0% | 23,893 | -3.2% | |||||||||
Loans and Financing | 123,744 | 70,370 | 75.9% | 15,403 | 703.4% | |||||||||
Debentures | 5,136 | 15,919 | -67.7% | - | n.a | |||||||||
Trade Accounts Payable | 36,189 | 34,370 | 5.3% | 18,221 | 98.6% | |||||||||
Reserve for Guarantee | 6,705 | 7,077 | -5.3% | 7,669 | -12.6% | |||||||||
Advances from Customers | 122,222 | 131,791 | -7.3% | 138,444 | -11.7% | |||||||||
Land Payable | 47,051 | 78,784 | -40.3% | 80,491 | -41.6% | |||||||||
Dividends Payable | - | - | n.a | - | n.a | |||||||||
Due to Related Parties | 1,052 | 856 | 22.9% | 725 | 45.1% | |||||||||
Deferrend Taxes | 11,047 | 12,305 | -10.2% | 11,286 | -2.1% | |||||||||
Use Rights Payable | 2,928 | 2,990 | -2.1% | 3,186 | -8.1% | |||||||||
NON-CURRENT LIABILITIES | 611,308 | 578,963 | 5.6% | 522,210 | 17.1% | |||||||||
Loans and Financing | 254,793 | 223,447 | 14.0% | 75,389 | 238.0% | |||||||||
Debenture | 299,483 | 299,328 | 0.1% | 303,968 | -1.5% | |||||||||
Land Payable | - | - | n.a | 83,331 | -100.0% | |||||||||
Reserve for Guarantee | 7,496 | 6,530 | 14.8% | 5,155 | 45.4% | |||||||||
Reserve for Contigencies | 8,603 | 10,182 | -15.5% | 15,683 | -45.1% | |||||||||
Deferred Taxes | 31,737 | 29,678 | 6.9% | 27,162 | 16.8% | |||||||||
Other Debts to Third Parties | 2,389 | 2,389 | 0.0% | 2,389 | 0.0% | |||||||||
Use Rights Payable | 6,807 | 7,409 | -8.1% | 9,133 | -25.5% | |||||||||
SHAREHOLDER'S EQUITY | 4,643,626 | 4,567,735 | 1.7% | 4,476,449 | 3.7% | |||||||||
CONTROLLING SHAREHOLDERS' EQUITY | 4,577,177 | 4,511,872 | 1.5% | 4,387,528 | 4.3% | |||||||||
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% | (42,627) | 6.0% | |||||||||
Earnings Reserves | 1,677,702 | 1,677,702 | 0.0% | 1,430,111 | 17.3% | |||||||||
Accumulated Profits | 107,530 | 42,225 | 154.7% | 162,918 | -34.0% | |||||||||
Goodwill on Transactions with Partners | (49,414) | (49,414) | 0.0% | (49,414) | 0.0% | |||||||||
PATRIMÔNIO DOS ACIONISTAS NÃO CONTROLADORES | 66,449 | 55,863 | 19.0% | 88,921 | -25.3% | |||||||||
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EZTec Empreendimentos e Participações SA published this content on 10 August 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 18 August 2023 10:37:08 UTC.
