GFASY - Earnings call transcript Q4 2020

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Operator

Good morning. Welcome to the Fourth Quarter '20 Conference Call.

We are going to have Ian Andrade as the main speaker, VP of Management and Finance VP as well as Chief Financial Investor Relations Officer.

We have Guilherme Benevides, Operations VP; and Guilherme Pesenti, CEO of Gafisa Propriedades; João Pedro Figueiredo, Corporate Law and Corporate Governance Manager; as well as Daniel Viana, Investor Relations Manager, will also be present at the Q&A session. We would like to inform you that this presentation is being recorded and that all participants will be in a listen-only mode during the presentation. begin, risks, like to uncertainties we management's inform future Before involve statements and Instructions] we to would that events. [Operator may refer other the in results changes macroeconomic or and Any policies may performance. Company's any affect loss operating Mr. Andrade, you can proceed.

Ian Andrade

all well, release I market. XXXX availability to to happening much. thanking start XXXX turning our be annual you being at quarter part everyone. and of you to fourth PSV, Thank like like here to of healthy XXXX. Thank We've you today. morning, for for a be was growth would here for were would very the to to for reached sustainability and Good with like in by all earnings dear We the everything with further call. our the Gafisa. by your the we interest earnings interest are ones. especially since would of thank your Brazil I in been us release just mindful million COVID that your has in the point saying our best start launched in BRLXXX and world XXXX. restrictions. I concerning performance share hope you upturning

fourfold double sales market all of with the the very what PSV and which top of reached gross the best than units, 'XX, total was a projects, Company. very management. XX significant offered sold market clients quarter increase which in a high, growth, We the X,XXX a was quarter in XXXX, and very positive also obtained showing we which Our the new We agreed sales conditions activities positive, sales the in 'XX already that terms our a we of with in third was volume delivered Xx and the had fourth conditions.

them two You XX are were out hear of further of to projects, going anticipations. that the

delivered -- we delivered XX. but have We XX, just delivered

of ones acquired XX we At growth, and organic an through Landbank, neutral, organic acquisitions. increase we options new terms in Gafisa, had of M&A. we two M&A through In and PSV, are and won

had a so and assets. our run, development platform in in a have Gafisa value we Propriedades a the real have diversify We Gafisa can operations. long number transformation And estate, created of that of we construction to of long-term

Guilherme us, We with have is Gafisa here CEO Pesenti the of who Propriedades.

portfolio in the the We of of emphasize brand all signified. this operating. happening management very financial Gafisa, a and be have within a results of is to a It's achieved lot DNA, operating activity well-created are we to going of of consolidation innovation, new markets Gafisa new important a business well dedicated concept support which that a and for merit, we were of everything repositioning, new

but reaching and in results our in of So creating results, excellence. focused in team dynamic collaboration, a a way, and on new we are way, developing

in the that the XXX% of quarter million had to increase terms over operating growth. The reflecting growth the in BRLXXX quarter fourth also quarter Gross XXX%, fourth third the We BRLXX increase 'XX, the increase in Likewise, profit financial projects. In BRLXXX our significant is was million 'XX over a our as in of over XXX we the of revenues the our XXXX. that XXX% of followed to this 'XX in million over also had quarter. And and as the 'XX, third and opposed profit in the 'XX. activities, quarter, to line highlights. of the 'XX and growth annual third gross third the quarter profit we BRLXXX new net had an fourth reflects third whole of opposed year million quarter an which revenue,

backlog And our third level In maintained of we our result, XX% the fourth All backlog margin recurring above strengthening the the gross of loss recurring million comparing us results quarter in have terms the of of quarter operations, margin million of BRLXX increase net to to us quarter. profit our is fourth fourth take is helped have of of profitability XX%, in this and 'XX. as the to results quarter margin. and of the results BRLXXX which the

margin Company's of the As increase by to the of that see is if Company. you with are projects the sustainable directly and being financial slides, can the see going of you operating in have volume level remain, the slides, we related can and that higher results launched the our trend

a million. Our balance to in is level cash BRLXXX net strong, still showing as of million an of opposed BRLXXX debt liquidity, excellent

context With growth these basis sustainable our lot in a very XXXX we company. generating going I'm just the now sure it Benevides, is Guilherme our VP that absolutely of in are for a solid hand over DNA, our to future, to dynamic highlights to in new our you, a Operations.

Guilherme Benevides

Thank Thank you, Good for Ian. morning, being us. you with here everyone.

to with to results the of Gafisa, work and share a new of here of lot We on culture all which focus our the are be shareholders. you delighted results to valuing

show the Slide Now fourth X, performance operating talking about the for budget quarter. we in

in to Janeiro, Rio in million we de and So brought BRLXXX the market Curitiba projects in PSV. Ecoville Cyano

As Slide results the a unique our is the can and of have X, sales. XX% project, in units. in already we main available see de highlight, plot, and facing Rio top-quality just the sold construction this Janeiro, we ocean

million left, the 'XX. XXX% over quarter gross over can the comparing and in quarter, increase the XXX% show BRLXXX we quarter fourth third in On 'XX sales the over

quality ongoing units, clients. the was trust of of On the of breakout our showing and that and launched and the construction XX% we can over in to be projects right, of show our the sales XX% ready

Approximately and the Paulo, XX% units. shows São regions. approximately Rio in residential XX% our quarter. had fully our of in we the and new As of inventories our inventory are launches million highlight, other In highlight, down. inventory, in on is And XXXX, fourth nearly new inventory BRLXXX XX% broken Slide obtained constructions. X% in as XX% billion have million X, BRLX in we a it BRLXXX

fourth XXXX. projects, results, XX PSV operating presentation delivered new a for we the towers, of BRLX quarter, XX units X,XXX Following billion with over of the in

Paulo delivering in quality sales BRLX.X projects, expected. In XX BRLXXX slides outperformed have projects two quarter and billion a the billion BRLX.X Landbank we already fourth quarter, our and good five than million and projects, budget, speed. we Our to Thank our BRLX projects amount, deliver In alone, projects, million but mid-term or have strength focused projects billion the launch, our to over and good with for operations, in present Last projects expectation being deliver developed, total. approved total We very our acquired in of of much. and the XX Rio. PSV maintaining and XXXX. X and the fourth Landbank short- BRLXXX showing opportunities more still and units São Landbank. XXX of maintaining with we best approval, under of capacity XX BRLX maintained all guidance was in billion you

to I would it Now Gafisa to over Guilherme like hand Pesenti, of CEO Propriedades.

Guilherme Pesenti

and the our Guilherme, to developed morning, this as you, of strategic Gafisa a of It's part call result Propriedades, is just during you. good by XXXX. be planning, pleasure the new Company Ian the management of with everyone. told has Thank you, Andrade

Company, we for business additional is and its real future were we of an the were of estate area already growth the expansion what one the of restructuring foundations the core them income. just While for going the thinking about is through of

of Gafisa generation diversifying its is estate Gafisa a value So Propriedades of market. expertise real way within in

organic growth We by building products in can partnership of concerning developing making the Gafisa. the that and are as the into These next so yield of done transformed development current assets revenues. In with slide, in talk of growth the we portfolio of will of third area area from be about also development we and investments acquisition parties, through have products M&A the Company. products

Propriedades real maintain well. So XXX,XXX GLA Gafisa Slide meters This in Paulo, also exclusivity Rio hotel stores estate, but with small malls in shopping and square as we we has also São to complement going XX residential business, of for and commercial is something activity you. organizations. and have that are and over

small-sized One focused assets -- to areas and development de process lease of in that want Rio the Paulo units resell apartment São Gafisa. of apartments new Janeiro the of most as from focus and on will we of the a

excited very new really this are We business. about

subsidiary Gafisa motivated, S.A., of the dedicated and you Thank Company. to much. we line are a generation a a highly creating build of very full new team are revenue for We and cash

Ian Andrade

evident Thank footprint. is And closely, very following are businesses. -- is be new The the sign our you, enthusiastic service, bullish dynamic market. following real Gafisa and market Propriedades Guilherme. real Gafisa it and that bold with subsidiary Guilherme. very clear combine expanding market is the we the market to and Brazil very glad It of cycles. and estate very a it to is Company. into development, revenue, whole to in evidence a technology bold upcoming we really is estate and the that the This have for it's its about of clearer Thank the in The will market enthusiasm. most -- great you, are bullish belief expanding the

XX. in results Now financial Slide

third opposed revenue of margins in quarter was Gross million. an Gross than qualitative billion of increase and significant to our almost leap, quarter. quarter, by the present revenue our as There volumes the that's million emphasize. revenue is increase growth tend Company quantitative, BRLXXX positively in me gross in is BRLXXX the which impact we of not there impact line. As by used Net mentioned but really our in was operating whenever million BRLX in XXX%, deterioration, by the of net margin that results margins, same revenues, before. is in the in better companies, management. both to in the the Annualized, projects there line a an and a the to profit the of presentation, new revenue followed have beginning to quite financial been amounts fourth have It's to fourth BRLXXX XXXX, have case. increase they think important common an to without

recurring have no in the 'XX moving or no which quarter which and adjustment, the years. fourth no still fourth our quarter effect, We the net of revenue non-operating the increase there income over our a of margins an of whatsoever is towards profit all sustainable future of and BRLXX margin for benefit margins, same in the indication legal quarter maintained see million, of million. backlog increased was third And BRLXX the discussion of quarter fourth

'XX recurring shows fourth in annualized, when recurring a the the growth reversion gain. a we quarter, had trend terms to of really also see can we profit it's exclude without any 'XX events, and we of BRLXX adjustments. million the sustainable And In profit a quarter-over-quarter, loss. when So of

results. increase that really And let this margin. substantial of without a capturing emphasize important revenue also and are is financial in for me our deterioration because operating impact We performance and again

XX, heart see the Slide can on in we business Now detail generation. of

we the of different have the results projects. all So

projects gross result first show So see is been of up, how our of XX%. margin. net, a healthy exactly good projects that the That's There we have margin generating margin which gross We we to Backlog the XX%. results talk our portfolio of In of indicator is balance. a they XX% and XX, total very very we stabilization Slide volumes margin, the and has are. our If can adjusted clearly delivering can company. add company. about and over sustainable healthy

picked related We of fact have from up our that in debt has indebtedness corporate with growth. of XXX% the Company increase is our indebtedness results nothing An is its the projects. XX% indebtedness There gross here. level, gross

need we and launches, to them. making are structures financial launch We

Considering our receivables, funding dues. disciplined. liquidity All the in our discussions are indebtedness opposed and off. we pay Our sure very project company, all level when really having we to our it funding launch start level tested to gives to a alternatives sum the any line it's and and don't the to construction without very that make never place, of We the provided project. us pays of really as cash important financial have

good We we and liquidity the on can amount newer opportunities. that of cash growing for also and have keep allocated of so business managing for Company a investments in

all We focus focus growth. a have -- on we very always good all cash routine. We management investment

Brazilian us debt good our which philosophy So that opportunities liquidity a based benefit all very a significant company. projects, good together the confident healthy the a of really of portfolio on of makes of from of and our can as percentage and receivables, equity we part is really cash, bringing cycle, level balance

of a We real market are had we to because with in good It's hidden industry that's as XXXX. really provider the an market demand of the crisis estate confident a that from filling assets. XXXX have

that see a short users be to option, everything maintained final Brazil rates is in estate. And we probably there as the attraction going in for for see investment the hidden estate natural and demand we an of So some can and midlevel. is real interest considering real the

than past. rates probably maintained used the So we have will interest lower levels to be at in the

strategy with side of presentation results. financial had So side our close operating important you you that, session. the the the we opportunity with of all that, and We the new And financial and open thank share I for you. Thank our of to to our today the attention, a business. the would now I like very Company, line Q&A for with your Company, said

Ian Andrade

Instructions] Let's were we read some submitted webcast. are There the start which questions, them with through and I'm then [Operator going questions the question-and-answer session. answered. have the to

would will first have Lopes‏ be from response Research. consolidated What is maximum to that is Well, guidance. you providing you in EBITDA? percentage the Nord first Daniel, anticipate of The Danielle question from

So future just We never guidance on financial you a terms guidance of give this cannot is percentage launches. market to practices, EBITDA. new I have We results. answer in course, provide of on which of follow

Let it to me elaborate Pesenti. hand our business Maybe strategy. further he over can

Guilherme Pesenti

Thank is to and M&A status Paulo. and This Rio anything guidance potential generation cannot is great with think revenues real assets Company investment advocation be get limitations. to we opportunities, cash also because What revenue developing have Gafisa in to and adding we attention about a of to Ian. especially São is to do and you, for structure estate current the of We the company. is want that our say purposes paying

Ian Andrade

Danielle is are for The from Company what Nord applicable next is Lopes‏ this to whole comes make Research. industry, a the you to sure in do full from What operation? to the Well, right? would conditions can the So question that question of we generates rate ever interest have interest estate us it really operation, positive say and keep into businesses. I rate, lowest that and market Historically, real conditions really the right? I are level the full precisely the the that a tell a twice impacting rate an what's that still keep would with from Maybe in you us operated rate, our have I've [indiscernible], industry its whole would what prevent the be question two-digit from that recently, saying interest about start be had interest X% center. Jacob today, rate interest cannot would working. really is operation. interview we rate, level maintain maybe heard covering would what would interest our which full on at

Ian Andrade

question The comes from Casiano Pedro Branca. next from

question please. morning. from your next The comes ask now MDN. Marcelo can You question Hello, good

that you of have to it's of better return lease, contract if the lease course, long-term because, still, of also You've want Have mentioned course, that because time takes is of have having that you to But business. [indiscernible] rent of some it leasing periods go than the possibility for more way limited any other leasing renting time for it just services a with. units you as a that? period or a short-term studied you apartment it have on such you considered add

Guilherme Pesenti

are lease mid-term Guilherme this of Thank the offering lease a short-term, long-term you and model also answering. we business This question. contracts. for Yes, residential creating is Pesenti and

to our are model, considering of are to business solutions a the platforms market in developing technology back And We we refer possibilities. fully and in market. aligned our available report other with the number going

Ian Andrade

the would to have sales about the you unit. of Cyano investment in Great. also sales assertiveness of a regular the tends lease the I of of that I return noticed be hear to contract. terms better if on units like value, of

Guilherme Benevides

seen project the region. are while it a Bajada. Benevides project, know special, well a is a the was It level that Rio, in market. hadn't Yes, well top-quality received Guilherme very you for very of positioned is in Cyano And in the very This in speaking. project you

the So has between building. very been constructed units depending XX,XXX of on units the the It's well it received. in sold. already area, and meters for the XX% of Over XX,XXX been square have position

new Company. good the well we So positioned the and have launch we the in projects, market. have We of want good received always But the been in made very well to market. saw a line

Ian Andrade

live with. Yes, a going believe I close place. to selling very you right. the I to It's in succeed used units. very good you're are

Ian Andrade

next question from Bronco. comes Instructions] from [Operator Casciano Pedro The

Ian Andrade

and would also am the here My great ask pandemic. to to question connection to you in presentation IGPM. Gafisa sorry. about hear impact my in and I and the results. There delay increase I like before. options place good on that IGPM I index like a concerns a was in would question congratulate couldn't I reduce the And the put of

Guilherme Benevides

in Casino, put speaking. pandemic, Thank measures. the is you. Hi, this number have Concerning a Guilherme place of we Benevides

in which that fill. them, impact COVID and top from macro wave measure, first a Every would met an understand we could specific was create have right that of could on the committee. beginning to resulting single pandemic had date so the that be emergence day, the we the is management One impact we of that what the

necessary impact life also our in in of necessary sales, professionals. and had and sanitary the industry committee. we of we The the just our sales avoid in on office sitting Concerning measures, point restrictions, preserving with stands of and put the have contact adopted this And taken So points all our or a them our activity, construction everyday in civil measures perceived to of the prevention and was sites. measures place we and sales activities still in taken an number sites by keep construction all our steering terms in construction the an as we both all essential have customers. operations

of to real to the but appropriate process pre-schedule. other also we estate course, up making players. measures, But industry, all all has digitalization the to helped Gafisa, pandemic only embraced not have sanitary of Of the speed

contracts our of XXX% fully digitalized. have we Now

digital quite we committee, the all done Everything using have clients. quotes not done everything on platform, impacted in XXX on and scenarios adapted COVID providing And keep macro so new sales be force, meeting analyzing attracting without we and negatively site, over people well. resilience are just Our the our having to pandemic. a we are digital, by by online working showing that

Ian Andrade

place Thank it measures Concerning you. effect you any that? IGPM Great. the have the the of put offset and had, potential in could new have increase and impact to

Guilherme Benevides

question? repeat you you repeat Could please Could question? your please your

Ian Andrade

the any than in rate. IGPM Sure. over has been much have higher you Concerning the to which action the avoid increase IGPM, XX%, expected place or to had of was anticipated, avoid which anyone put charging impact,

Guilherme Benevides

question. Great you. Thank

our Propriedades, results relevant. the come which not INCC, IGPM very construction, We from but is it's sales development contracts have we short the a to unit tend Gafisa of concluded, all the moment period a until we rate deliver the really construction. project during When and and construction development it is time. rate unit. is deliver construction for The the civil the period, adjusts and very

to period be IGPM So new development, the and during very IGPM. of are by readjusted contract exposed tends of this for when are But company greater really it IGPM. comes it's to lease contracts rate not concern us. we rental then a to rental because

development. still Our in is portfolio

any So of IGPM still Gafisa haven't impact today, at we felt operations.

Ian Andrade

Next question comes from Guilherme [indiscernible].

Unidentified Analyst

morning. cash excellent question question. good My of Hello, is my flow. about the the on fourth you result for answering Thank Congrats quarter.

the What into estate And do to yet. fund? is like seen number transform to a do it you think that a reflected you -- XXXX. projects, hear I'd Propriedades delivered flow about going into first been what but of about You to real hasn't impact Gafisa quarter plan seasonality, that? we've your cash it how

Ian Andrade

there generation cash to on. all going cash a we know theme Considering start, is

transfers XXXX, those place. fourth the that of operating estate million, the go of in of billion delivered, we of quarter terms there as to BRLXX some A registration was we over in have been some difficulties have number third pointed the are in offices operational In -- over transfers. projects done transfers we've But will come other because went real As and elements. quarter, they they BRLX once into very out, similar what in PSV delivered well.

offset very terms the and is to our So well have being portfolio we coming of because are much in of units today, advanced, number constructions cash the all open a conclusion. flow transferred

we what the the So if gets lost we've currently here. we room. under construction today. while And Okay. Please sound hold have to [Technical back speaker forecast Difficulty]

using are backup our here. We

please. can You on, move

Unidentified Company Representative

far us? how could hear you So

Unidentified Analyst

deliveries about the the quarter. And been Well, you main my us built. to telling flow, being cash backlog. flow, operating and similar cash expected But the you million considering the concerns third point has the about were what the were BRLXX as talking

Ian Andrade

Well, middle Guilherme, broke I'm so of we up exactly in sorry the my answer.

it here. resume let So me

terms single delivered year. In any that already over numbers historical considering all in that or communicated in present projects, been quarter, them And BRLX selling well. using fourth million generation, in quite anticipated and quarter, forecast, fact transfer, we million the whole of BRLXX we billion every cannot have cash of the BRLXXX

that of going cash. inventory So to then us have that we and to have units be to amortization and really an are generating of the transferred

the have to that So to throughout cash to we is XXXX. portfolio transferred and a and has be realized, are of going today be amount construction that under take very relevant place

Unidentified Analyst

into The a and transforming know BRLX it of Gafisa second BRLXXX Propriedades, had already Yes, I fund. million wanted you the to accounted billion, question balance for. said been estate of real about concern,

So we match based against debt you have. the on a have can that,

Ian Andrade

projects. and were Well, because let take our the everyone trying to with model that opportunity you me share

very to of and slide all projects, a going provide construction Excel Relations are in the Investor our with user-friendly operations. the We all percentage file

flow available all analysis. participants believe you and more and very our to IRs be are shared perform and the about that based So forecast. to And everyone you file who on can be it's perform analysis going available and shortly, information this modeling I will to to cash market. projections to like their would market help your the hear channel useful with

to now Pesenti. hand me Let Guilherme it

Guilherme Pesenti

is through its assets funds. acquiring already real and estate Propriedades structuring Gafisa

to but keep real manager not and a of to consultant fund, our operations So on of we we do being role playing large. operations expect also a estate a become at want

Ian Andrade

Mariani. Mario question next asked by The

Unidentified Analyst

answered had we have trends, increased year, line. expenses, bottom history, you you from question in questions. this but that with two And caused -- already previous your your SG&A project. One lose have can some it dropped In in and it see the I impacts it. about

these expectations keep So very your we'd a this you to results a in you -- go another factor of main and account acquisition volumes pipeline have in Will like growing past will -- had been it additional is past. it Gafisa belong important And the performance. on if the months? greater you capitalization really to to hear upcoming need the that trend, and impacted and from Will assets. whether your some Propriedades, question probably So Company you concerning whether excellent that have will in considering into capital? need also congrats on the

Ian Andrade

Thank you, Mario. you your questions. for Thank the you for Thank comments.

that issues, quarter. legal quarter, In about the and our results they and the third made old reviewed third dispute. some impacted First we in adjustments, some time

possible place this that positive legal legal we settlements years. very very it reduce them the there no to advance the impact. that backlog possible, balance, that been law audit, have with and in resulted as also firms transparent to according top-quality more was of as In And created groups throughout the agreements our issues done and XXXX, was from working making XXXX all previous internal I third basis to of some of really have the legal am have try as some work quarter, cleaning from and Now our Throughout detailed. things much serious, revisiting losses. to we Company

We reorganized really things. have

And to issues have. likely effort. is continuous a to still Company a that the allowed enough believe It's the and that deal with that agreements. of level to settlement, risk to contingency any of provision we legal came have We

the based number, results our expectation anymore. So in our to everything on quarter, contingency have of result has the is done the been impacting stabilized as and of year throughout a that the a not last adjustments

Unidentified Analyst

the increase question, really you're business and need wonder whether the grow concerning acquire Now the and additional to levels. Company, capital capital going I new going capitalization Company projects, of second to plan as because is

Ian Andrade

of is of pointed capital As Propriedades, we each is we investors Guilherme Each in with each when project investment to and funding reinvestments And focused to a projects. a made, and Gafisa we a structure out the already own in his currently third-party portfolio to a being Pesenti that and to connected structure. combination opportunity on tailored a capital specific creating transaction are transaction analyzed which pay of that of presentation, debt. capital acquisitions are and you It's create our project. the at pay specific to are

any So deal don't intention bringing at business with more of to capital at see S.A. the new in we of midterm this GafisaPropiedades. and Gafisa pipeline projects

Unidentified Analyst

once kudos results. on you to And again, the

Operator

for closing Well, would And further Instructions] [Operator to over no to if like questions, there close. now hand would Ian I to it we like are Andrade his remarks.

Ian Andrade

it Well, I think results was -- the were good. very

assertive, conference anticipate very has very results. specialists, year investors, interest good shareholders, impactful attracted Our market of the really with our call and we a

beginning. are We proud, are very the is just and purpose we firm in our to say that this

just we the the difficulties and but the financial do. have really and where obtaining an and We focusing good capital a was strategic was with are we inflow shareholders. of interest of of new management to begun. has XXXX and already beginning it overcome the of year own had it, results have have Company, a us. XXXX all results, to of produced our on lot good Shareholders

a We'll to always let a do. you do, planning lot interest very Thank very our the us. all be and And all much you. much today. for the now, to Have to good Thank exchange of channel are to. very thank additional conference day. you questions, information. resort that are to We and reinforce transparently very you have follow transparent that IR you time everything in your being for Thank market. above open, of an all we XXX% And available It's with channels along call. any much me for

Gafisa (GFASY) 17 Mar 212020 Q4 Earnings call transcript