In This Article:
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Cash Generation: BRL229 million in the third quarter.
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Net Sales: BRL3.5 billion in the quarter; BRL7.4 billion in the first nine months of 2024, a 19% increase from 2023.
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Gross Margin: 37.5% for the quarter.
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Units Produced: 27,000 units in the first nine months, a 13% increase from the same period in 2023.
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Accumulated Wealth: BRL37 billion, a 17% increase from the same period in 2023.
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EBITDA: BRL857 million in the first nine months of 2024, nearly double the same period in 2023.
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Adjusted Net Income: BRL76 million in the third quarter; BRL206 million year-to-date.
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Net Debt Over Equity: 39.1%.
Release Date: November 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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MRV Engenharia e Participacoes SA (BSP:MRVE3) reported a strong increase in sales and sales prices, which are rising above inflation.
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The company has managed to keep costs below inflation, contributing to a healthy gross margin of 37.5%.
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MRV's cash generation reached BRL229 million in the quarter, with net sales of BRL3.5 billion.
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The company has a competitive advantage due to its large geographic coverage and strategic land purchases at favorable conditions.
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MRV is optimistic about future cash generation and profitability, expecting to deliver strong financial results in the coming years.
Negative Points
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Resia, a subsidiary of MRV, faces challenges due to high interest rates in the US, affecting property sales.
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The company has experienced a loss of BRL105 million in the settlement of swaps, impacting financial results.
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There is uncertainty regarding the macroeconomic environment, particularly with rising interest rates and inflation concerns.
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The pro-soluto portfolio remains stable, but there is a need to further reduce it to improve cash flow.
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The US market context remains challenging, with potential impacts from political changes and fiscal policies.
Q & A Highlights
Q: Can you explain the dynamics of direct financing and its impact on MRV's operations? A: Ricardo Rodrigues, CFO, explained that MRV's direct financing is offered at IPCA plus 0.95% per month. This model allows individual investors to fund MRV directly, with half of the direct credit concessions done with SBPE and the other half with MCMV. The decision to use direct funding is strategic, especially for projects with a POC of 70%-75%, as it offers better returns compared to traditional bank financing.
Q: Is the current gross margin from new sales sustainable, and what are the cost dynamics affecting it? A: Rafael Menin, Co-CEO, stated that the gross margin from new sales is stable, with expectations of continued growth. The company anticipates inflation at 6%, but MRV's costs are below INCC inflation, and sales prices are above it. This dynamic supports the potential for higher margins, aiming for the best gross margin in the industry next year.