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• Launches: BRL9.6 billion in 2024, up from BRL5.8 billion in 2023.

• Net Sales: Over BRL10 billion in 2024, 70% higher than in 2022.

• Average Price: Increased to BRL250 in 2024 from BRL233 in 2023.

• Gross Margin: Improved to 26.5% in 2024 from 22.7% in 2023.

• EBITDA: BRL1.14 billion in 2024, more than doubled from BRL593 million in 2023.

• Cash Generation: BRL420 million in 2024, compared to a cash burn of BRL230 million in 2023.

• Net Income: BRL274 million profit in 2024, compared to a BRL132 million loss in 2023.

• Net Revenue: BRL8.5 billion in 2024, 70% higher than in 2023.

• SG&A Expenses: 14.5% of net revenue, 1.7% below 2023.

• Net Debt to EBITDA: Dropped 23% against 2023.

• Corporate Debt Exposure: BRL3.6 billion attached to CDI, with a net exposure impact of BRL12 million per year.

• Warning! GuruFocus has detected 6 Warning Signs with BSP:MRVE3.

Release Date: February 25, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• MRV Engenharia e Participacoes SA (BSP:MRVE3) reported a significant increase in launches, from BRL5.8 billion in 2023 to BRL9.6 billion in 2024, indicating a strong recovery and growth in sales.

• The company achieved a notable improvement in its accounting gross margin, rising from 22.7% in 2023 to 26.5% in 2024, with a further increase to 27% by the end of the year.

• MRV generated BRL420 million in cash in 2024, a significant turnaround from a cash burn of BRL230 million in 2023.

• The company exceeded its guidance for 2024, delivering BRL8.5 billion in net revenue and a gross margin of 26.4%, along with cash generation of BRL420 million.

• MRV's EBITDA more than doubled from BRL593 million in 2023 to BRL1.14 billion in 2024, reflecting strong operational performance and profitability improvements.

Negative Points

• Despite improvements, MRV's profit attributable to shareholders was BRL274 million in 2024, which is still lower than desired, indicating room for further profitability enhancement.

• The company faced challenges with construction inflation, particularly in labor costs, which remains a point of concern for maintaining margins.

• MRV's exposure to the Selic interest rate rise and its impact on financial results remains a concern, with BRL1.2 billion in corporate debt attached to CDI.

• The U.S. subsidiary Resia is experiencing low profitability, with a focus on deleveraging and selling properties to generate cash, which may impact short-term financial results.

• The company is operating in fewer cities, reducing from 120 to 80 by the end of the year, which may limit market reach and growth opportunities.