Companhia Melhoramentos de São Paulo (MSPA3) Q1 2023 earnings summary

Executive summary

• Q1 2023 results faced macroeconomic pressure and delayed institutional book sales; consolidated net revenue fell 12% YoY to R$49.6 million and net loss widened to R$8.2 million.

• Forest operations improved gross-profit performance through efficiency measures, while property results benefited from Swiss Park lot sales and the sale of Nova Caieiras V.

Financial highlights

• Net revenue was R$49.617 million, down 12% YoY and 8% QoQ; delayed institutional sales in publishing were the main YoY driver.

• Net loss was R$8.194 million versus a R$1.694 million loss in Q1 2022; EBITDA was R$5.553 million, down 16% YoY.

• Gross profit was R$18.366 million versus R$21.636 million YoY; gross-profit profitability was maintained despite input-price pressure.

• Consolidated financial result was an expense of R$4.628 million, versus an expense of R$1.506 million in Q1 2022; income tax and social contribution expense was R$4.010 million.

Outlook and guidance

• Expected institutional and retail publishing sales deferred from Q1 to be realized during 2023, supported by greater public-entity and retail coverage and a current-affairs-aligned release schedule.

• Operations are prioritizing process reviews and efficiency to preserve profitability in an inflationary environment.