Construtora Tenda (TEND3) Q1 2018 earnings summary

Executive summary

• Q1 net pre-sales reached BRL 424 million, up 25% YoY and in line with full-year guidance.

• 41 construction projects were on schedule; transfers recovered after prior-quarter delays tied to Caixa Econômica.

Financial highlights

• Adjusted EBITDA grew 84% YoY; adjusted gross margin was 35%, in line with guidance.

• Net income for the last 12 months rose 75% to BRL 124 million.

• Transfers generated PSV of BRL 413 million, up 29% versus the comparison cited on the call.

Outlook and guidance

• Targeting 10%-15% annual growth from 2018; 2018 net sales guidance was 13% above 2017.

• Growth is expected to center on São Paulo over the next three years, supported by Faixa 2 elevator projects; expansion into a new region is intended each year.

• Long-term net debt-to-equity target is near 0%, with a 10% fluctuation in either direction; adjustment is expected to be gradual, not necessarily achieved in 2018.