Cyrela Brazil Realty S.A. (CYRE3) Q2 2024 earnings summary

Executive summary

• Net revenue for the first half of 2024 reached R$3.4 billion, up 18% year-over-year, with Q2 revenue at R$1.9 billion and net income at R$412 million, a 47% increase year-over-year; H1 net profit was R$679 million, up 53% year-over-year.

• Gross margin improved to 32.9% in Q2 2024, up 0.6 p.p. year-over-year, and 32.2% for H1 2024.

• Despite macroeconomic deterioration globally and in Brazil, real estate activity remained resilient, with strong pre-sales and operational performance.

• Management remains confident in the launch pipeline and expects continued strong operating and financial results for the remainder of 2024 and into 2025.

• Cash burn in Q2 2024 was R$61 million, mainly due to non-recurring effects, but H1 2024 saw R$69 million in cash generation.

Financial highlights

• Net revenue was R$1.9 billion in Q2 and R$3.4 billion year-to-date, up 18% year-over-year.

• Net income for Q2 was R$412 million (net margin 22.2%), and R$679 million year-to-date, up 53% year-over-year.

• Gross margin in Q2 was 32.9%, up from 32.3% in Q2 2023 and 31.4% in Q1 2024.

• Return on equity for the last twelve months was 15.5%.

• Earnings per share in Q2 2024 was R$1.10, compared to R$0.75 in Q2 2023.

Outlook and guidance

• Management expects continued strong operating and financial results, with confidence in the launch and sales pipeline for the remainder of 2024 and into 2025.

• Launch expectations for the year remain unchanged despite a weak Q2 2024 for new launches.

• Cash generation guidance for the year remains at R$0–200 million, with expectations for a more favorable environment next year.