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

Executive summary

• Net revenue reached R$1,857 million in 2Q24, up 14% year-over-year, and R$3,430 million in 6M24, up 18% year-over-year, with gross margin at 32.9% for the quarter.

• Net income for 2Q24 was R$412 million, a 47% increase year-over-year, and R$679 million in 6M24, up 53% year-over-year, with ROE at 15.5%.

• Despite macroeconomic deterioration, including persistent US inflation and higher Brazilian interest rates, the real estate market showed resilience with strong sales and stable operational results.

• Management remains confident in the business outlook for the second half of the year, despite lower-than-expected launches in Q2.

• Cash burn of R$61 million in 2Q24, including a non-recurring effect from the sale of Cury shares.

Financial highlights

• Gross margin in 2Q24 was 32.9%, up 0.6 p.p. year-over-year; 6M24 gross margin was 32.6%.

• Net margin in 2Q24 was 22.2%, up 5.1 p.p. year-over-year.

• Gross profit for 2Q24 was R$610 million, up 18% year-over-year.

• Earnings per share in 2Q24 was R$1.10, compared to R$0.75 in 2Q23.

• Net financial result was a positive R$45 million in 2Q24, up from R$29 million in 2Q23.

Outlook and guidance

• Management expects to maintain launch plans for the year and is optimistic about the second half, with a robust pipeline for 2025 and 2026.

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

• Gross margin is expected to remain around 33–34% in the coming quarters.