EZTEC Empreendimentos e Participações S.A. (EZTC3) Q2 2024 earnings summary

Executive summary

• Achieved the second highest sales volume in company history in Q2 2024, with gross sales of R$556 million and strong performance in new launches, notably Villares Parada Inglesa (93% sold) and Brooklin Studios by Lindenberg (62% sold), reducing inventory to R$2.5 billion.

• Net sales outpaced launches, with high absorption rates and over 70% of 2024 and 2025 deliveries already sold.

• Two low-income projects delivered, totaling R$151 million in VGV, with 81% sold.

• Dividend of R$21 million (R$0.10 per share) approved for payment on August 30, 2024.

Financial highlights

• Net revenue grew 80% year-over-year to R$416 million, with net profit reaching R$89 million, up 56% sequentially, and net margin at 21.3%.

• Gross margin decreased to 30.9% in Q2 2024, mainly due to product mix and higher ready unit sales.

• EPS reached R$0.40, up 54% sequentially.

• Commercial and administrative expenses totaled R$64 million in Q2 2024.

• Equity income more than doubled to R$23 million, mainly from Mooca Città Milano and other ongoing projects.

Outlook and guidance

• Upcoming launches in Q3 2024 include Lindenberg Alto das Nações in Santo Amaro, with PSV of R$569.7 million and 216 units, and construction already started.

• Land bank expected to reach R$14 billion by year-end, with current PSV at R$9.3 billion and BRL 5 billion in contracts pending approval.

• Management focuses on asset turnover, inventory reduction, and prudent land acquisition, with a major land purchase decision due in 2H24.