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 net sales of R$508 million, driven by strong new launches and high sell-through rates.

• Net income reached R$89 million in 2Q24, up 56% year-over-year and the highest in six quarters.

• Villares Parada Inglesa achieved 93% sales, and Brooklin Studios by Lindenberg reached 62% sold shortly after launch.

• Inventory levels remain healthy, with over 70% of 2024 and 2025 deliveries already sold and inventory reduced to R$2.5 billion.

• 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 gross profit of R$128.3 million and net profit of R$89 million.

• Gross margin declined from 34% to 30.9% due to product mix, while net margin was 21.3% in 2Q24.

• EPS reached R$0.40 (+14.3% YoY).

• Net debt increased to R$122.7 million, reversing from net cash in the prior year.

• Commercial and administrative expenses totaled R$64 million in 2Q24, with increases due to profit-sharing provisions.

Outlook and guidance

• Upcoming launches in Q3 2024 include Lindenberg Alto das Nações, with construction started and launch set for August, PSV of R$569.7 million and 216 units.

• 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.

• Dividend policy maintained with quarterly payout.

• Internal consensus for 2024: net revenue median R$1.35 billion, gross margin 35.9%, net income R$336 million, net margin 24.8%.

• Reduction in deliveries expected for 2024, with 80% of units already sold.