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 net sales of R$508 million and gross sales of R$556 million, driven by strong performance in new launches and high sell-through rates, notably Villares Parada Inglesa (93% sold) and Brooklin Studios by Lindenberg (62% sold).

• Net income reached R$89 million in Q2 2024, up 56% year-over-year and the highest in six quarters, with net margin at 21.3%.

• Gross margin declined to 30.9% due to a higher share of ready unit sales, but future margins remain robust.

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

• Inventory levels remain healthy, with R$2.56 billion in inventory and over 70% of 2024 and 2025 deliveries already sold.

Financial highlights

• Net revenue for Q2 2024 reached R$416 million, up 80% year-over-year, with gross profit of R$128.3 million and net income of R$88.7 million.

• Gross margin was 30.9% in Q2 2024, down from 34% YoY, and net margin was 21.3%.

• EPS for Q2 2024 was R$0.40–0.41.

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

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

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.

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

• Management focuses on asset turnover, inventory reduction, and strong launch performance to sustain returns.

• 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%.