Lavvi Empreendimentos Imobiliários (LAVV3) Q2 2024 earnings summary

Executive summary

• Net revenue reached R$295 million in 2Q24 (up 4% YoY) and R$580 million in 1H24 (up 31% YoY), both record highs.

• Net income was R$66 million in 2Q24 (margin 22.4%) and R$136 million in 1H24 (up 44% YoY, margin 23.4%).

• Launches totaled R$660 million in 2Q24 and R$1.4 billion in 1H24, up 45% YoY.

• Net sales reached R$461 million in 2Q24 (up 18% YoY) and R$1.2 billion in 1H24 (up 116% YoY).

• Backlog revenue was R$1.8 billion (up 38% YoY), with a gross margin of 35.3%.

Financial highlights

• Adjusted gross margin was 31.8% in 2Q24 (down 1.5 p.p. YoY) and 34.4% in 1H24 (up 1.7 p.p. YoY).

• Adjusted EBITDA reached R$76 million in 2Q24 (up 13% YoY, margin 25.8%) and R$151 million in 1H24 (up 57% YoY, margin 26%).

• Annualized ROE was 21% at the end of 2Q24.

• Net cash position was R$125 million as of June 30, 2024; net debt/shareholders' equity ratio was -7.9%.

• Interim dividends of R$15.7 million (~R$0.08/share) approved for 2Q24, to be paid August 26, 2024.

Outlook and guidance

• Management expects margin recovery in 2H24, citing non-recurring impacts in 2Q24.

• Landbank of R$5.7 billion supports launches for 2024 and 2025 in medium-high to luxury segments; ongoing search for land for economic segment launches in 2025 and beyond.

• Speed of sales (SoS) remained high at 25% in the quarter and 53% over the last twelve months.