Lavvi Empreendimentos Imobiliários (LAVV3) Q3 2024 earnings summary

Executive summary

• Net revenue reached R$394 million in 3Q24, up 92% year-over-year, and R$974 million in 9M24, up 50% year-over-year, surpassing all of 2023's volume.

• Net income was R$87 million in 3Q24 (up 78% YoY) with a net margin of 22.0%; 9M24 net income was R$223 million (up 55% YoY) with a 22.9% margin.

• Launches in 3Q24 totaled R$463 million (up 91% YoY), with major projects including Petra by Boca do Lobo and Edifício Brás.

• Net sales in 3Q24 were R$492 million (Lavvi share, up 155% YoY) and R$1.6 billion in 9M24 (up 126% YoY); total net sales reached R$760 million in 3Q24 and R$2.3 billion in 9M24.

• Interim and additional dividends of R$80.6 million (~R$0.41/share) approved for payment in November 2024.

Financial highlights

• Adjusted gross margin was 33.9% in 3Q24 (down 1.1 p.p. YoY) and 34.2% in 9M24 (up 0.8 p.p. YoY).

• Adjusted EBITDA reached R$98 million in 3Q24 (up 117% YoY) and R$249 million in 9M24 (up 76% YoY), with a margin of 25.0% in the quarter.

• Net cash position was R$95 million as of September 30, 2024, with a net debt/equity ratio of -5.8%.

• Backlog revenue stood at R$2.0 billion (up 55% YoY) with a gross margin of 34.6%.

• Free cash at period end was R$95 million, with adjusted cash burn of R$14 million in 3Q24, mainly due to land acquisitions.

Outlook and guidance

• Landbank of R$5.7 billion (total view) or R$3.9 billion in % Lavvi, supporting launches for 2024 and 2025 across all segments.

• Launch pipeline for 2025 is robust, with BRL 2.5–3 billion in launches planned, slightly below 2024 but with expectations for continued sales growth.

• Company continues to negotiate land for the economic segment, aiming to expand the Novo brand from 2025 onward.

• Speed of sales (SoS) remained high at 27% in the quarter and 59% in the last twelve months.

• Management remains optimistic about maintaining high sales and launch pace, focusing on quality plots and strong locations.