Melnick Desenvolvimento Imobiliário (MELK3) Q3 2024 earnings summary

Executive summary

• Achieved significant recovery in launches and sales in 3Q24, with YTD launches up 25% year-over-year to BRL 843 million and net sales of BRL 601 million, despite flood disruptions in 2Q24.

• Four projects launched in 3Q24 (PSV BRL 325.9M), with a 53% sales rate; inventory at BRL 1.3 billion, with 42% of completed stock leased.

• Maintained a robust cash position of BRL 519.5 million and net cash of BRL 175.7 million, with no corporate debt and 98.4% of debt in SFH contracts.

• Paid BRL 41.4 million in dividends in 2024, maintaining a 15-year track record of high payout ratios.

• Ended partnership with Even, with founders holding 47% of shares and a new growth cycle underway.

Financial highlights

• Net revenue for 3Q24 was BRL 245.6 million, down 5% year-over-year; YTD net revenue was BRL 631.5 million, down 21%.

• Gross profit for 3Q24 was BRL 67.2 million (margin 31.2%); YTD gross profit was BRL 127 million.

• Net income for 3Q24 was BRL 35.6 million (net margin 21.3%); YTD net income was BRL 37.1 million (net margin 11.2%).

• EBITDA for 3Q24 was BRL 47.8 million (margin 19.5%); YTD EBITDA was BRL 50.4 million (margin 7.9%).

• Operational cash generation YTD was BRL 102.2 million.

Outlook and guidance

• Construction pace normalized post-flood, with all delays incorporated into delivery forecasts.

• Launch volume for 2025 expected to remain at current levels, with flexibility to accelerate if market absorption improves.

• Focus on leveraging a robust, approved land bank and strong cash position to support growth.

• Continued attention to emerging economy segment via Open unit, with potential for increased launches.

• Strategy emphasizes financial solidity, operational capacity, and differentiated products.