EZTEC EMPREENDIMENTOS E PARTICIPAÇÕES S.A. Earnings Release
4Q22
Conference Call
with simultaneous translation
March 17, 2023
10h (Brasília time) / 08h (US EST)
Zoom:
Clickhereor access via QR Code 850 9936 9094
Contact IR | · Ronan Aley | ||
· A. Emílio C. Fugazza | |||
· Pedro Tadeu T. Lourenço | · Vitor Hashimoto | ||
· Giovanna Bittencourt |
Tel.: +55 (11) 5056-8313ri@eztec.com.brri.eztec.com.br/en/
EARNINGS RELEASE | 4Q22 |
SUMMARY | |
EZ PARQUE DA CIDADE | 6 |
EZ SHOW | 8 |
BALANCE SHEET | 10 |
INCOME STATEMENT | 11 |
FINANCIAL INDICATORS | 12 |
REVENUE, COST & GROSS PROFIT | 12 |
SELLING EXPENSES | 14 |
ADMINISTRATIVE EXPENSES | 15 |
EQUITY INCOME | 16 |
RESULTS TO BE RECOGNIZED | 17 |
FINANCIAL RESULTS | 18 |
CASH AND DEBTS | 19 |
OPERATIONAL INDICATORS | 20 |
LAUNCHES | 20 |
OPERATIONS INFORMATIONS | 21 |
EZ INC | 22 |
SALES & CANCELLATIONS | 23 |
DIRECT RECEIVABLES PORTFOLIO | 25 |
INVENTORY | 26 |
LANDBANK | 27 |
CAPITAL MARKETS | 29 |
ADDITIONAL VALUE | 29 |
ANNEXES | 31 |
CASH FLOW | 31 |
POC EVOLUTION | 32 |
INVENTORY BY PROJECT | 33 |
REVENUE BY PROJECT | 35 |
RESULTS FOR SHARED CONTROL PROJECTS | 37 |
EZ INC | 38 |
FIT CASA | 40 |
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EARNINGSEARNINGSRELEASERELEASE 4Q22
4Q22 HIGHLIGHTS
Sales until 03.13.2023
Company ends 2022 with revenue above R$1.1 billion, 2nd highest revenue in its history
With new strategies and tools developed throughout 2022, sales grow 14.4% compared to 2021
Financial Highlights
4Q22 | 3Q22 |
%Var
4Q21 | %Var |
2022
2021
%Var |
Net Revenue (R$ k) | 310,897 | 280,646 | 10.78% | 176,398 | 76.25% | 1,121,260 | 957,866 | 17.06% | ||||||||||||
Gross Profit (R$ k) | 76,990 | 110,277 | -30.18% | 77,170 | -0.23% | 384,229 | 441,803 | -13.03% | ||||||||||||
Gross Margin | 24.8% | 39.3% | -14.5 p.p | 43.8% | -19 p.p | 34.3% | 46.1% | -11.9 p.p | ||||||||||||
Net Income (R$ k) | ||||||||||||||||||||
31,511 | 105,427 | -70.11% | 72,480 | -56.52% | 324,707 | 430,127 | -24.51% | |||||||||||||
Net Margin | 10.1% | 37.6% | -27.4 p.p | 41.1% | -31 p.p | 29.0% | 44.9% | -15.9 p.p | ||||||||||||
Earnings per Share (R$) | ||||||||||||||||||||
0,15 | 0,48 | -68.75% | 0,33 | -54.55% | 1,48 | 1,90 | -22.40% | |||||||||||||
Net Debt (Cash) (R$ k) | 241,151 | 411,952 | -41.46% | 868,331 | -72.23% | 241,151 | 868,331 | -72.23% | ||||||||||||
Cash Generation (Burn) (R$ k) | ||||||||||||||||||||
(170,801) | (196,966) | -13.28% | (143,230) | 19.25% | (627,180) | (203,815) | 207.72% | |||||||||||||
Operational Highlights
4Q22 |
3Q22 |
%Var
4Q21 |
%Var |
2022 |
2021 |
%Var |
# of Projects/Phases Launched | 3 | 1 | 200.0% | 5 | -40.0% | 9 | 9 | 0.0% | ||||||||||
PSV %EZTEC | 469,446 | 410,200 | 14.4% | 490,500,0 | -4.3% | 1,783,446 | 1,906,300 | -6.4% | ||||||||||
Gross Sales* | 345,780 | 470,560 | -26.5% | 391,613 | -11.7% | 1,434,945 | 1,253,899 | 14.4% | ||||||||||
Net Sales* | 304,335 | |||||||||||||||||
415,255 | -26.7% | 358,566,0 | -15.1% | 1,255,002 | 1,126,562 | 11.4% | ||||||||||||
Total Inventory* | 2,843,490 | 2,748,535 | 3.5% | 2,824,000 | 0.7% | 2,843,490 | 2,824,000 | 0.7% | ||||||||||
Net SoS | 9.7% | 13.1% | -3.4 p.p | 13.9% | -4.2 p.p | 30.6% | 28.5% | 2.1 p.p | ||||||||||
# of Active Construction Sites | 20 | 21 | -4.8% | 21 | -4.8% | 20 | 21 | -4.8% | ||||||||||
Total Landbank ** | 10,416,998 | 10,974,334 | -5.1% | 11,078,821 | -6.0% | 10,416,998 | 11,078,821 | -6.0% |
*Total Residential Inventory + Performed Commercial Inventory **Landbank available for future development + Esther Towers + Air Brooklin Commercial
São Paulo, March 16, 2022 - EZTEC S.A. (BOVESPA: EZTC3) celebrates its 44th anniversary as one of the most profitable builders and developers in Brazil. The Company announces its results for the fourth quarter of 2022 (4Q22). Except where stated otherwise, EZTEC's operating and financial information is presented on a consolidated basis and in Brazilian real (R$), in accordance with Generally Accepted Accounting Principles in Brazil ("BR GAAP") and the International Financial Reporting Standards (IFRS) applicable to real estate developers in Brazil, as approved by the Accounting Pronouncement Committee (CPC), Securities and Exchange Commission of Brazil (CVM) and Federal Accounting Board (CFC). Non-accounting and non-financial data were not audited.
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EARNINGS RELEASE | 4Q22 |
MANAGEMENT'S4Q22 COMMENTS
EZTEC's Management announces the results for the fourth quarter of 2022 (4Q22) that completes the fiscal year of 2022. With 4Q22with gross margins of 24.8%, net margins of 10.1%, and net profit of R$ 32 MM, the Company closes FY 2022 with an annual gross margin of 34.3%, net of 29%, and an annual result of R$ 325 MM. The Company maintained its distinguished operating performance in a year marked by uncertainties regarding the possible impacts of the war between Russia and Ukraine on the international scenario, the resumption of a post-pandemic normality, the persistent inflation that hit the industry raw materials until the middle of the year, not reflected in the INCC, and the interest rate that increased 4.5 p.p. during this fiscal year.
It is worth starting here by addressing the evident drop in the quarterly gross margin observed in this release, which varied by 14.5 p.p. in comparison with the 3Q22 quarterly margin, and the net margin, which varied by 27.4 p.p.. The reduction in gross margin is primarily due to the Company's management's option to recognize the fine and fully accrue for all effects from the expected delay beyond the expected finish date for the EZ Parque da Cidade project. It is worth noting that by opting for full recognition in this quarter the Company frees itself from the need to recognize significant impacts arising from this episode on its future results.It becomes, therefore, a one-timeeffect limited to the fourth quarter. Also, the reduction in net margin has as one of its main factors the incidence of a negative IGP-DIon the portfolio of financed clients.
Aware of the unprecedented delay in the delivery of a project in the Company's history and due to the enormous appreciation that EZTEC, its clients, employees and investors have for this project, we have prepared a specific page within this release so that everyone can learn more about the history and challenges behind the execution of this new icon that EZTEC will very soon proudly deliver to its clients and to São Paulo. (EZ Parque da Cidade)
In addition to this particularity, it is worth pointing out that 3 projects were launched this quarter: (i) Park Avenue, a high- end project with 50% EZTEC participation and R$250 million of PSV on the EZ percentage, located in Moema, close to República do Líbano avenue and Clube Atlético Monte Libano; (ii) Chanés Street, a high-endproject with conventional and smart-livingunits, also in Moema, 100% EZTEC and R$170 million in PSV and; (iii) PIN Osasco - 2nd phase, a low-endproject in Osasco with 60% EZTEC participation and R$43.5 million in PSV.
In this last quarter we also delivered the Haute Ibirapuera, ID Jauaperi, ID Lisboa and Pátrio Ibirapuera projects, 87% of which were sold, with a PSV %EZTEC of R$385 million. Thus, we closed the fiscal year 2022 with eight projects delivered, all well sold, adding up to a %EZTEC PSV of R$768 million. It is worth reinforcing that, although high for the Company's historical levels, this delivery volume corresponds to only 42% of the volume expected for 2023, reinforcing our expectation that this new year will be marked by a high volume of well-solddeliveries and strong cash generation.
This new fiscal year that is starting points out that some of the challenges faced in 2022 should still persist in our industry, such as the pressure on margins due to inflation felt in project costs and the difficulty in passing on this increase in priceand, while we create solutions to the known challenges, new ones appear on the horizon. This is the case of our inventory outflow, which will be the main challenge for 2023.
To this end, we currently understand that the Company must pay attention to the volume of launches and make greater use of its differentials to stand out from its peers in this new cycle. As an example, in January 2023 we launched the Estilo EZTEC campaign that unites the strength of our real estate broker's house TECVENDAS, our brand, and our real estate credit operation to offer a differentiated credit line to all our inventory, whether under construction or performed, with
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EARNINGS RELEASE | 4Q22 |
rates starting at 7.99% + IPCA and financing up to 35 years. More details of this campaign and its initial results can be found on the EZSHOWpage within this document.
Besides these pages that highlight EZSHOWand EZ Parque da Cidade, we have reorganized the way in which we present some data in our materials to bring more transparency and intuitiveness to thereader. As an example, we created the classification of Landbank in execution in our inventory for those projects that have not been launched, but that already have activity in their construction sites, as is the case of Esther Towers and the land beside IBM. We have also changed the criteria for classifying the status of our projects to make them more intuitive to understand.
We count on the confidence of our investors in our business model and in the Company's management, which has accumulated more than 44 years in the market and the experience of several industry cycles, to overcome the current challenges. Finally, we take this opportunity to inform our shareholders that the Board of Directors has approved the payment of dividends out of quarterly earnings. The total amount will be R$7.5 million, approximately R$0.03 (three cents) per share to be paid on March 31, 2023.
Enjoy your reading,
THE MANAGEMENT
Arbitration Chambers: Pursuant to Article 41 from EZTEC's Bylaws, the Company, its shareholders, Management, and members of the Audit Committee are obliged to resolve each and every of dispute and controversy that may arise among them through arbitration towards The Chamber of Arbitration of the Market (Câmara de Arbitragem do Mercado), especially in regard to the application, the validity, the efficacy, interpretation, and violation of its effects, of the the Corporation Law (Lei das Sociedades por Ações), of the Company's Bylaws, of the norms edited by the National Monetary Council, by the Central Bank of Brazil or by CVM, as well as of the remaining norms applicable to the functioning of the capital market in general, and of the Novo Mercado Regulation, the Arbitration Regulation, the Sanction Regulation, and the Participation Contract in Novo Mercado.
Relationship with Independent Auditors: In compliance with CVM Instruction number 381/03 we inform that the independent auditors Ernst & Young Auditores Independentes S.S. did not provide services other than those related to external auditing in 2022. The company's policy when contracting the services of independent auditors ensures that there is no conflict of interest, loss of independence or objectivity.
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EZTec Empreendimentos e Participações SA published this content on 16 March 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 16 March 2023 23:05:02 UTC.
