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04 01-2009 - 4 q08 earnings presentation

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04 01-2009 - 4 q08 earnings presentation

  1. 1. Cidade Paradiso (Nova Iguaçu, RJ) 4Q08 and 2008 Results April 2009
  2. 2. 2 Pure-play developer that outsources construction and brokerage services Partnership model with niche players: Project origination mechanism Market analysis Low fixed costs (headcount of approximately 80) Agility/Operational flexibility CR2 Focus: Offer products where there is credit availability Business Model
  3. 3. 3 Managers Track-record 1999-2005 •Group CR2 is founded in 1999 •Activities in Credit and Real Estate •Brazilian real estate sector still in its infancy •CR2 launches 11 projects with PSV worth R$218mm 2006 •Sector in expansion mode •Raised R$60mm via fund structure •Banks increase credit availability to construction finance and home buyers •CR2 Empreendimentos Imobiliários SA is founded •Shift in target market from high/middle income to economic segment 2007 •Sector gains access to capital markets •IPO raises R$307mm •Business model enables flexibility to accelerate when there is ample liquity •Total PSV launched of R$774mm, and CR2’s share of R$535mm 2008 •Anticipating the impact from the global financial crisis, the pace of new launches is reduced starting in 1H08 •Priorities are to secure financing for projects, preserve cash •Total PSV launched of R$347mm, and CR2’s share of R$293mm •Launches consistent with initiative to focus on the economic segment, and to expand into the São Paulo market 1S09 •Economic activity still contracting and visibility limited •Lower interest rates and controlled inflation are positives •Government housing package to provide oppotunitites •Focus remains in the economic segment (92% of land bank) •Maintain selective stance towards new launches, focus on inventory reduction
  4. 4. 4 2008 Highlights 2008 marked by the contrast between strong growth in 1H and deceleration already evident in 2H Given deteriorating credit conditions in 3Q08, our priorities were: Secure construction financing with Caixa Econômica Federal (CEF) and commercial banks Contract whenever possible financing under CEF’s Crédito Associativo model Preserve and rebuild our cash position In 2H08 we postponed new launches and concentrated our efforts in reducing inventories Inventory at market value was R$258mm (4Q08), representing 65% of shareholder’s equity (among the lowest in the sector) In 2009 our cash flow is expected to turn positive, given the typical construction cycle and that CR2 initiated its operations in 2006 We have secured financing for 95% of launched PSV (2006-2008)
  5. 5. 5 2008 Operational Highlights 293,4 385,2 53,7 201,1 20082007 Launches (R$ mm) Partners CR2 347,0 586,3 141,6 251,7 80,1 65,3 2007 2008 Contraced Sales (R$ mm) Partners CR2 221,7 317,0 221,7 317,0 With a conservative posture, we launched in 2008 PSV of R$347mm (R$293mm %CR2) compared to R$586mm (R$385mm %CR2) in 2007 Contracted sales of R$317mm (+43% vs 2007) and CR2’s share of R$252mm (+78% vs 2007) We delivered 2 projects in 2008 with total PSV of R$61mm *2007 lanches adjusted for the cancellation of the Parque das Águas project (total PSV of R$187mm, and CR2’s share of R$149,3mm) *
  6. 6. 6 2008 Financial Highlights 2008 EPS of R$1,08 compared to R$0,39 (adjusted for IPO expenses) in 2007 Net profit of R$50mm in 2008, compared to R$18mm in 2007 Net margin before minorities of 24,3% in 2008 ROE de 13,6% em 2008, vs 8,4% in 2007 2008 net revenue of R$243mm, increased 488% from 2007 4T08 net revenue of R$82mm increased 309% vs 4T07 2008 EBITDA of R$49mm (20,3% margin) 4T08 EBITDA of R$14mm (17,2% margin) Results above are before the accounting adjustments required by Law 11,638
  7. 7. 7 2008 Financial Highlights (1) For 2007, EBITDA, net income before minority interest, net income and EPS were adjusted by excluding non-recurring IPO expenses of R$23.108 million. (2) In 2008, EBITDA includes R$15.252 million from the sale of the interest in CR2 Shoppings Empreendimentos. (3) For the ROE in 2007, given the significant change in shareholder’s equity following the April 2007 IPO, we used the average shareholder’s equity between 2006 and 2007. For other periods, we used the shareholder’s equity of the immediately preceding period as the denominator for calculating ROE. Consolidated Financials (R$'000) 4Q08 3Q08 4Q07 ∆4Q/3Q ∆4Q/4Q 2008 2007 ∆08/07 Gross Operating Revenue 82.469 71.305 20.162 16% 309% 242.840 41.277 488% Gross Profit 25.655 21.825 4.906 18% 423% 73.128 10.021 630% % Gross Profit Margin 31,1% 30,6% 24,3% 0,5 p.p. 6,8 p.p. 30,1% 24,3% 5,8 p.p. EBITDA(1)(2) 14.164 7.238 -1.221 96% -1260% 49.266 -6.071 -911% % EBITDA Margin 17,2% 10,2% -6,1% 7,0 p.p. 23,2 p.p. 20,3% -14,7% 35,0 p.p. Net Profit before minorities(1) 18.093 9.080 7.633 99% 137% 59.065 18.053 227% % Net Margin before minorities 21,9% 12,7% 37,9% 9,2 p.p. -15,9 p.p. 24,3% 43,7% -19,4 p.p. Net Profit(1) 14.287 7.220 6.910 98% 107% 49.754 17.887 178% % Net Profit 17,3% 10,1% 34,3% 7,2 p.p. -16,9 p.p. 20,5% 43,3% -22,8 p.p. Net Income per Share(1) – EPS R$ 0,31 0,16 0,15 98% 107% 1,08 0,39 178% ROE (%) - annualized(3) 14,7% 7,6% 7,7% 7,1 p.p. 7,0 p.p. 13,6% 8,4% 5,3 p.p.
  8. 8. 8 Results to be Recognized Revenues and Results to be Recognized (R$ 000) 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 Revenues to be Recognized 136.489 202.990 214.237 339.572 366.611 306.111 Cost of Units Sold to be Recognized 94.999 144.234 150.543 233.694 248.861 207.262 Gross Profit to be Recognized 41.490 58.756 63.694 105.878 117.750 98.849 Gross Margin to be Recognized 30,4% 28,9% 29,7% 31,2% 32,1% 32,3% 30,4% 28,9% 29,7% 31,2% 32,1% 32,3% 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 Margin to be Recognized Revenue to be recognized of R$306mm in 4Q08 and result to be recognized of R$99mm (32,3% margin) On- and off-balance sheet receivables totaled R$256mm in 4Q08, out of which R$202mm in the short term
  9. 9. 9 Capital Structure / Liquidity Consolidated Financials (R$'000) 4Q08 3Q08 2Q08 Cash 43.612 86.891 133.608 Corporate Debt 14.620 15.808 0 Net Cash 28.992 71.083 133.608 SFH 40.644 26.647 9.873 Shareholders Equity 394.849 389.561 382.341 Total Assets 592.819 551.033 510.057 Net Cash / Shareholders Equity (ex SFH) -7,3% -18,2% -34,9% Net Cash / Shareholders Equity (including SFH) 3,0% -11,4% -32,4% 4Q8 Liquidity: R$44mm cash position and corporate debt of R$15mm We expect positive cash flow in 2009, due to: 7 projects are scheduled to be delivered in 2009, with total PSV of R$373mm SFH financing of R$41mm on the balance sheet (4Q08) accounted for only 2 projects, as of now we already have 5 projects where SFH financing has kicked-in With regards to CEF, we started to receive financing for 1 of our projects in early 2009, and expect to have financing kick-in for another 5 projects before the end of April—already under the improved terms from the Government’s housing package 2008 ROE = 13,6%, with low leverage
  10. 10. Project Bank Type of Funding Project Delivery - Forecast Financing Status Line of Credit Green Park 3000/4000 Itaú "Repasse nas Chaves" Dec-2008 Contract Signed - transfer of credit underway Verano I Itaú "Plano Empresário" Aug-2009 Contract Signed - financing kicked-in Itaú Verano II Itaú "Plano Empresário" Mar-2010 Contract Signed - financing kicked-in R$250 milion Parque das Águas Itaú "Plano Empresário" Mai-2010 Contract Signed - financing kicked-in Parque das Águas Unibanco "Repasse na Planta" Dec-2010 Contract Signed - transfer of credit underway Unibanco Splendore Valqueire I Unibanco "Repasse na Planta" Jul-2009 Contract Signed - transfer of credit underway R$29 milion of PSV Villaggio Del Mare Santander "Plano Empresário" Jul-2009 Contract Signed - financing kicked-in Santander Barra Allegro Santander "Plano Empresário" Dec-2009 Contract Signed - financing kicked-in R$100 milion of PSV Verano III Bradesco "Plano Empresário" Mar-2011 Contract in Process Bradesco R$90 milion Felicittá Real "Plano Empresário" Apr-2010 Contract in Process Real R$12 milion Via Parque CEF "Repasse nas Chaves" Mar-2008 Contract Signed - transfer of credit underway Mirante Bonsucesso CEF "Crédito Associativo" Mai-2009 Contract Signed - financing kicked-in Top Life Itamaraty CEF "Crédito Associativo" Feb-2010 Contract in Process Villagio do Campo CEF "Crédito Associativo" Jun-Dec 2009 Contract in Process CEF (1) Premium Cpo. Grande CEF "Crédito Associativo" Jun-2010 Contract in Process R$ 2,5 bilion of PSV Acqua Park CEF "Crédito Associativo" Jul-2010 Contract in Process Top Life Park CEF "Crédito Associativo" Jul-2010 Contract in Process Jardim Paradiso* CEF "Crédito Associativo" Paradiso 1: Dec-2009 Letter of Credit 10 Financing by Project *Commitment signed with CEF in July 2007. The R$2.5 billion will fully cover Cidade Paradiso. Know-how and good relationship with CEF
  11. 11. Segments of Operation 11 100% Launches 2008 Economic 92% 8% Land Bank Economic Commercial
  12. 12. 209.621 326.292 166.422 204.762 164.587 116.630 112.891 101.154 87.331 2006 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 Average PriceUnits Sold(R$) 12 Sales Historical Trend
  13. 13. 13 Sales Speed – SS and SoS SS (CR2’s share): *contracted sales of launches in the period / launched PSV in the period+, net of physical swaps SOS (CR2’s share): *contracted sales in the period / (inventories at the beginning of the period + launched PSV in the period net of physical exchanges)] Period (R$ mm) Inventory at the Beginning of Period Launches (CR2's share) Contracted Sales (CR2's share) Inventory at the End of Period Sales over Supply (SoS) 2006 0,0 33,4 11,9 21,5 36% 2007 21,5 336,5 141,6 216,3 40% 2008 216,3 293,1 251,7 257,8 49% Period (R$ mm) Launched PSV in the Period Contracted Sales of Launches in the Period Sales Speed (SS) 2007 336,5 137,2 41% 2008 293,1 203,3 69% 65% of Shareholder’s Equity
  14. 14. 14 Launches to Date Development City (State) Launch Date Segment Launched Units Sold Units % Sold Total PSV (R$ MM) CR2's PSV (R$ MM) % CR2 Green Park 3000/4000 Barra (RJ) mar/sep 06 Middle-Income 240 191 80% 55,7 33,4 60% Verano I / II / III Barra (RJ) mar/sep/oct 07 Middle-Income 913 596 65% 302,0 181,2 60% Villaggio Del Mare Recreio (RJ) may/07 Middle-Income 120 105 88% 58,9 30,6 52% Splendore Valqueire I V. Valqueire (RJ) jul/07 Economic 120 115 96% 15,9 12,7 80% Parque das Águas I S. Gonçalo (RJ) oct/07 Economic 1.058 403 38% 140,0 112,0 80% Barra Trade Barra (RJ) nov/07 Comercial 5 0 0% 28,0 19,6 70% Barra Allegro Barra (RJ) nov/07 Middle-Income 144 94 65% 41,5 29,0 70% Mirante Bonsucesso Guarulhos (SP) mar/08 Economic 368 353 96% 28,4 24,4 86% Via Parque Caxias (RJ) mar/08 Economic 99 54 55% 4,9 3,2 66% Felicittá Jacarepaguá (RJ) mar/08 Economic 230 210 91% 29,3 20,5 70% Top Life Itamaraty Santo André (SP) apr/08 Economic 417 415 100% 43,0 37,0 86% Villagio do Campo Campo Grande (RJ) jun/08 Economic 999 765 77% 65,0 52,0 80% Premium Cpo. Grande Campo Grande (RJ) jun/08 Economic 196 142 72% 47,0 42,3 90% Acqua Park Guarulhos (SP) jul/08 Economic 747 276 37% 67,3 57,9 86% Top Life Park Santo André (SP) jul/08 Economic 200 195 98% 25,3 21,8 86% Jardim Paradiso I Nova Iguacu (RJ) sep/08 Economic 534 175 33% 36,8 34,2 93% Cummulative Total 6.390 4.089 64% 989,0 712,0 72% In 2006* 240 43 55,7 33,4 60% In 2007* 2.360 1.126 586,3 385,2 66% In 2008* 3.790 2.920 347,0 293,4 85% Total 6.390 4.089 64% 989,0 712,0 72% *Values of the referred period.
  15. 15. 15 Land Bank (to be launched) Development City (State) Segment Units Total PSV (R$ MM) CR2's PSV (R$ MM) % CR2 Jardim Paradiso II – III Nova Iguaçu (RJ) Economic 1.283 87,0 80,9 93% Javri Santo André (SP) Economic 190 33,0 28,4 86% Colônia Paraíso S. J. Campos (SP) Economic 392 32,0 27,5 86% Manaú 2 Guarulhos (SP) Economic 420 34,0 29,2 86% Splendore Valqueire II Rio de Janeiro (RJ) Economic 160 25,0 20,0 80% Sta. Cecília – Madureira I Nova Iguaçu (RJ) Economic 1.613 80,0 64,0 80% Barrartes Rio de Janeiro (RJ) Commercial 507 120,0 84,0 70% Sta. Cecília – Madureira II Nova Iguaçu (RJ) Economic 1.612 80,0 64,0 80% Pq. das Águas II São Gonçalo (RJ) Economic 1.152 187,0 149,3 80% Pq. das Águas III São Gonçalo (RJ) Economic 492 84,0 67,2 80% Pq. das Águas IV São Gonçalo (RJ) Economic 942 84,0 67,2 80% Warehouse ABEAR Rio de Janeiro (RJ) Commercial 389 230,0 161,0 70% Cidade Paradiso Nova Iguaçu (RJ) Economic 30.183 2.180,0 2.180,0 100% Total 39.335 3.256,0 3.022,7 93% Units, Total PSV and CR2’s PSV are represented in the expected launch amount and include exchange agreements (physical and financial).
  16. 16. 16 Investors Relations Rogério Furtado CFO and IR Officer Daniel Grozdea IR Manager www.cr2.com.br/ir phone: (21) 3095-4600 (21) 3031-4600 IR Contact
  17. 17. 17 Disclaimer This presentation contains certain statements that are neither reported financial results or other historical information. They are forward-looking statements. Because these forward-looking statements are subject to risks and uncertainties, actual future results may differ materially from those expressed in or implied by the statements. Many of these risks and uncertainties relate to factors that are beyond CR2’s ability to control or estimate precisely, such as future market conditions, currency fluctuations, the behavior of other market participants, the actions of governmental regulators, the Company's ability to continue to obtain sufficient financing to meet its liquidity needs; and changes in the political, social and regulatory framework in which the Company operates or in economic or technological trends or conditions, inflation and consumer confidence, on a global, regional or national basis. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this document. CR2 does not undertake any obligation to publicly release any revisions to these forward looking statements to reflect events or circumstances after the date of this presentation.

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