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05 19-2009 - 1 q09 earnings presentation

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05 19-2009 - 1 q09 earnings presentation

  1. 1. Cidade Paradiso (Nova Iguaçu, RJ) 1Q09 Results May 2009
  2. 2. 2 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 •Modest recovery in economic activity, but visibility still 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) •Initiatives to preserve cash and sell inventories are showing results
  3. 3. 3 1Q09 Highlights 1Q09 net profit of R$1.3mm (R$0.03 EPS) vs R$486.000 (R$0.01 EPS) in 1Q08 Initiatives were focused on preserving the cash position: We did not carry out any launches in the quarter, and focused on selling inventories We adjusted construction outlays to match disbursements from construction financing lines We accelerated the process of transferring home buyers to banks/CEF Drastic reduction in cash burn to R$5mm in 1Q09, from R$44mm in 4Q08, finished 1Q09 with R$39mm cash on the balance sheet Corporate debt was R$19mm and construction financing (SFH) was R$68mm, which equate to low leverage levels with net debt/equity = 13% After the launch of the housing program Minha Casa Minha Vida, we achieved our goal to sign an additional 5 contracts with Caixa Econômica Federal (CEF), taking the total to 7 projects or R$281mm Well positioned to benefit from the housing program Minha Casa Minha Vida, given exposure to the economic segment and know-how to operate with CEF—the preliminary results are positive
  4. 4. 27,2 12,6 19,1 10,0 3,0 4,9 1Q08 4Q08 1Q09 CR2 Partners 15,5 37,2 24,0 4 1Q09 Operational Highlights In 1Q09 we continued to focus on reducing inventories without any new launches, which limited the speed of sales 1Q09 contracted sales were better than 4Q08 reaching R$24mm (+55% Q/Q) and CR2’s share at R$19mm (+52% Q/Q) Sales in April already benefited from the housing program Minha Casa Minha Vida, presenting an improvement >50% vs the average monthly rate in 1Q09 Contracted Sales (R$ mm)
  5. 5. 209.621 326.292 166.422 204.762 164.587 116.630 112.891 101.154 87.331 168.923 2006 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 Average PriceUnits Sold(R$) 5 Sales Historical Trend
  6. 6. Period (R$ mm) Inventory at the Beginning of Period Launches (CR2's share) Contracted Sales (CR2's share) Inventory at the End of Period SoS 2006 0,0 33,4 11,9 21,5 35,7% 1Q07 21,5 62,4 31,5 52,4 37,6% 2Q07 52,4 27,0 18,5 60,8 23,3% 3Q07 60,8 63,1 32,4 91,6 26,1% 4Q07 91,6 183,9 59,2 216,3 21,5% 1Q08 216,3 47,9 27,2 237,0 10,3% 2Q08 237,0 131,3 144,4 223,9 39,2% 3Q08 223,9 113,9 67,6 270,2 20,0% 4Q08 270,2 0,0 12,6 257,7 4,6% 1Q09 257,7 0,0 19,1 238,6 7,4% 6 Inventory at Market Value & SoS 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)] Presents a downward trend 1Q09 = 64% of Shareholders’ Equity
  7. 7. 11% 29% 60% Inventory at Market Value - AveragePrice R$350k - R$500k R$220k - R$350k < R$220k 7 Inventory at Market Value Profile 4% 74% 22% Inventory at Market Value - Construction Status Completed Under Construction Construction not Started 100% of inventory eligible to SFH financing
  8. 8. 8 Projects Delievery - Schedule 90% 74% 51% 82% 58% 53% 49% 750 1.021 909 763 1.484 952 172 - 200 400 600 800 1.000 1.200 1.400 1.600 2T09 3T09 4T09 1T10 2T10 3T10 4T10 Delivery Schedule (Units Sold and Inventory) Sold Inventory 7 projects to be concluded in 2009 with total PSV of R$376mm and CR2’s share at R$261mm 71% of the 2,680 units to be delivered in 2009 already sold
  9. 9. Project Total PSV (R$ MM) Bank Type of Funding Project Delivery - Forecast Financing Status Line of Credit Green Park 3000/4000 55,7 Itaú "Repasse nas Chaves" Dec-2008 Contract Signed - transfer of credit in progress Verano I 130,0 Itaú "Plano Empresário" Aug-2009 Contract Signed - financing kicked-in Itaú Verano II 105,0 Itaú "Plano Empresário" Mar-2010 Contract Signed - financing kicked-in R$250 milion Parque das Águas 140,0 Itaú "Plano Empresário" Mai-2010 Contract Signed - financing kicked-in Parque das Águas 140,0 Unibanco "Repasse na Planta" Dec-2010 Contract Signed - transfer of credit in progress Unibanco Splendore Valqueire I 15,9 Unibanco "Repasse na Planta" Jul-2009 Contract Signed - transfer of credit in progress R$29 milion of PSV Villaggio Del Mare 58,9 Santander "Plano Empresário" Jul-2009 Contract Signed - financing kicked-in Santander Barra Allegro 41,5 Santander "Plano Empresário" Dec-2009 Contract Signed - financing kicked-in R$100 milion of PSV Verano III 67,0 Bradesco "Plano Empresário" Mar-2011 Contract in Process - To be signed in May/June Bradesco R$90 milion Felicittá 29,3 Real "Plano Empresário" Apr-2010 Contract in Process - To be signed in May/June Real R$12 milion Via Parque 4,9 CEF "Repasse nas Chaves" Mar-2008 Contract Signed - transfer of credit in progress Mirante Bonsucesso 28,4 CEF "Crédito Associativo" Mai-2009 Contract Signed - financing kicked-in Top Life Itamaraty 43,0 CEF "Crédito Associativo" Feb-2010 Contract Signed - disbursements in May/June Villagio do Campo 65,0 CEF "Crédito Associativo" Jun-Dec 2009 Contract Signed - disbursements in May/June CEF(1) Premium Cpo. Grande 47,0 CEF "Crédito Associativo" Jun-2010 Contract Signed - disbursements in May/June R$ 2,5 bilion of PSV Acqua Park 67,3 CEF "Crédito Associativo" Jul-2010 Contract Signed - disbursements in May/June Top Life Park 25,3 CEF "Crédito Associativo" Jul-2010 Contract Signed - disbursements in May/June Jardim Paradiso 36,8 CEF "Crédito Associativo" Dec-2009 Letter of Credit - Under engineering analysis at CEF 9 Financing (1) Commitment signed with CEF in July 2007. The R$2.5 billion will fully cover Cidade Paradiso. CEF update: First disbursements in Crédito Associativo Total of 7 projects financed by CEF, with a total PSV of R$281mm and CR2’s share at R$239mm Know-how and good relationship
  10. 10. Financial Highlights 1Q09 27.241 51.682 0 10.000 20.000 30.000 40.000 50.000 60.000 1Q08 1Q09 NetOperating Revenue (R$ 000) 7.573 9.732 27,8% 18,8% 0,0% 5,0% 10,0% 15,0% 20,0% 25,0% 30,0% 0 2.000 4.000 6.000 8.000 10.000 12.000 1Q08 1Q09 GrossProfit (R$ 000) & Gross Profit Margin -2.506 -927 -9,2% -1,8% -10,0% -9,0% -8,0% -7,0% -6,0% -5,0% -4,0% -3,0% -2,0% -1,0% 0,0% -3.000 -2.500 -2.000 -1.500 -1.000 -500 0 1Q08 1Q09 EBITDA (R$ 000) & EBITDA Margin 486 1.286 1,8% 2,5% 0,0% 0,5% 1,0% 1,5% 2,0% 2,5% 3,0% 0 200 400 600 800 1.000 1.200 1.400 1Q08 1Q09 Net Profit (R$ 000) & Profit Margin 10
  11. 11. 11 Results to be Recognized 1Q09 revenue to be recognized of R$285mm and results to be recognized of R$92mm (32,2% margin) On and off balance sheet receivables totalled R$527mm in 1Q09, of which R$151mm are short-term Revenues and Results to be Recognized (R$ 000) 1Q09 4Q08 4Q07 Revenues to be Recognized 284.746 311.074 195.918 Cost of Units Sold to be Recognized 193.016 206.360 139.923 Gross Profit to be Recognized 91.730 104.714 55.995 Gross Margin to be Recognized 32,2% 33,7% 28,6%
  12. 12. 12 Capital Structure / Liquidity 1Q09 liquidity update: cash position of R$39mm and corporate debt of R$19mm Cash burn was reduced to R$5mm in 1Q09, including a positive cash flow in March Important progress in disbursements of financing lines: SFH disbursements were R$27mm in 1Q09, almost double the amount in 4Q08, reaching R$68mm on the balance sheet, we still have R$170mm in contracted SFH financing to be disbursed First disbursement of the Crédito Associativo from CEF (R$6mm from one project) After the launch of Minha Casa Minha Vida we signed another 5 contracts with CEF, bringing the total to R$281mm Optimization of the transfer of receivables from completed units, which totalled R$28mm in 1Q09 Low leverage with a net debt/equity of 13% (including SFH financing)
  13. 13. 13 Land Bank (To Be Launched) Development City (State) Segment Average Price (R$ 000) Units Total PSV (R$ MM) CR2's PSV (R$ MM) % CR2 Jardim Paradiso II – III Nova Iguaçu (RJ) Economic 68 1.283 87,0 80,9 93% Javri Santo André (SP) Economic 174 190 33,0 28,4 86% Colônia Paraíso S. J. Campos (SP) Economic 82 392 32,0 27,5 86% Manaú 2 Guarulhos (SP) Economic 81 420 34,0 29,2 86% Splendore Valqueire II Rio de Janeiro (RJ) Economic 156 160 25,0 20,0 80% Sta. Cecília – Madureira I Nova Iguaçu (RJ) Economic 50 1.613 80,0 64,0 80% Barrartes Rio de Janeiro (RJ) Commercial 237 507 120,0 84,0 70% Sta. Cecília – Madureira II Nova Iguaçu (RJ) Economic 50 1.612 80,0 64,0 80% Pq. das Águas II São Gonçalo (RJ) Economic 162 1.152 187,0 149,3 80% Pq. das Águas III São Gonçalo (RJ) Economic 171 492 84,0 67,2 80% Pq. das Águas IV São Gonçalo (RJ) Economic 89 942 84,0 67,2 80% Warehouse ABEAR Rio de Janeiro (RJ) Commercial 591 389 230,0 161,0 70% Cidade Paradiso Nova Iguaçu (RJ) Economic 72 30.183 2.180,0 2.180,0 100% Total 83 39.335 3.256,0 3.022,7 93%
  14. 14. Segments of Operation 14 100% Launches 2008 Economic 92% 8% Land Bank Economic Commercial
  15. 15. 15 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 240 201 84% 55,7 33,4 60% Verano I Barra (RJ) mar/sep/oct 07 Middle-Income 395 309 78% 130,0 78,0 60% Villaggio Del Mare Recreio (RJ) may/07 Middle-Income 120 103 86% 58,9 30,6 52% Splendore Valqueire I V. Valqueire (RJ) jul/07 Economic 120 114 95% 15,9 12,7 80% Verano II Barra (RJ) sep/07 Middle-Income 346 214 62% 105,0 63,0 60% Parque das Águas I S. Gonçalo (RJ) oct/07 Economic 1.058 506 48% 140,0 112,0 80% Verano III Barra (RJ) oct/07 Middle-Income 172 84 49% 67,0 40,2 60% Barra Trade Barra (RJ) nov/07 Comercial 5 0 0% 28,0 19,6 70% Barra Allegro Barra (RJ) nov/07 Middle-Income 144 109 76% 41,5 29,0 70% Mirante Bonsucesso Guarulhos (SP) mar/08 Economic 368 360 98% 28,4 24,4 86% Via Parque Caxias (RJ) mar/08 Economic 99 60 61% 4,9 3,2 66% Felicittá Jacarepaguá (RJ) mar/08 Economic 230 217 95% 29,3 20,5 70% Top Life Itamaraty Santo André (SP) apr/08 Economic 417 412 99% 43,0 37,0 86% Villagio do Campo Campo Grande (RJ) jun/08 Economic 999 670 67% 65,0 52,0 80% Premium Cpo. Grande Campo Grande (RJ) jun/08 Economic 196 144 73% 47,0 42,3 90% Acqua Park Guarulhos (SP) jul/08 Economic 747 304 41% 67,3 57,9 86% Top Life Park Santo André (SP) jul/08 Economic 200 196 98% 25,3 21,8 86% Jardim Paradiso I Nova Iguacu (RJ) sep/08 Economic 534 228 43% 36,8 34,2 93% Cummulative Total 6.390 4.231 66% 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% In 2009* 0 142 0,0 0,0 0%
  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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