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4 q08 presentation

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4 q08 presentation

  1. 1. 4Q08 and 2008 ResultsCidade Paradiso (Nova Iguaçu, RJ) April 2009
  2. 2. Business ModelPure-play developer that outsources construction and brokerage servicesPartnership model with niche players: Project origination mechanism Market analysis Low fixed costs (headcount of approximately 80) Agility/Operational flexibilityCR2 Focus: Offer products where there is credit availability 2
  3. 3. Managers Track-record 1999-2005 2006 2007 2008 1S09•Group CR2 is •Sector in expansion •Sector gains access •Anticipating the •Economic activity founded in 1999 mode to capital markets impact from the still contracting and global financial visibility limited•Activities in Credit •Raised R$60mm via •IPO raises R$307mm crisis, the pace of and Real Estate fund structure new launches is •Lower interest rates reduced starting in and controlled •Business model 1H08•Brazilian real estate •Banks increase enables flexibility to inflation are sector still in its credit availability to accelerate when positives infancy construction finance there is ample liquity •Priorities are to and home buyers secure financing for •Government projects, preserve housing package to•CR2 launches 11 •Total PSV launched cash projects with PSV •CR2 of R$774mm, and provide worth R$218mm Empreendimentos CR2’s share of oppotunitites Imobiliários SA is R$535mm •Total PSV launched founded of R$347mm, and •Focus remains in the CR2’s share of economic segment R$293mm (92% of land bank) •Shift in target market from high/middle income •Launches consistent •Maintain selective to economic with initiative to stance towards new segment focus on the launches, focus on economic segment, inventory reduction and to expand into the São Paulo market 3
  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 thatCR2 initiated its operations in 2006 We have secured financing for 95% of launched PSV (2006-2008) 4
  5. 5. 2008 Operational Highlights With a conservative posture, we launched in 2008 PSV of R$347mm (R$293mm %CR2) compared toR$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$61mm Launches (R$ mm)* Contraced Sales (R$ mm) 317,0 586,3 65,3 201,1 221,7 347,0 Partners 80,1 Partners 53,7 CR2 251,7 CR2 385,2 293,4 141,6 2007 2008 2007 2008 *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) 5
  6. 6. 2008 Financial Highlights2008 EPS of R$1,08 compared to R$0,39 (adjusted for IPO expenses) in 2007Net profit of R$50mm in 2008, compared to R$18mm in 2007 Net margin before minorities of 24,3% in 2008ROE de 13,6% em 2008, vs 8,4% in 20072008 net revenue of R$243mm, increased 488% from 2007 4T08 net revenue of R$82mm increased 309% vs 4T072008 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 6
  7. 7. 2008 Financial HighlightsConsolidated Financials (R$000) 4Q08 3Q08 4Q07 ∆4Q/3Q ∆4Q/4Q 2008 2007 ∆08/07Gross Operating Revenue 82.469 71.305 20.162 16% 309% 242.840 41.277 488%Gross Profit 25.655 21.825 4.906 18% 423% 73.128 10.021 630%% Gross Profit Margin 31,1% 30,6% 24,3% 0,5 p.p. 6,8 p.p. 30,1% 24,3% 5,8 p.p.EBITDA(1)(2) 14.164 7.238 -1.221 96% -1260% 49.266 -6.071 -911%% EBITDA Margin 17,2% 10,2% -6,1% 7,0 p.p. 23,2 p.p. 20,3% -14,7% 35,0 p.p.Net Profit before minorities(1) 18.093 9.080 7.633 99% 137% 59.065 18.053 227%% Net Margin before minorities 21,9% 12,7% 37,9% 9,2 p.p. -15,9 p.p. 24,3% 43,7% -19,4 p.p.Net Profit(1) 14.287 7.220 6.910 98% 107% 49.754 17.887 178%% Net Profit 17,3% 10,1% 34,3% 7,2 p.p. -16,9 p.p. 20,5% 43,3% -22,8 p.p.Net Income per Share(1) – EPS R$ 0,31 0,16 0,15 98% 107% 1,08 0,39 178% (3)ROE (%) - annualized 14,7% 7,6% 7,7% 7,1 p.p. 7,0 p.p. 13,6% 8,4% 5,3 p.p.(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. 7
  8. 8. Results 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$202mm in the short termRevenues and Results to be Recognized (R$ 000) 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08Revenues to be Recognized 136.489 202.990 214.237 339.572 366.611 306.111Cost of Units Sold to be Recognized 94.999 144.234 150.543 233.694 248.861 207.262Gross Profit to be Recognized 41.490 58.756 63.694 105.878 117.750 98.849Gross Margin to be Recognized 30,4% 28,9% 29,7% 31,2% 32,1% 32,3% Margin to be Recognized 32,1% 32,3% 31,2% 30,4% 29,7% 28,9% 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 8
  9. 9. Capital Structure / Liquidity 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 Consolidated Financials (R$000) 4Q08 3Q08 2Q08 Cash 43.612 86.891 133.608 Corporate Debt 14.620 15.808 0 2008 ROE = 13,6%, Net Cash 28.992 71.083 133.608 with low leverage 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% 9
  10. 10. Financing by Project Project Delivery - Project Bank Type of Funding Financing Status Line of Credit ForecastGreen Park 3000/4000 Itaú "Repasse nas Chaves" Dec-2008 Contract Signed - transfer of credit underwayVerano I Itaú "Plano Empresário" Aug-2009 Contract Signed - financing kicked-in ItaúVerano II Itaú "Plano Empresário" Mar-2010 Contract Signed - financing kicked-in R$250 milionParque das Águas Itaú "Plano Empresário" Mai-2010 Contract Signed - financing kicked-inParque das Águas Unibanco "Repasse na Planta" Dec-2010 Contract Signed - transfer of credit underway UnibancoSplendore Valqueire I Unibanco "Repasse na Planta" Jul-2009 Contract Signed - transfer of credit underway R$29 milion of PSVVillaggio Del Mare Santander "Plano Empresário" Jul-2009 Contract Signed - financing kicked-in SantanderBarra Allegro Santander "Plano Empresário" Dec-2009 Contract Signed - financing kicked-in R$100 milion of PSVVerano III Bradesco "Plano Empresário" Mar-2011 Contract in Process Bradesco R$90 milionFelicittá Real "Plano Empresário" Apr-2010 Contract in Process Real R$12 milionVia Parque CEF "Repasse nas Chaves" Mar-2008 Contract Signed - transfer of credit underwayMirante Bonsucesso CEF "Crédito Associativo" Mai-2009 Contract Signed - financing kicked-inTop Life Itamaraty CEF "Crédito Associativo" Feb-2010 Contract in ProcessVillagio do Campo CEF "Crédito Associativo" Jun-Dec 2009 Contract in Process CEF(1)Premium Cpo. Grande CEF "Crédito Associativo" Jun-2010 Contract in Process R$ 2,5 bilion of PSVAcqua Park CEF "Crédito Associativo" Jul-2010 Contract in ProcessTop Life Park CEF "Crédito Associativo" Jul-2010 Contract in ProcessJardim Paradiso* CEF "Crédito Associativo" Paradiso 1: Dec-2009 Letter of Credit*Commitment signed with CEF in July 2007. The R$2.5 billion will fully cover Cidade Paradiso. Know-how and good relationship with CEF 10
  11. 11. Segments of Operation Launches 2008 Land Bank 8% 92% 100% Economic Commercial Economic 11
  12. 12. Sales Historical Trend Average Price Units Sold (R$) 326.292 209.621 204.762 166.422 164.587 116.630 112.891 101.154 87.331 2006 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 12
  13. 13. Sales Speed – SS and SoS Contracted Sales Period (R$ Launched PSV in Sales Speed of Launches in the mm) the Period (SS) Period 2007 336,5 137,2 41% 2008 293,1 203,3 69% SS (CR2’s share): *contracted sales of launches in the period / launched PSV in the period+, net of physical swaps Inventory at the Contracted Inventory at Period Launches Sales over Beginning of Sales (CR2s the End of (R$ mm) (CR2s share) Supply (SoS) Period share) Period 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% 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)] 65% of Shareholder’s Equity 13
  14. 14. Launches to Date Launched Total PSV CR2s PSV Development City (State) Launch Date Segment Sold Units % Sold % CR2 Units (R$ MM) (R$ MM) 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. 14
  15. 15. Land Bank (to be launched) Total PSV CR2s PSV Development City (State) Segment Units % CR2 (R$ MM) (R$ MM) 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). 15
  16. 16. IR Contact Investors Relations Rogério Furtado CFO and IR Officer Daniel Grozdea IR Manager www.cr2.com.br/ir phone: (21) 3095-4600 (21) 3031-4600 16
  17. 17. DisclaimerThis presentation contains certain statements that are neither reported financial results or other historical information. Theyare forward-looking statements.Because these forward-looking statements are subject to risks and uncertainties, actual future results may differ materiallyfrom those expressed in or implied by the statements. Many of these risks and uncertainties relate to factors that arebeyond CR2’s ability to control or estimate precisely, such as future market conditions, currency fluctuations, the behavior ofother market participants, the actions of governmental regulators, the Companys ability to continue to obtain sufficientfinancing to meet its liquidity needs; and changes in the political, social and regulatory framework in which the Companyoperates or in economic or technological trends or conditions, inflation and consumer confidence, on a global, regional ornational basis.Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date ofthis document. CR2 does not undertake any obligation to publicly release any revisions to these forward looking statementsto reflect events or circumstances after the date of this presentation. 17

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