Good morning, ladies and gentlemen. Welcome to Cyrela Brazil Realty S/A's Q1 2023 earnings call. We have Mr. Raphael Horn, CEO, and Mr. Miguel Mickelberg, CFO and IRO with us today. This call is being recorded and simultaneously translated. You can hear the translation by clicking the interpretation button. To those hearing the English translation, you can mute the original audio by clicking Mute Original Audio. You can find the slide deck in English on the company's investor relations website at www.ri.cyrela.com.br. During the company's presentation, all participants will be in a listen-only mode. After the presentation, we'll have a Q&A session. To ask a question, please click the Q&A button and enter your name and organization. When your name is called, a request will pop up on your screen to unmute your microphone before asking your question. We would like to inform that any statements that may be made during the call related to Cyrela's business perspectives, operating and financial targets are projections made by the company's management that may or may not occur. Investors should be aware that political, microeconomic and other operating factors may affect the future of the company and lead to results that differ materially from those expressed in such forward-looking statements. To open Cyrela's Q1 2023 earnings call, I'd like to turn it over to Mr. Raphael Horn, CEO. Mr. Horn, you may proceed. Good morning, everyone. Continuing the good results reported in 2022, Cyrela's operation in the first quarter 2023 showed satisfactory performance. Even in a challenging macroeconomic scenario and uncertainties regarding supply and demand in our segment, the company remained true to its strategic planning of continuing to launch unique developments in selected regions, always offering a differentiated experience for the customer. We launched eight projects in the quarter, BRL 1.3 billion. BRL 479 million has already been sold. Added to an inventory sale of BRL 1.1 billion, we total BRL 1.5 billion in net sales in the quarter, 18% higher than the same period last year. Regarding the financial performance, Cyrela showed resilient results at the beginning of the year. BRL 1.3 billion net revenues, slightly above year-over-year. Gross margin 30.7%. Net profit BRL 164 million. 12.7% net margin and ROEs 12.3%. Once again, one of the highlights was the company's low leverage at 6.5% a quarter. The company understand the magnitude of the challenge that the year 2023 poses, and we continue to operate with diligence to maintain its positive performance, always seeking to maximize its return for customer, shareholders and other stakeholders. Onto our operational results now. Thank you, Raphael, and good morning, everyone. On slide five, we'll address Cyrela's launches. In Q4, we launched eight new products with a PSV of BRL 1.3 billion, 30% higher year-on-year and 52% lower quarter-on-quarter. The company's stake in the volume launched in the quarter was 69%. Excluding swaps, the volume launchd in Cyrela state was BRL 875 million in the quarter. Onto slide six, we'll talk about our sales performance. In the quarter, pre-sales reached BRL 1.5 billion, a 42% reduction quarter-on-quarter and 18% year-on-year. Excluding swaps, sales reached BRL 1.1 billion in Cyrela state. The state of São Paulo accounted for 56% of our sales. On slide seven, we'll address sales of speed. The company's CSO in the last 12 months was 49%. Looking at sales speed by launch vintage, projects launched in Q1 have been 36% sold. On slide eight, we'll talk about our inventory. At the end of the quarter, inventory at market value was BRL 8.7 billion, 4% lower quarter-on-quarter. The change in our inventory can be seen on the chart on your left. On slide nine, we show our finished units. We sold 11%. Adding the inventory projects delivered along the quarter and pricing of units at market value, finished units decreased by 4% quarter-on-quarter. On slide 10, we'll talk about delivered units. Cyrela delivered 10 projects in the quarter at 2,714 units and a PSV of BRL 1 billion year-to-date. On slide 12, rather, we'll present our financial results. Net revenue was 0.36% lower quarter-on-quarter and 4% higher year-on-year. The gross margin for the first quarter was 30.7% compared to 31.4% in the previous quarter and 31% in the same quarter of 2022. Gross income in the quarter was BRL 160 million against BRL 208 million quarter-on-quarter, and BRL 162 million year-on-year. On to slide 13 to see our profitability. In the quarter, our return on equity, net income of last 12 months over the average shareholders equity was 12.3%. On slide 14, we'll talk about the debt. Gross debt at the end of the quarter was BRL 4.6 billion. The cash position was BRL 4.1 billion. Our net debt was BRL 486 million. 77% of the total gross debt is long-term. Our net debt over equity ratio was 6.5%, 1.4 percentage points lower quarter-on-quarter. The low debt level confirms Cyrela's financial soundness and puts us in the right direction to maximize return on to shareholders. Slide 15 shows the company's cash generation. In Q1 2023, our cash consumption was BRL 35 million against a cash generation of BRL 54 million quarter-on-quarter and BRL 53 million in the first quarter of last year. Rafa and I will be available for the Q&A session. Thank you. Thank you. We'll now begin the Q&A session. To ask a question, please click the Q&A button and enter your name and organization. When your name is called, a request will pop up on your screen to unmute your microphone before asking your question. Ema Costa from UBS asks the first question. Good morning, Raphael, and good morning, Miguel. I actually have two questions about margins. What's your take on the outlook given the more complicated launch strategy? Are there any discount policy on your radar that may affect your margins? A question is about the land bank. How soon can you introduce new launches given the land bank you have? Do you have to speed up buying land for 2024 or are you comfortable with that position on your land bank? Good morning. I'll be talking about gross margin. Actually, the gross margins for the launches that were accounted for the quarter were a little below what we had seen before. 20%, that's the margin for the quarter. That's the admin. At the beginning of the booking, the margin is close to 27%. At the end, it will be reaching the 34% level. Barter may affect the beginning, but gross margins will be close to those of last year, 31%-32%. The launches that haven't been booked yet up until March, I mean, they haven't been accounted for. They have a gross margin at 31%. We do believe that there may be a slight improvement in gross margins because of that effect. When you look at gross margins for the first quarter, those launches of 2021, 2022 is usually above that at 34%. We believe that gross margins will recover slightly throughout the year, but I don't expect much differences or many differences when compared to those numbers of last year. We don't think that discounts will impact gross margins throughout the year. Raphael will now address the question about land bank. As far as the land bank for 2024 is concerned, we have most of it has been purchased already. We don't see any problems for 2024. Of course, the market has been very selective, but it's a good thing we purchased that ahead of time. We don't like to start buying left and right to fill any gaps for the following year. It's a good thing we have almost everything is in-house already. We are at a relatively comfortable position. Perfect. Thank you. Gustavo Cambauva from BTG Pactual asks the next question. Good morning. I actually have two questions. One is about São Paulo. We have seen many promotional events, some discounts. I'd like to hear your take as to what the competition will probably do. Do you detect any price drops or more discounts being ramped up? Do you think that that may impact your inventory as well? The second question is about CashMe. You have securitized your portfolio, I would like to understand the dynamics at CashMe, especially for those that are looking for real estate credit. What's the demand like on the part of buyers, as well as the funding side? What's the cost of funding for CashMe? What's the spread like? What's the development of the portfolio? Could you update us on the situation at CashMe? Hello, how are you? We haven't seen many discounts from the competition. The market remains quite challenging. We've been able to navigate through these rough waters, if I may. Products are very differentiated. When you have that combination, the entire combo, we can show more resilience. Well, we don't expect, of course, if macroeconomic situation deteriorates, of course, that will impact us. With the given characteristics I mentioned, I think we'll be able to navigate through. On to the question about CashMe. The demand is somewhat weaker in the quarter across the board. I don't know whether it's for the entire market, but for CashMe. After Americana's costs went up, but we have been able to operate with our standard spread. It's more complicated. It's a little more expensive, but the operation continues according to plan. The demand is somewhat weaker. At least that was the case for the first quarter. Thank you. Have a good day, Raphael. Fanny Oreng from Santander asks the following question. Good morning, Raphael and Miguel. I actually have two questions. Can you elaborate on your launches performance? What's your take for the first or for the second quarter? My question is more low income launches. Despite the workers' compensation issue, the government may improve the program conditions on the short term. Would it make sense to expand the CashMe participation in the mix? Actually, there are three questions. What's your take on your dividends payments for the next 12-24 months? Thank you. Thank you. Good morning, Fanny. As to the performance of launches, we had three major launches in São Paulo in April, two in Moema, one in Ipiranga. Sales speed is reasonable. It's too early to tell, but the response has been positive from the marketplace. We may have a reasonable number of launches in Q2. As to low income projects, we like that segment. I think it's the right time to be there. Of course, we cannot talk about the workers' compensation decision because it remains uncertain. Only two justices have voted. We keep monitoring their decision, and we have to have that good exposure to low income projects. That requires purchasing land, and it takes time. There should be no short-term impact, therefore. As to dividends, we burn cash in the quarter. We expect to burn even more cash for the entire year. There should be some leverage increase. The market remains challenging with many uncertainties. We have to wait for the stabilization of the cash leverage. We have to be more comfortable as to the future of the market. It's unlikely to have extraordinary dividends being paid this year. For next year, that will depend on the market and our cash flow, but there, the chances are a little higher for next year. Perfect. Thank you, Miguel Mickelberg. André Dibe from Itaú asks the next question. Good morning, Raphael Horn. Good morning, Miguel Mickelberg. Thank you. I would like to follow up on the questions on dividends. Is the leverage ceiling remains at 25%? That's my question. Maybe it's not unlikely this year. How soon can we imagine more dividends being paid out? My second question is about to better understand the market dynamics. The first answer you gave us, you don't see discounts coming in. The fact is that operational performance for the beginning of the year was a lot better than expected. In January, you had savings being withdrawn at record numbers. The good performance was surprising. What do you expect that is behind that sales performance despite an unfavorable condition? These are my two questions. Good morning, Dibe. This is Miguel. Let me answer your follow-up on dividends. We remain at the 25% ceiling. That's the agreement we have with the board. There's many uncertainties as to how high we can get as far as leverage is concerned, but this will be a lot clearer before year's end. Leverage is on the rise. We've seen that happening. We expect to burn more cash. We have to be convinced as to where it's going to stabilize to consider paying out extraordinary dividends. As to the market dip. Well, that trend will continue. We were expecting negative GDP or zero. That was 1.52%. This year, we expecting GDP at zero. Now they're beginning to talk about 1.5%. Brazil hasn't stopped. Brazilians love real estate. If the company keeps on going, the demand will be there. The market remains challenging, selective, but the demand is still there. We cannot say it's surprising. I don't consider the scenario surprising, but we hope it continue that way. It was a lot better, 2021, 2022. That was a surprise. We'll hope macroeconomic conditions remain the same. The banks love to finance individuals in real estate through cross-sell, and we hope the bank's appetite remain the same. As long as there's activity, we'll be launching products. Let's keep hoping for the best. So far, so good. That was very clear. Thank you. Have a good day. Pedro Chomnalez come from Credit Suisse asks the next question. Good morning. Thank you for taking my question. I was a little late, so I'd like to apologize in advance. You've already addressed that issue. What would be the main lever for results? Is it gross margins, speed of sales? What can be the driver for the year? Can you expand your margins or the project's pipeline? Do you believe that the speed of sales can be higher than what you have reported so far? What would be the main drivers, in your opinion? Good morning, Pedro. This is Miguel. Well, most likely, the main driver is the recycling of our land banking. The launches were mostly purchased in first half of 2020. There was a major inflection with a lot more inflation than expected and higher interest rates. Affordability was highly impacted. For this vintage of land banks that we purchased then, it has been difficult to maintain the minimum margin. Land that we have purchased now, they are according to this present reality. If there are no surprises, this is an important driver to expand our margins. For the land we purchase now, we take into account our minimum margins. As far as costs, the accrued ICC is 1.7% from June to April. Our construction basket is slightly lower than the INCC. You have a 10-month period with an almost flat INCC, which is good because it contributes to defending margins. If we remain that way, that can also be an important driver. In practical terms, and I will address your question about if we can launch, if there's the market, if you have decent speed of sales, we can expect good results for the year. The trigger is to actually launch more products. Market that is welcoming the entire portfolio of projects, we hope that the market is there. We analyze the market on a project-by-project basis. We have many good things to launch this year, we hope the market is welcoming. That's perfect. Thank you. Have a good day. Igor Otero from XP is next. You can ask your question now, Igor. The next one [audio distortion]. Bruno Mendonça from Bradesco asks the next question. Good morning. I have two questions. Consolidations and deconsolidations for the quarter, that's my first question. From SKR and Eden. Of course, you disclosed the cash generation. Can you elaborate on the impacts on margins, both reported gross margin but also the REF margin, whether these consolidations and deconsolidations will affect them? My second question is about SG&A. We have very good numbers and G&A decreases quarter-on-quarter, year-on-year at nominal value. Commercial expenses are much higher. Can you explain that a little better? I know you have to reclassify CashMe. Is that the only reason? Can you elaborate on higher commercial expenses and lower G&A, and what can we expect for the future? Thank you for your questions, Bruno. As to consolidations and deconsolidations, Eden was a project that generated cash, it contributed to less cash burn. At SKR, we have separated that effect, we isolated the impact and the net accounting numbers. As to gross margin, gross margin was low for the quarter. When we compare Q4 X SKR would have been a little higher. As to REF, the revenue or the REF revenue is very small when you compare it to the BRL 5.8 billion of Cyrela. It does not cause any relevant impact. A few base points of impact, but the REF margin would have been a little smaller than our own. It's a very minute effect because the REF revenue is very small. As to commercial expenses, in the quarter when compared year-over-year, we had increase in two lines. One is for stands. We had to write off a few launches, stands, it's only natural that you may have a little more than Q1. That was the case. BRL 15 million of write-offs because you have holidays and Mardi Gras, you start construction in March, April. It's worth tear down the stand to prevent expenses in low season periods. There's another impact in the commissions lines. Vivaz boosted their sales in 2022 and also in 2023. That was relevant. We had more sales from Vivaz, the commission is taken from the price. It's full price. That's why you have increases. Commission goes through results through POC. It's only natural that it go up. When compared to Q4, that's commission for Q1. It's within third-party services, commercial expense, that's usually higher. Commercial expenses for the year, we don't expect any major variations when compared to last year's numbers, especially as a proportion of revenue and new launches. We maintain the same efficiency levels as far as sales, budget adherence, and we maintain the same budget parameters. We haven't changed any, not for commissions, not for the stand amount, not even for the media expenses. We don't expect, therefore, relevant changes when compared to the volumes that will be launched and sold. Thank you. Perfect. [audio distortion] Good morning. Can you hear me? Yes, we can. Yep. Good. I have two questions. Can you give us more color on the lower inventory prices? Is it for specific product, one vintage? Can you elaborate on the drivers for that drop? The second question is about CashMe. What's your strategy for the mid and long term for CashMe? Is it going to be 15% of the book value? Do you believe it can expand even more when compared to Cyrela? What are the avenues to growth? More credit targeted in the state of São Paulo or other states, other types of homes. If you could update us on the strategy of CashMe, that would be fantastic. Thank you. Hello, Galliers. How are you? As to adjustments in the inventory, they're very marginal the way that we see it. We adjust prices up or down depending on the market. Back in December or January, we adjusted prices. We do that every six months. Sometimes prices go up or go down. We lowered slightly the price of that inventory given the market reality. It was very small and it's only part of the game. It's not because of a vintage or a region, small price decreases across the board. We are going to replace INCC every month. Every now and then you have to make small adjustments. It's not nothing major, no specific region, a little bit everywhere. We're not doing it. I don't think we're doing that for the rest of the year. We should focus on new launches and trying to include the full margin. We have been operating at margins a little lower than standard because just like Miguel said, inflation rates in 2021, 2022 affected the land bank. The margins we are implementing in the market is not exactly what we wanted, but it's very close. As to CashMe, the 15% of PL, that number is somewhat misleading because it takes more time and then it will reach the PL. It wouldn't be that size, that PL that big. We have to consider that number post-CRIs. That's not the right number. 15% is not the right number. When we are below leverage for CashMe, that number may seem bigger. We've had two CRIs. We have two other CRIs for the quarter, and we'll adjust the PL to the right place. CashMe is an operation that requires leverage, right? We have 10%, 15% of sub, and the rest is senior. It cannot consume so much capital. I don't think it is going to be 15%. It shouldn't be, and it won't be 15% of Cyrela. The strategic planning, we can talk about it in further detail, but overall our goal is to grow. CashMe is a company for the entire country, not only for São Paulo. It's focused on home equity. We have been operating there, and the intention is to keep on growing little by little with that low PL number. That was clear. Thank you. Marcelo Motta from JP Morgan is up next. Can you elaborate on financing? Caixa has increased the PPE. Banks have seen some savings accounts withdrawals. Have you seen any margin increase from both public and private banks? Sales in April are okay, right? Do you detect any changes from your consumers? Good morning, Motta. This is Miguel. We've seen an increase in the financial or the mortgage rates. They published that. 70 basis points, that was the increase when compared to late last year. We talked to banks, and they see the demand for real estate financing remains strong. We haven't seen any impacts caused by these higher rates. Perfect. Thanks. Andre Mazini from Citi asks the next question. Good morning, Raphael and Miguel. Can you explain the provisioning criteria change? You reverted BRL 27 million provision. Was that due to any accounting regulation that changed or the auditors thought differently or is it just a matter of administrative reasons? The other question is about CashMe. More expensive banking credit. Is it worth to focus CashMe strategy to have a direct financing, to have some crowding in [audio distortion] higher credit or higher costs for credits? Good morning, Mazini. This is Miguel. As to the change of provisioning, CashMe is a very new operation. We started in 2018. At the start, we adopted very conservative provisioning criteria because we didn't have all the parameters in place. We stressed out the model, and it had to stand on its own. That's why provisioning was way more conservative. As we accumulated statistical data, we had several auctions under our belt, and then we had a more robust database to come up with more precise parameters to define provisioning rules. Losses are a lot smaller than what we projected first. Following IFRS 9, to provision expected losses, we indicated that we needed a much smaller provisioning. That's why we made the adjustment in the quarter. On to the second question. Rates practiced by CashMe are much higher than IPCA + 2 financing. The funding costs are very high. IPCA + 12 spreading would be a slot smaller than what CashMe wants to operate. I don't see that as a possibility at this time. That's it. Thank you. This concludes the Q&A session. I'll turn over to Mr. Raphael Horn for his closing remarks. Thank you for attending the call. Let's hope for macroeconomic and microeconomic situations in Brazil maintain the same. This concludes Cyrela's earnings call. Should you have any questions, please contact the investor relations team at ri@cyrela.com.br. Thank you very much for attending. Have a good day.