ROSSI RESIDENCIAL S.A. São Paulo, March 16, 2022. Rossi Residencial S.A. (B3: RSID3; Bloomberg: RSID3 BZ Equity), announces its results for the fourth quarter and the year of 2021.
RSID3: R$ 8.05 per share
Total shares: 17,153,337
Market value: R$ 138.1 million
Maintenance of the 12 months sales speed - SoS (2021 vs. 2020)
Efficiency of 89% in the resale of canceled units over 2021
12% decrease in administrative expenses YoY in 2021
Reduction of 28% in Net Debt (Rossi's share) in 2021
Conference Call
March 17, 2022
In Portuguese with Simultaneous Translation 10:00 (Brasília) / 09:00 (US ET)
Link to webcast: https://webcastlite.mziq.com/cover.html?webcastId=badc3e67- 0256-468f-b3fa-4f72a54d614d
Replay available at the Company's IR website:
http://ir.rossiresidencial.com.br
Investor Relations
Team
ri@rossiresidencial.com.br
+55 (11) 4058-2502
4Q21 and 2021 Earnings Release
SUMÁRIO
Message from the CEO | 3 |
Operating and Financial Indicators | 4 |
Operating Performance | 5 |
Contracted Sales and SoS | 5 |
Sales Cancellation | 8 |
Inventory at Market Value | 10 |
Costs to be Incurred | 12 |
Land Bank | 12 |
Financial Performance | 13 |
Net Revenue | 13 |
Gross Profit and Margin | 13 |
Operating Expenses | 14 |
Financial Result | 16 |
Accounts Receivable | 17 |
Marketable Properties | 17 |
Debt | 18 |
Transfers | 21 |
Relationship with Independent Auditors | 22 |
Exhibit I - 100% Indices | 23 |
Exhibit II - IFRS Indices | 24 |
Exhibit III - Income Statement | 25 |
Exhibit IV - Balance Sheet | 26 |
Exhibit V - Inventory (100%) | 28 |
Glossary | 29 |
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4Q21 and 2021 Earnings Release
MESSAGE FROM THE CEO
For Rossi, 2021 still was a quite challenging year. We continued facing a scenario of uncertainties and low economic predictability after a long period living with the new coronavirus pandemic (COVID-19) and its outcomings. The unemployment rate continues high, and the basic interest rate keeps its upward trend, due to a rise in the main inflation indexes, thus affecting the Brazilian population purchasing power and its access to credit.
Even facing such challenges, the Company remained concentrated on its restructuring process, focusing entirely on the mitigation of risks and execution of its financial deleverage plan and simplification of its operational structure. In this context, during the year, new financial debt renegotiations were celebrated with our main creditors.
In the first half, the Company successfully concluded the process to restructure and settle corporate debt contracts with Banco Bradesco and Banco do Brasil. The Company used cash from the sale of assets that collateralized these debts to settle them, as well as financial discounts obtained with the banks, which positively affected the Company's financial result by R$ 245 million. Therefore, the Company's corporate debt fell by 56% in the last 12 months.
In addition to the renegotiations, formalized and concluded in 2021, the Company also negotiated, at the beginning of 2022, a new transaction to tackle another significant portion of its bank debt. As mentioned in the Material Fact disclosed on February 22, 2022, the Company signed an investment agreement with BPS Capital, which acquired approximately R$ 75 million of credits raised from construction financing operations (SFH), which will be partially capitalized and settled without disbursing cash. As consequence, new reductions in the Company's net debt are expected for this first quarter.
In the same transaction, BPS Capital is also expected to acquire credits from consumer lawsuits, creating favorable conditions to reduce this other major liability of the Company, which, if restructured, will also reinforce our Balance Sheet and will be essential for the success of our new launches in the medium and long terms.
Regarding our strategy to reduce costs and simplify our operational structure, our teams' efforts continued to yield positive results over 2021, maintaining the downward trend of administrative expenses, which fell by 12% from 2020.
We also maintained the resale efficiency of units canceled, which reached 89% in 2021, and saw a flat transfer performance over the year, with an SoS of 22% in the fourth quarter, in line with the same period in 2020.
We will continue to prepare ourselves to face the new challenges diligently and confident in our planning and in the results already achieved, to soon begin the transition into a new phase of the Company, of resumed growth and value creation with the development of new projects.
João Paulo Franco Rossi Cuppoloni
CEO
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4Q21 and 2021 Earnings Release
OPERATING AND FINANCIAL INDICATORS
R$ MM | 4Q21 | 4Q20 | Var. (4Q21 x | 2021 | 2020 | Var. (2021 x |
4Q20) | 2020) | |||||
Operating Performance | ||||||
Launches - 100% | - | - | - | - | - | - |
Gross Sales - 100% | 15.8 | 28.1 | -43.9% | 95.6 | 142.2 | -32.8% |
Cancellations - 100% | 14.0 | 29.8 | -53.1% | 131.0 | 151.4 | -13.5% |
Net Sales - 100% | 1.8 | -1.7 | -207.7% | -35.4 | -9.2 | 285.2% |
Launches - % Rossi | - | - | - | - | - | - |
Gross Sales - % Rossi | 15.6 | 26.4 | -40.9% | 94.8 | 125.0 | -24.2% |
Cancellations - % Rossi | 13.7 | 28.0 | -51.0% | 128.3 | 135.9 | -5.6% |
Net Sales - % Rossi | 1.9 | -1.6 | -217.1% | -33.5 | -10.9 | 205.9% |
Financial Performance | ||||||
Net Revenue | 9.5 | 81.0 | -88.2% | 59.4 | 104.7 | -43.3% |
Gross Margin¹ | -513.1% | -6.6% | -506.6 p.p. | -23.0% | -3.8% | -19.2 p.p. |
Gross Margin (ex interest)² | -501.2% | 5.9% | -507.1 p.p. | -17.3% | 10.8% | -28.1 p.p. |
Adjusted EBITDA³ | -123.7 | -188.5 | 34.4% | -264.4 | -359.8 | -26.5% |
Adjusted EBITDA Margin³ | -1298.2% | -232.6% | -458.0% | -445.0% | -343.6% | -101.4 p.p. |
Net Income | -162.2 | 195.7 | -182.9% | -190.7 | 14.9 | -1376.0% |
Net Margin | -1702.6% | 241.6% | -804.8% | -320.9% | 14.3% | -335.2 p.p. |
Cash Generation (Burn) - Rossi's share | -22.3 | 531.6 | -104.2% | 227.7 | 605.4 | -62.4% |
- Consolidated as per CPC19 (R2) and CPC36 (R3), relating to the subsidiaries. ² Gross Margin excluding interest allocated to cost.
³ EBITDA and EBITDA Margin adjusted for expenses that do not represent a cash outflow and for non-recurring items. Reconciliation with EBITDA as per CVM Instruction 527/2012 is shown in the glossary at the end of this document.
4
4Q21 and 2021 Earnings Release
OPERATIONAL PERFORMANCE
The operating metrics shown in this earnings release are calculated on the basis of proportional view. In addition to the proportional view, the results are broken down by consolidated (IFRS) and non-consolidated companies, as shown in Exhibit II. Details of the amounts taking 100% of operations into account, irrespective of the method of consolidation, are given in Exhibit I.
SALES CONTRACTED AND SALES SPEED (SoS)
Contracted gross sales totaled R$ 15.8 million in 4Q21 (R$ 15.6 million - Rossi's share), a YoY decrease of 41% in Rossi's share. In 2021, sales reached R$ 95.6 million (R$ 94.8 million - Rossi's share), down by 24% from 2020 in Rossi's share.
Gross Sales - R$ million
142.2 | ||||||||||||||||||||||||||||||||
17.2 | 95.6 | |||||||||||||||||||||||||||||||
0.8 | ||||||||||||||||||||||||||||||||
28.1 | 40.9 | 22.5 | 125.0 | |||||||||||||||||||||||||||||
0.5 | 16.4 | 15.8 | 94.8 | |||||||||||||||||||||||||||||
1.7 | 0.1 | |||||||||||||||||||||||||||||||
40.3 | 0.2 | |||||||||||||||||||||||||||||||
26.4 | 22.4 | 16.4 | ||||||||||||||||||||||||||||||
15.6 | ||||||||||||||||||||||||||||||||
4Q20 | 1Q21 | 2Q21 | 3Q21 | 4Q21 | 2020 | 2021 | ||||||||||||||||||||||||||
Rossi | Partners | |||||||||||||||||||||||||||||||
Quarter-on-quarter, sales slightly fell by 5% in 4Q21. But when compared to 4Q20, the reduction in sales is directly related to inventory depreciation, which is natural as the Company concluded projects launched until 2017 and maintains a conservative approach regarding new launches. Furthermore, the industry performance in the second half also negatively affected the Company, such as high inflation, rise in the basic interest rate, and the concerning unemployment rate, which leads to a decline in family income and reduce individual's capacity to take new loans.
Year-to-date, the reduction in sales is lower, as it reflects the good performance reached in the first half of 2021, and the rapid recovery of the real estate sector, which suffered from the initial impacts of the new coronavirus (COVID-19) but rapidly adapted to a new way of selling properties, more focused on new technologies and process digitalization.
Gross sales (Rossi's share) by construction stage and metropolitan region are presented in the charts below:
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Rossi Residencial SA published this content on 16 March 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 March 2022 01:20:06 UTC.
