Rossi Residencial hosted an earnings call to discuss its performance in the first quarter of 2006. Key highlights included:
- Contracted sales grew 63% year-over-year to R$131.7 million, driven by strong growth in São Paulo, Campinas and Porto Alegre.
- Landbank increased to 1.7 million square meters after acquisitions.
- Launches totaled R$94.3 million in the quarter, up from R$5.8 million in the prior year.
- Net debt declined significantly to negative R$494 million due to proceeds from a public offering and strong operating cash flow.
2. 1
Forward Looking Statements
NoticeNotice –– Information and OutlookInformation and Outlook
The material shown is a presentation of general information about
Rossi Residencial S.A.’s record until the present date. It’s a summary
of the information with no intention of being complete, that should not
be taken under consideration by potential investors as a
recommendation. We make no statements nor guarantee the
correctness, the conformity or the scope of the following information
and any investment decision should not be based on them.
Although ROSSI believes in the expectation and assumption
contained on this statement, as well as the prospective information to
be reasonable and also based on current data available to its
management, ROSSI could not guarantee results nor future events.
ROSSI fully exempts itself from the duty of updating any one of the
prospective statement and information.
.
4. 3
History
In 1980, Grupo Rossi established Rossi Residencial, which enabled a new focus to the
group’s activities in the real estate market. Since then, Rossi Residencial became the leader,
operating in all real estate segments and in several Brazilian regions.
1980 1992 1996 1997 20001999 2002 2003 2006
Plano 100
Launch
Plano 100
Launch
Establishment
of Rossi
Residencial
Establishment
of Rossi
Residencial
Launch of the
Vida Nova
Product Line
Launch of the
Vida Nova
Product Line
Launch of a new
concept for
housing: Villa
Flora
Beginning of the
corporate
restructuring per
region.
Implementation of
the SAP system.
IPO: Listing at
Bovespa and
NYSE
Acquisition of
America
Properties
Issuance of R$80
million in shares and
adhesion to
Bovespa’s Corporate
Governance Level 1
Public Offering
above R$1 billion
and adhesion to
Bovespa’s Novo
Mercado
11. 10
Launches
1Q06
TLV
( R$ 000 )
Usable area
(m2
)
Number
of units
%- Rossi's
Share
%Sold
TLV Rossi's
share
Metropolitan Region of São Paulo
Gran Vita Parque Club 35,632 15,674 152 100.0% 23.7% 35,632
Porto Alegre
Terra Mater Club House 45,644 25,556 119 75.0% 83.2% 34,233
Campinasand Sumaré
Praça Capital - Fase III 4,282 1,811 44 70.0% 75.0% 2,997
Condominio dasVioletas 3,708 3,445 58 100.0% 27.6% 3,708
Condominio dasCamomilas 5,038 4,743 80 100.0% 7.5% 5,038
T O T A L 94,303 51,229 453 86.5% 54.1% 81,608
Launches
12. 11
Launches
HISTORY OF LAUNCHES SCHEDULED
2002 2003 2004 2005 Average
1st.Quarter 1.9% 7.5% 22.0% 1.5% 8.2%
2nd. Quarter 32.4% 33.1% 12.4% 36.4% 28.6%
3rd. Quarter 19.3% 54.4% 3.1% 16.4% 23.3%
HISTORY OF LAUNCHES SCHEDULED
2002 2003 2004 2005 Average
1st.Quarter 1.9% 7.5% 22.0% 1.5% 8.2%
2nd. Quarter 32.4% 33.1% 12.4% 36.4% 28.6%
3rd. Quarter 19.3% 54.4% 3.1% 16.4% 23.3%
5,8
94,3
1Q05 1Q06
TLV - ( R$ million )TLV - ( R$ million )
HISTORY OF THE LAUNCHES SHCEDULE
2002 2003 2004 2005 Average
1Q. 1.9% 7.5% 22.0% 1.5% 8.2%
2Q. 32.4% 33.1% 12.4% 36.4% 28.6%
3Q. 19.3% 54.4% 3.1% 16.4% 23.3%
4Q 46.4% 5.0% 62.5% 45.7% 39.9%
HISTORY OF THE LAUNCHES SHCEDULE
2002 2003 2004 2005 Average
1Q. 1.9% 7.5% 22.0% 1.5% 8.2%
2Q. 32.4% 33.1% 12.4% 36.4% 28.6%
3Q. 19.3% 54.4% 3.1% 16.4% 23.3%
4Q 46.4% 5.0% 62.5% 45.7% 39.9%
13. 12
Landbank
Totalconstructible
area( m
2
)
Metropolitan
Region of São
Paulo
Campinas
and Sumaré
Rio de
Janeiro and
Niterói
Porto Alegre Curitiba Other cities T OT AL
InDecember 2005 1,084,086 162,352 160,996 75,033 20,591 64,111 1,567,170
(+)Acquisitions (48,410) 63,461 182,735 27,385 - 5,714 230,885
(-)Launches (25,694) (11,973) - (28,182) (65,849)
OnMarch31, 2006 1,009,982 213,840 343,731 74,236 20,591 69,825 1,732,206
15. 14
Net Indebtedness
Indebtedness 1Q05 1Q06 Chg (%)
Indebtedness – Short Term:
Construction financing 43,229 67,974 57.2%
Loans – Working capital 30,381 1,882 -93.8%
Indebtedness – Long Term:
Construction financing 22,932 25,159 9.7%
Loans – Working capital 10,148 1,059 -89.6%
Total Indebtedness 106,690 96,074 -10.0%
Cash and Cash Position:
Cash and banks 3,696 13,653 269.4%
Short Term Investments 10,628 574,626 5,306.7%
Long Term Investments 4,111 1,816 -55.8%
Total Cash Position 18,435 590,095 3,100.9%
Net Debt 88,255 -494,021
16. 15
Solid Financial Positioning
Net Debt – in R$ (MM)
279,6
148,5
74,3
360,2
Long Term Receivables
Construction Cost
Long Term
Short Term Receivables
Construction Cost
Short Term
35%
Receivables X Development Costs – in R$ (MM)
17. 16
Balance Sheet
ASSETS Mar-06 AV% Dec-05 AV% LIABILITY Mar-06 AV% Dec-05 AV%
CURRENT ASSETS CURRENT LIABILITIES
Cash and Banks 13,653 1.0 9,641 1.2 Financing 69,856 5.1 121,938 15.4
Short term investments 574,626 42.3 6,108 0.8 Suppliers 12,645 0.9 11,118 1.4
Customers 133,914 9.8 149,651 18.9 Wages and payroll chrages 3,317 0.2 3,551 0.4
Inventories 302,473 22.2 299,226 37.7 Taxes and contributions receivables 7,304 0.5 11,346 1.4
Prepaid expenses 23,711 1.7 28,244 3.6 Land payable 40,440 3.0 45,799 5.8
Sundry receivables 53,736 4.0 47,780 6.0 Dividend payable 4,797 0.4 4,796 0.6
Associated companies - - 37,701 4.7
Advance to customers 18,310 1.3 34,751 4.4
Other payables 25,119 1.8 16,799 2.1
1,102,113 81.1 540,650 68.1 181,788 13.4 287,799 36.3
LONG TERM ASSETS LONG TERM LIABILITIES
Customers 172,495 12.7 183,304 23.1 Financing 26,218 1.9 18,643 2.3
Long term investments 1,816 0.1 2,133 0.3 Land payable 75,211 5.5 85,908 10.8
Judicial deposits 28,841 2.1 28,373 3.6 Taxes and contributions receivables 26,993 2.0 27,356 3.4
Deferred social contributuion and income tax 47,349 3.5 29,813 3.8 Deferred social contributuion and income tax 19,314 1.4 15,098 1.9
Associated companies - - 4,508 0.6 Associated companies - - 28,076 3.5
Other receivables - - 182 0.0
250,501 18.4 248,313 31.3 147,736 10.9 175,081 22.1
MINORITY INTEREST - - 38,352 4.8
PERMANENT ASSET Shareholder's equity
Investments 3,401 0.3 1,484 0.2 Capital stock 445,117 32.7 230,732 29.1
Fixed 1,695 0.1 1,757 0.2 Capital reserve 548,115 40.3 - -
Deffered 2,009 0.1 1,676 0.2 Statutory reserve 5,902 0.4 5,902 0.7
Profit retention reserve 56,014 4.1 56,014 7.1
Period result (24,953) (1.8) - -
7,105 0.5 4,917 0.6 1,030,195 75.8 292,648 36.9
ON MARCH 31, 2006 AND IN DECEMBER 2005 ( in thousand reais )
Balance Sheet
18. 17
Income Statement
Mar-06 AV% Mar-05 AV%
GROSS OPERATING REVENUE
Real state and services sales 87,745 103 85,615 103
Sales deduction (2,535) (3) (2,861) (3)
Operating net income 85,210 100 82,754 100
REAL STATEAND SERVICES SALES COST (59,667) (70) (57,148) (69)
Gross profit 25,543 30 25,606 31
(EXPENSES) OPERATING INCOME
Administrative (8,013) (9) (7,579) (9)
Commercial (9,827) (12) (9,304) (11)
Financial Income 20,552 24 18,951 23
Financial expenses (18,808) (22) (19,387) (23)
Other Operating Income (Expenses) 13 0 16 0
Operational profit (Loss) 9,460 11 8,303 10
(EXPENSES) NON OPERATING INMCOME (46,870) (55) (130) (0)
RESULT BERORE TAXATION AND
INTEREST (37,410) (44) 8,173 10
INCOMETAX AND SOCIAL CONTRIBUTION 12,457 15 (1,354) (2)
NET PROFIT (LOSS) BEFORE
MINORITY INTEREST (24,953) (29) 6,819 8
ROSSI RESIDENCIAL S.A.
RESULT STATEMENT
(in R$ thousand)
19. 18
Cash Flow
CASH FLOW STATEMENTS ON MARCH 31, 2006 AND 2005
(in thousand reais)
2006 2005
OF THE OPERATING ACTIVITIES
Net profit (loss) (24,953) 6,819
Adjustments to the net profit (loss)
Depreciation and amortization 218 399
Interest in a controlled company - -
Goodwill amortization (729) 167
Deffered income tax and social contribution (12,977) 1,000
Net interests and financing charges (5,692) (15,353)
Adjusted net profit (44,133) (6,968)
Variation on asstes and liabilities
Customers 6,713 3,151
Real state to be sold (28,505) (9,022)
Prepaid expenses 201 (1,367)
Advance for suppliers 1,196 821
Customers pass on (2,796) (310)
Accounts receivables (13,362) (600)
Judicial deposits (744) (41)
Accounts payable for land acquisition 3,406 3,541
Accounts payable (25,722) 187
Taxes and contribution (2,542) (3,571)
Advance from customers (13,873) (6,059)
Others 4,380 9,890
Net cash deriving from operating activities (115,781) (10,348)
Consolidated
20. 19
Cash Flow
2006 2005
OF INVESTMENTS ACTIVITIES
Investments increase - -
Capital contribution in maneuver (28,797) 14,592
Minority interest - 2,735
Fixed asset acquisition (47) (209)
Softwares acquisition and development (442) (107)
Net cash deriving from investments activities (29,286) 17,011
OF FINANCING ACTIVITIES
Capital increase 214,385 -
Goodwill on shares issuing 548,115 -
Debt
Funding 41,876 24,600
Amortization (83,660) (32,269)
Financial activities net flow 720,716 (7,669)
Net increase (decrease) of cash 575,649 (1,006)
CASH, BANKS AND FINIANCING INVESTMENTS
At the beginning of the period 12,629 21,471
At the end of the period 588,278 20,465
Consolidated
22. 21
Interest decrease
Credit Expansion
The Right Time
Leadership at the Middle Class Segment
Flexibility to adjust according to demand
Exposure to different markets
Adequate Product Mix
Geographical diversification
Present in areas with high
housing deficit
The Right Place
Regional offices with great local knowledge
Experienced
Management
30 executives with, at least, 30-year
experience in the sector
SAP / Integrated operations
Capacity of managing a high number of
projects
Strong market acknowledgment
Why Rossi?
24. 23
Geographical Diversification
Regional offices in São Paulo, Rio de Janeiro, Porto Alegre and Campinas.
Projects in 19 of the main Brazilian cities (Rio de Janeiro, Niterói, São Paulo, Guarujá, Santos, Praia
Grande, São José dos Campos, Santo André, São Caetano do Sul, Osasco, Santana do Parnaíba,
Sorocaba, Jacareí, Campinas, São Carlos, Ribeirão Preto, Sumaré, Curitiba and Porto Alegre).
Expantion plans focused at the States of Minas Gerais, Espírito Santo, Bahia, Santa Catarina, Goiás
and Federal District, consolidating the Company’s operations within the country.
Hired (on April / 2006) Regional Officer for the development of new markets – Brasília and Belo
Horizonte.
Regional Offices
Projects on going
States where we operate