SAO PAULO, April 17 Homebuilder MRV Engenharia
SA on Monday reported a rise in first-quarter net
sales and record housing starts, helped by slowing sales
cancellations as management declared a turning point after years
of economic crisis in Brazil.
By contrast, Cyrela Brazil Realty SA, which
warned of high levels of sales cancellations in the quarter,
reported slipping sales and flat housing starts.
The divergence, reported in separate securities filings,
underscores how the performance of builders of affordable
housing in Brazil hinges on the ability to contain a surge in
canceled sales due to rising unemployment amid a lingering
MRV's Co-Chief Executive Rafael Menin said by booking only
"guaranteed sales," it had waited longer to register new
signings, slowing the growth of gross sales to 7 percent from a
year earlier, but slashing sales cancellations by 15 percent.
As a result, net sales climbed 15 percent from a year
earlier to 1.322 billion reais ($427 million).
"The first quarter represented a turning point and we expect
this year to be more active for launches and sales than 2016,"
Menin told Reuters in a telephone interview.
The value of MRV's new projects launched in the first
quarter rose 25 percent from a year earlier to 1.211 billion
reais, the highest ever for the quarter and largely concentrated
in the month of March.
Menin said MRV aims to invest an additional 100 million to
120 million reais buying land in 2017 compared to last year.
"There is not much competition and we want to build a
gigantic land bank before this window of opportunity closes," he
said, referring to MRV's land holdings, which grew 0.7 percent
in the three months through March to 41.4 billion reais.
MRV said spending on land, construction and urban amenities
cut free cash generation by 58 percent from a year ago to 75
million reais. The transfer of some 8,000 units has also been
held up by banks with restrictive credit policies, which should
be overcome in the second half of the year, generating more cash
and sales, according to the securities filing.
Cyrela did not provide information about its cash generation
or land bank. It reported a 4.5 percent drop in net sales to 520
million reais, while the value of new construction edged 0.2
percent lower to 612 million reais.
($1 = 3.098 Brazilian reais)
(Reporting by Gabriela Mello; writing and additional reporting
by Brad Haynes; editing by G Crosse)