Even Construtora e Incorporadora SA

BOVESPA:EVEN3

Earnings Call Transcript 2021-Q3

[Operator]

Good morning, ladies and gentlemen, and thank you for holding. Welcome to Even's webinar concerning the results of the third quarter. Here with us today are Mr. Leandro Melnick, Carlos Wollenweber and Tiago Krall.

We would like to inform you that this event is being recorded and will have a simultaneous translation into English. [Operator Instructions] Before we proceed, we would like to clarify that any statements that might be made during this presentation regarding business prospects of the company as well as its operating and financial projections and goals are based on the beliefs and assumptions held by Even's management and other information currently available to the company.

Forward-looking considerations are not guarantee of performance and involve risks, uncertainties and assumptions since they refer to future events that depend on circumstances that may or may not happen. Investors should understand that general economic conditions, industry conditions and other operating factors may affect future outcomes for the company and may lead to results that materially differ from those expressed in these considerations.

I'd like now to give the floor to Mr. Carlos Wollenweber, CFO and Investor Relations Director. Mr. Wollenweber, you have the floor.

[José Carlos Filho, executive]

Good morning, everyone. It is my pleasure to present Even's results of the third quarter and the first 9 months. I would like to begin this presentation by bringing you some highlights in Slide #2. In these 9 months, Even launched 13 projects, which totaled BRL 2 billion in PSV, of which BRL 1.6 billion is Even's share. This represented a 79% growth in relation to the same period of 2020, as you can see in the graph on the top left side.

Net sales totaled BRL 1.2 billion Even's share, also a growth of 17% in relation to last year. Our net income in the 9 months was BRL 189 million, an important growth of 82%, representing an annualized return on equity of 14%, same in the graph on the top right side.

We generated in the year BRL 155 million in operating cash. We paid BRL 181 million in dividends and buying back Even shares. And still maintained a cash position that's very robust at BRL 1.1 billion, shown at the bottom of the slide. It is also worth noting the improvement in the aging of our inventory, where the volume of finished units decreased 52% in the period, going from 35% to 14% of total PSV.

You can see the breakdown of our launches in Slide 3. We launched in the third quarter, 2 projects in São Paulo with a PSV of BRL 584 million and 2 projects in Rio Grande do Sul, amounting to BRL 182 million. Even's participation in the launched PSV in the quarter was BRL 658 million. The launches in this quarter targeted the upper middle and upper income segments.

And in the next slide, we have pictures of the projects launched in São Paulo. Arbo is located in Alto de Pinheiros neighborhood. It is a high-end project with a clubhouse and a home office solution and YBY Ibirapuera, a project with 1, 2 and 3-bedroom units, targeting the upper middle-income segment.

In the next slide, we break down net sales performance totaling BRL 277 million in this quarter and represented a consolidated sales-over-supply of 11%, as you see in the graph on the left side. In this quarter, our sales speed was affected by the concentration of launches at the end of the quarter and due to our strategy to seek higher prices per square meter. It is important to note, however, our volume of inventory is very healthy, and it's a new inventory. It gives us great flexibility to work with the sales of our launches more intelligently in order to get the highest profitability possible.

Looking at sales cancellations in the graph on the right side, we reduced our cancellations in the year by 21% of PSV when compared with the same period of 2020. Our customer portfolio is very healthy and at Even São Paulo, our NPL is at an all-time low.

On Slide 6, we break down our inventory. We have a total inventory of BRL 2.3 billion, where all the deliveries program for 2022, 72% is already sold; and out of the deliveries for 2023, 52% is already sold. You can see this in the bar graph on the bottom right. As I have already mentioned, the volume of our finished Even's inventory represents only 14% of total.

Moving on to our land bank in the next slide. We have currently BRL 6.2 billion worth of land bank, Even's share, or BRL 9.8 billion in total, comprising 60 lots located mainly in prime neighborhoods in the cities of São Paulo and Porto Alegre. In this quarter, we purchased 4 lots, 1 in São Paulo, 3 in Rio Grande do Sul, totaling a PSV of BRL 411 million.

In Slide 8, we show you our capital structure. We closed the quarter with a gross debt of just BRL 351 million and a cash position of BRL 1.1 billion, which represents net cash of BRL 763 million or 30% of consolidated shareholders' equity.

As seen in the chart on the left side, we generated in the year BRL 155 million in operating cash. And in the third quarter, we burned BRL 82 million, basically as a consequence of paying cash for the acquisition of new lots.

Finally, in Slide 9, we show our results. Our net revenue totaled BRL 1.7 billion in the first 9 months. A growth of 42% in relation to 2020, shown in the graph on the top left side. Our gross profit increased proportionally to our revenue, totaling BRL 483 million in the year. Our net income increased 82% in the period, totaling BRL 189 million in the year and a net margin of 12.8%, which means an annualized ROE of 14%, as you can see in the graph at the bottom. It's important to mention Even São Paulo is a consolidated company and delivered an annualized ROE of 18% in this period.

In the short term, it is natural that our investment in Melnick, brings our consolidated ROE down until Melnick gets to the end of its growth curve and has invested a capital raise in its IPO.

And now I give the floor to Leandro, Even's CEO.

[Leandro Melnick, executive]

Good morning, everyone. I'd like to emphasize that we are very happy with the results that we have presented in the accumulation of this year. Our operating vision, our sales, speed of sales in this quarter has been showing a very positive result, which means a very low level of finished inventory, which is very healthy for the company.

We were able to increase the number of launches and absorb the speed of sales of these launches, and we're able to keep our margins, which is really relevant in this moment we're going through, this first half of the year. And Even nowadays very unstable in relation to increasing costs and economic instability.

Our default in our perform is in a level all-time low. So it's a very healthy level. And I'd like to highlight the demand we are experiencing in which the INCC Index is very high, which shows the consistency and the health of our portfolio when the level of default under these circumstances is still at a very low level.

So we have seen an expressive growth. And when you see in terms of profitability, as Carlos mentioned, profitability, our ROE. Our annualized ROE for São Paulo operation is at 8%. And if we consolidate with Porto Alegre operation, which is coming from raising capital due to the IPO, in 14% of profitability.

Our analysis, these good figures are a consequence of our strategic plan, which on the one hand, speeds and delivers financial solidity, which is very relevant for a company, with a strategy to purchase land through swaps, which gives us flexibility in terms of management, which is very important in our market, in our moment, gives us in this scenario of instability in the mid and long term.

On the other hand, we have a strategic planning that is based on unique products that aggregate balance. And we only work on regions that we know very well. And the consequence of this is an assertiveness in terms of launch, and we have been able to bring some differentiating factors into our products, which allows us to price these products in a way that's different -- that's unique in relation to the market and still maintain the planned margins, even though we are going through a moment of price changes. Overall, our strategic planning makes us really tranquil to go through this moment we are living.

Our launches in operation has delivered positive results, but with a macroeconomic vision of instability and difficulty of seeing what the next quarters will be like in terms of the economy. And this next year will be an electoral year. And this model of ours allows us to be in position to take advantage of the market if it continues positive as it has been in the previous quarters because of our swapped land bank or if we settle for -- on a level of launches according to the markets. So we are comfortable with the moment we're going through. And our strategic planning is allowing us to reap these results.

I would like now to move on to questions.

[Operator]

[Operator Instructions] Our first question comes from [ Thais Alonso ] from Citi Bank.

[Unknown Analyst]

Congratulations for the result. I think we're able to maintain margins, which is something everyone have been securely keeping. And my question is related to this. For the next year, we see some developers finding difficulty in finding labor for the construction work, because there were higher number of launches. This labor situation, how will this affect you? Do you have some margin in terms of feasibility? And regarding new projects, your launch pipeline is huge for next year. But they come at a slightly more difficult moment. We're going to face a raise in interest rates. So if you will keep the same volume of launches or we're going to see it being postponed into '22, 2023?

[Leandro Melnick, executive]

Leandro, here. The first part of your question regarding labor, we are pretty confident about this. Traditionally, our construction company is very big. We have a big operation in São Paulo. We have always had our own construction work. And we have a strategic partnership in the long-term with the main suppliers, both in material and labor. In this moment of changes or the instability, we are able -- this more tense moment, we are able to keep with a good margin -- safety of the supply of both material and labor. So we have been going through some tension in terms of material supply, the delivery of materials in this moment in the supply chain. And regarding labor, we have a very solid partnership with the main vendors, and we have been keeping an eye out for this in the number of launches accumulated in the last years in relation to previous years. And this will certainly create some difficulty in terms of production from our segment.

In relation to your second question, regarding the pipeline, the margins and the people or not keeping the level of launches. So this is related to our strategic plan. We always keep a way of keeping a high-volume and keeping products that we believe in very much in terms of their resilience, so usually in the metropolitan area and the central parts of São Paulo, which is very important for our operation. But the way we acquire land, our strategy of being a light company, it allows us to make the choices at the moment of the launch without incurring some penalties in terms of profitability. So our performance is very good in terms -- in our launches, and we will have -- continue having this. It's a recurring question we haven't received. And we will implement our pipeline, as we perform the analysis.

And we are always very close to the market. It's a very volatile market. And the condition we operate in, makes us very comfortable to put us in a position to take advantage of the market. It responds well to products or mainly will adapt our launches without any problems if we understand that this is necessary. In the acquisition of land bank, the way we acquire land bank makes us a live company, puts us in a good position.

[Operator]

Pedro Lobato from Bradesco would like to ask a question.

[Pedro Lobato Garcia Fernandes, analyst]

I'd like to understand a little better in terms of cash flow and how far this purchasing of land fits into the third quarter? It indicates a change in your strategy looking forward. And the second question is, we understand there has been a concentration of your land banking in that upper income segment. We would like to understand the feasibility of your products in terms of mid-income and how you deal with this kind of projects for next year, considering the macroeconomic deteriorating?

[José Carlos Filho, executive]

Thank you, Pedro. This is Carlos. In relation to the use of cash, it's important to understand today, we have 2 companies that they do not talk with their cash. Today, we have a net cash to equity into the order of 20% Melnick, because of the IPO has a bigger cash, net cash, 40% in relation to its equity. And of course, we could have a cash structure that's a little more leveraged. But we are operating under a scenario that is positive for the company, as Leandro explained. When we separate São Paulo from Porto Alegre, Even São Paulo has been delivering an ROE that's very robust, very solid. We delivered 18% of our annualized ROE with a deleveraged capital structure.

So in Brazil, where 2022 scenario is very uncertain, we prefer to keep a cash position that's robust. We practically reduce to 0 our gross debts in the holding. We are going to pay practically 100% and amortize the rest, BRL 180 million of corporate debt that we are still amortizing, we'll continue amortizing along next year. We preserve cash in an uncertain scenario. And we will study this as we see better where the future is going.

When you look at land acquisition, it's part of Melnick's strategy, buying land by cash using the IPO money that raised -- the money raised in the IPO and the cash reimbursement this quarter, BRL 82 million. Most of the BRL 52 million came from Melnick, which was due to the purchase of 3 lots. 3 lots we have already acquired. And at Even, we continue with our policy and strategy of financial swaps. But given a tax scenario that's a little more uncertain, we will keep cash in periods where the financials struggle, as we are going through right now are in doubt in terms of the payment of dividends, in terms of the SPEs. This cash will allow us to continue investing through swaps, even if on occasion have to use cash to buy well-located lots.

We bought a lot this quarter to the order of BRL 16 million in Alto de Pinheiros, which is a very resilient and desired place -- region in São Paulo. And this is a more difficult moment in the market. So we keep our structure. That's not ideal, that's more deleveraged than would be optimal. But in a more uncertain scenario for next year in our business, which demands a lot of capital, we prefer to keep it until we see better.

And the way to complement your question, let's go to the company's strategy, which is relevant for the moment. We'll be able to keep our margins at levels. And in a few quarters, we'll be able to maintain our margins. Even is a financially solid company. It's Even's characteristic to keep a robust level of cash. This may have been the most efficient structure, but is in our vision, what guarantees a very stable position in this uncertain macroeconomic situation. We will maintain this cash and gives us stability for the future.

In relation to the development in launches, as I mentioned, in our São Paulo operation, since we acquired that through swaps. Our strategy of land acquisition gives us flexibility to adjust our pipeline of launches, which is very important in the situation we are going through right now. And under these circumstances, we are able to analyze, to diagnose the market and choose the land and the launches according to the month. So within this strategy, we have been able to maintain our pipeline of launches in a way that [Technical Difficulty].

I would like just to wrap up the answer. You talked about future launches and also highlight, and also mentioned in relation to dividends that this year, when we look at what we have already paid in dividends and buybacks, it was an important one, BRL 181 million. We're still maintaining a capital structure, like Leandro said, that's very solid. But this year, it's already a 12% yield if we look at the company's market cap.

So moving on to your second question, in a quick way. When you look at our pipeline, our project pipeline, the São Paulos land bank, where Even has a BRL 5 billion land bank, it's very concentrated in upper and high-end projects, upper income and high-end project. We understand that if we break down the main segments -- we could talk about the more affordable segment, where it's more difficult to transfer prices and maintain margins. The segment for investors, which -- because of the increase in interest rates is a segment we are looking at more carefully.

In the high-end segment, which has shown to be very resilient because of strong demand and also because we are able to transfer the prices many times above the inflation index, which -- because we can put a lot of differentiating attributes and features in our products. And that's why ARBO, for example, one project we launched in Alto de Pinheiros or Portugal, that have been selling success.

So looking to the future, we have a concentration that's very high in the upper income segment and high-end segment that we -- the luxury segment. We understand that's more resilient in this market where the interest rates are higher.

[Operator]

Our next question is from Ygor Altero from XP.

[Ygor Altero, analyst]

My question is related to the speed of sales dynamic that slowed down this quarter in relation to last quarter. If you see this as of tendency, the market getting colder and how do you see the question between oversupply and margin, if you can talk a little about how we have been able to transfer the prices? How long your customers' affordability go? How far your customers can absorb these increases in prices?

[Leandro Melnick, executive]

We have been working very intensely with this issue, and we have been able to keep a higher price and maintain our margin without impacting significantly our sales oversupply. This high aggregate development within its segment in relation to its competitors, we have more aggregate value, so we can charge a high price. Because we can make products that are comparable with our competitors, but with higher quality. This kind of product is a little more resilient exactly in this moment of market instability. This kind of customer has more -- there's a limitation, of course, but it has more elasticity in absorbing increasing prices [Technical Difficulty]

[José Carlos Filho, executive]

I will complement Leandro's -- Leandro's audio is not good. So we'll try to understand what's going on with his audio. But when we look into this quarter's SOS, this quarter was a little lower when we compare with previous quarters. It was very healthy. Previous quarters, in the last 4 quarters, our sales-over-supply ratio was 35%, 36% in the quarter, which we understand is a healthy SOS. I would like to qualify 2 points. When you look at the quality of our inventory, if we take a picture of the company's inventory, about 2 years ago, half of our inventory, BRL 1 billion was finished units inventory.

Today, the volume of finished unit inventory is very low, it's 14% of our total inventory, which we understand the ideal is around 10%, which is the customers who cannot finance by bank at the time of delivery. So our finished unit inventory is not ideal, but our total inventory, which is BRL 2.3 billion, is very new inventory, products that have been launched in the last 2 or 3 quarters. So it's very new inventory. Some of them still where the sales stand, some of them where the sales stand being built right now. It gives us enough time to work on the price, which is what Leandro was saying.

We went through the last 12 months with an inflation in our construction costs in the order of 12% that we have to transfer to our prices to keep the margin. So in the first question, Vanessa brought this issue, brought up this issue. So it's important just to keep our margin. So we have a very low inventory, which gives us time to work on the sales along the construction phase of the project and the construction work with the project virtually sold out.

Another point that brought our SOS down was the concentration of launches at the end of the quarter. We launched 4 projects, 2 projects São Paulo, 2 projects in Porto Alegre. One project in São Paulo is launched at the end of the quarter in Líbero Badaró, an Arte Country Club in Porto Alegre, which is a highly desired product was launched at the end of the quarter. So the sales of these 2 projects is very healthy and in line with what we expected.

And now in the fourth quarter, we already launched a product in Brooklyn, which is a product that has a high PSV and the speed of sales is very good. So it's a product also targeting the high-end segment, which, as we commented, is more resilient. So we are comfortable with our SOS, our sales-over-supply and able to work with a ratio that's a little lower, but being able to maintain the profitability of our projects, which in the micro region, where we launch them, are the best products.

[Operator]

Next question is from Daniel Gasparete from Credit Suisse.

[Daniel Gasparete, analyst]

2 questions. I would like to understand how you feel the demand now in how you see the market as a whole, not just the high-end segment, if you see a deceleration? And the second question is related to the rise in interest rates. If you have been talking to banks, if there is a possibility of increasing the interest rates in the financing?

[José Carlos Filho, executive]

Carlos here. First, in relation to the demand, we read the situation a very clear way. We understand the segmentation in which the market is. São Paulo has been launching many compact units and also 2 bedroom units. When we launch this kind of product where the customers' affordability is more important, we feel both because of the more expensive financing conditions, if we change 1% in the interest rate in which the clients can finance these products, this is 7% of this total payment.

And increases in relation to 3 months ago, we see 150 bps, 200 bps higher than the banks used to charge. So this is 11% to 14% in a higher PMT. So when we look with a customer profile that has issues with how affordable the project is, the speed of sales will be more affected. So it will be leaner. As we used to see when the interest rates were very low and conditions were very attractive.

The silver line of this is that when you look at Even's land bank, as I have already said, in São Paulo, we only have 1 lot, 1 project to be launched in the emerging segment. The rest is concentrated in the middle, upper middle and luxury segments, which has been shown to be a very resilient segment, and this is answering your first question, how we see the demand.

We have just launched a project that -- which is in Brooklyn, neighborhood of São Paulo. And we understand it's the best project in the neighborhood, recently launched, present a solution for remote work, home office, which our customers have really liked and we're able to launch our nonresidential unit in an intelligent way, where the customer is paying for the square meter. An amount that, of course, that's a higher amount in relation to the residential unit is purchasing, and this has been very good.

And the demand for this kind of product that we launched recently was very solid. Our speed of sales at launch was around 30%, which we think is a healthy -- maybe not the 35% we used to have. But if you consider we are charging higher price, the speed of sales is still robust. So considering the products Even have in its land bank, because we have -- we work on regions where we have differentiating products in these regions are desired, we are at a more comfortable position because this segment is more resilient.

[Daniel Gasparete, analyst]

Carlos, if you could comment on the financing interest rates, if you think it can still go higher?

[José Carlos Filho, executive]

It's difficult to say that if the interest rate to finance the products will continue going up. I can give you what I think in my personal opinion, from my constant conversations I have been having with the main banks, especially the ones have great saving account portfolio. If the interest rate continues going up, this signals something that we'll get in the 2 digit area. I think it's natural that the financing for the customer, it will probably still go up. I don't believe that the financing for the customer will go back to be in 2 digits, but will be very close to being 2 digits by the end of the cycle.

Again, the biggest impact will be on the projects that are being delivered now, maybe not for the launches, because we should already see during the period of construction, maybe an interest rate that will be a little better in the future. But for the deliveries that we are going to make now, this is an important point. But if the benchmark interest rates, Selic continued going up since the future interest rate signals, I think we still have some room for 100 bps, 200 bps for the bench to increase their financial costs.

[Operator]

Our next question is from Elvis Credendio from BTG Pactual.

[Elvis Credendio, analyst]

It's a question about competition. If you can see -- if you could comment on how you see the competition in the region where you're launching products? How you see the pricing strategies for the competitors? And if this is something that worries you or if you think the market is reacting in a more rational way to the moment?

[Leandro Melnick, executive]

Hello, Elvis, we see this market with a more competitive when we are now -- and we now understand that the level of launches will decrease a little. We'll see [Technical Difficulty]

[José Carlos Filho, executive]

I'm going to complement Leandro's answer. because the quality of the sound is not good. We still have some problems, but let's jump.

When I -- when we see our products, taking into consideration the products we have launched, the project we have launched recent, we launched in Alto de Pinheiros in São Paulo, which is a vision that's highly desired and with very few options for the kind of product. We launched a product that has a clubhouse, which does not have a comparable product in the region. So the square meter for this project is the highest among the comparable products with a very nice, very high speed of sales.

And when we look at the company's pipeline for next year, our pipeline is -- and our level of PSV to be launched is very robust. But considering that next year presents an uncertain scenario, we can afford to prioritize our launches that are more resilient. So recently, about a year ago, we bought a lot, a 17,000 square meter lot to launch in Pinheiros region, next to shopping mall Eldorado, next to our headquarters, which is a high-end luxury product with a level of desire because of the characteristic of the product, and which we understand is very resilient, and it's a significant PSV for the company. And the same is true for products we have been developing and having approved that guarantees us to keep the same level of launches.

We have been working with this year, basically, and we imagine we will keep the same speed on products and projects that have high resilience even under more difficult economic conditions. So this puts us in a comfortable position so that the company can continue delivering at the same levels of return we were able to reach. We're able to reach this level of return to the high 2 digits, again, looking at the market that's more challenging than like the one in 2022 will be.

[Operator]

Next question from [ Alexa from Eleven Research ].

[Unknown Analyst]

Congratulations for the results. I have 2 questions regarding the G&A costs, the rates, if this is a recurring level or if we still should expect an increase? Or if you can give us more details why it's going up? And the second question is the legal settlements, the Board settlement, if you could comment if this is related with the increase in the number of cancellations for the company, the sales cancellations.

[José Carlos Filho, executive]

It's Carlos. Let me start with the G&A. Our G&A, when we compare with previous quarters, yes, you are right, it was a little higher. It was BRL 2 billion. BRL 2 billion higher than the previous quarter. We do not see increases in G&A looking forward, even because we are more cautious that it makes no sense for us to increase our G&A, especially if we see the more consolidated structure of the São Paulo operation.

This increase came for 2 reasons. We foresee the results for this year of 2021. That's good. We're going to reach 100% of the company's goals or very close to 100% this year and reinforce our provision for the short-term incentives for the company. Given the uncertainties in the first quarter regarding the possibility of reaching the targets because of the COVID, when we had -- when you could see better the results -- the consolidated results for this, we reinforced our provisions, and that's what -- that increased our G&A.

And the other part was because of the annual trench that we do with long-term incentives for the company's management. And this impacted in a higher volume of provision for these long-term incentives, which are goals that are linked to the return of the company. So these long-term incentives will only be paid -- so it's a 3-year period. They will only be paid if 2 years from now we measure the return for the company -- the return of the company, and this is at a very healthy level. This will be the main indicator to pay the incentive in shares. But we see -- we do not see a growth in G&A.

Talking about tax expenses, they were higher, in fact, this quarter. What we see this year, what we have been doing along this year, especially in the last 2 quarters in a more -- in a stronger way, we have been intensifying the number of negotiations with the counterparties in a way that we speed up the resolution of these cases in relation to our liabilities. What happens is that some of these processes, these cases that were probably going to happen that were possible, but not probable to have to show we provision for it, we sped up these negotiations. These negotiations were attractive enough for the company. And we settled these negotiations and now this is transitioning directly cash through vis-à-vis results that had not been provisioned previously because we had a workflow of provisions.

And when we state it out, but we understand that for the company this is healthy. And again, looking forward, we are going to probably have a decrease in the volume of the legal settlement in our results. Because when you look at the number of days, number of processes, it's much higher than the number of -- the number of cases that have been solved is much higher than the number of new cases that come to them. So this legal contingency provisioning will remain the same.

When you look at our cancellations, it actually did not increase. Our cancellations have actually been nominally decreasing. But because the net volume of sales in the quarter was a little lower because of what we have already commented in previous questions, the percentage of cancellations on the net sales is a little high. But practically speaking, the number of cancellations has been decreasing. When you look at the quality of our portfolio, both at Even São Paulo and Melnick, our investee in Rio Grande do Sul, we are at our lowest level of NPL for the last 5 years. And when we look at this by segment, break it down by segment, the high-end segment or by compact units or emerging market units, the same movement is reflected in all segments. The quality of our portfolio is very good, and we see the volume of cancellations is tending to actually get lower.

[Operator]

Our last question.

[Fanny Oreng Avino, analyst]

I have a question. I don't know if it was answered already, or not. I apologize. So talking about -- we have seen a deterioration in the macroeconomic scenario in the short-term in the last month, 1.5 month. And given the size that this represents to our customer, the size of purchase, I'd like to know if you have seen a deterioration in terms of deterioration of the SOS? How you see the trend in sales because of this macro situation we have been going through?

[José Carlos Filho, executive]

Fanny, thank you for your question. Carlos here. In fact, we see 2 movements. We Even commented a little bit during the call, but I think it's worth going over it again because it's a relevant point. The first impact is the customer who can -- who is -- whose affordability is more limited, that feels that is higher price per square meter is important to this customer. And we will see this in all segments, compact, economic and high income. If we see that the level of visitation on this sales end is lower. When we see the products Even has been launched, we have been launching these projects, and we can see this looking forward because we have a volume in our pipeline, in our land bank that is ready to be launched and very robust and we can choose the more resilient projects.

We have been prioritizing the projects that are located in regions that are desired. And because of the -- because we are launching a product that we understand in that micro region is the best or one of the best. And when we look at the volume of inventory in São Paulo by launches in the last 3 years, we have launched very little, and the absorption was really good, even due to zoning restrictions. So those largest units, 200 square meters, high income, so we see a strong demand in this segment. So we see in our sales stand that the visits is still at a high-volume, a very solid volume, in line with what we could see 2 or 3 quarters ago.

And a customer that is really willing to buy the product, because they are willing to move into that region to buy a product that's higher aggregate value because they want to have a home office solution, their lives have changed because of the pandemic. So they value more their living a little more. So we have been able to transfer this increasing price, even a little above the INCC variation. We are optimistic in this segment. We have just launched the product, as I commented before, in the Brooklyn neighborhood on Portugal Avenue in São Paulo. And the adherence, the absorption has been very good. So in this segment, our trend is positive.

When we look at the entry level, the emerging markets, yes, it will be more difficult to transfer the increasing prices because of the income of this kind of customer and more compact products, also because of the increase in the interest rates and more profitability. So the profile of the customer is more an investor who buys this kind of product, we see a decrease in the speed of sales, but this is not Even's focus and it's not the kind of product we trade.

[Operator]

We now close our questions-and-answer session. I would like now to give the floor to Mr. Carlos Wollenweber for his final remarks.

[José Carlos Filho, executive]

Well, firstly, I would like to thank you for your participation in our teleconference. We are very proud with the evolution of our results and the improvement of our profitability, return, dividend payment we have been able to deliver to our shareholders. So we thank you very much for your participation.

We are 100% at your disposal, especially Leandro, where it's important for him to relay all the strategic part because his audio was not so good. So he is 100% at your disposal, if you wish to ask him any questions in another call. So please feel free to call us. It will be a pleasure to see you again on our next earnings call.

[Operator]

Even's webinar is now wrapped up. Thank you for your participation. Have a good day.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]