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Good afternoon, ladies and gentlemen. At this time, we would like to welcome everyone to EZTEC's First Quarter 2020 Results Conference Call. Note that this event is being recorded [Operator Instructions] Today's event is available through a live webcast that may be accessed through the EZTEC Investor Relations website at www.eztec.com.br/ir by clicking on the banner Webcast. The following presentation is also available for download on the webcast platform. The following information is stated in Brazilian real and in BR GAAP and IFRS, applicable to real estate developers in Brazil, except where stated otherwise.
Before proceeding, let me mention that any forward-looking statements made in today's conference call regarding the business outlook, forecasts and financial and operating targets is based on the beliefs and assumptions of EZTEC's management and the information currently available to the company. Forward-looking statements are no guarantee of performance. They involve risks, uncertainties and assumptions because they relate to future events and, therefore, depend on circumstances that may or may not occur in the future. Investors should understand the general economic conditions, industry conditions and other operating factors can also affect the future results of the company, and could cause results to differ materially from those expressed in such forward-looking statements.
Now I will turn the conference over to Mr. Emilio Fugazza, IRO and CFO, who will begin the presentation. Please, Mr. Fugazza, you may begin the conference.
Thank you very much. Welcome, everyone, to our first quarter 2020 results. This is a moment that I have to say, first quarter 2020 was a skyrocket moment for EZTEC. So just to bear in mind, the slide number -- on Page #3, you're going to see some operational and financial highlights for this company, before I will give the word to Mr. Hugo Soares. So on the operational side, you're going to see net sales of BRL 455 million, for launches of BRL 564 million. So it was a kind of moment that without selling apartments on March, we could achieve almost a record sales moment for January and February 2020. And that's why even in terms of gross margin, we were improving compared to 2019. Landbank, we closed the first quarter holding something around BRL 7.9 billion in Landbank, which means that in the first quarter, we bought something around BRL 1.1 billion in new piece of land. From the financial side, gross profit of BRL 101 million but better news are coming from the gross margin, achieving almost 41% in the first Q. Net income coming at BRL 78 million with a net margin of more than 31%. In terms of cash, given the follow-on, we did in last September 2019, we reached almost BRL 1.3 billion. Trying to remind you that we hold something around BRL 552 million of performed receivables at the end of the quarter. From this amount, BRL 512 million are statutory lien agreements. So this is a kind of financing we provide to our clients, yielding something around 10% or 12% annually plus IGP.
In terms of subsequent events, it's important to bear in mind that in our -- in terms of directors -- in the position of the directors, we managed to change Mr. João Paulo Flaifel for Silvio Ernesto Zarzur in terms of New Business Officer position. Mr. João Paulo Flaifel has been working for EZTEC for 12 years. It was the time of retirement. He resigned specifically because in this pandemic moment, it's a little bit hard to keep going with the operation of buying new piece of land. Let me remind you that holding something around BRL 8 billion in new piece of land means that I am completely achieved my goal for the next 4 years. So it's a hard moment. It's a tough moment here in São Paulo. He is 76 years old, so it was a common decision with the company to resign, to get retired. And we thank very much Mr. João Paulo Flaifel for all the jobs done in the company. And now Mr. Silvio Ernesto Zarzur, who is our Vice President and New Developments -- and the Development Director is assuming -- is accumulating the work of New Business Officer position.
In terms of Board of Directors, another kind of change. In order to ask someone as an independent Board member, to come to EZTEC, to help the team to reflect, to think about what is happening now in this new kind of world, in this new momentum happening in the real estate sector here in Brazil, we called Mr. Luiz Pretti, which is the former Cargill, CEO and Chairman of Votorantim Cimentos Board of Directors. Votorantim is one of the major companies -- producers of cement here in our country. So he is the Chairman of Board of Directors over there. He's going to help EZTEC a lot about improving governance, improving transparency, improving the way we think about our business. And in order to do that, Mr. Flavio Ernesto Zarzur and Mr. Ernesto -- Marcelo Ernesto Zarzur resigned their spots on the Board of Directors specifically because it was not a time -- nowadays, it was not a time to increase spend in terms of new salaries, new payrolls for new members. So in order to open space for the new -- this new member, Flavio Ernesto and Marcelo Ernesto, they resigned of their responsibilities. Let me remind you that they are keeping completely their positions about Mr. Flavio Ernesto Zarzur who is our CEO, and Marcelo Ernesto Zarzur is our Chief Technical Officer. Important to bear in mind that all the Board of Directors and the managing directors of the company are completely united. They are, in a common sense, thinking about what is going to happen, what is the best way to manage this company. We are more prepared than ever about sailing in this time of uncertainties, in this new moment of our economy and real estate business here in Brazil.
So saying that, I would like to give the word to Mr. Hugo Soares in order to talk a little bit more about the operational side of our company. Please Hugo, go ahead.
Emilio, thank you very much, and good afternoon, one and all. I'll be speaking of the operational side right before taking it back to Emilio to conclude with the financials. Now if you could please move to Slide #4, where we discuss our Landbank.
And just like Emilio just mentioned, we are talking about an operational pillar from EZTEC that is currently under the leadership of Silvio Zarzur. Silvio Zarzur, naturally is a person that had very much involvement with new acquisitions as he is the development officer from the company. So naturally, as the person who conceives of the projects who -- that will be developed, he has always been a part of the process of making acquisitions, and he's a person that knows the city of São Paulo on the palm of his hand. So when you look at the Landbank that we have accumulated thus far, what you realize in the table below is that we're talking about approximately BRL 8 billion potential sales value in our land bank. That is a very nicely distributed among all different income segments and typologies, while entirely within the -- our geographical domain in the broader São Paulo region and specifically the city of São Paulo. As far as the different types of projects we have, we can roughly break it down between the corporate side, which you see represented mainly by EZTEC Towers on the left most chunk of the table. And while the residential chunk basically represents BRL 6.1 billion in PSV, which are roughly distributed between a first 1/3 of economic projects, which have a vocation for Minha Casa Minha Vida; you have another 1/3 of the projects within the mid-high and the high-income segments, which are most suited for family as final consumers, also a type of a very useful asset to have in our Landbank; while the latter 1/3 could be distributed between the middle-income segment and the smart living segments. Smart living is basically small units suited for investors -- with a very high appeal for investors. As you know, we have recently come from our follow-on, where we've raised as much as BRL 941 million of new cash, some of which was already being directed towards new acquisitions, which gets reflected on the first quarter of 2020 as that BRL 1.1 billion in added PSV. Within that BRL 1.1 billion, you have the possibly the most importantly, the IBM parking lots, the IBM parking lots in the Paraíso neighborhood, a very, very appealing neighborhood where people do aspire to live in. It's a high income project which in some way resembles the prominence and profile of EZ Parque da Cicade, also a very high success in the past quarters.
And as we stand with the BRL 8 billion in Landbank and approximately BRL 6.1 billion in residential Landbank, the BRL 6.1 billion basically implies as much as 3.2x the amount of -- the volume of launches in 2019. So we currently have in the residential Landbank, 3.2x the volume of launches we had in 2019. It's a very comfortable Landbank position to have. It does grant us a lot of flexibility in times of unpredictability. And naturally, the projects where we already had work information and they already had ongoing developments, some of that will continue despite current circumstances. But naturally, that's a Landbank that allows us to be very opportunistic as far as new acquisitions, in terms of really digging in for the most salient discounted options that there's no need, no imperative to buy Landbank given what we already have.
Now if you please move to Slide #5, it's a slide where we exhibit basically what has been the operational track record for EZTEC going back a few years. And what you realize is that after having gone through a sustained boom period, we -- and surviving a very strenuous crisis, we were on a skyrocketing trajectory towards a very prosperous operational cycle with launches and net sales going together at very high speeds. Naturally, as everyone knows, there's a very abrupt interruption in this trend given the COVID-19 pandemic. But ultimately, from what you can see, it's a pandemic that cuts the operational cycle very early stage and the fact that it's early stage actually has some -- actually makes it less of a burden to deal with than what you saw in the past crisis. So for example, the launches that we have just recently made, they should be starting to get delivered and to finish their construction by the end of 2021. That gives us plenty of room to accommodate both in terms of engineering, but also in terms of clients, as far as digesting the current situation before having to face the delivery of the project and having to transfer their balance to the banks. So basically, it is a very prosperous beginning, a very promising cycle, very abruptly interrupted, but leaving a very solid foundations and a good standing going forward.
Now if you move to Slide #6, you see more details, what I mean by that. On Slide #6, on the left side, we showed the volume of launches that we had pushed forward in the past years. And you also see on the carve-out, realize how much of what we launched is actually sold by this point. And what you realize is that despite the very high volume of launches we made, the actual gross inventory formation is very much under control. And even -- and when you look qualitatively at those sales, what you realize is that those are sales that were followed, were accompanied by very, very fast down payments. So the amortization schedule in average for the projects that we launched ever since 2018, implies that clients will have paid as much as 54% of the ticket price by the time of delivery. Naturally, that has a very strong, very positive implications as far as the leverage that we have to incur to deal with construction going forward. And as you see, the sales on the right side, the sales and cancellations. First of all, cancellations haven't shown their face in the first quarter and still very much -- very few symptoms on the going forward. And as far as gross sales, naturally, we were looking at a year -- looking at a beginning of a cycle of a year of 2020, which was on its way to break all operational records of the company. Very unfortunate turn of events but still very solid ground.
Now going forward towards Slide #7, where we'll get into further detail as far as the company's inventory. When you look at the company inventory, first and foremost, like I just mentioned, the volume of the inventory is absolutely under control. You see it's less than BRL 2 billion in inventory -- in current inventory and the vast, the largest proportion of it concentrated within the south zone of São Paulo, where we can do very well. You can see on the bottom bar chart, you see the separation of construction -- of which stage of construction, the project is and see that those -- the chunk of the projects that we have under construction and there were recent launches, those are projects that, like I said before, you still have as much as 2 years for it to be able to properly digest and to be able to work with before the time of delivery. So it's a very manageable asset to have. As far as the commercial inventory, which, again, very much concentrated in the south zone of São Paulo. It's the type of stuff where you have most of the already rented rewarding greater rates than the base rate for sure. And all in all, is a very comfortable position to be in.
If you could please move to Slide #8, where we get into details as far as the projects that we launched -- that we just launched. Naturally, the main takeaway in here is the Air Brooklin project, the Air Brooklin project was a phenomenal project, both in terms of the product type. It's actually a project that was recently reconceived to fit into the new regulatory master plan of urban development in the city of São Paulo. So it's the type of project that's very much suited for this new investor-driven small unit type of profile, which has been the most salient mark of the cash cycle. And so within the very first months, as much as 60% of the project and we actually managed over the course of that launch to pick up some of the price where it ultimately delivers in the first quarter around 39% in gross margin. Even though it has the investor profile, I mentioned, usually investors, they will pressure somewhat the margins just out of the fact that they're down paying so fast so quickly. That usually is followed by some discount at the margin. But even so, it's a project that delivered a margin of 39% with great sale speed. On the side, you have Fit Casa Alto do Ipiranga. Fit Casa Alto do Ipiranga is possibly the first project that we have conceived and launched as a Minha Casa Minha Vida project originally. And much like the Fit Casa alignment, it does resemble very much the Fit Casa Brás project. It has -- it counts on a very robust demand, but there is very much pent-up demand in the Minha Casa Minha Vida and especially within the city of São Paulo. But usually it doesn't deliver very concentrated sales, very fast sales in the short term. It's all about the surrounding bureaucracy of transferring still while at the launch. So it's a project that has a very consistent pace of sales and a good project overall.
When you look at Z Ibirapuera, it's a project that very unfortunately had a bad timing as first launch in the sense that it was launched already by mid-May. It was actually launched at a week where we had a few circuit breakers. So it's -- the sale speed that we ended up having a little bit less of 10% doesn't exactly reflect the underlying quality of the project but it's also very much a project that we're comfortable in carrying forward, both because it's very close to the headquarters, the type of place where we'll surely be able to find clients going forward. And also because of the quality of the type of the project. Z Ibirapuera is a follow-up to Z Cotovia or Z Pinheiros, both of which at this point are more than 70% sold.
Going forward to Slide #9. We do address what we have as a landscape for launches going forward. And like we mentioned before, the Landbank we have is quite versatile. So it does enable us to play in different fronts. You have Fit Casa Estação José Bonifácio. Again, it's a project where you can rely on a very abundant underlying demand just out of the pent-up demand in the Minha Casa Minha Vida segment. And when you look at Armando Ferrentini and República do Líbano, the park avenue project, both are high-income projects where you can easily -- where if you were to be launched recently, they would deliver gross margins as large as 40% in Armando Ferrentini and possibly as much as 50% in República do Líbano. They are projects that also make us very comfortable as far as the capacity to absorb them going forward. So they should be a safe place in the environment that we're having to face. That basically rounds up the operational side that EZTEC is living in. And if I could please pass the word to Emilio Fugazza as he discusses the financial performance of the quarter and going forward. Emilio, please.
Thank you very much, Hugo. Talking about our amazing operational performance in the first quarter 2020 as much as January and February sales over there. Now talking about financial performance on Slide #10. Starting with the first Q 2020, BRL 250 million of net revenue come in that quarter. It's an increment coming from the first quarter 2019. And mostly because of the Air Brooklin project launched in February. As in this project, we sold something around 60% of the project, the contribution of net revenues coming from that project was barely BRL 60 million over there, something around 20% to 25%. It's important to bear in mind that net revenues are coming from 3 main sites. The first side is when I am selling performed units. So the whole price of the performed units are coming to you as a net revenue at once simply because as the performed unit, I am selling and receiving the price or providing financing to my client. And then I can recognize at once, 100% of the price as net revenue. The second way to see net revenue is when I am selling recent launches. So given the recent launches, I can recognize the cost of the land and the proportion of the land in the price. So in a project like Air Brooklin, the price of the land is so high because it's a fancy project in the south zone of São Paulo. It's a kind of project that can provide much better and higher recognition of the revenues.
And the third way is by the percentage of completion. So as I am going forward with the construction, I am recognizing the percentage of the completion as revenues for our company. So I'm saying that because in the second or third quarter of 2020, what are you going to see is much more revenues coming from the side of the construction side, then performed units being sold or launches been doing, specifically because there is no room for doing launches or selling as much as -- as many as units -- perform units we were selling in the last quarters. Saying that, I would like to say something about gross profit. BRL 101 million in the first Q 2020, an improvement of thoroughly 100% from the first Q 2019, but the more important message coming from this shot is the 41% of gross margin. Let me remind you people that -- guys, that the margin of the project, the Air Brooklin project which was the major contributor for net revenue was 39%. Let me explain this 39% of gross margin. So if you remember the units are being sold from the bottom to the top. So a lot of investors, they prefer because it's a little bit cheaper to buy units at the bottom of the building. And obviously, the units at the top of the building are units that can be sold for higher prices and mainly for the final users. And one -- another kind of thing that is very good from the side of selling Air Brooklin was the majority of the people buying Air Brooklin, so 60% of them, they bought the project paying much more than compared to the initial agreements we proposed to our clients. So the regular asking price is paying something around a 35% in the meantime we are doing the construction. But in this situation, specific situation, given the low interest rate we have in Brazil, so the majority of the people, they agreed to pay something around 60% at the time we deliver the keys.
So going forward, obviously, we are going to need less production finance in this project so -- or using the money of the client to accomplish the construction. But this is the bright side. But the other side is that -- so you have to provide a kind of discount. In our case, in 2020, we have been providing something around 4% of present value adjustment in the prices of the units sold. And that's why the push recognized went off of gross margin, it's a little bit about 39%. Going forward with the inflation of the sector, adjusting the price, you were going to see something around 40% to 41% or up to 42% in the Brooklin project.
Other projects like Cidade Maia, for instance, the major projects we have performed units of that being sold. It's a product that we can provide 44% of gross margin. Projects coming from the Minha Casa Minha Vida side, which is the low rate project. Fit Casa Rio Bonito is a project of 44% of gross margin. Fit Casa Brás in downtown São Paulo, it's a project of 46% gross margin. But projects located in fancy neighborhoods of the city like the west zone of São Paulo or south zone of São Paulo like Z Pinheiros in south, it's a project of 47% gross margin, making a huge contribution for margins in our balance sheet. Z Ibirapuera project launched in 2018. By the end of 2018, the project of 57% gross margin. So going forward, the level -- the 40% gross margin level, it's a kind of assured by the projects we sold so far. In terms of expenses like G&A expenses and selling expenses, 2 kind of different things. Given the pandemic woes, in the first Q 2020, you saw BRL 27 million, BRL 1 million more compared to the 4Q 2019, mostly because we made a lot of adjustments in salaries and payrolls in our company, specifically because it was the kind of very -- it was a very profitable moment in order to launching more projects, selling more projects. So we hired a little bit more people over there, much more skilled people over there with higher salaries, but now the reality is completely different. It's game changing completely.
In the second quarter of 2020, we're going to see going down a little bit because of the adjustments we have been doing in our payrolls and also because of the service providers we have in our company, like law firms or even -- so rent, we have to pay for our offices or for our sales stand. So you're going to see coming down a little bit the G&A expenses for the next 2 quarters. The same for the selling expenses. Obviously, the expenses about publicity, for instance. So nowadays, this is only online publicity, cheaper than the offline publicity we have been doing. Even though about the sales stand, so all the sales -- we shut down the sales stand. Nowadays it's only online. So we have no more expenses to pay to support the sales stand. So in the second quarter and the third quarter, you're going to see a low level of selling expenses. And obviously, the remaining expenses you're going to see is remaining to support the expenses to the performed units to pay for the maintenance. It has dropped for the performed units that you can see all the sales expenses.
So moving to Slide #11, I would like to talk about the financial results of our company. First Q was BRL 37 million. Let me remind you that mostly because our receivables portfolio right now, which is about BRL 514 million and the adjustment of IGP, so inflation in this quarter was 2.7%. So when we provide financing to our clients for over 20 years, we provide by an interest rate of 10% plus an adjustment of inflation. Inflation -- the index of inflation is IGP. So the IGP for this 3 quarter -- this 3 months of the first quarter was 2.7%. Only to compare with the first quarter 2019, the inflation adjustment was minus 1.52%. So there was a deflation at the beginning of 2019 compared with a lot more inflation in the first Q 2020. To just -- as a forecast, in the second quarter 2020, we're going to see an adjustment of 1.71% on this financial results compared to 2.7% in the first Q 2020. Equity income on the top right of this slide is the project we are not consolidating in our balance sheet. So projects we are sharing the management of those projects. And the majority of them are located in the city of Osasco, which is metropolitan region of São Paulo. And recently, in last year, 2019, we launched Reserva JB. Reserva JB is a project of middle-income segment, selling very good even in the pandemic time. So it's a kind of project to achieve middle end people who is paying something around -- about BRL 300,000 to BRL 400,000 per unit. It's a project to provide something around 36% of gross margin, but it's a project of more than 700 units over there. We have something around 50% of these projects sold and the construction going to start by the beginning of March -- by the beginning of May. So you're going to see the recognizement of revenues coming from this project in the next coming quarters. And that's going to be impacted in this equity income results, going a little bit higher than the last few quarters.
In terms of backlog results, results to be recognized. That's the bright side of this release, which is BRL 445 million to be recognized. But the margin, it's about 44%. 44% means that all the sales we have done so far are in a margin of -- in a gross margin of 44%. As we are making the completion of the construction, we're going to see these results coming to our P&L. It's important to remind you that as we are not using production finance to support the cash flow of our construction. So mainly because the clients are paying their installments in advance, and we are with cash in excess to fulfill the construction. Obviously, we are not going to be impacted at the cost of the financing for this construction. So -- which means that the 41% gross margin is going toward the 44% backlog margin, we're going to see -- we can see in this specific chart. And finally, the net income, the net margin. Net income came at BRL 78 million, more than 4x the first Q 2019, mainly due to the financial results and improvement in the operational side. But the bright side is about 31% of net margin in this time. So that's a kind of thing that even living in the pandemic time, you were going to see because of the reduction of G&A -- SG&A expenses, you're going to see net margin improving a little bit.
So guys, moving to Page #12. This is a little more detail about our portfolio of direct receivables. We ended 2019 at a position of BRL 519 million of performed receivables. And now in the first Q 2020, BRL 514 million, meaning that there was origination of BRL 13 million, yield of BRL 29 million. And finally, payments in advance regularly of BRL 44 million. Foreclosure, almost nothing so far. And all of it regarding 1,910 units under management of EZTEC. So going to the last slide, giving space, giving room to questions, I would like to talk about balance sheet, value generation for our shareholders and analysts. So EZTEC is a company that ended up first Q 2020 in a shareholders' equity of BRL 3.88 billion. And the majority of it -- so it's a kind of mid of assets in a size of BRL 4.3 billion and size -- and BRL 4.3 billion meaning that BRL 1.2 billion, BRL 1.3 billion is cash and equivalent. So completely available to new investments, to new development. And we have a range of things due to think in this middle way, we are living here in Brazil. So we can buy new piece of land, we can go forward with the construction of the new corporate towers like we have done with EZ Towers, and we are doing with EZ Cidade towers. We can buy a small company or a company, a real estate developer, another segment or another region. We know what we are going to do. And that's why we are -- we think that it's the best moment to take very good decisions. The moment we are fulfilling of cash to pass through this moment without any kind of instability. In this -- all these assets, you can see finished units receivables, which means the portfolio we are providing financing to our clients, something around a BRL 552 million. Ready inventory, ready inventory is very interesting because, as Mr. Hugo told you before, the total amount of units we have, performed units ready to leave, it's about BRL 700 million in our inventory. And the cost of this inventory ready to leave, is about BRL 344 million. So less than -- or a little bit more than 50% gross margin in our inventory. That's very important to bear in mind.
And finally, talking about Landbank. So as Mr. Hugo told you before, it's about BRL 8 billion in Landbank. And this BRL 8 billion in Landbank, the cost is about BRL 900 million. Meaning that all the land, all the piece of land we have in the city of São Paulo, in metropolitan region of São Paulo are in the cost of 12% to 13% cost over potential sales value. When you see our liability -- so I said something about BRL 4.3 billion in assets. But in terms of liability, we are talking about less than BRL 500 million. And the main liability -- we have construction financing, we don't have. So land. So given we are acquiring land by installment in some piece of land, we have BRL 145 million to pay in the next coming quarters. Dividends. We have approved dividends in our shareholders' general meeting held in last -- by the end of April, BRL 67 million to be paid in the next coming months. And finally, other liabilities, over 7% of our equity, which means BRL 254 million.
So saying that, I would like to finish the presentation, hearing -- coming from new guys, some kind of questions that we can provide good answers to you. Thank you very much for today.
[Operator Instructions]
Our first question will come from Nicole Inui.
I think you stated very well that this was a cycle that was interrupted. And I'm curious, it's hard to see what's ahead, when the cycle is going to turn again. But what -- I'm curious, what kind of things do you look at? Will you be looking at to decide whether to resume launch more strongly, especially in the mid to high segment. So is this something you're going to look at consumer confidence, you're going to see where mortgage rates are, you're going to see where -- how your finished inventory is selling. Just to get an idea of what you look at to kind of -- in terms of signs that the cycle is getting better, hopefully, once again.
Nicole, thank you very much for the question. That's a very tricky question, specifically because it's a kind of forecast. I would like to say something we have been discussing in our company. In terms of -- let me break down into 3, 4 answers. In terms of providing financing, for instance, obviously, given the interest rate in Brazil right now, it's about 3%. There's no sense to provide mortgage financing for our clients. Banks -- the commercial banks provide the mortgages came in at the rate of 7% to 8%. So some kind of -- some sort of banks are increasing the interest rates in the mortgages side, which is a little bit insane. We have been fighting with the commercial banks in order to provide we call saving plus. Saving plus, it's a kind of interest rate that you can provide using as an asset the savings accounts for the people. So the Central Bank of Brazil could liberate a little bit the compulsory deposits over there in order to lend this amount of money because it's savings. So if the compulsory coming on the savings account, lending this money within this spreads of the -- adding a spread of the interest rate of the savings account. So something like, let's say, a spread of 3%, 3.5%. And given the savings accounts, compensation nowadays, which is a little bit more than 2%. The interest rate could decline from 7% or 8% to 5% to 4.5%. This could improve a lot of the sales eventually much more the sales of the performed receivables, which is so important for the whole sector. Because obviously, when we talk about performed units or units launching or under construction in the south zone of São Paulo, this is easy to sell. Sooner or later, we are going to sell those units. But the problem is all of Brazil in the countryside or even the metropolitan region of São Paulo, it's a little bit more tricky to sell those units without compensating the client who are watching TV all the time and perceiving that it doesn't match the interest rate of the mortgages with the interest of Brazil.
Coming from the consumer confidence, we think that the problem is not only the consumer confidence, the problem is to understand how much -- how many people are going to lose their jobs by the end of this process. Because the problem is not that a single person losing their job. The problem is the feeling, the mood this could cause in the whole society. For instance, so far, we have been perceiving that probably public employees are buying apartments coming from the Minha Casa Minha Vida side. So that's why that is specifically because they are completely, I would say, with confidence that they are not going to lose their jobs. And that's why I keep selling apartments in the Minha Casa Minha Vida side. And that's why, obviously, one of the projects, we are going to target the moment we are going to come back long-term projects is this project of Minha Casa Minha Vida. In terms of high end, that's why we placed the launches between Minha Casa Minha Vida and the high end. High end is something easy to understand, Nicole, for instance -- so we know that likely the interest rate in Brazil is going to get down a little bit further. So from 3% to 2% to 2.5% and the problem is passing this moment, people saving money, yielding something around 2% minus taxes over there is not going to work. A lot of people are going to think about 3 kind of things: So are they going to buy dollar? Are they going to buy currency? Are they going to buy stock? Because they are so depreciated, the São Paulo stock exchange is so depreciated right now or they are going to buy apartments. Because an apartment is something that we can assure the value eventually for people from mid-high to high-end. They think that they can add a little bit more. This is the kind of thing that they are going to provide earnings for the future, for instance, as a kind of a retirement plan. That's the kind of thing that, in my personal opinion, we are going to see by the end of this cycle. The tricky part of it is just to understand what is going to come from the middle-end segment. We do know how hurt they are in terms of coming back and buying apartments. My personal opinion is something like that. So only at the moment they are going -- could see jobs are generating in our society. They are going to come -- to go buying apartments at the end because they are not afraid of losing their jobs or losing their earnings. So far, we think that we are going to see this movement coming from low end, people which are not afraid of losing their jobs. And at the high end, people are moving assets, moving money coming from the banks to the real estate sector. So the mindset is something like that. But we have no answer exactly what is going to be the turning point that is going to -- that could change the idea of launching this or that project, Nicole.
This will conclude our Q&A session, and will conclude our presentation today. You may disconnect your line at this time, and have a nice day.