MRV&Co reverses holding company losses and makes a profit of R$87 million in the third quarter | Companies

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In consolidated data, net operating income increased by 17.9%, reaching R$2.88 billion. Gross profit margin increased 3.2 percentage points to 29.6%. Gross profit margin without interest increased by 3.3 points to 33.1%.

This quarter, MRV’s national operation, with the MRV and Sensia brands, contributed R$154.4 million to net profits, a strong growth of 234.7%. For the subdivisions, the City of Europe received R$18.7 million, which equates to a loss of R$7.5 million last year.

“It was another quarter in which we were able to demonstrate how we were able to convey the operational improvements that have been made and are still being made,” says CFO, Ricardo Baixão, regarding the MRV and Sensia operation.

Resia, an MRV&Co company in North America, and Lugo, which offers rental properties, also posted losses in the period. In Resia, the result was negative at R$79.3 million, compared to a loss of R$52.3 million last year. Luggo reversed a gain of R$991,000 and incurred a loss of R$6.8 million in the July-September period.

MRV&Co’s Brazilian operations, together with MRV, Lugo and Urba, provided net debt of R$2.5 billion, an increase of 5.5% in one year, and annual earnings before interest, taxes, depreciation and amortization (EBITDA) of R$2.26 billion, an increase of 58.8%. This led to a rise in the ratio of net debt to EBITDA to 1.11 times, compared to 1.86 times in the third quarter of 2024.

Cash generation amounted to R$14.2 million, compared to R$124 million in the same period last year.

Resia, which reported an “impairment” (expected loss of recoverable value) of US$144 million (R$761.5 million at current prices) in July, offered debt of US$743 million (R$3.9 billion), a growth of 10.8% in one year. The company sold land worth US$149 million (R$787.9 million) as part of its divestment plan, which aims to reach sales of US$800 million (R$4.2 billion) by the end of 2026. “The (US) market is recovering, and should improve further, with further interest rate cuts,” Paixao says, highlighting that it will be necessary to “accelerate” sales next year to achieve the target.

MRV&Co’s debt covenant is 0.65x. In the second quarter, the company came close to this limit, reaching 0.60 times. In the third quarter, the value decreased to 0.50 times, Paixao highlights.

Minha Casa, Minha Vida (MCMV) software updates should benefit the company, according to the executive.

Changes were announced in the unit sales price ceiling in Bands 1 and 2 and in the support curve. About 50% of MRV operations cover these program domains, Paixao recalls. The company also operates in the North region, which has received the largest updates.

“One of the features of the program and the government’s actions is consistency in parameter optimization (MCMV),” he said, noting that more changes are expected in the coming months, such as reviewing the values ​​of income ranges.

Income tax exemption for those earning up to R$5,000 is another factor that will favor businesses in Brazil. “Most of our clients have that income, and they will have more money left over for the condo payment,” he says.