MRV&Co was able to reverse the year-ago net loss in the third quarter. The holding company, which combines the operations of MRV, Luggo, Urva and Regia, reported a net profit attributable to controlling shareholders of R$87 million, compared to a loss of R$12.7 million in the same period last year. Adjusted net income was R$111.1 million, compared to R$17.3 million in the third quarter of 2024.
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Continuing with the consolidated data, net operating revenue increased by 17.9% to R$2.88 billion. Gross profit margin increased 3.2 percentage points to 29.6%. Gross profit margin after interest increased by 3.3 percentage points to 33.1%.
During the quarter, MRV’s country-incorporated operations under the MRV and Sensia brands contributed R$154.4 million in net profit, registering a significant growth of 234.7%. Urba gained R$18.7 million for the subdivision, compared to a loss of R$7.5 million a year ago.
“It was also a quarter where we were able to demonstrate how we were able to transition the operational improvements that have been made and will continue to be made,” Finance Director Ricardo Paisan said of MRV and Sensia’s operations.
MRV&Co’s North American business, Resia, and rental property provider Luggo, both posted losses in the period. Resia posted a loss of R$79.3 million compared to a loss of R$52.3 million in the same period last year. Luggo reversed a profit of 991,000 reais from July to September, resulting in a loss of 6.8 million reais.
MRV&Co’s Brazilian operations, in partnership with MRV, Luggo and Urva, had net debt of R$2.5 billion, an increase of 5.5% in one year, and earnings before interest, taxes, depreciation and amortization (EBITDA) of R$2.26 billion, an annualized increase of 58.8%. As a result, the net debt to annualized EBITDA ratio was 1.11x, compared with 1.86x in the third quarter of 2024.
Cash proceeds amounted to R$14.2 million compared to R$124 million in the same period last year.
In July, Regia announced an “impairment” (an expected loss in recoverable value) of USD 144 million (R$ 761.5 million at current prices), while its debt stood at USD 743 million (R$ 3.9 billion), an increase of 10.8% over the year. The company has sold land worth US$149 million (Reais 787.9 million) as part of a divestment plan that aims to reach sales of US$800 million (Reais 4.2 billion) by the end of 2026. “The[U.S.]market is recovering, and further rate cuts should improve it further,” Paixao said, stressing that sales will need to “accelerate” next year to reach the target.
MRV&Co’s debt covenant is 0.65x. In the second quarter, it approached this upper limit, reaching 0.60 times. In the third quarter, that value fell to 0.50 times, Paixão highlighted.
The executive said updates to the Minha Casa, Minha Vida (MCMV) program should benefit the company.
Changes to unit selling price caps, bands 1 and 2, and subsidy curves have been announced. Paixão recalls that approximately 50% of MRV’s business covers these program bands. The company also operates in the northern region, which has received the biggest updates.
“A hallmark of the program and the government’s actions is the consistency in improving the parameters (of the MCMV),” he said, stressing that more changes are expected in the coming months, including a review of the income band values.
Income tax exemption for those earning up to R$5,000 is another factor that favors doing business in Brazil. “Most of our customers have this income, so they will have more money left over to pay the installments of the apartment,” he says.
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