By Brazil Stock Guide – Brazilian homebuilders shifted focus to profitability in the second quarter of 2025, with low-income developers driving sector performance, according to data from Valor Econômico and analysis by Bradesco BBI. Average gross margin for 28 listed and non-listed companies rose 3.2 percentage points from a year earlier to 31.7%, while net margin increased 1.7 points to 11.9%.
The Minha Casa Minha Vida (MCMV) program once again stood out, supported by federal subsidies and regional down-payment assistance. Cury (CURY3.SA) reported R$236.7 million in net income, exceeding analysts’ projections. “Our forecast was already one of the highest among banks, and they still beat it,” said Ygor Altero, an analyst at XP. Direcional (DIRR3.SA) posted a 38.9% gross margin, up three points from last year. CEO Ricardo Gontijo cautioned in a call with analysts that the figure should converge to 35%-36% over time. “Although Cury and Direcional operate above their steady-state margin, it has lasted,” noted Bruno Mendonça, Bradesco BBI analyst.
Tenda (TEND3.SA) also delivered solid results, despite continued losses from its prefabricated homes unit, Alea. Its adjusted gross margin fell 1.2 points sequentially, to 35.1%, reflecting cuts in pro-soluto financing — a risky down-payment credit fronted by developers to MCMV buyers. Both Tenda and MRV (MRVE3.SA) are scaling back such exposure. MRV’s Brazilian arm booked R$88.3 million in net income, but holding MRV&Co posted a R$811.8 million loss, weighed down by a U.S. impairment at subsidiary Resia. If holding results were included, combined net profit across the 28 companies would fall to R$920 million, down 31.5% year-on-year.
Among high-end builders, Cyrela (CYRE3.SA) saw a 6% decline in net income, pressured by higher land acquisition costs. “It was still a resilient result, and we expect a strong second half,” said Altero. Moura Dubeux (MDNE3.SA) reported what analysts called an “outlier quarter,” expanding relevance in the Northeast and preparing to enter the low-income segment. Eztec (EZTC3.SA) posted “good” results, though analysts said performance remains below the level expected for its balance-sheet strength.
The mid- and high-income segments remain under scrutiny, as high interest rates squeeze both consumer mortgages and the plano empresário financing for construction. “We are still in an environment that suggests deceleration, and we’re looking for signs of that,” Mendonça said. Launches jumped 56% in the quarter to R$9 billion, with Cyrela accounting for 32% of that total. Meanwhile, debt is rising: net financial debt increased 20.8% year-on-year, and leverage climbed 2.6 points to 28.6%.
Leave a Reply