Emccamp to invest R$4.5bn in Southeast region in 2 years

Construction company expects to launch 1,871 units in Rio de Janeiro by end of 2022

08/12/2022

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André Campos — Foto: Gladyston Rodrigues/Divulgação

Construction company Emccamp Residencial, based in Minas Gerais, which operates mainly in the economic residential development area, will invest R$4.5 billion in two years, of which R$1.5 billion this year, already in progress. The resources will be used to expand the company’s operation in the Southeast region, where it is present in 16 cities.

By the end of the year, Emccamp will launch 1,871 residential and commercial units in Rio de Janeiro. Currently, the total potential sales value of Emccamp’s land bank in Rio de Janeiro is R$869 million.

“The company is very excited about Rio, where we have already delivered more than 30,000 apartments. The goal is to launch R$1 billion in real estate per year in the city,” said Emccamp’s chief commercial officer André Campos. By the end of July, the company had launched R$750 million in real estate.

Emccamp worked mainly with the now-defunct Minha Casa, Minha Vida housing program with the current program, Casa Verde-Amarela. But the construction company has been launching properties with higher prices, which can be financed by the Brazilian Savings and Loan System (SBPE). The new condos offer more sophisticated services, such as coworking spaces, jogging tracks, beach tennis courts, and open-air cinemas.

“The Casa Verde e Amarela housing program is completely out of scope in Rio de Janeiro. In the other states there is little,” said Mr. Campos. According to Secovi RJ, the employer union of the real estate industry in Rio de Janeiro, residential property sales in the state fell by 11% in the first half, compared to the same period in 2021. The sales of non-residential real estate shrank 6.9%. Real estate companies need to invest in innovations to attract consumers affected by the current scenario of inflation and high-interest rates.

Mr. Campos said that Emccamp will also launch projects this year in the metropolitan region of São Paulo, Belo Horizonte, and Contagem (Minas Gerais).

Founded in 1977 by Régis Pinheiro de Campos, the construction company is controlled by its founder, with a 42% stake. Other partners are Eduardo Campos (22.8%), Eduardo Filho (8.6%), André Campos (8.6%), and other minority shareholders, all from the founder’s family.

In May 2021, Emccamp was registered with the Brazilian Securities and Exchange Commission (CVM) to issue securities in category B. “We went public because we understand that it is part of the process of a mature company. But as the moment was not adequate because of the pandemic, we decided to wait for the best window of opportunity to make the IPO,” said Mr. Campos. According to the executive, there is no deadline for this.

Mr. Campos said that the company has always carried out projects with its own resources. But to support part of the accelerated growth, it issued naked debentures in August 2021, in the total amount of R$150 million, maturing in 2024. The Standard and Poor’s Global rating agency (S&P) attributed the A+ risk rating to Emccamp.

In the first quarter, Emccamp reached the mark of 10,135 units produced simultaneously, with a projected total potential sales value of R$2.2 billion. In the quarter, 700 units were delivered in São Paulo, with a total potential sales value of R$97.3 million. Net revenue increased 37.2%, to R$164.1 million. EBITDA totaled R$16.7 million, up 9.7%. Net income grew 45.1%, to R$8.1 million. The net margin fell 7.4 percentage points, to 5%.

The land bank totaled R$5.45 billion. Mr. Campos said that the land bank is currently at R$6 billion. “We have a land bank for two to three years of developments,” he said.

For the year, Emccamp expects to reach a revenue of R$800 million, rising to R$1.2 billion in 2023. In 2021, revenue was R$724.8 million, and profit, was R$19.6 million.

*By Cibelle Bouças — Belo Horizonte

Source: Valor International

https://valorinternational.globo.com/