This article first appeared on GuruFocus .
Release Date: May 12, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Direcional Engenharia SA ( BSP:DIRR3 ) achieved record gross sales, growing 29% compared to the first quarter of the previous year.
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The company reported a record gross margin of 42.9% after adjustments for financing rates.
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Net profit reached BRL 213 million, even after significant dividend payments and the sale of a 15% stake in a subsidiary.
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The company closed the quarter with an annualized ROE of 38%, which is considered a benchmark in the industry.
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Direcional Engenharia SA ( BSP:DIRR3 ) has a strong inventory position, allowing flexibility in pricing to maintain margins in an inflationary environment.
Negative Points
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The company began the year with a higher leverage level due to dividend payments, leading to increased financial expenses.
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There is concern about the potential impact of rising oil prices on construction costs, although this has not yet materialized.
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Cancellations increased in some states due to the non-delivery of expected subsidies, impacting sales.
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The company faces challenges in maintaining sales speed amidst potential cost increases.
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There is a need for continued vigilance in managing inflationary pressures, particularly in the context of rising INCC and its impact on costs.
Q & A Highlights
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Q: With regards to inflation and cost, what efforts has the company made in terms of pricing and inventory management? A: Ricardo Concigo, CEO: We are comfortable with our capacity to maintain solid margins despite potential cost increases. We've been working on repricing certain products and have not relaxed our credit policies for Prosoluto. Demand remains strong, and we see no concerns regarding costs or demand at this time.
Q: How do you see the impact of the Belo Horizonte master plan and regional programs on Direcional's operations? A: Ricardo Concigo, CEO: The Belo Horizonte master plan is positive for the central region and could be a growth vector for us. We are optimistic about approvals and believe it will benefit the city and our operations. Regarding regional programs, we are waiting for checks to return in some states, but we are operating where checks are available.
Q: What is the impact of oil prices on freight costs, and how does this affect your operations? A: Ricardo Concigo, CEO: Freight represents about 3% of our costs, so while it has an impact, it's not the most significant factor. We are well-prepared for potential cost increases and have a strong hedge with accounts receivable, which provides comfort in managing costs.
Q: Can you explain the difference in margins between the HEVA and Jirico brands? A: Paolo So, CFO: The margin difference is primarily due to the mix of sales. HEVA sold more in Minas Gerais with higher margins, while Jirico sold more in Rio de Janeiro. There is no structural change between the two brands, and margins are balanced overall.
Q: How do you view the health of consumer credit and its impact on demand? A: Paolo So, CFO: We see a long-term trend of slightly lower conversion rates, but demand remains strong. We are using technology to improve client processing and maintain sales growth. The demand for the Mia Casa Mia Vida program is significant, and we are not concerned about credit impacting demand.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
