How to Build Even’s Model?

Corporate Structure

Even runs its real estate development and construction activities directly or through SPEs, which are used as mechanisms to maximize its activities results, and transfer its businesses.

Companies incorporated as SPEs aim to facilitate the contracting of loans, given that they enable segregating the SPEs’ equity from the Company’s equity, minimizing risks to lenders. Additionally, they consist of a more efficient mechanism for the implementation of partnerships, the participation of each partner in the venture being therefore very clear.

Main Sources of Revenue

EVEN´s revenue from real estate developments and the sale of properties derives from the sale of units of their residential developments (95%) and, to a lesser extent, commercial properties (5%).

Real Estate Development Revenues

Real estate development revenue includes the values stemming from the sale of the Company’s projects’ units, including monetary restatement and excluding interest for the installment sales projects.

Service Revenues

Service revenue is driven by management fees charged on the management and construction services provided in proprietary and third party projects.

Main Costs

Even’s costs come mainly from real estate development and, in a smaller scale, from costs for services rendered

Real Estate Development

The real estate development costs comprise land and construction costs, which include project, foundation, structure and finishing, as well as the costs relative to a wide variety of raw materials and proprietary and third party labor.

Among the real estate development costs, it is worth underlining the cost relating to land acquisition. This cost may vary significantly, due to the characteristics of each land lot, the region and the sector of the project to be launched. The land acquisition methods consist of payment in cash, swap for units in their current or future projects, financial swap (in which revenues arising from the sale of the units of the project to be developed in the land lot are transferred to the seller), and any combination of these methods.

Approximately 50% of total construction costs consist of labor expenses. The remaining 50% consist of raw material costs, in which no single raw material alone represents a significant portion of the Company´s total costs.

In average, construction cost growth is distributed as shown in the table below:

Period of construction (in months) Percentage of costs per project incurred (1)
1st to 6th 15%
7th to 12th 25%
13th to 18th 35%
19th to 24th 25%
(1) Excluding cost of land.

Operating Expenses

Even’s operating expenses include selling expenses and general and administrative expenses.

Selling expenses

Selling expenses consist of costs related to the creation of sales stands, decoration of model units from each of the launched projects, commissions on sales, advertisement and marketing. These expenses are deferred and charged to income based on the percentage of physical or financial completion of the respective development.

General and administrative expenses

The general and administrative expenses consist primarily of (i) outsourced auditing, consulting, legal and other services; (ii) payroll and related social charges; (iii) management fees and related social charges; (iv) corporate expenses, including the publication of minutes and financial statements; (v) notary publics and registries; and (vi) collection expenses and outsourced services.