(Adds comments by co-CEO)
SAO PAULO, Jan 16 (Reuters) - Brazilian low-income homebuilder MRV Engenharia e Participacoes SA posted a 1.6 percent dip in fourth-quarter net revenue from a year earlier, according to a securities filing on Monday.
The company reported a 6.2 percent drop in gross sales, but a lower rate of sales cancellations eased the impact on net revenue, which totaled 1.008 billion reais ($311 million) in the quarter, the filing said.
Co-Chief Executive Rafael Menin said gross sales would have been higher if the company had not hit snags with permitting in strategic cities.
“Unfortunately, the issuance of permits suffered delays in several strategic cities, affecting our gross sales,” Menin said, declining to name the problematic jurisdictions. “It is not a problem related to demand. It is more a bureaucratic issue,” he said.
Despite the building permit setbacks, Menin said the company will continue to deliver strong results as it steps up efforts to curb sales cancellations and grow its land bank.
In the fourth quarter, MRV reduced sales cancellations to a ratio of 22.1 percent of gross sales, a 3.6 percentage point drop from the same quarter of 2015.
The improvement shows MRV has had some luck slowing cancellations with measures such as booking a sale only after lenders approve mortgages for homebuyers.
Year-to-date, MRV shares are up 4.57 percent.
MRV should also be able to accelerate new construction in the first quarter after a surge of building permits issued in November and December, Menin said.
Fourth-quarter launches of new construction fell 37 percent to 6,777 units, while the value of new projects fell 34 percent to 1.071 billion reais, the company said.
The value of the company’s land bank rose to 41.1 billion reais in December, a 23 percent increase from a year earlier.
$1 = 3.24 reais Reporting by Ana Mano; Editing by Alan Crosby