Vinte constantly seeks to reduce its exposure to risks that represent the greatest threat to the continuity of the Company, as well as to minimize their potential impact on its results through the implementation of solid and effective strategies, supported by state-of-the-art technological platforms that allow its proper and timely application.
Capital Risk Management
The objective of Vinte’s capital management is to maximize returns for its shareholders, ensuring the Company’s permanence in the market through the optimization of the debt and capital structure. In this sense, Vinte has gradually reduced its Net Debt to Stockholders’ Equity ratio in recent years.
Credit Risk Management
The main credit risk arises from cash, cash equivalents and restricted cash. In that respect, Vinte has a policy to carry out transactions only with highly recognized institutions with solid credit quality.
Interest Rate Risk Management
Vinte is exposed to interest rate risks as its debt is primarily contracted at variable rates. In order to reduce its exposure to floating interest rates, the Company maintains a hedging strategy consisting of the arrangement of long-term derivative financial instruments or other hedging instruments that present no speculative or exchange risk and are sufficient to cover unexpected increases in the cost of debt service.
Market Risk Management
Vinte follows the strategy of aligning its housing pre-sale program with the pace of construction, in order to readjust its operation to minimize the inventory of finished homes. Furthermore, Vinte mainly develops three-story horizontal and vertical homes, which allows the Company to adjust the dimensions of its products based on market trends and the availability of mortgage financing. On the other hand, the concept of higher added value homes, especially after-sale services, has provided the Company with a strong market penetration in the locations where it operates.
Management of Other Market Risks
Vinte recognizes that increases in the cost of construction materials, mainly steel, concrete and labor, can affect its operative results. In order to minimize this impact, the Company implements a strategy of entering into corporate supply contracts and maintaining agreements with large suppliers, fixing the price of main inputs at lower levels and more convenient terms.
Liquidity Risk Management
Vinte manages the liquidity risk by maintaining a policy of retaining a balance of up to six weeks of cash in hand exclusively invested in short-term and low-risk instruments.
Exchange Risk Management
Vinte has no relevant exposure to foreign currency risks.