Risk Factors

Before taking an investment decision, potential investors shall carefully consider all the information available in this website, especially the risks mentioned below. Vitacon's businesses, financial status and operation results may be adverse and materially affected by any of those risks and, consequently, cause a negative impact on titles obtained by the Company and all its assets. The risks described below are those known by Vitacon and are seen as potential relevant impacts on the Company. Additional risks unknown to Vitacon or irrelevant may also affect its businesses.

1) Macro risks

  • The Federal Government exercises significant influence on the Brazilian economy. This influence, as well as the Brazilian political and economic scenario, may cause an adverse effect that is relevant to Vitacon's activities.

  • Inflation and the Federal Government's response actions to it may contribute in a significant manner to Brazil's uncertain economy, the company's financial position and its operational results.

  • The volatility in real exchange rates in relation to dollar may adversely affect Vitacon's financial position and its operational results.

  • Political, economic and social events and the perception of risks in other countries, mainly in emerging economies, may adversely affect the Brazilian economy, Company's businesses and market value for Brazilian securities.


2) Risks related to the Real Estate Sector

  • The company is exposed to risks associated to real estate development, construction and property selling.

  • The lack of resources available for obtaining financing may present damage the capability or availability of potential property purchasers to finance their acquisitions, what may cause a negative impact on Vitacon's sales and force them to change the financial conditions offered to its customers.

  • Vitacon is subject to risks usually associated to financing.

  • The company's future development may require and additional capital, which may not be available or, in a positive case, may not present satisfactory conditions.

  • The real estate sector in Brazil is highly competitive and the company may lose its position in the market under certain circumstances.

  • Vitacon's activities are subject to an extensive regulation, which may raise its cost and limit its development or, alternatively, cause an adverse impact on its activities.

  • The rising of existing tax rates, the creation of new taxes or the cancellation of certain regimes or treatments from which the company benefits may cause relevant damages to it.

  • The gap between rates used for indexation of Vitacon's incomes and the rates used for indexation of its expenses may cause a negative impact on its financial position and its operational results.


3) Risks Related to the Company

  • Several aspects may directly affect Vitacon, such as funding shortfall, rise in interest rates, reduction in sales of new ventures and rise in default rate in the customer portfolio.

  • The loss of members in the company's top management, or the incapability of attracting and maintaining additional personnel to integrate it may have an adverse and relevant effect on Vitacon.

  • Vitacon is a company whose results depend on its subsidiaries and affiliated companies' results, which it cannot assure will be made available.

  • A reduction in the sale price and demand for real estate ventures of the company by customers may significantly affect Vitacon's operational results.

  • The Company may not be successful in ventures executed outside the areas where it traditionally acts.

  • Vitacon's success depends on reasonable lands for attractive prices.

  • The market value of the lands that the company maintains in stock may decline, what may have an adverse impact on its operational result.

  • Moreover, for the purpose of increasing Vitacon's lands inventory, the company may have to reduce its working capital, which may make it more exposed toeventual uncertainties related to the market in which it acts.

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