Net operating revenue increases 75% to R$267 million SAO PAULO,
Brazil, Aug. 6 /PRNewswire-FirstCall/ -- Gafisa S.A. (Bovespa:
GFSA3; NYSE: GFA), Brazil's leading diversified national
homebuilder, today reported its financial results for the second
quarter ended June 30th, 2007 (2Q07). The following financial and
operating information, unless otherwise indicated, was prepared and
presented in accordance with Brazilian GAAP (BR GAAP) and in
Brazilian Reais (R$). Additionally, financial statements and
operating information consolidate the numbers for Gafisa and its
subsidiaries, and refer to Gafisa's stake (or participation) in its
developments. To view a more detailed review of second quarter
results filed with the Brazilian Comissao de Valores Mobiliarios
("CVM") and the U.S. Securities and Exchange Commission ("SEC"),
please visit Gafisa's website http://www.gafisa.com.br/ir. Net
operating revenue for the second quarter, recognized by the
Percentage of Completion ("PoC") method, increased 75% to R$266.5
million from R$152.2 million in the prior year period. Backlog of
Results to be recognized under the PoC method at the end of the
second quarter reached R$418.8 million (Backlog margin of 38.1%),
an increase of 75% from the previous year's quarter. EBITDA for the
second quarter increased 90% to R$38.4 million from R$20.2 million
in the prior year period. Net Income for the second quarter, rose
52% to R$32.1 million, or R$0.25 per share. This compares to an
adjusted net income of R$21.1 million, or R$0.21 per share, from
the prior year period. There was a 26% increase in the number of
weighted average shares outstanding to 129 million shares from 102
million shares. Project launches during the quarter totaled R$470.7
million, an increase of 72% over the same period in 2006, while
pre-sales for the quarter increased by 50% to R$342.8 million over
the prior year period. Gafisa's land bank reached R$6.2 billion on
June 30, 2007, equivalent to almost 50,000 units. The highly
diversified land bank includes 91 different sites with 68% of
properties outside of the cities of Rio de Janeiro and Sao Paulo.
Selling, general and administrative (SG&A) expenses were R$44.5
million in 2Q07 (9.4% of launches) versus R$19.4 million in the
prior year (7.1% of launches). The increase in SG&A was due to
the implementation of quarterly accruals for bonuses (R$4.9
million), consolidation of AlphaVille's SG&A (R$5.5 million),
and increased employee head count to support growth. Ramping up
operations at Fit Residential and staffing at Bairro Novo also
contributed to the increase in G&A expenses (R$2.8 million). "I
am pleased with the operating and financial results we delivered
during the first half of 2007. With almost R$800 million in product
launches, on a consolidated basis, and growth in pre-sales of 57%,
Gafisa continued to show that its team is executing on plan and its
products are meeting consumer demand," said Wilson Amaral, chief
executive officer of Gafisa S.A. "We are committed to serving all
levels of the homebuyer market through products tailored to their
needs and to the introduction of new financing options for
consumers. This commitment, coupled with positive industry trends,
strong brand recognition and a well capitalized balance sheet, puts
Gafisa in a sound position to continue to deliver rapid and
sustainable growth. "Gafisa continues to introduce innovative
mortgage products to the market, facilitating greater consumer
access to financing. Blueprint Mortgage, launched along with a
leading financial institution during the 2Q07, offers consumers a
favorable rate with a long-term repayment option while reducing
working capital requirements for Gafisa." continued Mr. Amaral.
"Our commitment to expanding our presence in the mid-low income
segment of the market through Fit Residencial is well underway with
new development projects in Salvador (Bahia), Bel�m (Par�), Goiania
(Goias) and Porto Alegre (Rio Grande do Sul). Fit Residencial�s
land bank has now reached R$233 million. Additionally, Bairro Novo,
our joint venture with Odebrecht aimed at developing large scale
Affordable Entry Level communities, now has a management team in
place and plans are underway to launch our first large scale
development in the first semester of 2008. "Competition,
particularly in Sao Paulo, is increasing as additional well
capitalized players enter the market. Although we haven't seen
scarcity of available land, prices have been increasing and
permitting is becoming more difficult. Over the years Gafisa has
developed proprietary technology for permitting projects, which
together with our well diversified land bank, has enabled the
company to continue approving and launching developments on
schedule. "The Company's strong performance during the first half
of 2007 reflects positively on our ability to execute on our long
term strategy. Additionally, our shareholders have benefited from
the almost four-fold increase in share liquidity since our
follow-on offering on the BOVESPA and listing on the New York Stock
Exchange (NYSE) in March of this year. And, the increase in our
public float to 86% during the second quarter further reinforces
the Company's position as a truly public company with a strong
commitment to the highest standards of corporate governance. We
believe that this provides Gafisa with an important competitive
edge in today's marketplace," concluded Mr. Amaral. Outlook Gafisa
reiterates its outlook for the full year of 2007. The company
expects an increase of 60% to 65% in consolidated project launches
over 2006. Approximately 25% (R$250 million) should come from
Gafisa's core business, 20% (R$200 million) from Fit Residencial,
and another 20% (R$ 200 million) from AlphaVille. Gafisa expects to
deliver a consolidated 2007 EBITDA margin of 15% to 16%. Gafisa's
core business continues to increase its EBITDA margin, but the
consolidated figure will be impacted by costs associated with
ramping up Fit Residencial, Bairro Novo, and AlphaVille. Conference
Call The management of Gafisa will host a conference call in
English on Tuesday, August 7, 2007, at 11:00 a.m. EDT/12:00 p.m.
Brasilia Time. To access the call, dial +1 (973) 935-8893 and enter
the code # 9046538. A replay of the conference call will be
available until August 14, 2007. To access the replay, dial +1
(973) 341-3080 and enter the code # 9046538. A live webcast of the
conference call will be available on the internet at
http://www.gafisa.com.br/ir. About Gafisa We are one of Brazil's
leading diversified national homebuilders. Over the last 50 years,
we have been recognized as one of the foremost professionally-
managed homebuilders, having completed and sold more than 900
developments and constructed over 37 million square meters of
housing, which we believe is more than any other residential
development company in Brazil. We believe "Gafisa" is one of the
best-known brands in the real estate development market, enjoying a
reputation among potential homebuyers, brokers, lenders,
landowners, and competitors for quality, consistency, and
professionalism. This release contains forward-looking statements
relating to the prospects of the business, estimates for operating
and financial results, and those related to growth prospects of
Gafisa. These are merely projections and, as such, are based
exclusively on the expectations of management concerning the future
of the business and its continued access to capital to fund the
Company's business plan. Such forward-looking statements depend,
substantially, on changes in market conditions, government
regulations, competitive pressures, the performance of the
Brazilian economy and the industry, among other factors; therefore,
they are subject to change without prior notice. Consolidated
Statements of Income R$ 000 2Q07 2Q06 1Q07 2Q07 x 2Q07 x 2Q06 1Q07
Gross Operating Revenue 280,121 158,701 246,053 77% 14% Real State
development and sales 264,319 139,602 242,727 89% 9% Construction
and services rendered 15,802 19,099 3,326 -17% 375% Deductions
-13,573 -6,550 -21,737 107% -38% Net Operating Revenue 266,548
152,151 224,316 75% 19% Operating Costs -186,467 -113,027 -156,356
65% 19% Gross profit 80,081 39,124 67,960 105% 18% Operating
Expenses -41,665 -18,949 -31,749 120% 31% Selling expenses -17,330
-9,422 -12,006 84% 44% General and administrative expenses -27,146
-10,021 -19,134 171% 42% Equity Income -37 1,185 -259 -103% -86%
Other Operating Revenues 2,848 -691 -350 -512% -914% EBITDA 38,416
20,175 36,211 90% 6% Depreciation and Amortization -5,517 -1,022
-5,061 440% 9% Extraordinary expenses 0 -1,840 -30,174 na na EBIT
32,899 17,313 976 90% 3269% Financial Income 15,395 16,621 8,080
-7% 91% Financial Expenses -18,340 -12,631 -16,765 45% 9% Income
before taxes on income 29,954 21,303 -7,710 41% -489% Deffered
Taxes 5,703 -881 -1,551 -747% -468% Income tax and social
contribution -1,774 -1,140 -1,591 56% 12% Income after taxes on
income 33,883 19,282 -10,852 76% -412% Minority Shareholders -1,743
0 -1,701 na 2% Net income 32,140 19,282 -12,553 67% -356% Adjusted
net income per thousand shares outstanding 0.25 0.21 0.18 0.04 0.07
Consolidated Statements of Income R$ 000 1H07 1H06 1H07 x 1H06
Gross Operating Revenue 526,174 296,193 78% Real State development
and sales 507,046 262,584 93% Construction and services rendered
19,128 33,609 -43% Deductions -35,310 -12,216 189% Net Operating
Revenue 490,864 283,977 73% Operating Costs -342,823 -209,927 63%
Gross profit 148,041 74,050 100% Operating Expenses -73,414 -33,453
119% Selling expenses -29,336 -18,551 58% General and
administrative expenses -46,280 -16,622 178% Equity Income -296
2,354 -113% Other Operating Revenues 2,498 -634 -494% EBITDA 74,627
40,597 84% Depreciation and Amortization -10,578 -1,734 510%
Extraordinary expenses -30,174 -29,176 3% EBIT 33,875 9,687 250%
Financial Income 23,475 27,323 -14% Financial Expenses -35,105
-30,246 16% Income before taxes on income 22,245 6,764 229%
Deffered Taxes 4,152 -289 -1537% Income tax and social contribution
-3,365 -1,970 71% Income after taxes on income 23,032 4,505 411%
Minority Shareholders -3,444 0 na Net income 19,588 4,505 335%
Adjusted net income per thousand shares outstanding 0.39 0.34 0.05
Consolidated Balance Sheet R$ 000 2Q07 2Q06 1Q07 2Q07 x 2Q07 x 2Q06
1Q07 ASSETS Current assets Cash and banks 21,328 13,090 34,049 63%
-37% Financial investments 474,688 409,689 587,203 16% -19%
Receivables from clients 435,887 311,648 392,634 40% 11% Properties
for sale 594,013 326,174 559,459 82% 6% Other accounts receivable
119,417 103,680 117,856 15% 1% Deferred selling expenses 25,259
48,054 18,972 -47% 33% Prepaid expenses 13,238 43,367 7,691 -69%
72% 1,683,830 1,255,702 1,717,864 34% -2% Long-term assets
Receivables from clients 316,057 72,763 236,576 334% 34% Deferred
taxes 73,913 41,446 59,921 78% 23% Other 38,704 29,133 44,287 33%
-13% 428,674 143,342 340,784 199% 26% Permanent assets Investments
167,709 554 171,602 30172% -2% Properties and equipment 15,169
7,014 11,507 116% 32% 182,878 7,568 183,109 2316% 0% Total assets
2,295,382 1,406,612 2,241,757 63% 2% LIABILITIES AND SHAREHOLDERS'
EQUITY Current liabilities Loans and financings 51,710 56,213
53,716 -8% -4% Debentures 10,481 28,691 2,663 -63% 294% Real estate
development obligations 5,710 27,757 5,088 -79% 12% Obligations for
purchase of land 108,913 61,282 127,846 78% -15% Materials and
service suppliers 75,638 25,209 62,144 200% 22% Taxes and
contributions 60,349 42,912 49,045 41% 23% Taxes, payroll charges
and profit sharing 21,141 6,830 19,587 210% 8% Advances from
clients - real state and services 50,181 45,828 62,833 9% -20%
Dividends 2,823 114 11,163 2376% -75% Other 15,359 14,499 22,558 6%
-32% 402,305 309,335 416,643 30% -3% Long-term liabilities Loans
and financings 68,566 37,950 59,469 81% 15% Debentures 240,000
152,880 240,000 57% 0% Obligations for purchase of land 13,501
14711 14,055 -8% -4% Deferred taxes 52,260 29,387 43,848 78% 19%
Unearned income from property sales 1,053 4,032 95 -74% 1008% Other
51,365 36,457 51,535 41% 0% 426,745 275,417 409,002 55% 4% Deferred
income Deferred income on acquisition of subsidiary 345 14,227
1,281 -98% -73% Minority Shareholders 3,616 0 -9,489 na -138%
Shareholders' equity Capital 1,220,490 585,930 1,214,580 108% 0%
Treasury shares -18,050 -47,026 -18,050 -62% 0% Capital reserves
167,276 167,276 167,276 0% 0% Revenue reserves 92,655 101,453
60,516 -9% 53% 1,462,371 807,633 1,424,322 81% 3% Total liabilities
and shareholders' equity 2,295,382 1,406,612 2,241,757 63% 2%
DATASOURCE: Gafisa S.A. CONTACT: Investor Relations: Carlos Gros,
+55 11 3025-9305, ; or Media Relations, US - Europe, Eileen Boyce,
Reputation Partners, +011 312 222 9126, Fax: +011 312 222 9755, ;
or Media Relations, Brazil, Joana Santos, Maquina da Noticia, +55
11 3147-7900, Fax: +55 11 3147-7900, Web site:
http://www.gafisa.com.br/ir
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