- 3Q07 Launches Increase 119% to R$426 million and Pre-sales
Increase 56% to R$367 million SAO PAULO, Brazil, Nov. 7
/PRNewswire-FirstCall/ -- Gafisa S.A. (Bovespa: GFSA3; NYSE: GFA),
one of Brazil's leading diversified national homebuilders, today
reported its financial results for the third quarter (3Q07) and
nine months ended September 30, 2007 (9M07). The following
financial and operating information, unless otherwise indicated,
was prepared and presented in accordance with Brazilian GAAP (BR
GAAP) and in Brazilian Reais (R$). 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 third quarter results filed with the Brazilian Comissao de
Valores Mobiliarios ("CVM"), please visit Gafisa's website
http://www.gafisa.com.br/ir. Net operating revenue for the third
quarter, recognized by the Percentage of Completion ("PoC") method,
increased 91% to R$309 million from R$162 million in the prior year
period. Backlog of Results to be recognized under the PoC method at
the end of the third quarter reached R$465 million (Backlog margin
of 38.5%), an increase of 60% from the previous year's quarter.
Project launches during the quarter totaled R$426 million, an
increase of 119% over the same period in 2006. Pre-sales reached
R$366.9 million, an increase of 56% over the 3Q06 pre-sales of
R$235.3 million. The Company's land bank is currently R$8.9 billion
of future sales, close to 3 times our 2008 potential launch value,
and 44% higher than at the end of 2Q07. The increase is largely due
to the addition of the Bairro Novo land bank of R$468 million and
R$1.1 billion, corresponding to the 70% share of the land bank
acquired through the Cipesa transaction. This acquisition gives
Gafisa a strong foothold in the Northeast region of the country.
Selling, general and administrative (SG&A) expenses were R$47.1
million in 3Q07 versus R$27.8 million in the prior year. The
increase in SG&A is primarily due to the Company's rapid
expansion and management expenses associated with the new divisions
targeting Brazil's lower income segments, Fit and Bairro Novo.
Additionally, 3Q07 amounts include the consolidation of Alphaville
and the implementation of quarterly accruals for bonuses during
2007. EBITDA for the third quarter increased 61% to R$47.8 million
from R$29.8 million in the prior year period. Net Income for the
third quarter increased 12% to R$30.9 million, or R$0.24 per share
from R$27.7 million in the third quarter of 2006. Net Income taxes
for the quarter were R$8.7 million versus R$0.7 million in 3Q06.
The lower tax figures in 2006 were mainly due to utilized tax
credits. Nine month EBITDA reached R$122 million (15.3% EBITDA
margin) in 2007 versus R$69 million (16.3% EBITDA margin) in 2006
and adjusted net income was R$81 million (10.1% adjusted net
margin) in 9M07 compared to R$60.4 million (14.2% adjusted net
margin) in 9M06. Commenting on results, Wilson Amaral, chief
executive officer of Gafisa S.A., said, "We continue to see robust
growth in the Brazilian housing industry and strong prospects for
accelerated growth in the future driven by increased access to
financing, especially in the lower income population segments.
Through Fit Residencial and Bairro Novo, we are now creating the
conditions to lead the housing industry in serving the lower income
segments of the population which we believe will fuel long term
growth in the industry. And, while implementing these programs, we
have continued to drive profitable growth across the organization."
Amaral continued, "I am very pleased with our third quarter and
year to date operating and financial results. We are on track to
meet our profitability targets and expect to exceed our earlier
outlook for launches by year end 2007. We also expect significant
growth in launches during 2008. In fact, we now expect the first
launch of a Bairro Novo development targeting the lower income
segment with large scale housing developments, to take place by the
end of 4Q07 rather than in the first half of 2008. Bairro Novo's
high quality land bank with certain existing permits allowed us to
accelerate the launch of this project. "Pre-sales, a strong
indicator of Gafisa's ability to meet market demand, remain strong
with year to date growth of 56%, reaching R$964 million, while
EBITDA increased 77% during the same period. We have also continued
to launch new projects in diverse geographies at an unprecedented
rate. During the first nine months of the year Gafisa's new
developments reached nearly R$1.2 billion." Commenting on the
Company's strategy, Amaral said, "To date, we have created the
infrastructure and teams to serve all segments of the market. Our
long-established products, complemented by the acquisition of
Alphaville earlier in the year, solidify our leadership position in
serving the high and mid-high end of the population with a
differentiated product offering. Fit Residencial and Bairro Novo
will serve the lower income markets with increased access to
financing through programs established by the Caixa Economica
Federal (CEF) and commercial banks. We have already launched 3
projects in diverse geographies under the Fit brand and are
announcing today the expected launch of our first Bairro Novo
project by the end of this year. "Our strategy not only addresses
segment diversification, but also geographic diversification.
Gafisa's R$8.9 billion land bank is distributed over 118 separate
land parcels, 61% of which is located outside of Sao Paulo and Rio.
The Gafisa brand, reputation and diverse products have helped
attract excellent partners that complement Gafisa with local market
knowledge and access to high quality land. Our recent acquisition
of Cipesa, a leader in the Northeastern state of Alagoas was the
result of a successful partnership. "Our investment in human
capital will assure our on-going ability to aggressively execute
and deliver the most appropriate products on the market. We have
dedicated teams developing, executing and selling the products that
serve unique market segments. And, through our trainee program, we
are guaranteeing that we will have a steady flow of expertise into
the future. Our trainee program is among the top three largest and
most competitive across all industries in Brazil. "Finally, the
underlying macroeconomic conditions are very favorable and we
expect conditions to continue to improve for long term housing
expansion. Overall savings deposits, an important source of
mortgage financing, increased 9.6% in the first nine months of 2007
as compared to the same period in 2006. This translated into an 81%
increase in the amount of mortgages provided utilizing this source
of funding over the same period. Commercial banks are offering
longer repayment periods and lower interest rates. Additionally, we
are working closely with banks to streamline access to financing
for our clients and intend to continue to play an important role in
this process," concluded Amaral. Outlook At the end of 3Q07, Gafisa
reached 72% of the guidance provided for full year 2007 launches.
Therefore, we are increasing 2007 full year launch guidance to
R$1.9 billion (from R$1.65 billion) given our accelerated schedule
for the fourth quarter. The Company now expects an increase of 90%
in consolidated project launches over 2006. Approximately R$1.5
billion of the year's launches are expected to come from Gafisa's
core business, R$200 million from Fit Residencial, R$200 million
from AlphaVille. For 2008, Gafisa expects to launch R$3 billion for
the consolidated company. The Company continues to expect a full
year 2007 EBITDA margin of between 15% and 16%. Conference Call The
management of Gafisa will host a conference call in English on
November 8, 2007, at 9:00 a.m. EST/12:00 p.m. Brasilia. To access
the call, dial +1 (480) 293-1744 and enter the code # 3797967. A
replay of the conference call will be available until November 08,
2007. To access the replay, dial +1 (303) 590-3030 and enter the
code # 3797967. 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 Investor Relations: Bruno Teixeira Phone: +55 11 3025-9297
Email: Website: http://www.gafisa.com.br/ir Media Relations (US -
Europe) Eileen Boyce Reputation Partners Phone: +1 312 222 9126
Fax: +1 312 222 9755 E-mail: Media Relations (Brazil) Joana Santos
Maquina da Noticia Phone: +55 11 3147-7900 Fax: +55 11 3147-7900
Email: Consolidated Statements of Income R$ 000 3Q07 3Q06 2Q07 3Q07
x 3Q06 3Q07 x 2Q07 Gross Operating Revenue 320,787 168,690 280,121
90.2% 14.5% Real State development and sales 309,373 163,304
264,319 89.4% 17.0% Construction and services rendered 11,414 5,386
15,802 111.9% -27.8% Deductions (12,232) (7,148) (13,573) 71.1%
-9.9% Net Operating Revenue 308,555 161,542 266,548 91.0% 15.8%
Operating Costs (215,822) (104,896) (186,467) 105.7% 15.7% Gross
profit 92,733 56,646 80,081 63.7% 15.8% Operating Expenses (44,884)
(26,839) (41,665) 67.2% 7.7% Selling expenses (18,941) (15,874)
(17,330) 19.3% 9.3% General and administrative expenses (28,173)
(11,900) (22,207) 136.7% 26.9% Equity Income 33 962 (37) -96.6%
-189.2% Other Operating Revenues 2,197 (27) (2,091) na -205.1%
EBITDA 47,849 29,807 38,416 60.5% 24.6% Depreciation and
Amortization (1,986) (918) (5,517) 116.3% -64.0% Extraordinary
expenses -- -- 0 na na EBIT 45,863 28,889 32,899 58.8% 39.4%
Financial Income 11,543 13,399 15,395 -13.9% -25.0% Financial
Expenses (14,959) (13,909) (18,340) 7.5% -18.4% Income before taxes
on income 42,447 28,379 29,954 49.6% 41.7% Deffered Taxes (1,987)
(1,061) 5,703 87.3% -134.8% Income tax and social contribution
(6,744) 349 (1,774) -2032.4% 280.2% Income after taxes on income
33,716 27,667 33,883 21.9% -0.5% Minority Shareholders (2,777) --
(1,743) na 59.3% Net income 30,939 27,667 32,140 11.8% -3.7%
Adjusted net income per thousand shares outstanding 0.24 0.27 0.25
na na Consolidated Statements of Income R$ 000 9M07 9M06 9M07 x
9M06 Gross Operating Revenue 836,248 444,923 88.0% Real State
development and sales 815,893 425,887 91.6% Construction and
services rendered 20,355 19,036 6.9% Deductions (36,829) (19,363)
90.2% Net Operating Revenue 799,419 425,560 87.9% Operating Costs
(558,645) (294,865) 89.5% Gross profit 240,774 130,695 84.2%
Operating Expenses (118,301) (61,454) 92.5% Selling expenses
(48,277) (35,586) 35.7% General and administrative expenses
(74,453) (28,522) 159.7% Equity Income (263) 3,315 -107.9% Other
Operating Revenues 4,692 (661) na EBITDA 122,473 69,241 76.9%
Depreciation and Amortization (12,564) (2,651) 373.9% Extraordinary
expenses (30,174) (29,176) na EBIT 79,735 37,414 113.1% Financial
Income 35,260 40,722 -13.4% Financial Expenses (50,307) (44,154)
13.9% Income before taxes on income 64,688 33,982 90.4% Deffered
Taxes (5,352) (3,031) 76.6% Income tax and social contribution
(2,592) 309 -938.8% Income after taxes on income 56,744 31,260
81.5% Minority Shareholders (6,221) -- na Net income 50,523 31,260
61.6% Adjusted net income per thousand shares outstanding 0.65 0.61
na Consolidated Balance Sheet R$ 000 3Q07 3Q06 2Q07 3Q07 x 3Q06
3Q07 x 2Q07 ASSETS Current assets Cash and banks 30,454 11,766
21,328 158.8% 42.8% Financial investments 341,638 318,440 474,688
7.3% -28.0% Receivables from clients 485,989 356,370 435,887 36.4%
11.5% Properties for sale 709,115 383,136 594,013 85.1% 19.4% Other
accounts receivable 119,062 103,560 119,417 15.0% -0.3% Deferred
selling expenses 29,136 15,505 25,259 87.9% 15.3% Prepaid expenses
7,921 2,051 13,238 286.2% -40.2% 1,723,315 1,190,828 1,683,830
44.7% 2.3% Long-term assets Receivables from clients 384,934 72,852
316,057 428.4% 21.8% Deferred taxes 77,316 30,614 73,913 152.6%
4.6% Other 42,738 42,802 38,704 -0.1% 10.4% 504,988 146,268 428,674
245.2% 17.8% Permanent assets Investments 167,574 2,838 167,709
5804.7% -0.1% Properties and equipment 21,396 8,177 15,169 161.6%
41.1% 188,970 11,015 182,878 1615.5% 3.3% Total assets 2,417,273
1,348,111 2,295,382 79.3% 5.3% LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities Loans and financings 31,731 41,828 51,710
-24.1% -38.6% Debentures 2,043 183,126 10,481 -98.9% -80.5% Real
estate development obligations 4,168 14,529 5,710 -71.3% -27.0%
Obligations for purchase of land 166,286 69,407 108,913 139.6%
52.7% Materials and service suppliers 78,655 36,717 75,638 114.2%
4.0% Taxes and contributions 67,860 45,170 60,349 50.2% 12.4%
Taxes, payroll charges and profit sharing 29,929 7,944 21,141
276.8% 41.6% Advances from clients - real state and services 29,504
34,980 50,181 -15.7% -41.2% Dividends -- -- 2,823 -- -100.0% Other
17,036 16,203 15,359 5.1% 10.9% 427,212 449,904 402,305 -5.0% 6.2%
Long-term liabilities Loans and financings 102,773 26,527 68,566
287.4% 49.9% Debentures 240,000 -- 240,000 -- 0.0% Obligations for
purchase of land 28,600 8,373 13,501 241.6% 111.8% Deferred taxes
62,407 20,979 52,260 197.5% 19.4% Unearned income from property
sales 637 3,320 1,053 -80.8% -39.5% Other 48,129 29,206 51,365
64.8% -6.3% 482,546 88,405 426,745 445.8% 13.1% Deferred income
Deferred income on acquisition of subsidiary -- -- 345 -- --
Minority Shareholders 14,154 -- 3,616 -- 291.4% Shareholders'
equity Capital 1,220,542 591,315 1,220,490 106.4% 0.0% Treasury
shares (18,050) (47,026) (18,050) -61.6% 0.0% Capital reserves
167,276 167,276 167,276 0.0% 0.0% Revenue reserves 123,593 51,211
92,655 141.3% 33.4% 1,493,361 809,802 1,462,371 84.4% 2.1% Total
liabilities and shareholders' equity 2,417,273 1,348,111 2,295,382
79.3% 5.3% DATASOURCE: Gafisa S.A. CONTACT: Investors, Bruno
Teixeira, +011-5511-3025-9297, , or Media Relations (US - Europe),
Eileen Boyce, Reputation Partners, +1-312-222-9126, fax,
+1-312-222-9755, ; or Media Relations (Brazil), Joana Santos,
Maquina da Noticia, +011-5511-3147- 7900, fax, +011-5511-3147-7900,
Web site: http://www.gafisa.com.br/
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