- Full Year Adjusted Net income Rose 89% on 77% Gain in Net
Revenues SAO PAULO, Brazil, March 4 /PRNewswire-FirstCall/ --
Gafisa S.A. (Bovespa: GFSA3; NYSE: GFA), Brazil's leading
diversified national homebuilder, today reported financial results
for full year and fourth quarter ended December 31, 2007. The
financial statements were 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 fourth quarter results filed with the Brazilian
Comissao de Valores Mobiliarios ("CVM"), please visit Gafisa's
website http://www.gafisa.com.br/ir Full Year Results Net operating
revenue for the full year 2007, recognized by the Percentage of
Completion ("PoC") method, rose 77% to R$1,172 million from R$664
million in 2006. Pre-sales for the year remained strong, growing by
63% to R$1.6 billion from R$995 million. Project launches in 2007
totaled R$2.2 billion, an increase of 122% from R$1.0 billion in
2006. Approximately 46% of the launches for the year took place in
the fourth quarter. Fit Residencial and Bairro Novo also launched
their first developments during 2007 and accounted for 13% of the
total launches. The Company's land bank totaled R$10.2 billion at
the end of the year and consists of 136 different sites totaling
approximately 19.2 million meters. Reflecting the Company's
strategy of servicing all segments and geographies of the homebuyer
market, 42% of the consolidated land bank was outside the states of
Rio de Janeiro and Sao Paulo. EBITDA, adjusted for public offering
expenses, increased 87% to R$183.8 million in 2007 and adjusted
EBITDA margin improved to 15.7%. Net Income was R$113.6 million, an
increase of 146.7% while Net Income adjusted for public offering
expenses totaled R$143.8 million, up 89% from R$76.0 million in
2006. Gafisa adopts one of the most conservative accounting
standards in the industry. Starting in the fourth quarter, the
Company began to capitalize the interest cost from corporate debt
and recognize it on a percentage of completion basis. As a result,
Gafisa now accounts for interest expense on the COGS line of its
income statement which impacts gross margin. Selling, general and
administrative (SG&A) expenses were R$192.4 in 2007 versus
R$103.8 in 2006. G&A represented R$113.1 million in 2007 of the
total amount, up from R$52.1 million in 2006. This increase in
G&A primarily reflects the Company's consolidation of
AlphaVille and the ramp-up of operations at Fit and Bairro Novo.
Fourth Quarter Results Net operating revenue for the quarter,
recognized by the PoC method, was R$372.8 million, an increase of
56% from R$238.3 million during the fourth quarter of 2006. Backlog
of Results to be recognized under the PoC method at the end of the
fourth quarter totaled R$583 million, up 96% from R$298 million in
the previous year. Backlog margin to be recognized reached 38.2%.
Project launches for the fourth quarter were up 176% from R$374.8
million in the same period last year to R$1.0 billion. Fourth
quarter EBITDA rose 101% to 61.3 million from R$30.5 in the
previous year's quarter. EBITDA margin improved to 16.5%. Net
Income was R$63.1 million in 4Q07, versus R$14.8 million in the
fourth quarter of 2006. Commenting on results, Wilson Amaral, chief
executive officer of Gafisa S.A., said, "Through our disciplined
and professional approach, Gafisa delivered strong results in 2007,
expanded its reach both geographically and across socioeconomic
segments, as well as built a strategic platform to support future
growth initiatives. Gafisa, AlphaVille, Fit Residencial and Bairro
Novo are all substantially established with dedicated teams
specializing in meeting the needs of the specific socioeconomic
segments they serve within 40 cities across Brazil. " "As one of
the most geographically diversified homebuilder, offering products
for every socioeconomic segment, we are well-positioned to remain
an innovator and leader in the marketplace. Our land bank has
reached R$10.2 billion encompassing 136 different sites. Pre-sales,
a strong indicator of Gafisa's ability to deliver the appropriate
product to consumers, grew 63%, reaching R$1.6 billion in 2007,
while launches increased to R$2.2 billion, representing growth of
122% compared to the prior year. Based on our current market
outlook, we now expect to execute R$3 billion in launches for 2008,
a 34% increase over 2007. Our EBITDA margin for the year reached
15.7%, which we now anticipate will grow to between 16% and 17% by
the end of 2008." Commenting on the outlook for growth in the
industry, Amaral said, "Looking ahead, the outlook for continued
growth in the Brazilian residential housing industry remains strong
for years to come. With a current housing deficit of almost 8
million homes and the need for around two million new units per
year, the demand for housing is as robust as ever. And, while over
R$25.3(1) billion in housing credit was granted during 2007, the
demand for housing continues to far exceed the growth in available
credit. We made important strides throughout the year in partnering
with the public and private banking industry to innovate and
accelerate access to credit for all socioeconomic groups while also
creating a model that improved our own working capital structure.
Going forward we will continue to make it a priority to work hand
in hand with the banking sector to increase access to mortgages and
address the vast demand for financing particularly in the lower
income sectors of the market. "Responding to the demand for housing
in the lower income segments, I was pleased that we could announce
the launch of our first Bairro Novo development in December, months
ahead of its planned schedule. Additionally, Fit Residencial has
launched ten developments since its establishment at the end of
March, and we are seeing strong consumer acceptance. Fit has
already developed the five prototypes for future projects and has
substantially completed building out its corporate infrastructure.
"Finally, the strong demand for our shares this past year has
resulted in Gafisa's inclusion on the Bovespa Index (Ibovespa) and
the IBrX-50, as well as the MSCI Emerging Markets Index. We also
strengthened our commitment to transparency and excellence in
corporate governance, and we have a majority of independent
directors on the board. Gafisa is well-positioned to address the
rapidly expanding Brazilian housing market. The initiatives we
established in 2007 will enable us to deliver strong business
results long into the future while increasing returns to our
shareholders." Outlook For 2008, Gafisa reiterates its launch
guidance of R$3 billion by the end of 2008 for its share of
consolidated launches. Approximately R$2 billion is expected to
come from Gafisa, R$300 million from AlphaVille and R$700 million
from Bairro Novo and Fit Residencial. Based on the current market
outlook, the Company expects the EBITDA margin to be between 16%
and 17% for the full year 2008. Conference Call The management of
Gafisa will host a conference call in English on Wednesday, March
5, 2008, at 10:00 a.m. US EST/12:00 p.m. Brasilia time. To access
the call, dial +1 (973) 935-8893 and enter the code # 34871359. A
replay of the conference call will be available until March 12,
2008. To access the replay, dial above mentioned numbers. 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 almost 40 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. (1) Source:
ABECIP, Central Bank of Brazil, CEF and FGV. Investor Relations:
Duilio Calciolari CFO and IR Officer Phone: +55 11 3025-9297 Email:
Website: http://www.gafisa.com.br/ir Media Relations (US - Europe)
Eileen Boyce Reputation Partners Phone: +011 312 222 9126 Fax: +011
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 4Q07 x 4Q07 x R$ 000 4Q07 4Q06
3Q07 4Q06 3Q07 Gross Operating Revenue Real State development and
sales 366,678 250,112 309,373 46.6% 18.5% Construction and services
rendered 14,766 2,444 11,414 504.1% 29.4% Deductions (8,689)
(14,269) (12,232) -39.1% -29.0% Net Operating Revenue 372,755
238,287 308,555 56.4% 20.8% Operating Costs (238,269) (170,931)
(215,822) 39.4% 10.4% Gross profit 134,486 67,356 92,733 99.7%
45.0% Operating Expenses Selling expenses (31,101) (16,085)
(18,941) 93.4% 64.2% General and administrative expenses (38,753)
(22,533) (28,173) 72.0% 37.6% Equity Income -- -- -- -- -- Other
Operating Revenues (3,304) 1,783 2,230 -285.4% -248.2% EBITDA
61,328 30,521 47,849 100.9% 28.2% Depreciation and Amortization
(2,259) (1,651) (1,986) 36.9% 13.7% EBIT 59,069 28,870 45,863
104.6% 28.8% Financial Income 20,186 12,267 11,543 64.6% 74.9%
Financial Expenses 9,016 (23,036) (14,959) -139.1% -160.3% Income
before taxes on income 88,271 18,100 42,447 387.7% 108.0% Deffered
Taxes (16,137) (1,703) (1,987) 847.7% 712.1% Income tax and social
contribution (6,865) (1,600) (6,744) 329.0% 1.8% Income after taxes
on income 65,269 14,797 33,716 341.1% 93.6% Minority Shareholders
(2,189) -- (2,777) -- -21.8% Net income 63,080 14,797 30,939 326.3%
103.9% Adjusted net income per thousand shares outstanding 0.49
0.14 0.24 240.8% 103.3% R$ 000 2007 2006 2007 x 2006 Gross
Operating Revenue Real State development and sales 1,182,571
675,999 74.9% Construction and services rendered 35,121 21,480
63.5% Deductions (45,518) (33,632) 35.3% Net Operating Revenue
1,172,174 663,847 76.6% Operating Costs (796,914) (465,795) 71.1%
Gross profit 375,260 198,052 89.5% Operating Expenses Selling
expenses (79,378) (51,670) 53.6% General and administrative
expenses (113,054) (52,121) 116.9% Equity Income -- -- -- Other
Operating Revenues 973 3,958 -75.4% EBITDA 183,801 98,219 87.1%
Depreciation and Amortization (14,823) (4,302) 244.6% Extraordinary
expenses (30,174) (29,894) 0.9% EBIT 138,804 64,023 116.8%
Financial Income 49,446 52,989 -6.7% Financial Expenses (35,291)
(64,932) -45.6% Income before taxes on income 152,959 52,080 193.7%
Deffered Taxes (18,729) (1,393) 1244.5% Income tax and social
contribution (12,217) (4,631) 163.8% Income after taxes on income
122,013 46,056 164.9% Minority Shareholders (8,410) -- -- Net
income 113,603 46,056 146.7% Adjusted net income per thousand
shares outstanding 1.15 0.76 51.1% 4Q07 x 4Q07 x R$ 000 4Q07 4Q06
3Q07 4Q06 3Q07 ASSETS Current assets Cash and banks 79,590 45,231
30,454 76.0% 161.3% Financial investments 434,857 220,928 341,638
96.8% 27.3% Receivables from clients 524,818 365,741 485,989 43.5%
8.0% Properties for sale 774,908 377,576 666,150 105.2% 16.3% Other
accounts receivable 101,920 111,600 119,062 -8.7% -14.4% Deferred
selling expenses 37,023 17,032 29,136 117.4% 27.1% Prepaid expenses
8,824 5,446 7,921 62.0% 11.4% 1,961,940 1,143,554 1,680,350 71.6%
16.8% Long-term assets Receivables from clients 497,933 194,097
384,934 156.5% 29.4% Properties for sale 149,403 63,413 42,965
135.6% 247.7% Deferred taxes 61,322 53,134 77,316 15.4% -20.7%
Other 42,797 29,329 42,738 45.9% 0.1% 751,455 339,973 574,953
121.0% 37.1% Permanent assets Investments 209,689 2,544 167,574
8142.5% 25.1% Properties and equipment 27,409 8,146 21,396 236.5%
28.1% 237,098 10,690 188,970 2117.9% 25.5% Total assets 2,950,493
1,494,217 2,417,273 97.5% 22.1% LIABILITIES AND SHAREHOLDERS'
EQUITY Current liabilities Loans and financings 59,526 17,305
31,731 244.0% 87.6% Debentures 9,190 11,038 2,043 -16.7% 349.8%
Real estate development obligations -- 6,733 4,168 -- --
Obligations for purchase of land 163,034 120,239 166,286 35.6%
-2.0% Materials and service suppliers 86,709 26,683 78,655 225.0%
10.2% Taxes and contributions 70,293 41,574 67,860 69.1% 3.6%
Taxes, payroll charges and profit sharing 38,512 18,089 29,929
112.9% 28.7% Advances from clients - real state and services 47,662
76,146 29,504 -37.4% 61.5% Dividends 26,981 11,025 -- 144.7% --
Other 75,489 11,912 17,036 533.7% 343.1% 577,396 340,744 427,212
69.5% 35.2% Long-term liabilities Loans and financings 380,640
27,100 102,773 1304.6% 270.4% Debentures 240,000 240,000 240,000
Obligations for purchase of land 73,207 6,184 28,600 1083.8% 156.0%
Deferred taxes 63,268 32,259 62,407 96.1% 1.4% Unearned income from
property sales -- 2,439 637 -- -30.1% Other 35,733 29,107 48,129
22.9% -26.6% 792,888 337,089 482,546 135.2% 64.3% Deferred income
Deferred income on acquisition of subsidiary 32,223 2,297 --
1,308.8% Minority Shareholders 17,223 -- 14,154 -- 21.7%
Shareholders' equity Capital 1,221,846 591,742 1,220,542 106.5%
0.1% Treasury shares (18,050) (47,026) (18,050) -61.6% Capital
reserves 167,276 167,276 167,276 Revenue reserves 159,691 102,095
123,593 56.4% 29.2% 1,530,763 814,087 1,493,361 88.0% 2.5% Total
liabilities and shareholders' equity 2,950,493 1,494,217 2,417,273
97.5% 22.1% DATASOURCE: Gafisa S.A. CONTACT: Investors, Duilio
Calciolari, CFO and IR Officer, +011-5511-3025-9297, ; or media (US
- Europe), Eileen Boyce, Reputation Partners, +011-312-222-9126,
fax, +011-312-222-9755, for Gafisa; or media (Brazil), Joana
Santos, Maquina da Noticia, +5511-3147-7900, or fax,
+011-5511-3147-7900, , for Gafisa Web site:
http://www.gafisa.com.br/
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