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FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of August, 2007
Commission File Number: 001-33356
Gafisa S.A.
(Translation of registrant's name into English)
Av. Nacoes Unidas No. 4777, 9th floor
Sao Paulo, SP, 05477-000
Federative Republic of Brazil
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F:
Form 20-F |X| Form 40-F |_|
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(1):
Yes |_| No |X|
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(7):
Yes |_| No |X|
Indicate by check mark whether by furnishing the information contained in this
Form, the Registrant is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:
Yes |_| No |X|
If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): N/A
---
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Gafisa S.A.
TABLE OF CONTENTS
Item
----------
1 Communication dated August 06, 2007, regarding the earnings release
of the 2Q07.
Page 2 of 21
Gafisa Reports Strong Second Quarter Results
Net operating revenue increases 75% to R$267 million
Company posts 72% growth in launches and 50% growth in pre-sales
Sao Paulo, August 6, 2007 - Gafisa S.A. (Bovespa: GFSA3; NYSE: GFA), Brazil's
leading diversified national homebuilder, today reported its financial results
for the second quarter ended June 30, 2007 (2Q07). The following financial and
operating information, unless otherwise indicated, was prepared and presented in
accordance with Brazilian GAAP (BR GAAP) and in Brazilian Reais (R$).
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.
Commenting on second quarter results, Wilson Amaral, chief executive officer of
Gafisa S.A. said, "I am pleased with the operating and financial results we
delivered in the first half of 2007. Not only did we launch new developments
valued close to R$800 million, on a consolidated basis, but importantly, we also
continued to show robust pre-sales results during the quarter, indicating
increasing consumer demand for our products. 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." Additional management comments about the
Company's results can be found on page 4 of this release.
Operating & Financial Highlights for the 2Q07
IR Contact o Project Launches for 2Q07 totaled R$470.7
Email: ir@gafisa.com.br million, a 71.6% increase over 2Q06. Pre-sales
Tel: +55 (11) 3025-9305 for 2Q07 totaled R$342.8 million, a 49.8%
IR Website: increase over 2Q06.
www.gafisa.com.br/ir
2Q07 Earnings Results o For the three months ended June 30, 2007,
Conference Call consolidated net operating revenues, recognized
Date: by the Percentage of Completion ("PoC") method,
Tuesday, August 7, 2007 rose 75.2% to R$266.5 million from R$152.2
> In English million for the 2Q06 period.
11:00am EST
12:00pm Brasilia Time o 2Q07 EBITDA reached R$38.4 million (14.4%
Phone: +1 (973) 935-8893 EBITDA margin), a 90.4% increase compared to the
Code: 9046538 R$20.2 million 2Q06 EBITDA (13.3% EBITDA margin).
Replay: +1 (973) 341-3080
Code: 9046538 o Net Income for 2Q07 was R$32.1 million (12.1%
> In Portuguese Net Income margin), an increase of 52.2% compared
9:00am EST with the adjusted net income of R$21.1 million in
10:00am Brasilia Time 2Q06 (13.9% Net income margin). 2Q07 Adjusted
Phone: +55 (11) 2101-4848 Earnings per Share was R$.25, a 20.6% increase
Code: Gafisa compared to the R$.21 in 2Q06.
Replay: +55 (11) 2101-4848
Code: Gafisa o The Backlog of Results to be recognized under
the PoC method reached R$418.8 million in 2Q07
representing 75.4% growth over 2Q06. The Backlog
Margin to be recognized reached 38.1%.
o In 2Q07 we continued consolidating our national
presence, launching developments in Maceio (state
of Alagoas), Manaus (state of Amazonas), Salvador
(state of Bahia) and Belem (state of Para). Also,
in June we launched our first development in
Santos (state of Sao Paulo).
o During the quarter Gafisa launched an
innovative mortgage product with a leading
financial institution, "Blue Print Mortgage."
This new product offers consumers favorable rates
with a long-term repayment option while reducing
working capital requirements for Gafisa. In three
recent project launches offering the Blueprint
mortgage option on average 69% of the units sold
utilized the credit facility.
o Working capital requirements continue to
improve as more homebuyers finance pre-sales
through bank mortgages. During the first semester
of 2007 60% of our pre-sales were financed with
bank mortgages, compared with 35% during the year
of 2006.
o Leveraging Gafisa's existing regional
partnerships, Fit Residencial has expanded its
national footprint. FIT is currently developing
projects in Salvador (Bahia), Belem (Para),
Goiania (Goias) and Porto Alegre (Rio Grande do
Sul). Fit Residencial's Land Bank reached
R$233 million.
Page 3 of 21
Recent Developments
During the second quarter of 2007, Fit Residencial, a wholly-owned subsidiary
focused on urban developments for the mid-low income segment of the market,
accelerated the ramp-up of its operations. Strong consumer acceptance of Fit's
first project in Jacana, launched in March 2007, resulted in sales reservations
of over 85% (Fit Residencial recognizes sales only after the client has received
the final approval by Caixa Economica Federal). A dedicated team from CEF
working closely with Fit on qualifying home-buying applicants has resulted in
smooth and efficient credit processing procedures averaging less than 30 days to
complete. Leveraging Gafisa's existing partnerships, Fit Residencial
expanded its national footprint and increased its land bank to R$233 million.
Fit is currently developing projects in Salvador (Bahia), Belem (Para), Goiania
(Goias) and Porto Alegre (Rio Grande do Sul).
In 1Q07, Gafisa created a joint venture, Bairro Novo, with Odebrecht
Empreendimentos Imobiliarios, Ltda to exclusively develop, manage and build
large scale Affordable Entry Level (AEL) projects in suburban areas, with over
1,000 units per development. Since that time, a management team has been named
and plans are underway to launch the joint venture's first project during the
first semester of 2008. Modeled after the Mexican affordable housing model,
Bairro Novo will develop large standardized communities, complete with the
necessary community and public infrastructure.
During the quarter Gafisa launched an innovative mortgage product with a leading
financial institution, "Blue Print Mortgage." This new financial product allows
buyers to finance a 10% initial down payment as well as lock-in a twenty-five
year bank mortgage on the remaining 90% purchase price of a new home prior to
construction. Home buyers without an established credit history are able to
qualify by paying monthly installments on a timely basis. Additionally, home
buyers receive their units 6 to 10 months ahead of the regular schedule,
bringing important savings in rent and increased quality of life. This new
product offers consumers a favorable rate with a long-term repayment option
while reducing working capital requirements for Gafisa.
On March 16, 2007 Gafisa became the first Brazilian homebuilder publicly-traded
on the New York Stock Exchange (NYSE). Since the follow-on offering on the
Bovespa and the NYSE listing, the Company's trading volume has increased nearly
fourfold, with an average daily trading volume of 700.000 common shares on the
BOVESPA (approximately R$20MM) and an average daily trading volume of 650.000
common shares on the NYSE (approximately US$10MM).
During the quarter, the portion of Gafisa's outstanding shares held by public
investors ("float") increased to 86%, reinforcing the Company's position as a
truly public company with a strong commitment to the highest standards of
corporate governance. Management believes that this provides Gafisa with an
important competitive edge in today's marketplace.
Page 4 of 21
Operating and Financial Highlights 2Q07 2Q06 Var. (%) 1H07 1H06 Var. (%)
---------------------------------- ---- ---- -------- ---- ---- --------
Project Launches (R$000) (% Gafisa) 470,673 274,215 72% 773.819 436.239 77%
Project Launches (R$000) (including partners stakes) 678,832 372,196 82% 1.023.793 534.220 92%
Project Launches (Units) (including partners stakes) 2,744 1,254 119% 4.561 1.736 163%
Average Project Launch Price (R$/sq.m) (100% without
lots) 2,625 2,853 -8% 2.584 3.062 -16%
Pre-Sales (R$000) (% Gafisa) 342,778 228,870 50% 597.281 381.206 57%
Sales from projects launched in 2007 (R$000) (% Gafisa) 224,361 143,699 56% 299.521 186.163 61%
Sales from inventory prior to 2007 (R$000) (% Gafisa) 118,418 85,171 39% 297.760 195.043 53%
Pre-Sales (R$000) (including partners stakes) 439,012 272,458 61% 745.525 436.176 71%
Pre-Sales (Units) (including partners stakes) 1,806 766 136% 2.992 1.432 109%
Average Sales Price (R$/sq.m) (100% without lots) 2,705 2,805 -4% 2.741 2.838 -3%
------------------------------------------------- ----- ----- --- ----- ----- ---
Net Operating Revenues 266,548 152,151 75% 490,864 283,977 73%
Gross Profits 80,081 39,124 105% 148,041 74,050 100%
Gross Margin 30.0% 25.7% 4.33p.p. 30.2% 26.1% 4.08p.p.
EBITDA 38,416 20,175 90% 74,627 40,597 84%
EBITDA Margin 14.4% 13.3% 1.15p.p. 15.2% 14.3% 0.91p.p.
Extraordinary Expenses 0 -1,840 -100% -30,174 -29,176 3%
Adjusted Net Income 32,140 21,122 52.2% 49,762 33,681 48%
Adjusted Net Margin 12.1% 13.9% -1.82p.p. 10.1% 11.9% -1.72p.p.
Adjusted Earnings per Share 0.25 0.21 20.6% 0.39 0.34 14.3%
Average number of shares, basic 129,195,063 102,430,921 26% 127,098,840 98,305,345 29%
Backlog of Revenues 1,100 540 104% 1,100 540 104%
Backlog of Results 419 239 75% 419 239 75%
Backlog Margin(1) 38.1% 44.2% -6.15p.p. 38.1% 44.2% -6.15p.p.
Net Debt (Cash) -125,259 -147,045 -15% -125,259 -147,045 -15%
Cash 496,016 422,779 17% 496,016 422,779 17%
Shareholders' Equity 1,462,371 807,633 81% 1,462,371 807,633 81%
Total Assets 2,295,381 1,406,612 63% 2,295,381 1,406,612 63%
------------
Note: (1) In order to increase transparency and visibility of future earnings,
during the fourth quarter ended December 31st 2006, the Company changed the
accounting practice adopted with respect to the costs and earnings to be
recognized in our backlog.
Page 5 of 21
CEO Commentary and Corporate Highlights for Fiscal 2Q07
Fueled by continued growth in the housing industry reflecting increased consumer
demand and greater access to financing, Gafisa turned in strong results for the
second quarter of 2007. With 20 launches representing almost R$800 million in
potential sales value, and 57% growth in pre-sales during the first semester of
2007, Gafisa continued to show that its team is executing on plan and its
products are meeting consumer demand.
The real estate market continues to benefit from rising consumer confidence,
decreasing interest rates, expansion of loan terms and the strong inflow of
commercial bank mortgages. Demand for housing has been fueled by increasing
access to financing. The first semester of 2007 was marked by impressive
mortgage financing growth in Brazil, with a 67% increase in the amount of
mortgages granted over the first semester of 2006.
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.
Importantly, the Company's strong performance during the first half of 2007
reflects positively on our ability to execute on our long term strategy. We have
been able to leverage our competitive advantages to the benefit of our
customers, partners and shareholders:
Brand: Homebuyers trust the quality of the Gafisa product and have seen a
track-record of on-time deliveries. Our high sales velocity speaks to the
strength of our brand.
Land Bank: The Company has one of the most expansive and diversified land banks.
Gafisa now owns approximately R$6.2 billion in its land bank, in 91 different
sites, equaling almost 50.000 units. Importantly, this land bank is highly
diversified, with almost 70% outside of the cities of Rio de Janeiro and Sao
Paulo. As mentioned above, although permitting has become a bottleneck for some
companies, Gafisa's proprietary technology for permitting projects together
with our well-diversified land bank, has enabled us to continue launching on
schedule.
Management: Gafisa's professional management team, as well as its distinguished
training program, continues to attract an unprecedented number of candidates,
ensuring a strong pool of management into the future. The 2007 trainee program
has recently been launched and expanded to include recruiting in all 27 states
of Brazil.
Transparency: Gafisa's reputation for transparency has made us the preferred
partner for consumers who want consistent quality and on-time delivery, joint
venture partners who expect fair and transparent relationships, to shareholders
who demand the highest standards of corporate governance.
The second quarter of 2007 was highlighted by many significant accomplishments.
I am excited about the opportunities and remain confident in the strength of our
professional management team's ability to continue to execute on our long-term
growth strategy.
Wilson Amaral
CEO - Gafisa S.A.
Page 6 of 21
Project Launches and Pre-Sales
Gafisa's project launches rose by 71.6%, or R$196.5 million, from R$274.2
million in 2Q06 to R$470.7 million in 2Q07. Following our strategy of
diversification into under-explored markets, during 2Q07 Gafisa launched in
Maceio (in the state of Alagoas), Manaus (in the state of Amazonas), Salvador
(in the state of Bahia) and Belem (in the state of Para). Also, 2Q07 marked
Gafisa's debut in Santos (in the state of Sao Paulo). In 2Q07, 53.6% of the
launches were in markets outside the cities of Sao Paulo and Rio de Janeiro.
The decrease in the average price per square meter for the developments launched
during 2Q07 (R$2,625, compared to R$2,853 during the same period in 2006) is due
to the fact that the mix of our launches in 2Q06 was more concentrated on the
High and Mid-high Income segments (48% of launches in 2Q06), which are
characterized by a higher price point.
The tables below detail new projects launched in the second quarter and the
first 6 months of 2007:
-----------------------------------------------------------------------------------------------------------------------------------
Table 1 - 2Q07 Launches by Segment (1)
-----------------------------------------------------------------------------------------------------------------------------------
Launches (R$000) (% Gafisa) Launch price (R$/sq.m) (100%) Launches (usable area - sq.m) (100%)
Segments 2Q07 2Q06 Change (%) 2Q07 2Q06 Change (%) 2Q07 2Q06 Change (%)
---------------------------------------------------- -------------------------------------- -------------------------------------
HIG - 36,244 -100% NA 3,638 NA - 9,963 -100%
MHI 176,789 95,955 84% 3,178 3,296 -4% 81,587 51,763 58%
MID 290,796 99,712 192% 2,392 2,213 8% 172,826 48,104 259%
AEL 3,087 - NA 1,467 NA NA 4,207 - NA
LOT - 42,303 -100% NA 278 NA - 212,000 -100%
COM - - NA NA NA NA - - NA
---------------------------------------------------- -------------------------------------- -------------------------------------
TOTAL 470,673 274,215 72% 2,625 2,853 -8% 258,621 321,830 -20%
---------------------------------------------------- -------------------------------------- -------------------------------------
Table 2 - 2Q07 Launches by Region
-----------------------------------------------------------------------------------------------------------------------------------
Goeg. Region 2Q07 2Q06 Change (%) 2Q07 2Q06 Change (%) 2Q07 2Q06 Change (%)
-----------------------------------------------------------------------------------------------------------------------------------
Sao Paulo 128,545 73,266 75% 2,305 3,481 -34% 69,845 34,043 105%
Rio de Janeiro 89,767 58,933 52% 3,176 3,191 0% 44,342 27,683 60%
New Markets 252,360 142,016 78% 2,610 2,213 18% 144,433 260,104 -44%
---------------------------------------------------- -------------------------------------- -------------------------------------
TOTAL 470,673 274,215 72% 2,625 2,853 -8% 258,621 321,830 -20%
-----------------------------------------------------------------------------------------------------------------------------------
Segment Breakdown(1): HIG = High Income / MHI = Mid-High / MID = Middle Income /
AEL = Affordable Entry Level / LOT = Urbanized Lots /COM = Commercial
(commercial buildings).
-----------------------------------------------------------------------------------------------------------------------------------
Table 3 - 1H07 Launches by Segment (1)
-----------------------------------------------------------------------------------------------------------------------------------
Launches (R$000) (% Gafisa) Launch price (R$/sq.m) (100%) Launches (usable area - sq.m) (100%)
Segments 1H07 1H06 Change (%) 1H07 1H06 Change (%) 1H07 1H06 Change (%)
---------------------------------------------------- -------------------------------------- -------------------------------------
HIG - 82,397 -100% NA 3,778 NA - 21,808 -100%
MHI 176,789 172,134 3% 3,178 3,285 -3% 81,587 75,118 9%
MID 541,951 99,712 444% 2,452 2,213 11% 281,036 48,104 484%
AEL 20,061 6,983 187% 1,729 1,808 -4% 13,388 3,862 247%
LOT 35,018 42,303 -17% 232 278 -16% 225,269 212,000 6%
COM - 32,709 -100% NA 5,169 NA - 6,328 -100%
---------------------------------------------------- -------------------------------------- -------------------------------------
TOTAL 773,819 436,239 77% 2,584 3,062 -16% 601,280 367,219 64%
---------------------------------------------------- -------------------------------------- -------------------------------------
Table 4 - 1H07 Launches by Region
-----------------------------------------------------------------------------------------------------------------------------------
Launches (R$000) (% Gafisa) Launch price (R$/sq.m) (100%) Launches (usable area - sq.m) (100%)
Geog. Region 1H07 1H06 Change (%) 1H07 1H06 Change (%) 1H07 1H06 Change (%)
---------------------------------------------------- -------------------------------------- -------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
Sao Paulo 221,202 156,428 41% 2,296 3,292 -30% 110,449 61,260 80%
Rio de Janeiro 133,782 137,795 -3% 3,018 3,646 -17% 61,250 45,855 34%
New Markets 418,835 142,016 195% 2,609 2,213 18% 429,581 260,104 65%
---------------------------------------------------- -------------------------------------- -------------------------------------
TOTAL 773,819 436,239 77% 2,584 3,062 -16% 601,280 367,219 64%
-----------------------------------------------------------------------------------------------------------------------------------
-------------------
(1) For information about segmentation, refer to glossary in the end of this
report.
Page 7 of 21
Pre-sales for the three-month period ended June 30, 2007 amounted to R$342.8
million, a 50% increase over the same quarter in the previous year. As the
strong sales figures confirm, the increased supply in the market has not
decreased Gafisa180>s sales velocity.
In 2Q07, 83.0% of our pre-sales came from the mid (MID) and mid-high (MHI)
segments. High income (HIG), lots and affordable entry level accounted for the
remaining 17.0%. The large growth in the MID and MHI segments demonstrates that
the fundamentals of the industry remain very compelling. The real estate market
is benefiting from rising consumer confidence, decreasing interest rates,
expansion of loan terms and the strong inflow of commercial bank mortgages.
Our diversification strategy is showing strong results, as we continue to launch
and sell quickly in new markets. Our pre-sales in new markets increased 298%,
and accounted for 47% of our total pre-sales in 2Q07.
The tables below set forth a detailed breakdown of our pre-sales for the second
quarter and the first 6 months of 2007:
----------------------------------------------------------------------------------------------------------------------------------
Table 5 - 2Q07 Pre-Sales by Segment (1)
----------------------------------------------------------------------------------------------------------------------------------
Pre-Sales (R$000) (%Gafisa) Sales price (R$/sq.m) (100%) Pre-Sales - usable area (sq.m)(100%)
Segments 2Q07 2Q06 Change (%) 2Q07 2Q06 Change (%) 2Q07 2Q06 Change (%)
----------------------------------------------------------------------------------------------------------------------------------
HIG 21,924 49,451 -56% 3,633 4,018 -10% 6,149 12,308 -50%
MHI 69,889 108,688 -36% 3,060 3,189 -4% 35,155 45,627 -23%
MID 214,787 50,549 325% 2,619 2,089 25% 101,217 25,004 305%
AEL(2) 13,027 11,628 12% 1,984 1,239 60% 7,028 9,410 -25%
LOT 16,105 6,976 131% 189 738 -74% 126,050 16,010 687%
COM 7,047 1,578 347% 4,971 3,151 58% 1,418 573 148%
----------------------------------------------------- ---------------------------------- -------------------------------------
TOTAL 342,778 228,870 50% 2,705 2,805 -4% 277,017 108,932 154%
----------------------------------------------------- ---------------------------------- -------------------------------------
Table 6 - 2Q07 - Pre-Sales by Region
----------------------------------------------------------------------------------------------------------------------------------
Geog. Region 2Q07 2Q06 Change (%) 2Q07 2Q06 Change (%) 2Q07 2Q06 Change (%)
----------------------------------------------------------------------------------------------------------------------------------
Sao Paulo 129,945 129,908 0% 3,004 3,069 -2% 62,596 48,647 29%
Rio de Janeiro 50,958 58,270 -13% 2,969 2,660 12% 22,414 29,787 -25%
New Markets 161,876 40,693 298% 2,754 2,271 21% 192,007 30,497 530%
----------------------------------------------------- ---------------------------------- -------------------------------------
TOTAL 342,778 228,870 50% 2,705 2,805 -4% 277,017 108,932 154%
----------------------------------------------------- ---------------------------------- -------------------------------------
Table 7 - 2Q07 Pre-Sales by Launch Year
----------------------------------------------------------------------------------------------------------------------------------
Launching year 2Q07 2Q06 Change (%) 2Q07 2Q06 Change (%) 2Q07 2Q06 Change (%)
----------------------------------------------------- ---------------------------------- -------------------------------------
Launches from 2007 224,361 - NA 2,693 - NA 134,187 - NA
Launches from 2006 69,984 143,699 -51% 3,029 3,320 -9% 39,301 53,626 -27%
Launches from 2005 48,433 85,171 -43% 3,059 251 1118% 103,529 55,306 87%
----------------------------------------------------- ---------------------------------- -------------------------------------
TOTAL 342,778 228,870 50% 2,705 2,805 -4% 277,017 108,932 154%
----------------------------------------------------- ---------------------------------- -------------------------------------
Note: (1) For information about segmentation, refer to glossary in the end of
this report. (2) Fit Residencial recognizes sales only after the client has
received the final approval by Caixa Economica Federal.
----------------------------------------------------------------------------------------------------------------------------------
Table 8 - 1H07 Pre-Sales by Segment
----------------------------------------------------------------------------------------------------------------------------------
Pre-Sales (R$000) (%Gafisa) Sales price (R$/sq.m) (100%) Pre-Sales - usable area (sq.m)(100%)
Segments 1H07 1H06 Change (%) 1H07 1H06 Change (%) 1H07 1H06 Change (%)
------------------------------------------------------- ------------------------------------ -----------------------------------
HIG 46,432 65,028 -29% 3,718 3,854 -4% 12,602 16,871 -25%
MHI 128,544 159,761 -20% 3,160 3,252 -3% 57,678 61,974 -7%
MID 336,713 98,209 243% 2,574 2,207 17% 160,118 46,990 241%
AEL2 15,796 24,642 -36% 1,934 1,452 33% 8,647 17,058 -49%
LOT 45,973 8,978 412% 238 691 -66% 267,047 22,257 1100%
COM 23,823 24,588 -3% 5,206 4,791 9% 4,590 5,374 -15%
------------------------------------------------------- ------------------------------------ -----------------------------------
TOTAL 597,281 381,206 57% 2,799 2,838 -1% 510,681 170,524 199%
------------------------------------------------------- ------------------------------------ -----------------------------------
Table 9 - 1H07 - Pre-Sales by Region
--------------------------------------------------------------------------------------------- -----------------------------------
Geog. Region 1H07 1H06 Change (%) 1H07 1H06 Change (%) 1H07 1H06 Change (%)
------------------------------------------------------- ------------------------------------ -----------------------------------
Sao Paulo 229,950 226,338 2% 2,736 2,881 -5% 103,388 86,453 20%
Rio de Janeiro 90,830 95,366 -5% 2,923 3,129 -7% 40,941 39,511 4%
New Markets 276,501 59,502 365% 2,811 2,258 24% 366,352 44,560 722%
------------------------------------------------------- ------------------------------------ -----------------------------------
TOTAL 597,281 381,206 57% 2,799 2,838 -1% 510,681 170,524 199%
------------------------------------------------------- ------------------------------------ -----------------------------------
Table 10 - 1H07 Pre-Sales by Launch Year
----------------------------------------------------------------------------------------------------------------------------------
Launching year 1H07 1H06 Change (%) 1H07 1H06 Change (%) 1H07 1H06 Change (%)
------------------------------------------------------- ------------------------------------ -----------------------------------
Launches from 2007 299,521 - NA 2,611 - NA 237,456 - NA
Launches from 2006 200,261 186,163 8% 3,011 3,442 -13% 96,647 64,162 51%
Launches from 2005 57,765 128,594 -55% 3,099 2,540 22% 61,632 58,167 6%
Up to 2004
launchings 39,734 66,449 -40% 3,228 2,230 45% 114,945 48,195 139%
------------------------------------------------------- ------------------------------------ -----------------------------------
TOTAL 597,281 381,206 57% 2,799 2,838 -1% 510,681 170,524 199%
------------------------------------------------------- ------------------------------------ -----------------------------------
(1) For information about segmentation, refer to glossary in the end of this
report. (2) Fit Residencial recognizes sales only after the client has received
the final approval by Caixa Economica Federal.
Page 8 of 21
Operations
Gafisa now has 89 projects under construction in 14 different states, totaling
approximately 5.1 million square meters. With a strong record of managing
multiple construction sites spread over a wide geographical area, we believe
Gafisa has the expertise to deliver on our aggressive launch strategy.
We have delivered 12 projects this year and expect to deliver another 19 by the
end of the year.
Land Reserves
Consistent with our established land bank policies, the Company owns
approximately R$6.2 billion in its land bank distributed in 91 different sites.
Gafisa's current land reserve totals R$3.3 billion as we continue aligned with
our policy of maintaining land reserves of two to three years of future project
launches. The land bank totals 1.5 million square meters, which is equivalent to
13,425 units, of which 9,541 units are in the middle and mid-high income
segments. AlphaVille's current land reserves totals R$2.6 billion, which is
equivalent to 12.3 million square meters, and 33,388 units. Fit's current land
reserves totals R$233.1 million, which is equivalent to 137 thousand square
meters, and 2,965 units.
We continue with our land bank diversification strategy and at the end of the
quarter 68% of Gafisa's land bank was outside the cities of Rio de Janeiro and
Sao Paulo. Our land bank reflects our strategy of servicing all levels of the
homebuyer market. One of our goals going forward is to continue increasing the
land bank for Fit Residencial, aimed at the Affordable Entry Level segment.
As of June 30, 2007, the proportion of land acquired through swap agreements in
Gafisa dropped to 70.3% compared to 72.4% in March 31, 2007. In 2Q07, the
percentage of swap agreements in our land reserve in the city of Sao Paulo
decreased to 39.4% from 46.6% in 1Q07. The stock of land acquired through swap
agreements in the city of Rio de Janeiro and in new markets was 88.6% and 72.4%,
respectively.
Page 9 of 21
The table below shows a detailed breakdown of our current land bank:
Table 11a - Land Bank Gafisa
----------------------------------------------------------------------------------------------------------------------------------
Potential Units Future Sales (R$000) % acquired through
HIGH MID & MHI AEL COM&LOTS Swap
----------------------------------------------------------------------------------------------------------------------------------
Sao Paulo 636 2,074 - 102 1,192 39.4%
----------------------------------------------------------------------------------------------------------------------------------
Rio de Janeiro 776 750 - 418 500 88.6%
----------------------------------------------------------------------------------------------------------------------------------
New Markets 764 6,717 - 1,188 1,629 72.4%
----------------------------------------------------------------------------------------------------------------------------------
Total 2,176 9,541 - 1,708 3,321 70.3%
----------------------------------------------------------------------------------------------------------------------------------
% of Total 16% 71% 0% 13%
----------------------------------------------------------------------------------------------------------------------------------
Table 11b - Land Bank AlphaVille
----------------------------------------------------------------------
Potential Units Future Sales % acquired
LOTS (R$000) Swap
----------------------------------------------------------------------
Sao Paulo 15,739 1,033 85.1%
----------------------------------------------------------------------
Rio de Janeiro 1,736 178 100.0%
----------------------------------------------------------------------
New markets 15,913 1,396 82.3%
----------------------------------------------------------------------
Total 33,388 2,607 84.6%
----------------------------------------------------------------------
% of Total 100%
-------------------------------------
Table 11c - Land Bank Fit Residencial
----------------------------------------------------------------------
Potential Units Future Sales % acquired
AEL (R$000) Swap
----------------------------------------------------------------------
Sao Paulo 1,199 87 0.0%
----------------------------------------------------------------------
Rio de Janeiro - - 0.0%
----------------------------------------------------------------------
New markets 1,766 145 16.0%
----------------------------------------------------------------------
Total 2,965 233 10.6%
----------------------------------------------------------------------
% of Total 100%
-------------------------------------
2Q07 - Revenues
Total net operating revenues for the three months ending June 30, 2007 rose 75%
to R$266.5 million from R$152.2 million over the same period of the previous
year. This growth was primarily due to the recognition of higher pre-sales from
previous periods.
Revenues for the industry are recognized based on actual cost versus total
budgeted costs of land and construction (Percentage of Completion method or PoC
method) and the pre-sales portfolio is recognized in future periods even if the
company has already completely pre-sold developments.
The table below presents detailed information of pre-sales and recognized
revenues by launch year:
------------------------------------------------------------------------------------------------------------------------------
Table 12 - Pre-sales x Recognized revenues - 2Q07
------------------------------------------------------------------------------------------------------------------------------
2Q07 2Q06
Launching year Pre-Sales % of Total Revenues % of Revenues Pre-Sales % of Total Revenues % of Revenues
------------------------------------------------------------------------------------------------------------------------------
Developments
Launched in 2007 224,361 65.5% 16,038 6.0%
Launched in 2006 69,984 20.4% 73,398 27.5% 143,699 62.8% 16,042 10.5%
Launched in 2005 40,665 11.9% 128,083 48.1% 48,347 21.1% 43,144 28.4%
Launched up to 2004 7,768 2.3% 49,029 18.4% 36,824 16.1% 92,965 61.1%
------------------------------------------------------------------------ ----------------------------------------------------
TOTAL 342,778 100.0% 266,548 100.0% 228,870 100.0% 152,151 100.0%
------------------------------------------------------------------------------------------------------------------------------
Page 10 of 21
2Q07 - Gross Profits
Gross profits for 2Q07 totaled R$80.1 million, an increase of 105% compared to
the second quarter of 2006. The gross margin for 2Q07 was 30.0%, 430 basis
points (bps) higher than the same period of 2006. This result has been
influenced by the increase in sales at higher margins as we have been
recognizing revenue from projects launched in 2005 and 2006.
2Q07 - Selling, General, and Administrative Expenses (SG&A)
Our aggressive growth strategy leads to higher SG&A expenses. As seen below, the
main effect comes from the growth in G&A expenses. This growth is due to the
consolidation of AlphaVille (R$5.5 million), and the ramp-up of Fit Residencial
and Bairro Novo (R$2.8 million). Additionally, bonus provisions (R$4.9 million),
which were previously accrued at year end are now accrued quarterly.
In the current scenario, it is more appropriate to compare SG&A expenses with
the company's launches due to the lag in revenue recognition.
Table 13 - SG&A expenses 2Q07 2Q06 1H07 1H06
---------------------------------------------------------------- --------------------------------------------------------------
Selling Expenses 17,330 9,422 Selling Expenses 29,336 18,551
G&A Expenses 27,146 10,021 G&A Expenses 46,280 16,622
---------------------------------------------------------------- --------------------------------------------------------------
SG&A 44,476 19,443 SG&A 75,616 35,173
---------------------------------------------------------------- --------------------------------------------------------------
2Q07 2Q06 1H07 1H06
---------------------------------------------------------------- --------------------------------------------------------------
Selling Expenses / Launches 3.7% 3.4% Selling Expenses / Launches 3.8% 4.3%
G&A Expenses / Launches 5.8% 3.7% G&A Expenses / Launches 6.0% 3.8%
---------------------------------------------------------------- --------------------------------------------------------------
SG&A / Launches 9.4% 7.1% SG&A / Launches 9.8% 8.1%
---------------------------------------------------------------- --------------------------------------------------------------
2Q07 - EBITDA
EBITDA for 2Q07 totaled R$38.4 million, 90% higher than the R$20.2 million in
2Q06. As a percentage of net revenues, EBITDA increased 115 bps from 13.3% in
2Q06 to 14.4% in the 2Q07.
Our aggressive growth strategy leads to higher SG&A expenses, as Gafisa expenses
selling on a cash basis and increases the G&A to support growth. As we recognize
100% of the expenses as they are incurred, but use the PoC method to recognize
the revenues, SG&A expenses increase in advance of the higher revenues. Please
refer to the 4Q06 Earnings Release for a detailed description of the SG&A
accounting.
It is also important to mention that, starting in 2007, we are accruing our
bonus provision on a quarterly basis. During 2006 we provisioned the yearly
bonus fully in the last quarter, strongly impacting the quarter's EBITDA. Impact
in 2007 will be distributed in all four quarters, with an R$4.9 million
provision in 2Q07, which represents 1.9% of net revenues.
2Q07 - Depreciation and Amortization
Depreciation and amortization in 2Q07 amounted to R$5.5 million, an increase of
440% compared to the R$1.0 million in 2Q06. This is a result primarily of the
R$3.8 million amortization of goodwill from the AlphaVille acquisition. The
goodwill from the AlphaVille acquisition will be amortized over 10 years.
Page 11 of 21
2Q07 - Financial Results
Net financial results totaled a negative R$3.0 million in 2Q07 compared to a
positive R$4.0 million in 2Q06. Financial expenses in 2Q07 totaled R$18.3
million, an increase of 45% over 2Q06 R$12.6 million as we consolidated
AlphaVille's debt. Financial income decreased from R$16.6 million to R$15.4
million, primarily due to the effect in cash and cash equivalents of the lower
interest rates.
2Q07 - Income Taxes
Income taxes and social contribution for 2Q07 amounted to a positive R$3.9
million versus a negative R$2.0 million in same period of last year, mainly
because of tax credits in 2Q07.
2Q07 - Net Income and Earnings per Share
Net income for 2Q07 was R$32.1 million (12.1% of net revenues), R$11.0 million
or 52.2% higher than the adjusted Net income of R$21.1 million (13.9% of net
revenues) or 67% higher than the unadjusted net income of $19.3 million
registered in the same period of 2006. 2006 results were adjusted by a one off
charge of R$1.8 million.
Net earnings per share was R$0.25 in 2Q07 compared to pro-forma adjusted and
unadjusted net earnings per share of R$0.21 in 2Q06. Basic weighted average
shares outstanding were 129 million in 2Q07 and 102 million in 2Q06.
Backlog of Revenues and Results
The backlog of results to be recognized under the PoC method reached R$418.8
million in 2Q07, R$180.0 million higher than the 2Q06 and R$46.9 million more
than 1Q07.
The table below shows our revenues, costs and results to be recognized, as well
as the amount of the corresponding costs and the expected margin:
----------------------------------------------------------------------------------------------------------------------------------
Table 14 - Revenues and results to be recognized (R$000)
----------------------------------------------------------------------------------------------------------------------------------
(eop) 2Q07 1Q07 2Q06 2Q07 x 1Q07 2Q07 x 2Q06
----------------------------------------------------------------------------------------------------------------------------------
Sales to be recognized--end of period 1,100.2 985.7 540.1 11.62% 103.69%
Cost of units sold to be recognized - end of period -681.4 -613.8 -301.3 11.01% 126.14%
Backlog of Results to be recognized 418.8 371.9 238.8 12.6% 75.4%
Backlog Margin - yet to be recognized 38.1% 37.7% 44.2% 0.3% -6.1%
----------------------------------------------------------------------------------------------------------------------------------
Balance Sheet
Cash and Cash Equivalents
On June 30 2007, cash and cash equivalents increased to R$496.0 million, 20%
lower than March 31, 2007 (R$621.3 million), and 17% higher than 2Q06's (R$422.8
million).
Accounts Receivables
Accounts receivables increased 96.5% to R$1.8 billion in June 2007 when compared
to the R$0.9 billion figure of 2Q06, and 16.0% compared to the R$1.5 billion
that was registered in March 2007. In 2Q07, receivables of completed units
(post-completion receivables) reached R$239 million or 13% of the total accounts
receivables.
Page 12 of 21
----------------------------------------------------------------------------------------------------------------------------------
Table 15 - Accounts Receivables from Clients
----------------------------------------------------------------------------------------------------------------------------------
Real estate development receivables: 2Q07 2Q06 1Q07 2Q07 x 2Q06 2Q07 x 1Q07
----------------------------------------------------------------------------------------------------------------------------------
Current 411,256 311,648 365,848 32.0% 12.4%
Long-term 316,057 72,763 236,576 334.4% 33.6%
----------------------------------------------------------------------------------------------------------------------------------
Total 727,313 384,411 602,424 89.2% 20.7%
----------------------------------------------------------------------------------------------------------------------------------
Receivables to be recognized on our balance sheet according to PoC method and
BRGAAP(for more details, see note 5 on our Financial Statements:
----------------------------------------------------------------------------------------------------------------------------------
2Q07 2Q06 1Q07 2Q07 x 2Q06 2Q07 x 1Q07
----------------------------------------------------------------------------------------------------------------------------------
Current 270.288 116.048 220.894 132,9% 22,4%
Long-term 793.470 411.171 720.555 93,0% 10,1%
----------------------------------------------------------------------------------------------------------------------------------
Total 1.063.758 527.219 941.449 101,8% 13,0%
----------------------------------------------------------------------------------------------------------------------------------
Total Accounts Receivables 1.791.071 911.630 1.543.873 96,5% 16,0%
----------------------------------------------------------------------------------------------------------------------------------
Inventory (Properties for Sale)
Our inventory includes land paid in cash, construction in progress, and finished
units. Our inventory increased to R$594.0 million in 2Q07, an increase of 82.1%
as compared to the R$326.2 million registered in 2Q06 due to recent land
acquisitions in cash (more details in the "Land Reserves" section of this
report) and developments under construction. It is important to note that the
increase in units completed is due to the consolidation of AlphaVille.
The tables below details inventory for the 2Q07:
----------------------------------------------------------------------------------------------------------------------------------
Table 16 - Inventory
----------------------------------------------------------------------------------------------------------------------------------
2Q07 1Q07 2Q06 2Q07 x 1Q07 2Q07 x 2Q06
----------------------------------------------------------------------------------------------------------------------------------
Land 187,257 214,235 84,899 -12.6% 120.6%
Properties under construction 351,753 295,704 204,394 19.0% 72.1%
Units completed 55,003 49,520 36,881 11.1% 49.1%
----------------------------------------------------------------------------------------------------------------------------------
Total 594,013 559,459 326,174 6.2% 82.1%
----------------------------------------------------------------------------------------------------------------------------------
The table below details inventory units at market value for the 2Q07:
Table 17 - Inventory at Market Value
----------------------------------------------------------------------------------------------------------------------------------
Segments 2Q07 1Q07 2Q06 2Q07 x 1Q07 2Q07 x 2Q06
----------------------------------------------------------------------------------------------------------------------------------
HIG 69,856 91,930 106,389 -24% -34%
MHI 375,429 242,285 297,609 55% 26%
MID 385,465 312,472 123,059 23% 213%
AEL 10,549 20,253 13,685 -48% -23%
LOT 157,182 195,903 69,630 -20% 126%
COM 15,760 22,346 130,755 -29% -88%
----------------------------------------------------------------------------------------------------------------------------------
TOTAL 1,014,242 885,189 741,127 15% 37%
----------------------------------------------------------------------------------------------------------------------------------
Geog. Region 2Q07 1Q07 2Q06 2Q07 x 1Q07 2Q07 x 2Q06
----------------------------------------------------------------------------------------------------------------------------------
Sao Paulo 269,476 265,407 326,395 2% -17%
Rio de Janeiro 248,971 206,893 234,251 20% 6%
New Markets 495,794 412,889 180,481 20% 175%
----------------------------------------------------------------------------------------------------------------------------------
TOTAL 1,014,242 885,189 741,127 15% 37%
----------------------------------------------------------------------------------------------------------------------------------
Launching year 2Q07 1Q07 2Q06 2Q07 x 1Q07 2Q07 x 2Q06
----------------------------------------------------------------------------------------------------------------------------------
Launches from 2007 487,986 226,942 - NA NA
Launches from 2006 263,959 331,795 252,997 -20% 4%
Launches from 2005 161,553 203,340 242,449 -21% -33%
Launches from 2004 100,744 123,111 245,681 -18% -59%
----------------------------------------------------------------------------------------------------------------------------------
TOTAL 1,014,242 885,189 741,127 15% 37%
----------------------------------------------------------------------------------------------------------------------------------
Page 13 of 21
Liquidity
The following table sets forth information on our indebtedness as of June 30,
2007:
----------------------------------------------------------------------------------------------------------------------------------
Table 18 - Debt Breakdown
----------------------------------------------------------------------------------------------------------------------------------
Type of transaction Rates 2Q07 1Q07 2Q07 x 1Q07
----------------------------------------------------------------------------------------------------------------------------------
Debentures 1.3%p.a. + CDI 250,481 242,663 3.2%
Construction Financing (SFH) 6.2-11%p.a. + TR 38,295 34,248 11.8%
Downstream Merger obligation 10-12%p.a. + TR 16,237 16,925 -4.1%
Funding for developments 3-6.3%p.a. + CDI 22,359 23,147 -3.4%
Working Capital 3.5-6.2%p.a. + CDI 41,387 34,952 18.4%
Others (Alphaville) 19.6-25.7%p.a 1,998 3,912 -48.9%
----------------------------------------------------------------------------------------------------------------------------------
Total 370,757 355,847 4.2%
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
Total Cash 496.016 621.252 -20,2%
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
Net Debt (Cash) -125.259 -265.405 24,3%
----------------------------------------------------------------------------------------------------------------------------------
Debt payment schedule as of June 30, 2007:
----------------------------------------------------------------------------------------------------------------------------------
Table 19 - Debt Maturity
----------------------------------------------------------------------------------------------------------------------------------
Type Total 2007 2008 2009 2010 2011 and later
----------------------------------------------------------------------------------------------------------------------------------
Debentures 250,481 10,481 - 48,000 96,000 96,000
Construction Financing (SFH) 38,295 22,588 7,494 6,451 1,762 -
Downstream Merger obligation 16,237 4,894 3,865 5,257 2,221 -
Funding for developments 22,359 13,204 4,367 2,957 1,831 -
Working Capital 41,387 19,467 6,850 7,759 4,987 2,324
Others 1,998 654 741 603 - -
----------------------------------------------------------------------------------------------------------------------------------
Total 370,757 71,288 23,317 71,027 106,801 98,324
----------------------------------------------------------------------------------------------------------------------------------
As of June 30 2007, our net debt to equity ratio was negative 8.6% compared to
negative 18.2% in 2Q06 and negative 18.6% in 1Q07.
Outlook
We reiterate our outlook for the full year of 2007. We expect 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 the costs associated with ramping up Fit
Residencial, Bairro Novo, and AlphaVille.
Page 14 of 21
Glossary
Backlog of Results - As a result of the Percentage of Completion Method of
recognizing revenues, we recognize revenues and expenses over a multi-year
period for each residential unit we sell. Our backlog of results represents
revenues minus costs that will be incurred in future periods from past sales.
Backlog of Revenues - As a result of the Percentage of Completion Method of
recognizing revenues, we recognize revenues over a multi-year period for each
residential unit we sell. Our backlog represents revenues that will be incurred
in future periods from past sales.
Backlog Margin - Equals to "Backlog of results" divided "Backlog of Revenues" to
be recognized in future periods.
Land Bank - Land that Gafisa holds for future development paid either in Cash or
through swap agreements. Each decision to acquire land is analyzed by our
investment committee and approved by our board of directors.
PoC Method - Under Brazilian GAAP, real estate development revenues, costs and
related expenses are recognized using percentage-of-completion ("PoC") method of
accounting by measuring progress towards completion in terms of actual costs
incurred versus total budgeted expenditures for each stage of a development.
Pre-sales - Contracted pre-sales are the aggregate amount of sales resulting
from all agreements for the sale of units entered into during a certain period,
including new units and units in inventory. Contracted pre-sales will be
recorded as revenue as construction progresses (PoC method). There is no
definition of "contracted pre-sales'' under Brazilian GAAP.
HIG (High Income) - segment with residential units sold at minimum price of
R$3,600 per square meter.
MHI (Mid-High) - segment with residential units sold at prices ranging from
R$2,800 to 3,600 per square meter.
MID (Middle Income) - segment with residential units sold at prices ranging from
R$2,000 to 2,800 per square meter.
AEL (Affordable Entry Level) - residential units targeted to the mid-low and low
income segments with prices ranging from R$1,500 to 2,000 per square meter.
LOT (Urbanized Lots) - land subdivisions, or lots, with prices ranging from
R$150 to R$800 per square meter
COM (Commercial buildings) - Commercial and corporate units developed only for
sale with prices ranging from R$4,000 to R$7,000 per square meter.
SFH Funds - Funds from SFH are originated from the Governance Severance
Indemnity Fund for Employees (FGTS) and from savings accounts deposits. Banks
are required to invest 65% of the total savings accounts balance in the housing
sector, either to final customers or developers, at lower interest rates than
the private market.
Swap Agreements - A system in which we grant the land-owner a certain number of
units to be built on the land or a percentage of the proceeds from the sale of
units in such development in exchange for the land. By acquiring land through
this system, we intend to reduce our cash requirements and increase our returns.
Page 15 of 21
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.
Investor Relations:
Carlos Gros
Phone: +55 11 3025-9305
Email: ir@gafisa.com.br
Website: 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: eileen@reputationpartners.com
Media Relations (Brazil)
Joana Santos
Maquina da Noticia
Phone: +55 11 3147-7900
Fax: +55 11 3147-7900
E-mail: joana.santos@maquina.inf.br
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.
Page 16 of 21
Appendix
The following table sets forth detailed information of projects launched in 2007
by quarter:
Projects launched in 1Q07 Month of Segment Location Usable Area # of Units Gafisa's Sales Value at % Sold up
Launch (s.q.m) (100%) Stake Gafisa's Stake to 06/30/07
(100%) (R$000)
---------------------------------------------------------------------------------------------------------------------------------
Fit Jacana1 March AEL Sao Paulo - SP 9,181 184 100% 16,974 64%
Isla March Mid Sao Caetano - SP 31,423 240 100% 75,683 60%
Grand Valley March Mid Rio de Janeiro - RJ 16,908 240 100% 44,014 51%
Acqua Residence (Fase 1) March Mid Nova Iguacu - RJ 28,400 380 100% 71,701 43%
Celebrare March Mid Caxias - RJ 14,679 188 100% 35,189 65%
Reserva do Lago March Mid Goiania - GO 16,800 96 50% 24,567 52%
Campo Grande I March Lot Campo Grande - MS 225,269 489 67% 35,018 48%
---------------------------------------------------------------------------------------------------------------------------------
Total 342,660 1,817 303,147 54%
---------------------------------------------------------------------------------------------------------------------------------
Projects launched in 2Q07 Month of Segment Location Usable Area # of Units Gafisa's Sales Value at % Sold up
Launch (s.q.m) (100%) Stake Gafisa's Stake to 06/30/07
(100%) (R$000)
---------------------------------------------------------------------------------------------------------------------------------
CSF - Primula June Mid Sao Paulo - SP 13,897 96 100% 29,906 41%
CSF - Dalia June Mid Sao Paulo - SP 9,000 68 100% 18,430 33%
CSF - Acacia June Mid Sao Paulo - SP 23,461 192 100% 47,784 36%
Jatiuca Trade Residence June Mid Maceio - AL 32,651 500 50% 39,546 23%
Enseada das Orquideas June Mid-High Santos - SP 52,589 475 80% 125,721 3%
London Green June Mid-High Rio de Janeiro - RJ 28,998 300 50% 51,069 15%
Horizonte May Mid Belem -PA 7,505 29 60% 12,704 97%
Secret Garden May Mid Rio de Janeiro - RJ 15,344 252 100% 38,699 48%
Evidence April Mid Sao Paulo - SP 23,487 144 50% 32,425 27%
Fit Maceio April AEL Maceio - AL 4,207 54 50% 3,087 29%
Acquarelle April Mid Manaus - AM 17,742 259 85% 35,420 32%
Palm Ville April Mid Salvador - BA 13,582 112 50% 15,106 74%
Art Ville April Mid Salvador - BA 16,157 263 50% 20,777 84%
---------------------------------------------------------------------------------------------------------------------------------
Total 258,621 2,744 470,673 29%
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
Total YTD 2007 601,280 4,561 773,819 39%
---------------------------------------------------------------------------------------------------------------------------------
Note: (1) As mentioned above, Fit Residencial recognizes sales only after the
client has received the final approval by Caixa Economica Federal.
Page 17 of 21
The following table sets forth the financial completion of the construction in
progress in 2007 and 2006 and the related revenue recognized during those years:
----------------------------------------------------------------------------------------------------------------------------------
Final Revenue
Development Month/Year Total area Completion Percentage sold- Recognized Gafisa
launched (m(2)) (%) accumulated (BRL000) Stake (%)
----------------------------------------- ----------------- -------------------
2Q07 2Q06 2Q07 2Q06 2Q07 2Q06
---------------------------------------------------------------------------- ----------------- ---------------------------------
Empresarial Pinheiros nov-04 17,149 99.5% 49.4% 100.0% 11.0% 13,289 1,342 39.1%
Arena dez-05 29,256 59.7% 16.1% 100.0% 98.1% 11,710 4,971 100.0%
Villagio Panamby - Jazz Duet set-05 13,400 78.1% 22.2% 80.2% 38.1% 11,460 2,075 100.0%
Sunspecial Resid. Service mar-05 21,189 75.7% 21.2% 86.2% 73.3% 9,363 6,471 100.0%
Sunplaza Personal Office mar-06 6,328 60.6% 8.9% 87.4% 69.2% 7,568 1,182 100.0%
Peninsula Fit mar-06 24,080 34.5% 2.3% 55.5% 49.8% 6,948 666 100.0%
Bem Querer nov-05 11,136 70.0% 2.0% 100.0% 95.3% 6,909 377 100.0%
Olimpic Resort out-05 21,851 65.2% 12.7% 100.0% 99.2% 6,824 5,265 100.0%
CSF - Saint Etienne mai-05 11,261 66.0% 12.1% 96.3% 89.4% 6,652 849 100.0%
Villagio Panamby - Agrias nov-06 21,390 32.0% 0.0% 60.0% 0.0% 6,189 - 100.0%
Palm D'Or set-05 8,493 63.0% 25.5% 96.1% 36.4% 5,833 2,487 100.0%
Beach Park Acqua nov-05 9,770 55.7% 11.3% 86.2% 80.6% 5,766 1,168 90.0%
Blue Land ago-03 18,252 56.3% 36.4% 67.2% 22.4% 5,255 3,188 100.0%
Lumiar fev-05 7,193 89.6% 18.8% 96.8% 57.4% 5,181 942 100.0%
Del Lago mai-05 62,022 57.4% 19.2% 90.9% 48.6% 5,021 2,167 80.0%
Olimpic - Chacara Sto Antonio ago-06 24,988 27.1% 0.0% 91.9% 0.0% 4,392 - 100.0%
Villagio Panamby - Domaine Du
Soleil set-05 8,225 82.2% 26.5% 84.0% 49.1% 4,004 3,405 100.0%
Montenegro Boulevard jun-05 174,862 92.7% 65.3% 100.0% 99.7% 3,824 2,220 100.0%
Villagio Panamby- Mirabilis mar-06 23,355 48.4% 0.0% 80.5% 58.0% 3,784 - 100.0%
The Gold dez-05 10,465 69.3% 0.0% 68.3% 38.7% 3,653 - 100.0%
Icarai Corporate dez-06 5,683 29.5% 0.0% 85.2% 0.0% 3,643 - 100.0%
Celebrare mar-07 14,679 15.3% 0.0% 67.0% 0.0% 3,587 - 100.0%
Blue Vision - Sky e Infinity jun-06 18,514 58.1% 37.4% 84.4% 42.0% 3,568 2,848 50.0%
Grand Valley mar-07 16,908 15.4% 0.0% 47.0% 0.0% 3,546 - 100.0%
Riviera Ponta Negra - Cannes e
Marseille jan-04 22,332 100.0% 79.9% 73.3% 67.9% 3,455 5,044 100.0%
Espaco Jardins mai-06 28,926 22.1% 0.0% 95.3% 30.9% 3,383 - 100.0%
Paco das Aguas mai-06 24,080 45.2% 0.0% 69.6% 47.8% 3,219 - 45.0%
Sundeck nov-03 13,043 100.0% 65.9% 86.5% 72.8% 3,172 7,607 100.0%
Villagio Panamby - Parides nov-06 13,093 49.4% 0.0% 100.0% 0.0% 3,011 - 100.0%
Weber Art jun-05 5,812 69.8% 11.2% 91.2% 77.2% 2,790 702 100.0%
Vistta Ibirapuera mai-06 9,963 48.0% 32.3% 100.0% 100.0% 2,365 11,786 100.0%
Isla mar-07 31,423 12.6% 0.0% 68.1% 0.0% 2,300 - 100.0%
Felicita - Evangelina 2 dez-06 11,323 14.5% 0.0% 55.1% 0.0% 2,232 - 100.0%
Terras de Sao Francisco jul-04 114,160 100.0% 97.1% 93.5% 85.7% 2,093 2,627 50.0%
Collori nov-06 39,462 24.0% 0.0% 38.4% 0.0% 2,047 - 50.0%
Espacio Laguna ago-06 16,364 24.4% 0.0% 28.9% 0.0% 1,974 - 80.0%
Town Home nov-05 8,319 41.9% 13.2% 55.0% 20.0% 1,614 1,022 100.0%
Side Park - Ed. Style jul-04 10,911 90.5% 37.5% 100.0% 96.5% 1,598 2,418 100.0%
New Point abr-03 12,034 100.0% 59.6% 98.5% 97.1% 1,554 117 90.0%
CSF - Paradiso mai-07 16,286 7.4% 0.0% 72.1% 0.0% 1,435 - 100.0%
Sunprime nov-03 11,802 100.0% 92.2% 100.0% 93.4% 1,423 3,239 100.0%
La Place mai-04 8,416 100.0% 68.0% 91.2% 69.0% 1,412 5,892 100.0%
CSF - Santtorino ago-06 14,979 11.9% 0.0% 100.0% 0.0% 1,279 - 100.0%
Ville Du Soleil out-06 8,920 29.4% 0.0% 29.4% 0.0% 1,071 - 100.0%
Cuiaba dez-05 11,775 44.6% 0.0% 27.9% 9.2% 984 - 50.0%
Art Ville abr-07 16,157 5.3% 0.0% 68.3% 0.0% 938 - 50.0%
Quinta Imperial jul-06 8,422 12.3% 0.0% 76.5% 0.0% 905 - 100.0%
Reserva das Palmeiras fev-03 16,912 100.0% 96.1% 100.0% 100.0% 869 821 90.0%
Alphaville 61,409 -
Others 7,821 56,703
----------------------------------------------------------------------------------------------------------------------------------
Total 264,319 139,602
----------------------------------------------------------------------------------------------------------------------------------
Page 18 of 21
Consolidated Statements of Income
----------------------------------------------------------------------------------------------------------------------------------
R$ 000 2Q07 2Q06 1Q07 2Q07 x 2Q06 2Q07 x 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 0.25 0.21 0.18 0.04 0.07
outstanding
Page 19 of 21
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
Page 20 of 21
Consolidated Balance Sheet
----------------------------------------------------------------------------------------------------------------------------------
R$ 000 2Q07 2Q06 1Q07 2Q07 x 2Q06 2Q07 x 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%
============ ============ ============ ================ ===============
Page 21 of 21