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For the month of November, 2018
(Commission File No. 001-33356),
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the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1)
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to the registrant in connection with Rule 12g3-2(b): N/A
FOR IMMEDIATE RELEASE - São Paulo, November 8, 2018 – Gafisa S.A. (B3: GFSA3; NYSE: GFA), one of Brazil’s leading homebuilders, today reported its financial results for the third quarter ended September 30, 2018.
GAFISA ANNOUNCES
3Q18 RESULTS
|
Conference Call
► 11:00 a.m. Brasília time In Portuguese +55 (11) 3127-4971 / 3728-5971 (Brazil) Code: Gafisa
► 8:30 a.m. US EST In English (simultaneous translation from Portuguese) +1 516 300-1066 (USA) Code: Gafisa
Webcast: www.gafisa.com.br/ri
Replay: +55 (11) 3127-4999 Portuguese: 35492815 English: 40262218
Shares GFSA3 – B³ GFA – NYSE Total outstanding shares: 44,757,914¹ Average Daily Traded Volume (3Q18): R$11.9 million ¹including 871,664 treasury shares
|
As management was elected on 09/28/18, it is therefore not liable for 3Q18 operations and results, and hereby releases its first report. Firstly, over the past 40 days, our priority was to cut costs, processes and contracts, and optimize our structure. Specifically, we reduced our workforce by 50%, which will amount to R$36 million/year savings, which includes the Rio de Janeiro branch shutdown. From now on, we will concentrate our efforts solely on the region of São Paulo, Brazil’s largest market. In addition, we proposed to our shareholders to transfer the Company's headquarters from São Paulo to São Caetano do Sul, at Gafisa’s owned property, which, besides sheltering our operations, will save R$4.7 million/year on office lease costs. In addition to our focus on cost-cutting initiatives, the new management is pursuing innovation to Gafisa’s business model, highlighting as short-term actions: (i) the launch of Gafisa Serviços (Gafisa Services), which offers post-warranty services, house-up (customization of unit to be delivered according to customer’s needs) and rental of residential and commercial units, owned and third-party units, and (ii) the setup of an Innovation Committee, headed by Mr. Pedro Carvalho de Melo, one of our independent board members, and comprised of other four executives of the Company, representing the areas of building sites, new business, and sales. Mr. Melo is the academic coordinator of FGV/IDE's international programs and the chairman of Gafisa’s Audit Committee. For the fourth quarter, we have already directed our efforts toward selling existing inventory. As to launches, new management will prioritize more profitable projects with higher market acceptance. To subpsort the Company’s recovery in the upcoming years, we are analyzing funding alternatives. Over the next few months, we will be working on the Business Plan for the next two years, which will be released to the market in due course. Our objective is to continue adjusting the Company's business model, driving solid performance which creates value for shareholders and stakeholders.
Ana Recart CEO, CFO and Investor Relations Officer |
|
1 |
MAIN CONSOLIDATED INDICATORS
Table 1 - Operational Performance (R$ 000)
|
3Q18 |
2Q18 |
Q/Q (%) |
3Q17 |
Y/Y (%) |
9M18 |
9M17 |
Y/Y (%) | |
|
Launches |
71,144 |
399,875 |
-82.2% |
463,841 |
-84.7% |
609,734 |
463,841 |
31.5% |
|
Gross Sales |
188,125 |
405,858 |
-53.6% |
438,429 |
-57.1% |
887,443 |
914,834 |
-3.0% |
|
Cancellations |
(51,661) |
(59,912) |
-13.8% |
(84,390) |
-47.3% |
(169,276) |
(316,251) |
-46.5% |
|
Pre-Sales |
136,464 |
345,946 |
-60.6% |
354,039 |
-61.5% |
718,167 |
598,583 |
20.0% |
|
Net Sales over Subpsly (SoS) |
9.4% |
19.9% |
-10.5 bps |
18.3% |
-8.9 bps |
35.3% |
27.5% |
7.8 bps |
|
Delivery PSV |
346,009 |
300,991 |
15.0% |
75,227 |
360.0% |
647,001 |
820,153 |
-21.1% |
|
Inventories |
1,318,698 |
1,395,626 |
-5.5% |
1,581,402 |
-16.6% |
1,318,698 |
1,581,402 |
-16.6% |
Table 2 – Financial Performance (R$ 000)
|
3Q18 |
2Q18 |
Q/Q (%) |
3Q17 |
Y/Y (%) |
9M18 |
9M17 |
Y/Y (%) | |
|
Net Revenue |
252,306 |
302,271 |
-16.5% |
160,325 |
57.4% |
767,974 |
444,117 |
72.9% |
|
Adjusted Gross Profit |
80,330 |
104,366 |
-23.0% |
18,686 |
329.9% |
243,829 |
51,916 |
369.7% |
|
Adjusted Gross Margin 1 |
31.8% |
34.5% |
-2.7 bps |
11.7% |
20.1 bps |
31.7% |
11.7% |
20.0 bps |
|
Adjusted EBITDA |
20,535 |
29,164 |
-29.6% |
(44,199) |
-146.5% |
52,942 |
(156,582) |
-133.8% |
|
Adjusted EBITDA Margin² |
8.1% |
9.6% |
-1.5 bps |
-27.6% |
35.7 bps |
6.9% |
-35.3% |
42.2 bps |
|
Net Income |
(37,225) |
(29,359) |
26.8% |
(157,841) |
-76.4% |
(122,509) |
(485,417) |
-74.8% |
|
Backlog Revenues |
587,344 |
701,634 |
-16.3% |
630,168 |
-6.8% |
587,344 |
630,168 |
-6.8% |
|
Backlog Results ³ |
215,778 |
262,828 |
-17.9% |
220,174 |
-2.0% |
215,778 |
220,174 |
-2.0% |
|
Backlog Results Margin ³ 5 |
36.7% |
37.5% |
-0.8 bps |
34.9% |
1.8 bps |
36.7% |
34.9% |
1.8 bps |
|
Net Debt |
765,898 |
751,873 |
1.9% |
1,063,274 |
-28.0% |
765,898 |
1,063,274 |
-28.0% |
|
Cash and Cash Equivalents 4 |
194,446 |
212,897 |
-8.7% |
155,998 |
24.6% |
194,446 |
155,998 |
24.6% |
|
Equity + Minority Shareholders |
871,955 |
908,570 |
-4.0% |
1,221,093 |
-28.6% |
871,955 |
1,221,093 |
-28.6% |
|
(Net Debt – Proj. Fin.) / (Equity + Minorit.) |
22.7% |
17.3% |
5.4 bps |
12.7% |
10.0 bps |
22.7% |
12.7% |
10.0 bps |
¹ Adjusted by capitalized interests;
² Adjusted by stock option plan expenses (non-cash), minority shareholders;
³ Backlog results net of PIS/COFINS taxes (3.65%) and excluding the impact of PVA (Present Value Adjustment) method according to Law No. 11.638.
4 Cash and cash equivalents, and marketable securities.
5 Backlog results comprise the projects restricted by condition precedent
|
2 |
OPERATIONAL RESULTS
Table 3 - Operational Performance (R$ 000)
|
3Q18 |
2Q18 |
Q/Q (%) |
3Q17 |
Y/Y (%) |
9M18 |
9M17 |
Y/Y (%) | |
|
Launches |
71,144 |
399,875 |
-82.2% |
463,841 |
-84.7% |
609,734 |
463,841 |
31.5% |
|
Gross Sales |
188,125 |
405,858 |
-53.6% |
438,429 |
-57.1% |
887,443 |
914,834 |
-3.0% |
|
Cancellations |
(51,661) |
(59,912) |
-13.8% |
(84,390) |
-47.3% |
(169,276) |
(316,251) |
-46.5% |
|
Pre-Sales |
136,464 |
345,946 |
-60.6% |
354,039 |
-61.5% |
718,167 |
598,583 |
20.0% |
|
Sales over Subpsly (SoS) |
9.4% |
19.9% |
-10.5 bps |
18.3% |
-8.9 bps |
35.3% |
27.5% |
7.8 bps |
|
Delivery PSV |
346,009 |
300,991 |
15.0% |
75,227 |
360.0% |
647,001 |
820,153 |
-21.1% |
Launches
The Company launched one project in the quarter, the Vision Pinheiros, in the city of São Paulo, with total PSV of R$71.1 million. Launch volume in 9M18 reached R$609.7 million, 31.5% higher than the same period last year.
*It considers 9M18
Table 4 - Launches (R$ 000)
|
Project |
City |
Period |
PSV |
|
Upside Pinheiros |
São Paulo/SP |
1Q18 |
138,715 |
|
Upside Paraíso |
São Paulo/SP |
2Q18 |
147,949 |
|
Belvedere Lorian |
Osasco/SP |
2Q18 |
165,130 |
|
MOOV Belém |
São Paulo/SP |
2Q18 |
86,797 |
|
Vision Pinheiros |
São Paulo/SP |
3Q18 |
71,144 |
|
TOTAL |
|
|
609,734 |
|
3 |
Sales
In 3Q18, gross sales totaled R$188.1 million. Lower sales volume in the period, versus 2Q18 and 3Q17, is due to: (i) heightened political uncertainty, which resulted in an economic slowdown and drop in consumer confidence and (ii) lower volume of launches in the period. It is also worth mentioning that the Vision Pinheiros project was launched on September 29, last weekend of September, with many in-progress sales negotiations that will be included in fourth quarter results. In 9M18, gross sales totaled R$887.4 million versus R$914.5 million in 9M17.
Cancellations came to R$51.7 million in 3Q18, 13.8% lower than in 2Q18, and a sharp drop of 47.3% compared to 3Q17, despite a significant volume of projects delivered in the quarter. Cancellations performance year to date also reflects this downward trend, reaching R$169.3 million in 9M18. The average monthly Cancellations decreased from R$35.1 million in 9M17 to R$18.8 million in 9M18.
The net pre-sales totaled R$136.5 million in 3Q18. In 9M18, net pre-sales came to R$718.2 million, 20% higher than in 9M17.
|
4 |
Sales Over Subpsly (SoS)
Inventory (Property for Sale)
Inventory at market value was R$1,318.7 million in 3Q18, down 5.5% quarter-over-quarter. Year-over-year the reduction was 16.6%.
Table 5 – Inventory at Market Value 3Q18 x 2Q18 (R$ 000)
|
|
Inventories EoP 2Q18 |
Launches |
Cancellations |
Gross Sales |
Adjustements¹ |
Inventories EoP 3Q18 |
Q/Q(%) |
|
São Paulo |
1,148,760 |
71,144 |
35,557 |
(160,909) |
(2,739) |
1,091,812 |
-5.0% |
|
Rio de Janeiro |
191,798 |
- |
13,522 |
(19,677) |
(9,047) |
176,596 |
-7.9% |
|
Other Markets |
55,068 |
- |
2,583 |
(7,539) |
178 |
50,290 |
-8.7% |
|
Total |
1,395,626 |
71,144 |
51,661 |
(188,125) |
(11,608) |
1,318,698 |
-5.5% |
¹ Adjustments reflect the updates related to the project scope, launch date and pricing update in the period.
The inventory turnover at the end of 3Q18 was 19 months, in line with 3Q17.
|
5 |
The inventory of finished units fell from R$499.8 million (35.8% of total inventory) in 2Q18 to R$434.2 million in 3Q18 (32.9% of total).
From the total finished units, 47.6% are commercial projects. This percentage is due to lower sales speed in this segment, which has lower liquidity.
Table 6 – Inventory at Market Value – Financial Progress – POC - (R$ 000)
|
|
Not Initiated |
Up to 30% built |
30% to 70% built |
More than 70% built |
Finished Units |
Total 3Q18 |
|
São Paulo |
196,458 |
80,553 |
364,214 |
219,628 |
230,959 |
1,091,812 |
|
Rio de Janeiro |
- |
- |
- |
5,188 |
171,408 |
176,596 |
|
Other Markets |
- |
- |
18,478 |
- |
31,812 |
50,290 |
|
Total |
196,458 |
80,553 |
382,692 |
224,815 |
434,180 |
1,318,698 |
Delivered Projects and Transfer
The Company delivered three projects with total PSV of R$346.0 million, 15.0% higher than in 3Q17. As of September 30, 2018, Gafisa was managing the construction of 19 projects, all of which are on schedule.
Over the past few years, the Company has been taking steps to improve the receivables/transfer process, aiming at maximizing the return rates on capital employed in the projects. Currently, the Company’s guideline is to conclude the transfer process of 90% of eligible units within 90 days after project delivery.
PSV transferred in 3Q18 climbed 69.8% to R$238.6 million quarter-over-quarter and 90.0% year-over-year, bolstered by an increase in PSV of projects delivered in the period. In 9M18, PSV transferred came to R$438.1 million, 19.6% higher than in 9M17, due to a lower PSV volume of deliveries this year.
Table 7 – Transfer
|
|
3Q18 |
2Q18 |
Q/Q (%) |
3Q17 |
Y/Y (%) |
9M18 |
9M17 |
Y/Y (%) |
|
PSV Transferred ¹ |
238,644 |
140,505 |
69.8% |
125,609 |
90.0% |
438,147 |
366,392 |
19.6% |
|
Delivered Projects |
3 |
5 |
-40.0% |
1 |
200.0% |
8 |
8 |
0.0% |
|
Delivery Units |
780 |
1,025 |
-23.9% |
296 |
163.5% |
1,805 |
1,890 |
-4.5% |
|
Delivered PSV ² |
346,009 |
300,991 |
15.0% |
75,227 |
360.0% |
647,001 |
820,153 |
-21.1% |
¹ PSV transferred refers to the potential sales value of the units transferred to financial institutions;
² PSV = Potential sales value of delivered units.
Landbank
The Company’s landbank, with an estimated PSV of R$3.9 billion, represents 33 potential projects/phases which have been revised by the new management.
Aproximately 58.3% of land was acquired through swaps in the quarter. In 3Q18, Gafisa acquired three new land areas in its strategic market (São Paulo), with potential PSV of R$324.4 million. The physical swap of these land acquisitions accounted for 79% of total purchase.
|
6 |
Table 8 - Landbank (R$ 000)
|
|
PSV |
% Swap Total |
% Swap Units |
% Swap Financial |
Potential Units |
Potential |
|
São Paulo |
2,645,527 |
55.5% |
51.2% |
4.3% |
5,804 |
6,470 |
|
Rio de Janeiro |
1,273,603 |
62.5% |
62.5% |
0.0% |
1,712 |
1,712 |
|
Total |
3,919,130 |
58.3% |
55.7% |
2.6% |
7,516 |
8,182 |
¹ The swap percentage is measured compared to the historical cost of land acquisition.
² Potential units are net of swaps and refer to Gafisa’s and/or its partners’ interest in the project.
Table 9 – Changes in the Landbank (3Q18 x 2Q18 - R$ 000)
|
|
Initial Landbank |
Land Acquisition |
Launches |
Cancellations |
Adjustments |
Final Landbank |
|
São Paulo |
2,386,018 |
324,439 |
71,144 |
- |
6,214 |
2,645,527 |
|
Rio de Janeiro |
1,353,466 |
- |
- |
79,863 |
- |
1,273,603 |
|
Total |
3,739,484 |
324,439 |
71,144 |
79,863 |
6,214 |
3,919,130 |
FINANCIAL RESULTS
Revenue
Net revenues increased to R$252.3 million in 3Q18, up by 57.4% from 3Q17.The revenue contribution from projects launched from 2016 to 2017 were boosted by higher work evolution in the period. The MOOV Belém and Upside Pinheiros projects launched in 2Q18 contributed R$78 million revenue in the quarter.
Table 10 – Revenue Recognition (R$ 000)
|
|
3Q18 |
3Q17 | |||||||
|
Launches |
Pre-Sales |
% |
Revenue |
% Revenue |
Pre-Sales |
% |
Revenue |
% Revenue | |
|
2018 |
26,109 |
19.1% |
81,694 |
32.4% |
- |
0.0% |
- |
0.0% | |
|
2017 |
27,290 |
20.0% |
52,958 |
21.0% |
224,814 |
63.5% |
- |
0.0% | |
|
2016 |
29,067 |
21.3% |
83,723 |
33.2% |
27,258 |
7.7% |
19,555 |
12.2% | |
|
2015 |
35,017 |
25.7% |
44,362 |
17.6% |
40,346 |
11.4% |
73,627 |
45.9% | |
|
<2014 |
18,981 |
13.9% |
(10,431) |
-4.1% |
61,620 |
17.4% |
67,143 |
41.9% | |
|
Total |
136,464 |
100% |
252,307 |
100.0% |
354,039 |
100% |
160,324 |
100.0% | |
|
SP + RJ |
131,507 |
96.4% |
253,513 |
100.5% |
349,248 |
98.6% |
160,757 |
100.3% | |
|
Other Markets |
4,956 |
3.6% |
(23,735) |
-9.4% |
4,791 |
1.4% |
(433) |
-0.3% | |
Gross Profit & Margin
Gafisa’s adjusted gross profit totaled R$80.3 million in 3Q18, 329.9% higher than in 3Q17, due to sales of projects with better margins. In 9M18, such growth was 369.7% higher than in 9M17, totaling R$243.8 million.
Adjusted gross margin in 3Q18 was 31.8%, 2,018 bps higher than in 3Q17. This margin gain is also reflected in the year-over-year comparison, 31.7% in 9M18.
|
7 |
Table 11 – Gross Margin (R$ 000)
|
|
3Q18 |
2Q18 |
Q/Q (%) |
3Q17 |
Y/Y (%) |
9M18 |
9M17 |
Y/Y (%) |
|
Net Revenue |
252,306 |
302,271 |
-16.5% |
160,325 |
57.4% |
767,974 |
444,117 |
72.9% |
|
Gross Profit |
48,746 |
72,824 |
-33.1% |
(7,631) |
738.8% |
144,432 |
(39,201) |
468.4% |
|
Gross Margin |
19.3% |
24.1% |
-4.8 bps |
-4.8% |
24.1 bps |
18.8% |
-8.8% |
27.6 bps |
|
(-) Financial Costs |
31,584 |
31,542 |
0.1% |
26,317 |
20.0% |
99,397 |
91,117 |
9.1% |
|
Adjusted Gross Profit 1 |
80,330 |
104,366 |
-23.0% |
18,686 |
329.9% |
243,829 |
51,916 |
369.7% |
|
Adjusted Gross Margin 1 |
31.8% |
34.5% |
-2.7 bps |
11.7% |
20.1 bps |
31.7% |
11.7% |
20.0 bps |
¹ Adjusted by capitalized interests.
Selling, General and Administrative Expenses (SG&A)
General and administrative expenses totaled R$22.3 million in 3Q18, 7.0% higher than in 2Q18. This increase
is mainly due to a provision for severance pay to the former executive board in September 2018. However, in 9M18, we saw a 9.8% decrease, in line with cost-saving measures.
In 3Q18, selling expenses were 26.5% and 9.9% lower than in 2Q18 and 3Q17, respectively, due to lower commission and launch expenses in the period. By contrast, in the 9M18 vs 9M17 comparison, higher volume of launches increased selling expenses by 15.6% to R$73.0 million.
Therefore, selling, general and administrative expenses came to R$43.0 million in 3Q18 and R$134.9 million in 9M18.
Table 12 – SG&A Expenses (R$ 000)
|
|
3Q18 |
2Q18 |
Q/Q (%) |
3Q17 |
Y/Y (%) |
9M18 |
9M17 |
Y/Y (%) |
|
Selling Expenses |
(20,653) |
(28,110) |
-26.5% |
(22,929) |
-9.9% |
(73,042) |
(63,169) |
15.6% |
|
G&A Expenses |
(22,300) |
(20,845) |
7.0% |
(21,441) |
4.0% |
(61,841) |
(68,548) |
-9.8% |
|
Total SG&A Expenses |
(42,953) |
(48,955) |
-12.3% |
(44,370) |
-3.2% |
(134,883) |
(131,717) |
2.4% |
In 3Q18, other operating revenues/expenses totaled R$17.6 million, in line with 2Q18. The year-over-increase is mainly due to higher litigation expenses. In 9M18, however, other operating revenues/expenses came in 22.5% lower than in 9M17.
Table 13 – Other Operating Revenues/Expenses (R$ 000)
|
|
3Q18 |
2Q18 |
Q/Q (%) |
3Q17 |
Y/Y (%) |
9M18 |
9M17 |
Y/Y (%) |
|
Litigation Expenses |
(17,241) |
(15,747) |
9.5% |
(14,654) |
17.7% |
(44,764) |
(61,431) |
-27.1% |
|
Others |
(337) |
(1,972) |
-82.9% |
4,625 |
-107.3% |
(2,738) |
127 |
-2255.9% |
|
Total |
(17,578) |
(17,719) |
-0.8% |
(10,029) |
75.3% |
(47,502) |
(61,304) |
-22.5% |
|
8 |
Adjusted EBITDA
Adjusted EBITDA totaled R$20.5 million in 3Q18 and R$52.9 million in 9M18, 133.8% higher than in 9M17.
Table 14 – Adjusted EBITDA (R$ 000)
|
|
3Q18 |
2Q18 |
Q/Q (%) |
3Q17 |
Y/Y (%) |
9M18 |
9M17 |
Y/Y (%) |
|
Net Income |
(37,225) |
(29,359) |
26.8% |
(157,841) |
76.4% |
(122,509) |
(387,242) |
-68.4% |
|
Discontinued Operation Result 1 |
- |
- |
0.0% |
- |
0.0% |
- |
98,175 |
-100.0% |
|
Adjusted Net Income1 |
(37,225) |
(29,359) |
26.8% |
(157,841) |
76.4% |
(122,509) |
(485,417) |
74.8% |
|
(+) Financial Results |
19,179 |
19,082 |
0.5% |
21,069 |
-9.0% |
58,211 |
83,019 |
-29.9% |
|
(+) Income Taxes |
670 |
1,432 |
-53.2% |
(622) |
207.6% |
2,333 |
1,673 |
39.5% |
|
(+) Depreciation and Amortization |
6,393 |
5,140 |
24.4% |
8,379 |
-23.7% |
15,518 |
25,962 |
-40.2% |
|
(+) Capitalized Interest |
31,584 |
31,542 |
0.1% |
26,317 |
20.0% |
99,397 |
91,117 |
9.1% |
|
(+) Expenses w Stock Option Plan |
634 |
1,369 |
-53.7% |
1,194 |
-46.9% |
1,912 |
2,898 |
-34.0% |
|
(+) Minority Shareholders |
(700) |
(42) |
1566.7% |
(66) |
959.1% |
(1,920) |
(120) |
1500.0% |
|
(+) AUSA Income Effect Adjusted |
- |
- |
0.0% |
57,371 |
-100.0% |
- |
124,286 |
-100.0% |
|
Adjusted EBITDA1 |
20,535 |
29,164 |
-29.6% |
(44,199) |
146.5% |
52,942 |
(156,582) |
133.8% |
¹ Sale of Tenda shares.
Financial Result
In 3Q18, financial result totaled a R$19.2 million expense, in line with 2Q18. When compared to 3Q17, financial result dropped 9% due to debt reduction. In 9M18, financial result was an expense of R$58.2 million, 29.9% lower than the same period last year.
Net Income
In 3Q18, the Company posted a net loss of R$37.2 million, compared to a net loss of R$29.4 million in 2Q18 and R$100.5 million in 3Q17. For 9M18, net loss totaled R$122.5 million versus a net loss of R$361.1 million in 9M17.
Table 15 – Net Result (R$ 000)
|
|
3Q18 |
2Q18 |
Q/Q (%) |
3Q17 |
Y/Y (%) |
9M18 |
9M17 |
Y/Y (%) |
|
Net Revenue |
252,306 |
302,271 |
-16.5% |
160,325 |
57.4% |
767,974 |
444,117 |
72.9% |
|
Gross Profit |
48,746 |
72,824 |
-33.1% |
(7,631) |
-738.8% |
144,432 |
(39,201) |
-468.4% |
|
Gross Margin |
19.3% |
24.1% |
-4.8 bps |
-4.8% |
24.1 bps |
18.8% |
-8.8% |
27.6 bps |
|
Adjusted Gross Profit 1 |
80,330 |
104,366 |
-23.0% |
18,686 |
329.9% |
243,829 |
51,916 |
369.7% |
|
Adjusted Gross Margin |
31.8% |
34.5% |
-2.7 bps |
11.7% |
20.1 bps |
31.7% |
11.7% |
20.0 bps |
|
Adjusted EBITDA 2 |
20,535 |
29,164 |
-29.6% |
(44,199) |
-146.5% |
52,942 |
(156,582) |
-133.8% |
|
Adjusted EBITDA Margin |
8.1% |
9.6% |
-1.5 bps |
-27.6% |
35.7 bps |
6.9% |
-35.3% |
42.2 bps |
|
Income from Discontinued Operations 3 |
- |
- |
0.0% |
- |
0.0% |
- |
98,175 |
-100.0% |
|
Adjusted Net Income 4 |
(37,225) |
(29,359) |
26.8% |
(157,841) |
-76.4% |
(122,509) |
(485,417) |
-74.8% |
|
( - ) Equity income from Alphaville |
- |
- |
0.0% |
(57,371) |
-100.0% |
- |
(124,286) |
-100.0% |
|
Adjusted Net Result (ex-AUSA) |
(37,225) |
(29,359) |
26.8% |
(100,470) |
-62.9% |
(122,509) |
(361,131) |
-66.1% |
¹ Adjusted by capitalized interests;
² Adjusted by note 1, by expense with stock option plan (non-cash) and minority shareholders. EBITDA does not consider Alphaville's equity income;
³ Sale of Tenda shares;
4 Adjusted by item 3.
|
9 |
Backlog of Revenues and Results
The balance of backlog revenues totaled R$215.8 million in 3Q18, 17.9% lower than in 2Q18 and 2.0% lower year-over-year, both mainly due to revenue recognition of MOOV Belém and Upside Paraíso projects in the quarter.
Table 16 – Backlog Results (REF) (R$ 000)
|
|
3Q18 |
2Q18 |
Q/Q(%) |
3Q17 |
Y/Y(%) |
|
Backlog Revenues |
587,344 |
701,634 |
-16.3% |
630,168 |
-6.8% |
|
Backlog Costs (units sold) |
(371,566) |
(438,806) |
-15.3% |
(409,994) |
-9.4% |
|
Backlog Results |
215,778 |
262,828 |
-17.9% |
220,174 |
-2.0% |
|
Backlog Margin |
36.7% |
37.5% |
-0.8 bps |
34.9% |
1.8 bps |
Note: Backlog results net of PIS/COFINS taxes (3.65%) and excluding the impact of PVA (Present Value Adjustment) method according to Law No. 11.638.
Backlog results comprise the projects restricted by condition precedent.
|
10 |
BALANCE SHEET
Cash and Cash Equivalents and Marketable Securities
On September 30, 2018, cash and cash equivalents and marketable securities totaled R$194.4 million.
Receivables
At the end of 3Q18, total accounts receivables totaled R$1.4 billion, down 6.2% and 2.0% versus 2Q18 and 3Q17, respectively. Of this amount, R$783.5 million was already recognized on the balance sheet and $285.6 million is expected to be received in 2018.
Table 17 – Total Receivables (R$ 000)
|
|
3Q18 |
2Q18 |
Q/Q (%) |
3Q17 |
Y/Y (%) |
|
Receivables from developments (off balance sheet) |
609,594 |
728,214 |
-16.3% |
654,040 |
-6.8% |
|
Receivables from PoC- ST (on balance sheet) |
569,166 |
562,072 |
1.3% |
570,303 |
-0.2% |
|
Receivables from PoC- LT (on balance sheet) |
214,405 |
195,199 |
9.8% |
197,407 |
8.6% |
|
Total |
1,393,165 |
1,485,485 |
-6.2% |
1,421,750 |
-2.0% |
Notes: ST – Short term | LT- Long term | PoC – Percentage of Completion Method.
Receivables from developments: accounts receivable not yet recognized according to PoC and BRGAAP
Receivables from PoC: accounts receivable already recognized according to PoC and BRGAAP.
Table 18 – Receivables Schedule (R$ 000)
|
|
Total |
2018 |
2019 |
2020 |
2021 |
2022 – and after |
|
Receivables from PoC |
783,571 |
285,602 |
312,306 |
114,576 |
65,019 |
6,068 |
Cash Generation
Cash generation was negative R$14.0 million in 3Q18. Excluding land payment expenses in the period of R$26.1 million, cash generation would have totaled R$12.1 million.
Table 19 –Cash Generation (R$ 000)
|
|
2Q18 |
3Q18 |
|
Availabilities 1 |
212,897 |
194,445 |
|
Change in Availabilities (1) |
7,959 |
-18,452 |
|
Total Debt + Investor Obligations |
964,770 |
960,344 |
|
Change in Total Debt + Investor Obligations (2) |
-18,698 |
-4,426 |
|
Capital Increase (3) |
- |
- |
|
Cash Generation in the period (1) - (2) - (3) |
26,657 |
-14,026 |
|
Final Accumulated Cash Generation |
-45,203 |
-59,229 |
¹ Cash and cash equivalents. and marketable securities.
|
11 |
Liquidity
In 3Q18, net debt reached R$765.9 million, down 28.0% year-over-year. The Company’s Net Debt/Shareholders’ Equity ratio at the end of 3Q18 was 87.8%.
Table 20 – Debt and Investor Obligations (R$ 000)
|
|
3Q18 |
2Q18 |
Q/Q (%) |
3Q17 |
Y/Y (%) |
|
Debentures - FGTS (A) |
- |
- |
0.0% |
154,830 |
-100.0% |
|
Debentures – Working Capital (B) |
281,325 |
223,663 |
25.8% |
127,424 |
120.8% |
|
Project Financing SFH – (C) |
567,696 |
594,917 |
-4.6% |
753,639 |
-24.7% |
|
Working Capital (D) |
111,323 |
146,190 |
-23.9% |
183,379 |
-39.3% |
|
Total Debt (A)+(B)+(C)+(D) = (E) |
960,344 |
964,770 |
-0.5% |
1,219,272 |
-21.2% |
|
Cash and Availabilities¹ (F) |
194,446 |
212,897 |
-8.7% |
155,998 |
24.6% |
|
Net Debt (E)-(F) = (G) |
765,898 |
751,873 |
1.9% |
1,063,274 |
-28.0% |
|
Equity + Minority Shareholders (H) |
871,955 |
908,570 |
-4.0% |
1,221,093 |
-28.6% |
|
(Net Debt) / (Equity) (G)/(H) = (I) |
87.8% |
82.8% |
4.9 bps |
87.1% |
0.7 bps |
|
(Net Debt – Proj. Fin.) / Equity (G)- ((A)+(C))/(H) = (J) |
22.7% |
17.3% |
5.4 bps |
12.7% |
10.0 bps |
¹ Cash and cash equivalents and marketable securities.
The Company ended 3Q18 with R$201.4 million of total short-term indebtedness, 21.0% of total debt versus 51.5% at the end of 3Q17. On September 30, 2018, the consolidated average cost of debt stood at 11.46% p.a. or 175.2% of CDI.
Table 21 – Debt Maturity
|
(R$ thousands) |
Average Cost (p.a.) |
Total |
Up to Sep/19 |
Up to Sep/20 |
Up to Sep/21 |
Up to Sep/22 |
| ||||
|
Debentures – Working Capital (A) |
CDI + 3% / IPCA + 8.37% / CDI + 5.25% / CDI + 3.75% |
281,325 |
31,196 |
182,211 |
57,977 |
9,941 |
| ||||
|
Project Financing (B) |
TR + 8.30% a 14.19% / 12.87% / 143% CDI |
567,696 |
169,987 |
285,261 |
112,448 |
- |
| ||||
|
Working Capital (C) |
135% CDI / CDI + 2.5% / CDI + 3% / CDI + 3.70% / CDI + 4.25% |
111,323 |
184 |
37,364 |
73,775 |
- |
| ||||
|
Total Debt (A)+(B)+(C) = (D) |
960,344 |
201,367 |
504,836 |
244,200 |
9,941 |
| |||||
|
% of Total Maturity per period |
21.0% |
52.6% |
25.4% |
1.0% |
| ||||||
|
Project debt maturing as % of total debt (B)/ (D) |
84.4% |
56.5% |
46.0% |
0.0% |
| ||||||
|
Corporate debt maturing as % of total debt ((A)+(C))/ (D) |
15.6% |
43.5% |
54.0% |
100.0% |
| ||||||
|
Ratio Corporate Debt / Mortgage |
40.9% / 59.1% |
||||||||||
|
12 |
SUBSEQUENT EVENTS
Extraordinary Shareholders’ Meeting Call Notice
Headquarters relocation
On October 04, 2018, Gafisa called for an Extraordinary Shareholders’ Meeting (ESM) to resolve on the headquarters relocation from Avenida das Nações Unidas, 8,501, 19o andar, in the City and State of São Paulo, CEP: 05425-070, to Alameda Caulim, 115, in the city of São Caetano do Sul, State of São Paulo, CEP: 09531-195, and accordingly, amend Article 2 of the Company's Bylaws.
Election of Fiscal Council’s Members
On October 30, 2018, Gafisa called for an Extraordinary Shareholders’ Meeting (ESM) to resolve on the election of new members to the Company’s Fiscal Council.
Ratings Review
S&P Global Ratings downgraded Gafisa’s rating from ‘brBBB’ to ‘brBB-’ with Gafisa under negative CreditWatch after suspending payment to its subpsliers. The downgrade was due to the Company's announcement of temporary suspension of payments to subpsliers, aiming at reassessing its strategies; the ratings agency believes this impacts the Company’s reputation, as it reflects a weakened status of is liquidity and intensifies risks of refinancing.
The Company’s management clarifies that this suspension was temporary and to reassess internal strategies, and informs that payment to its subpsliers and contractors have resumed and remain on schedule as previously indicated.
Share Buyback Program
On September 28, the Company abpsroved the commencement of its Share Buyback Program. Shares acquired will be held in treasury, and may be subsequently cancelled, sold and/or used, observing the limit of up to 3,516,970 common shares. The maximum term to acquire the Company’s shares shall be twelve (12) months, beginning on October 1st, 2018 and ending on October 1st, 2019.
From October 01 to 24, 2018, considering the blackout period starting on October 25, 2018, the Company acquired 3,161,300 shares within the Share Buyback Program.
|
13 |
São Paulo, November 8, 2018.
Alphaville Urbanismo SA released its results for the third quarter of 2018.
Financial Results
In 3Q18, net revenue came in at negative R$4 million and net loss totaled R$243 million.
|
|
|
|
|
| ||
|
|
|
|
|
| ||
|
3Q18 |
3T17 |
9M18 |
9M17 |
3Q18 vs. 3Q17 |
9M18 vs. 9M17 | |
|
Net revenue |
-4 |
41 |
101 |
153 |
-111% |
-34% |
|
Net income |
-243 |
-191 |
-533 |
-414 |
n.a |
n.a |
|
|
|
|
|
|
|
|
It is worth mentioning that Gafisa discontinued the recognition of its share in future losses after reducing the accounting balance of its 30% stake in Alphaville's share capital to zero.
For further information, please contact our Investor Relations team at ri@alphaville.com.br or +55 11 3038-7131.
|
14 |
Consolidated Income Statement
|
|
3Q18 |
2Q18 |
Q/Q (%) |
3Q17 |
Y/Y (%) |
9M18 |
9M17 |
Y/Y (%) |
|
Net Revenue |
252,306 |
302,271 |
-16.5% |
160,325 |
57.4% |
767,974 |
444,117 |
72.9% |
|
Operating Costs |
(203,560) |
(229,447) |
-11.3% |
(167,956) |
21.2% |
(623,542) |
(483,318) |
29.0% |
|
Gross Profit |
48,746 |
72,824 |
-33.1% |
(7,631) |
-738.8% |
144,432 |
(39,201) |
-468.4% |
|
Gross Margin |
19.3% |
24.1% |
-4.8 bps |
-4.8% |
24.1 bps |
18.8% |
-8.8% |
27.6 bps |
|
Operating Expenses |
(66,822) |
(81,711) |
-18.2% |
(129,829) |
-48.5% |
(208,317) |
(361,644) |
42.4% |
|
Selling Expenses |
(20,653) |
(28,110) |
-26.5% |
(22,929) |
-9.9% |
(73,042) |
(63,169) |
15,6% |
|
General and Administrative Expenses |
(22,300) |
(20,845) |
7.0% |
(21,441) |
4.0% |
(61,841) |
(68,548) |
-9.8% |
|
Other Operating Revenue/Expenses |
(17,578) |
(17,719) |
-0.8% |
(10,029) |
75.3% |
(47,502) |
(61,304) |
22.5% |
|
Depreciation and Amortization |
(6,393) |
(5,140) |
24.4% |
(8,379) |
-23.7% |
(15,518) |
(25,962) |
40.2% |
|
Equity Income |
102 |
(9,897) |
-101.0% |
(67,051) |
-100.2% |
(10,414) |
(142,661) |
92.7% |
|
Operational Result |
(18,076) |
(8,887) |
103.4% |
(137,460) |
-86.8% |
(63,885) |
(400,845) |
-84.1% |
|
Financial Income |
6,130 |
3,737 |
64,0% |
6,604 |
-7.2% |
15,211 |
23,680 |
-35.8% |
|
Financial Expenses |
(25,309) |
(22,819) |
10,9% |
(27,673) |
-8.5% |
(73,422) |
(106,699) |
-31.2% |
|
Income Tax and Social Contribution |
(37,255) |
(27,969) |
33.2% |
(158,529) |
-76.5% |
(122,096) |
(483,864) |
-74.8% |
|
Income Tax and Social Contribution |
(670) |
(1,432) |
-53.2% |
622 |
-207.7% |
(2,334) |
(1,673) |
39.5% |
|
Net Income After Taxes on Income |
(37,925) |
(29,401) |
29.0% |
(157,907) |
-76.0% |
(124,430) |
(485,537) |
-74.4% |
|
Continued Op, Net Income |
(37,925) |
(29,401) |
29.0% |
(157,907) |
-76.0% |
(124,430) |
(485,537) |
-74.4% |
|
Discontinued Op, Net Income |
- |
- |
0.0% |
- |
0.0% |
- |
98,175 |
-100.0% |
|
Minority Shareholders |
(700) |
(42) |
1566.7% |
(66) |
960.6% |
(1,921) |
(120) |
1500.8% |
|
Net Income |
(37,225) |
(29,359) |
26.8% |
(157,841) |
-76.4% |
(122,509) |
(387,242) |
-68.4% |
|
15 |
Consolidated Balance Sheet
|
|
3Q18 |
2Q18 |
Q/Q(%) |
3Q17 |
Y/Y(%) |
|
Current Assets |
|
|
|
|
|
|
Cash and Cash equivalents |
7,931 |
14,161 |
-44% |
26,626 |
-70.2% |
|
Securities |
186,515 |
198,736 |
-6% |
129,372 |
44.2% |
|
Receivables from clients |
569,166 |
562,072 |
1% |
570,303 |
-0.2% |
|
Properties for sale |
858,726 |
777,405 |
10% |
987,657 |
-13.1% |
|
Other accounts receivable |
104,116 |
104,086 |
0% |
122,968 |
-15.3% |
|
Prepaid expenses and other |
3,184 |
4,125 |
-22.8% |
5,526 |
-42.4% |
|
Land for sale |
34,212 |
34,212 |
0.0% |
3,270 |
946.2% |
|
Subtotal |
1,763,850 |
1,694,797 |
4.1% |
1,845,722 |
-4.4% |
|
|
|
|
|
|
|
|
Long-term Assets |
|
|
|
|
|
|
Receivables from clients |
214,405 |
195,199 |
9.8% |
197,407 |
8.6% |
|
Properties for sale |
263,937 |
370,192 |
-28.7% |
475,700 |
-44.5% |
|
Other |
116,874 |
114,656 |
1.9% |
193,076 |
-39.5% |
|
Subtotal |
595,216 |
680,047 |
-12.5% |
866,183 |
-31.3% |
|
Intangible. Property and Equipment |
43,047 |
41,011 |
5.0% |
44,613 |
-3.5% |
|
Investments |
465,438 |
466,987 |
-0.3% |
665,813 |
-30.1% |
|
|
|
|
|
|
|
|
Total Assets |
2,867,551 |
2,882,842 |
-0.5% |
3,422,331 |
-16.2% |
|
|
|
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
|
Loans and financing |
170,171 |
255,144 |
-33.3% |
354,592 |
-52.0% |
|
Debentures |
31,196 |
21,875 |
42.6% |
238,671 |
-86.9% |
|
Obligations for purchase of land advances from customers |
145,468 |
148,536 |
-2.1% |
170,680 |
-14.8% |
|
Material and service subpsliers |
106,363 |
94,632 |
12.4% |
89,975 |
18.2% |
|
Taxes and contributions |
56,822 |
55,554 |
2.3% |
50,412 |
12.7% |
|
Other |
297,503 |
298,213 |
-0.2% |
335,353 |
-11.3% |
|
Subtotal |
807,523 |
873,954 |
-7.6% |
1,239,683 |
-34.9% |
|
|
|
|
|
|
|
|
Long-term liabilities |
|
|
|
|
|
|
Loans and financings |
508,848 |
485,963 |
4.7% |
582,426 |
-12.6% |
|
Debentures |
250,129 |
201,788 |
24.0% |
43,583 |
473.9% |
|
Obligations for Purchase of Land and advances from customers |
207,765 |
182,723 |
13.7% |
98,117 |
111.8% |
|
Deferred taxes |
74,473 |
74,473 |
0.0% |
100,405 |
-25.8% |
|
Provision for Contingencies |
98,557 |
90,516 |
8.9% |
72,381 |
36.2% |
|
Other |
48,301 |
64,855 |
-25.5% |
64,643 |
-25.3% |
|
Subtotal |
1,188,073 |
1,100,318 |
8.0% |
961,555 |
23.6% |
|
|
|
|
|
|
|
|
Shareholders’ Equity |
|
|
|
|
|
|
Shareholders’ Equity |
870,252 |
905,948 |
-3.9% |
1,217,086 |
-28.5% |
|
Minority Interest |
1,703 |
2,622 |
-35.0% |
4,007 |
-57.5% |
|
Subtotal |
871,955 |
908,570 |
-4.0% |
1,221,093 |
-28.6% |
|
Total liabilities and Shareholders’ Equity |
2,867,551 |
2,882,842 |
-0.5% |
3,422,331 |
-16.2% |
|
16 |
Consolidated Cash Flow
|
|
3Q18 |
3Q17 |
9M18 |
9M17 |
|
Net Income (Loss) before taxes |
(37,255) |
(158,533) |
(122,096) |
(483,864) |
|
Expenses/revenues that does not impact working capital |
(5,810) |
102,356 |
(23,707) |
287,718 |
|
Depreciation and amortization |
6,393 |
8,379 |
15,518 |
25,962 |
|
Impairment |
(14,232) |
- |
(39,469) |
(11,141) |
|
Expense with stock option plan |
634 |
1,195 |
1,912 |
2,898 |
|
Unrealized interest and fees. net |
2,885 |
4,240 |
10,229 |
46,975 |
|
Equity Income |
(102) |
67,051 |
10,414 |
142,661 |
|
Provision for guarantee |
(363) |
(4,124) |
(3,656) |
(7,439) |
|
Provision for contingencies |
(17,931) |
14,654 |
44,764 |
61,431 |
|
Profit Sharing provision |
1,291 |
1,037 |
3,795 |
9,394 |
|
Provision (reversal) for doubtful accounts |
(7,884) |
10,068 |
(19,037) |
17,767 |
|
Gain / Loss of financial instruments |
(743) |
(144) |
(763) |
(790) |
|
Clients |
(24,860) |
22,086 |
(117,062) |
180,528 |
|
Properties held for sale |
39,166 |
116,052 |
206,932 |
263,519 |
|
Other accounts receivable |
2,262 |
(9,673) |
(9,364) |
(9,272) |
|
Prepaid expenses and differed sales expenses |
941 |
377 |
2,351 |
(2,978) |
|
Obligations on land purchase and advances from clients |
21,974 |
2,861 |
44,399 |
(26,900) |
|
Taxes and contributions |
1,268 |
4,069 |
10,392 |
(1,430) |
|
Subpsliers |
11,870 |
10,939 |
8,530 |
10,520 |
|
Payroll. charges and provision for bonuses |
2,715 |
(10,701) |
3,080 |
(8,887) |
|
Other liabilities |
(20,266) |
(6,419) |
(63,033) |
(35,393) |
|
Related party operations |
(3,985) |
(13,203) |
(12,442) |
(22,906) |
|
Taxes paid |
(670) |
622 |
(2,334) |
(1,673) |
|
Cash provided by/used in operating activities /discontinued operation |
- |
- |
- |
51,959 |
|
Net cash from operating activities |
(1,030) |
60,833 |
(26,940) |
200,941 |
|
Investment Activities |
- |
- |
- |
- |
|
Purchase of fixed and intangible asset |
(8,429) |
(7,674) |
(17,943) |
(18,370) |
|
Capital contribution in subsidiaries |
(1,708) |
853 |
(3,988) |
1,294 |
|
Redemption of securities. collaterals and credits |
216,482 |
163,743 |
882,542 |
851,218 |
|
Securities abpslication and restricted lending |
(204,261) |
(116,521) |
(950,122) |
(756,944) |
|
Cash provided by/used in investment activities / discontinued operation |
- |
- |
- |
48,663 |
|
Transaction costs from discontinued operation |
- |
- |
- |
(9,545) |
|
Receivable of preemptive right exercise ref. Tenda |
- |
- |
- |
219,510 |
|
Net cash from investment activities |
2,084 |
40,401 |
(89,511) |
335,826 |
|
Funding Activities |
- |
- |
- |
- |
|
Related party contributions |
- |
- |
- |
(1,237) |
|
Addition of loans and financing |
167,511 |
69,523 |
377,841 |
255,805 |
|
Amortization of loans and financing |
(174,822) |
(181,467) |
(532,624) |
(721,076) |
|
Assignment of credit receivables. net |
- |
- |
- |
21,513 |
|
Related Parties Operations |
(688) |
(643) |
(843) |
5,625 |
|
Sale of treasury shares |
715 |
- |
715 |
317 |
|
Cash provided by/used in financing activities/ discontinued operation |
- |
- |
- |
24,089 |
|
Capital Increase |
- |
- |
167 |
- |
|
Subscription and payment of common shares |
- |
- |
250,599 |
- |
|
Net cash from financing activities |
(7,284) |
(112,587) |
95,855 |
(414,964) |
|
Net cash variation for sales operations |
- |
- |
- |
(124,711) |
|
Increase (decrease) in cash and cash equivalents |
(6,230) |
(11,353) |
(20,596) |
(2,908) |
|
Beginning of the period |
14,161 |
37,979 |
28,527 |
29,534 |
|
End of the Period |
7,931 |
26,626 |
7,931 |
26,626 |
|
Increase (decrease) in cash and cash equivalents |
(6,230) |
(11,353) |
(20,596) |
(2,908) |
|
17 |
|
Gafisa is one Brazil’s leading residential and commercial properties development and construction companies. Founded over 60 years ago. the Company is dedicated to growth and innovation oriented to enhancing the well-being. comfort. and safety of an increasing number of households. More than 15 million square meters have been built and abpsroximately 1,100 projects delivered under the Gafisa brand - more than any other company in Brazil. Recognized as one of the foremost professionally managed homebuilders. Gafisa’s brand is also one of the most respected. signifying both quality and consistency. In addition to serving the ubpser-middle and ubpser class segments through the Gafisa brand. the Company also participates through its 30% interest in Alphaville. a leading urban developer in the national development and sale of residential lots. Gafisa S.A. is a Corporation traded on the Novo Mercado of the B3 – Brasil. Bolsa. Balcão (B3:GFSA3) and is the only Brazilian homebuilder listed on the New York Stock Exchange (NYSE:GFA) with an ADR Level III. which ensures best practices in terms of transparency and corporate governance.
This release contains forward-looking statements about the business prospects. estimates for operating and financial results and Gafisa’s growth prospects. 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. |
IR Contacts Ana Recart Fernanda Nogueira Danielle Hernandes Telephone: +55 11 3025-9242 / 9474 Email: ri@gafisa.com.br IR Website: www.gafisa.com.br/ri
Media Relations Máquina Cohn & Wolfe Marilia Paiotti / Bruno Martins Telephone: +55 11 3147-7463 Fax: +55 11 3147-7438 E-mail: gafisa@grupomaquina.com
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18 |
SIGNATURE
|
Gafisa S.A. | |
|
By: |
/s/ Ana Maria Loureiro Recart |
|
Name: Ana Maria Loureiro Recart
Title: Chief Executive Officer | |