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