gfapr1q15_6k.htm - Generated by SEC Publisher for SEC Filing
 
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 

 
FORM 6-K
 
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934
 
For the month of May, 2015

(Commission File No. 001-33356),

 
Gafisa S.A.
(Translation of Registrant's name into English)
 


 
Av. Nações Unidas No. 8501, 19th floor
São Paulo, SP, 05425-070
Federative Republic of Brazil
(Address of principal executive office)



Indicate by check mark whether the registrant files or will file
annual reports under cover 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


 
 

 

 

FOR IMMEDIATE RELEASE - São Paulo, May 7, 2015 – Gafisa S.A. (Bovespa: GFSA3; NYSE: GFA), one of Brazil’s leading homebuilders, today reported financial results for the first quarter ended March 31, 2015.

            

 

GAFISA RELEASES
1Q15 RESULTS

MANAGEMENT COMMENTS AND HIGHLIGHTS

 

 

The first quarter of 2015 marked a turning point in Gafisa’s profitability. We are pleased to report that consolidated net income totaled R$31.6 million, of which the Tenda segment contributed R$11.4 million thanks to the increasing contribution of more profitable projects launched under the New Model. The Gafisa segment achieved net income of R$20.2 million, driven by the sale of inventory, cost reductions and equity income from Alphaville. This achievement is the result of the successful execution of our turnaround plan, which is based on three strategic pillars: improved operating efficiency, risk management and capital discipline.

The results are aligned with the Company’s strategy of improving operating performance and increasing profitability, despite challenges in the broader operating environment. These include interest rate, inflation and exchange rate movements which are directly impacting both consumer and investor confidence.

Within this context, we would like to highlight a substantial year-over-year increase in margin due to the solid performance of Gafisa’s and Tenda’s projects. The consolidated adjusted gross margin reached 34.5% in the first quarter, which is approximately 4 percentage points higher than the previous year. The Gafisa segment maintained stable results, with an adjusted gross margin of 36.9% in the quarter. At the same time, the increasing contribution of newer and more profitable projects launched under the New Model within Tenda led the segment to record an adjusted gross margin of 30.0%, which is considerably higher than 1Q14.

In keeping with the shift to a more conservative strategy amid greater risk aversion in the market, the Gafisa segment launched only one project during the quarter. Instead, we focused our efforts on reducing inventory levels, which accounted for approximately 92% of net pre-sales of R$179.8 million in the quarter. It is also worth highlighting strong delivery volumes in the Gafisa segment during the period: totaling 1,847 units and R$569.5 million in PSV, which equates to almost half of full year 2014 deliveries. The result benefited the level of transfers, which reached R$198.0 million, but negatively impacted cancellations, which reached R$124.8 million in 1Q15.

We ended the first quarter having achieved a 9.8%, or R$2.1 billion, reduction in inventory in the Gafisa segment. As a result, just 12.6% relates to completed projects. Of this amount, 44%, or R$115 million, pertains to

 

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discontinued locations. The performance of inventory sales contributed to the sales speed, which was 8.0% in 1Q15.

Amid the likely continuation of current economic conditions, we expect to take a conservative approach to launch activity throughout the remainder of the year. We will seek to balance the placement of new products in the market, prioritizing those with more liquidity, in order to achieve satisfactory sales and profitability levels.

Turning to the Tenda segment, we entered into 2015 with the intention of winding-down our remaining legacy projects. Accordingly, there are only 2 construction sites where work remains underway, and these should be delivered in the coming months. Our focus is on increasing the segment’s scale through higher launch volumes under the New Model. In 1Q15, 6 projects/phases were launched, totaling R$238.3 million, located in the states of São Paulo, Rio de Janeiro, Bahia and Pernambuco.

One of the most important highlights of the quarter in the Tenda segment was the strong level of sales speed achieved. The first quarter result of 23.3% reflected greater product availability after two quarters with high volume of launches, strong demand in the low income segment and the strong reduction in the volume of dissolutions observed during the period. As a result, net pre-sales increased significantly, totaling R$243.5 million, the highest level since the 4Q10.

Tenda delivered 6 projects during the quarter, representing 1,687 units and R$216.3 million in PSV, of which 50% (739 units, or R$102.3 million) were under the New Model.

The Tenda segment’s solid operating performance positively impacted its financial result, with adjusted gross income reaching R$53.8 million in 1Q15. The adjusted gross margin remained in the range of 28-30%, as it has since 2Q14.

Tenda has continued its efforts to achieve greater economies of scale by increasing launches and implementing strategies designed to ensure strong sales speed. The evolution in recent operating results in the last three quarters reinforces our confidence in the New Model.

On a consolidated basis, Gafisa and Tenda launched R$313.6 million in 1Q15, with net pre-sales of R$423.3 million. Adjusted gross profit was R$179.3 million, with margin of 34.5% in the quarter.

We are focused on achieving greater efficiency and productivity over the course of the business cycle, both in Gafisa and Tenda. In terms of selling and administrative expenses, the Gafisa segment achieved a 16.5% reduction on a year-over-year basis and a 21.7% decline compared with the fourth quarter of 2014. In the Tenda segment, the decrease was 9.6% y-o-y and 21.6% compared to 4Q14.

As a result of these initiatives, consolidated net income for the quarter was a positive result of R$31.6 million, consisting of net income of R$20.2 million from Gafisa and R$11.4 million at Tenda.

At the end of March 2015, the Net Debt / Shareholder’s Equity ratio reached 50.0%, slightly higher than the 47.1% registered in the previous quarter. Excluding financing for projects, the Net Debt / Shareholder’s Equity ratio was negative 15.7%. In the 1Q15, due to a higher volume of landbank acquisitions at Tenda, the Company recorded operating cash generation of R$15.1 million, with cash consumption of R$69.8 million.

Work related to the potential separation of the Gafisa and Tenda business units is continuing, with the goal of meeting the conditions deemed necessary for implementation of the plan. Since the beginning of 2014, a number of steps have already been completed, while some of the actions are still underway, including, for example, defining the appropriate capital structure for each of the business units. Taking into consideration that this is a necessary step in the separation process, it is still not possible to determine when the potential separation will be concluded, with the possibility that it could extend into 2016.

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Finally, we would like to highlight our satisfaction with the evolution of the business cycles at both Gafisa and Tenda. In recent years, both companies have strengthened and improved their operating and financial cycles, positioning them well for the challenges facing the sector in 2015. The Company has maintained its focus on achieving superior operating performance and continues to be guided, at all times, by capital discipline, the achievement of higher profitability and the generation of value for its shareholders and other stakeholders.

 

Sandro Gamba

Chief Executive Officer – Gafisa S.A.

Rodrigo Osmo

Chief Executive Officer – Tenda S.A.

 

 

 

 

 

 

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MAIN CONSOLIDATED FIGURES

Table 1. Operating and Financial Highlights – (R$000, and % Company)

 

1Q15

4Q14

Q/Q (%)

1Q14

Y/Y (%)

Launches

313,581

241,549

30%

535,379

-41%

Launches, Units

1,950

1,660

17%

1,866

5%

Net Pre-sales

423,344

303,888

39%

239,323

77%

Pre-sales, Units

1,908

1,215

57%

767

149%

Pre-sales of Launches

59,716

150,409

-60%

58,171

3%

Sales over Supply (SoS)

12.8%

8.9%

390 bps

7.5%

530 bps

Delivered projects (PSV)

785,748

726,213

8%

557,508

41%

Delivered projects, Units

3,534

3,036

16%

1,796

97%

Net Revenue

519,501

649,276

-20%

432,701

20%

Adjusted Gross Profit1

179,302

196,068

-9%

132,093

36%

Adjusted Gross Margin1

34.5%

30.2%

430 bps

30.5%

400 bps

Adjusted EBITDA2

96,363

71,725

34%

26,470

264%

Adjusted EBITDA Margin2

18.6%

11.0%

750 bps

6.1%

1,250 bps

Net Income (Loss)

31,651

8,045

293%

(39,791)

180%

Backlog Revenues

930,601

1,025,195

-9%

1,641,262

-43%

Backlog Results3

367,567

396,444

-7%

593,755

-38%

Backlog Margin3

39.5%

38.7%

83 bps

36.2%

332 bps

Net Debt + Investor Obligations

1,535,215

1,440,300

7%

1,403,824

9%

Cash and cash equivalents

1,116,168

1,157,254

-4%

1,563,226

-29%

Shareholders’ Equity

3,066,952

3,055,345

0%

3,106,358

-1%

Shareholders’ Equity + Minority

3,070,891

3,058,403

0%

3,129,511

-2%

Total Assets

7,333,898

7,205,851

2%

7,618,111

-4%

(Net Debt + Obligations) / (SE + Minority)

50.0%

47.1%

290 bps

44.9%

513 bps

1) Adjusted by capitalized interests.

2) Adjusted by expenses with stock option plans (non-cash), minority. Consolidated EBITDA considers the equity income from Alphaville.

3) Backlog results net of PIS/COFINS taxes – 3.65%, and excluding the impact of PVA (Present Value Adjustment) method according to Law 11,638

 

 

 

 

 

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FINANCIAL RESULTS

·         Net revenue recognized by the “PoC” method was R$340.1 million in the Gafisa segment and R$179.4 million in the Tenda segment. This resulted in consolidated revenue of R$519.5 million in the first quarter, an increase of 20.1% year on year, and a reduction of 20.0% from the previous quarter.

·         Adjusted gross profit for 1Q15 was R$149.2 million, up from R$97.3 million in 1Q14 and stable from the R$150.6 million in the previous quarter. Adjusted gross margin reached 34.5% versus 30.5% in the prior-year period and 30.2% in the 4Q14. Gafisa’s contribution was an adjusted gross profit of R$125.5 million, with an adjusted gross margin of 36.9%, while Tenda’s contribution was an adjusted gross profit of R$53.8 million, with a margin of 30.0% in 1Q15.

·         Adjusted EBITDA was R$96.4 million in 1Q15, with margin of 18.6%, an increase of 12.4 p.p. y-o-y and of750 bps q-o-q. The Gafisa segment reported adjusted EBITDA of R$58.3 million, while the Tenda segment’s adjusted EBITDA was positive R$21.1 million. Please note that consolidated adjusted EBITDA includes Alphaville equity income, while the Gafisa segment’s adjusted EBITDA is net of this effect.

·         The Company reported positive net income of R$31.6 million in the first quarter. Gafisa reported a net profit of R$20.2 million, while Tenda reported a profit of R$11.4 million.

·         Operating cash generation reached R$15.1 million in the 1Q15. In the period, net cash consumption of R$69.8 million was recorded.

OPERATING RESULTS

·         Launches totaled R$313.6 million in the 1Q15, encompassing 7 projects in the states of São Paulo, Rio de Janeiro, Bahia and Pernambuco, compared to R$241.5 million in 4Q14. The Gafisa segment accounted for 24% of the first quarter launches, while the Tenda segment accounted for the remaining 76%.

·         Net pre-sales totaled R$423.3 million in the 1Q15, of which R$179.8 million related to Gafisa and R$243.5 million to Tenda. The result is well above net pre-sales totaling R$239.3 million in the 1Q14. Consolidated sales from launches in the quarter represented 14.1% of the total, while sales from inventory comprised the remaining 85.9%.

·         Consolidated sales over supply (SoS) reached 12.8% in 1Q15, compared to 8.9% in 4Q14 and 7.5% in 1Q14. Over the past 12 months, Gafisa’s SoS was 27.9%, while Tenda’s was 42.2%.

·         Consolidated inventory at market value decreased R$249.7 million in the quarter, reaching R$2.9 billion. Gafisa’s inventory totaled R$2.1 billion and Tenda’s inventory totaled R$803.5 million.

·         Throughout the first quarter, the Company delivered 15 projects/phases, totaling 3,534 units, representing R$785.7 million in PSV. The Gafisa segment delivered 1,847 units, while the Tenda segment delivered the remaining 1,687 units.

      

 

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ANALYSIS OF RESULTS

GAFISA SEGMENT

Results Benefited from Growth in Revenues and Consistent Gross Margin, Reduction in Selling, General and Administrative Expenses and the contribution of Alphaville Results

Table 2. Gafisa Segment – Operating and Financial Highlights – (R$000, and % Gafisa)

 

1Q15

4Q14

Q/Q (%)

1Q14

Y/Y (%)

Launches

75,227

-

-

289,145

-74%

Net pre-sales

179,807

177,294

1%

187,555

-4%

Net pre-sales of Launches

14,436

57,770

-75%

37,915

-62%

Sales over Supply (SoS)

8.0%

7.2%

80 bps

7.9%

10 bps

Delivered projects (Units)

1,847

1,412

31%

524

252%

Net Revenue

340,058

490,947

-31%

326,750

4%

Adjusted Gross Profit1

125,502

150,806

-17%

116,530

8%

Adjusted Gross Margin1

36.9%

30.7%

620 bps

35.7%

120 bps

Adjusted EBITDA2

58,289

81,843

-29%

54,810

6%

Adjusted EBITDA Margin2

17.1%

16.7%

47 bps

16.8%

30 bps

Net Income (Loss)

20,205

36,819

-45%

(2,331)

967%

Backlog Revenues

742,154

894,344

-17%

1,429,230

-48%

Backlog Results3

294,093

356,254

-17%

526,273

-44%

Backlog Margin3

39.6%

39.8%

-20 bps

36.8%

280 bps

1) Adjusted by capitalized interests.

2) Adjusted by expenses with stock option plans (non-cash), minority. EBITDA from Gafisa segment does not consider the equity income from Alphaville.

3) Backlog results net of PIS/COFINS taxes – 3.65%, and excluding the impact of PVA (Present Value Adjustment) method according to Law 11,638.

 

Solid first quarter revenue performance reflects strong revenues from inventory sales, which represented 92.0% of net sales in the first quarter. In addition, equity income at Alphaville increased to R$16.9 million, versus a result of R$6.4 million which was not recorded in 4Q14. Another point worth highlighting is the reduction in selling, general and administrative expenses, which were 16.5% less than 1Q14 and 21.7% less than 4Q14. This reflects ongoing efforts in the Gafisa segment to increase efficiencies and improve cost management.

The adjusted gross margin ended the quarter at 36.9%, returning to the average levels presented in previous quarters, due to the absence of non-recurring items that impacted the gross margin in the previous quarter. These profitability levels ratify the equilibrium and stability of the gross margin in the Gafisa segment, observed since the beginning of 2013, and the solid performance of its projects, resulting from the continuous evolution of the Company's business cycle.

Net Income

Net income for the period was R$20.2 million, compared to a loss of R$2.3 million in the year ago period. Excluding the R$17.0 million in equity income from Alphaville, the Gafisa segment’s net income in the 1Q15 was R$3.2 million, higher than R$ 1.1 million recorded in 1Q14.

Table 3 – Gafisa Segment – Net Income (R$ Million)

Gafisa Segment (R$ 000)

1Q15

4Q14

1Q14

Adjusted Gross Profit

125.5

150.8

116.5

Adjusted Gross Margin

36.9%

30.7%

35.7%

Net Profit

20.2

36.8

(2.3)

Equity Income from Alphaville¹

17.0

20.7

(3.4)

Net Profit Ex-Alphaville

3.2

16.1

1.1

 

TENDA SEGMENT

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     TENDA SEGMENT
 

Higher Volume of New Model Projects and Consolidation of Operational Cycle Resulted in Increased Revenues and Profitability

Table 4. Tenda Segment – Operating and Financial Highlights – (R$000, and % Tenda)

 

1Q15

4Q14

Q/Q (%)

1Q14

Y/Y (%)

Launches

238,354

241,549

-1%

181,445

31%

Net pre-sales

243,537

126,594

92%

51,767

370%

Net pre-sales of Launches

45,280

92,638

-51%

20,256

124%

Sales over Supply (SoS)

23.3%

13.3%

1,000 bps

6.4%

1,690 bps

Delivered projects (Units)

1,687

1,624

4%

1,272

33%

Net Revenue

179,443

158,329

13%

105,951

69%

Adjusted Gross Profit1

53,800

45,262

19%

15,563

246%

Adjusted Gross Margin1

30.0%

28.6%

140 bps

14.7%

1,530 bps

Adjusted EBITDA2

21,114

(30,856)

168%

(24,913)

185%

Adjusted EBITDA Margin2

11.8%

-19.5%

3,125 bps

-23.5%

3,530 bps

Net Income (Loss)

11,446

(28,774)

140%

(37,460)

131%

Backlog Revenues

188,447

130,851

44%

212,031

-11%

Backlog Results3

73,474

40,190

83%

67,482

9%

Backlog Margin3

39.0%

30.7%

829 bps

31.8%

720 bps

1) Adjusted by capitalized interests.

2) Adjusted by expenses with stock option plans (non-cash), minority. Tenda does not hold equity in Alphaville.

3) Backlog results net of PIS/COFINS taxes – 3.65%, and excluding the impact of PVA (Present Value Adjustment) method according to Law 11,638.

 

The first quarter of the year was marked by the continued evolution of Tenda’s operational cycle, supported by an increase in the number of launches in the segment and higher net sales, as a result of the significant reduction in cancellations since the implementation of changes in the sales process (August/2014). As a result, the financial results of the Tenda segment improved significantly.

There was a strong increase in adjusted gross profit in the quarter, reaching R$53.8 million in 1Q15. In addition, the adjusted gross margin remained stable between 28 - 30%, which is in line with the range observed since the second quarter of 2014. This reflects the operational consolidation of projects executed under the New Model, which have demonstrated improved performance and profitability, as well as the decreasing contribution of legacy projects in the Tenda segment's revenue mix.

Furthermore, as observed in recent quarters, adjustments to the expense structure also benefited the quarter’s results. General and administrative expenses decreased 22.1% compared to the prior year, mainly due to the reduced operational complexity of the segment, the reduction in the number of legacy projects and reversal of the remaining bonus provision for 2014. Importantly, the Tenda segment achieved better cost management despite an increase in the number of launches and gross sales of 31.5% and 22.4%, respectively.

 

 

 

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Net Income

As a result of the above cost reductions and the increased contribution of more profitable projects launched under the New Mode, Tenda returned to profitability for the first time since 2Q11 (this excludes the 4Q13, which was impacted by the sale of stake in Alphaville). The Tenda segment achieved net income of R$11.4 million in 1Q15, compared with net losses of R$28.8 million in 4Q14 and R$37.5 million in 1Q14.

 

Table 5 – Tenda Segment – Net Income (R$ Million)

Tenda Segment (R$ 000)

1Q15

4Q14

1Q14

Adjusted Gross Profit

53.8

45.3

15.6

Adjusted Gross Margin

30.0%

28.6%

14.7%

Net Profit

11.4

(28.8)

(37.5)

 

 

 

 

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RECENT EVENTS

UPDATED STATUS OF THE SPIN-OFF PROCESS AND RECENT DEVELOPMENTS

Since an evaluation of the potential separation of the GafIsa and Tenda business units commenced in February 2014, a variety of activities have been executed in order to make the two business units independent of one another, from both an operational perspective as well as a capital structure perspective. We highlight the following actions that have already been completed: (i) separation of the administrative structures, with implementation of the changes required to processes and systems, (ii) definition of policies and corporate governance, (iii) preparation of Tenda for having its shares traded in the market, and (iv) performance of due diligence and studies of the various impacts the separation could have on operational, organizational, financial and market-related aspects of the Companies. 

Definition of the capital structure is one of the processes that is still ongoing, and the Company continues to work with financial institutions in order to achieve the conditions deemed necessary for the capital structure model, considering the business cycles of each of the business units.

As communicated in a Material Fact released to the market on April 29, these discussions are ongoing and are taking longer than had been expected initially. As a result, considering that this definition is a necessary step in the separation process, it is not yet possible to determine when the potential separation will be concluded with precision, and it is possible that the process could extend into 2016.

Additionally, in the same Material Fact, the Company informed the market that it had been contacted by groups interested in evaluating the potential acquisition of an equity stake in Gafisa and Tenda, either together or separately. At this time, no proposals have been accepted or any contracts entered into by the Companies, with the exception of confidentiality agreements due to requests for information by the interested parties involved in these studies. The Administrations of Gafisa and Tenda, in accordance with their fiduciary responsibilities, will evaluate any proposals that could result in the creation of value for the Companies and will communicate to their shareholders and the market in general any evolution in these discussions through presentation of a formal proposal.

These discussions have no impact on the work related to the potential separation of Gafisa and Tenda, the continuity of the Companies’ business plans and current initiatives targeting the creation of value already in progress, which seek to maximize shareholder returns while improving financial performance.

Reaffirming our commitment to our shareholders, since the end of 2013, through the variety of buyback programs offered during the period, we have acquired 63.2 million shares. Of this amount, 57.5 million, representing 15.2% of total shares issued by the Company, have already been cancelled. In 1Q15, through the old buyback program, the Company acquired 10.9 million shares, which amounted to disbursements of R$22.1 million. Furthermore, the Company started a new share buyback program, which began in February of this year, with a limit of up to 27 million common shares. When added to the 10.8 million shares currently held in treasury, the total corresponds to approximately 10% of the total common shares issued by the Company.

The Company will keep its shareholders and the market informed of any developments related to the subjects mentioned above.

 

 

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Gafisa Segment

Focuses on residential developments within the upper, upper-middle, and middle-income segments, with average unit prices above R$250,000.00..

Operating Results

Launches and Pre-Sales

First quarter 2015 launches reached R$75.2 million, representing 1 project/phase located in the city of Jundiaí, São Paulo state. Sales of this project started in March, and the sales speed reached 19.2%.

 

 

 

The Gafisa segment’s 1Q15 gross pre-sales totaled R$304.6 million. Dissolutions reached R$124.8 million and net pre-sales reached R$179.8 million in the quarter. In the 12M14, net sales totaled R$811.0 million and the volume of dissolutions was R$436.0 million. It is worth noting that even though only one project was launched during the previous two quarters, in 1Q15, the SoS of the Gafisa segment was slightly higher than the previous year, due to improved performance in the sale of inventory. 

 

The Company continues to concentrate its efforts on the sale of remaining units. As a result, approximately 92.0% of net sales during the period related to projects launched up to the end of 2012, resulting in an improvement in the inventory profile of the Gafisa segment.

 

 

 

 

 

                                                                                                                                                   

 

Table 6. Gafisa Segment – Launches and Pre-sales (R$000)

 

1Q15

4Q14

Q/Q (%)

1Q14

Y/Y (%)

Launches

75,227

-

-

289,145

-74%

Pre-Sales

179,807

177,294

1%

187,555

-4%

 

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Sales over Supply (SoS)

 

The sales velocity was 8.0% in 1Q15, slightly above the 7.2% recorded in 4Q14 and in line with 7.9% of the previous year. On a last 12 months basis, Gafisa’s SoS reached 27.9%.

 

 

 

Dissolutions

Uncertain economic conditions continued into the start of 2015 and directly impacted consumer confidence and the level of dissolutions in the first quarter. In the Gafisa segment, due to this challenging operating environment, the level of dissolutions increased in 1Q15, reaching R$124.8 million compared to R$84.9 million in 4Q14 and R$80.4 million in 1Q14. It is also worth noting that this higher level of dissolutions was also impacted by the increased volume of deliveries in the quarter, with 1,847 units, totaling R$569.5 million in PSV.  

 

During the last three years, the Company has been working on initiatives to achieve a higher quality of credit analysis in its sales. In doing so, the Company hopes to reduce the level of dissolutions throughout the construction and delivery cycle. Assertiveness in the credit review process at the time of the sale has generated greater efficiency in the process of transferring Gafisa customers to financial institutions, despite deteriorating macroeconomic conditions, especially from the second half of 2014.

 

 

 

In 1Q15, 255 Gafisa units were cancelled, and 102 units derived from dissolutions and returned to inventory were already resold in the period.

 

Inventory

Gafisa is maintaining its focus on inventory reduction initiatives. Projects launched in previous years represented about 92.0% of net sales in the period. The market value of Gafisa segment inventory reached R$2.1 billion in the 1Q15, 9.8% lower when compared to R$2.3 billion in the previous quarter. Finished units outside of core markets accounted for R$115.0 million, or 5.6% of total inventory.

 

 

 

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           Table 7. Gafisa Segment – Inventory at Market Value (R$000)

 

Inventories BoP 3Q14

Launches

Dissolutions

Pre-Sales

Adjusts + Other

Inventories BoP 4Q14

% Q/Q

São Paulo

1,560,182

75,227

100,311

(220,950)

(47,419)

1,467,350

-6%

Rio de Janeiro

591,949

-

15,371

(58,711)

(60,357)

488,251

-18%

Other Markets

143,066

-

9,124

(24,951)

(12,204)

115,036

-20%

Total

2,295,197

75,227

124,805

(304,612)

(119,979)

2,070,637

-10%

* The period adjustments are a reflection of updates related to the project scope, release date and inflationary update in the period.

 

During the same period, finished units comprised R$261.7 million, or 12.6% of total inventory. Inventory from projects launched outside core markets, currently exclusively comprised of finished units, represent
R$115.0 million, down 55.2% when compared to the R$256.9 million recorded last year. The Company has seen more consistent sales velocity in these markets over the past few quarters, and believes that between the end of 2015 and beginning of 2016 it will have monetized a large portion of its inventory in non-core markets.

 

It is worth noting that the largest share of Gafisa’s inventory, approximately 68% or R$1.4 billion, is concentrated in projects that are to be delivered from early 2016 onwards. This will account for the sale of inventory in the coming quarters, rather than finished units.

 

Table 8. Gafisa Segment – Inventory at Market Value – Construction Status (R$000)

 

Not Initiated

Up to 30% built

30% to 70% built

More than 70% built

Finished units¹

Total 4Q14

São Paulo

61,733

86,373

1,110,665

108,800

99,779

1,467,350

Rio de Janeiro

-

43,677

140,064

257,665

46,846

488,251

Other Markets

-

-

-

-

115,036

115,036

Total

61,733

130,049

1,250,730

366,465

261,661

2,070,637

1)      Inventory at market value includes projects in partnership. This indicator is not comparable to the accounting inventory, due to the implementation of new accounting practices on behalf of CPCs 18, 19 and 36.

 

 

 
 

 

 

12

 

 

 

 


 
 

 

Landbank

Gafisa segment landbank, with a PSV of approximately R$6.1 billion, is comprised of 33 different projects/ phases, amounting to nearly 11.3 thousand units, 78% located in São Paulo and 22% in Rio de Janeiro. The largest portion of land acquired through swap agreements is in Rio de Janeiro, thereby impacting the total amount of land acquired through swaps, which reached 57% in the first quarter.

 

Table 9. Gafisa Segment – Landbank (R$000)

 

PSV

(% Gafisa)

%Swap
Total

%Swap

Units

%Swap Financial

Potential Units
(% Gafisa)

Potential Units
(100%)

São Paulo

4,802,512

42.4%

41.6%

0.8%

9,649

10,258

Rio de Janeiro

1,315,335

89.0%

89.0%

0.0%

1,651

2,051

Total

6,117,847

56.8%

56.2%

0.6%

11,300

12,309

 

Table 10. Gafisa Segment – Changes in the Landbank (4Q14 x 1Q15 - R$000)

 

Initial Landbank

Land Acquisition

Launches

Adjusts

Final Landbank

São Paulo

4,875,918

-

75,227

1,821

4,802,512

Rio de Janeiro

1,301,089

-

-

14,245

1,315,335

Total

6,177,007

-

75,227

16,066

6,117,847

 

The adjustments of the quarter reflect updates related to project scope, expected launch date and inflationary adjustments to landbank during the period.

 

Gafisa Vendas

During 1Q15, Gafisa Vendas – the Company’s independent sales unit, with operations in São Paulo and Rio de Janeiro - accounted for 69% of gross sales of the quarter. Gafisa Vendas currently has a team of 467 highly trained, dedicated consultants, combined with an online sales force.

 

Delivered Projects

During 1Q15, Gafisa delivered 9 projects/phases and 1,847 units and R$569.5 million in PSV. In this quarter, Gafisa delivered its last project in non-core markets.

 

Currently, Gafisa has 36 projects under construction, all of them on schedule to set out in the Company’s business plan.

 

 

 

 

Transfers

Over the past few years, the Company has been taking steps to refine and improve the performance of its receivables / transfer process, in an attempt to achieve better performance in the return on invested capital.

13

 

 

 

 


 
 

 

Transfers

Over the past few years, the Company has been taking steps to refine and improve the performance of its receivables / transfer process, in an attempt to achieve better performance in the return on invested capital. Currently, our guideline is to transfer 90% of eligible units up to 90 days after the delivery of the project. In accordance with this policy, transfers reached R$198.0 million in PSV in the first quarter.

 

Table 11. Gafisa Segment – Delivered Project

 

1Q15

4Q14

Q/Q (%)

1Q14

Y/Y (%)

PSV Transferred ¹

198,014

270,214

-27%

231,807

-15%

Delivered Projects

9

8

13%

4

125%

Delivered Units

1,847

1,412

31%

524

252%

Delivered PSV²

569,459

520,005

10%

458,420

24%

1) PSV refers to potential sales value of the units transferred to financial institutions.

2) PSV = Potential sales value of delivered units.

 

 

14

 

 

 

 


 
 

Financial Results

Revenues

Net revenues for the Gafisa segment in 1Q15 totaled R$340.1 million, up 4.1% versus 1Q14 and decrease, due to seasonality effects, of 30.7%. The expansion compared to the 1Q14 is the effect of the higher concentration of inventory sales, due to the lower volume of launches in the last two quarters.

 

In 1Q15, approximately 99.2% of Gafisa segment revenues were derived from projects located in Rio de Janeiro/São Paulo, while 0.8% were derived from projects in non-core markets. The table below provides additional details.

 

Table 12. Gafisa Segment – Revenue Recognition (R$000)

 

 

1Q15

 

 

 

1Q14

 

 

Launches

Pre-sales

% Sales

Revenue

% Revenue

Pre-sales

% Sales

Revenue

% Revenue

2015

14,436

8.0%

-

0.0%

-

0.0%

-

0.0%

2014

59,353

33.0%

41,343

12.2%

37,915

20.2%

-

0.0%

2013

27,125

15.1%

58,455

17.2%

51,495

27.5%

25,220

7.7%

≤ 2012

78,893

43.9%

240,260

70.7%

98,146

52.3%

301,530

92.3%

Total

179,807

100.0%

340,058

100.0%

187,555

100.0%

326,750

100.0%

SP + RJ

163,980

91.2%

337,414

99.2%

162,615

86.7%

309,448

94.7%

Other Markets

15,827

8.8%

2,643

0.8%

24,940

13.3%

17,302

5.3%

 

Gross Profit & Margin

Gross profit for the Gafisa segment in 1Q15 was R$98.1 million compared to the R$101.1 million in 1Q14, and R$88.9 million in the prior year period. Gross margin for the quarter was 28.9%. Excluding financial impacts, the adjusted gross margin reached 36.9% in 1Q15 compared to 30.7% in the 4Q14 and 35.7% in the prior year. In the 1Q15, excluding the non-recurring effects recorded in the last quarter of 2014, the Gafisa segment adjusted gross margin was 36.9%, signaling the maintenance of consistent and balanced levels of operational profitability since the beginning of 2013. This is a result of the strategic consolidation in the metropolitan regions of São Paulo and Rio de Janeiro and the completion of older projects in other non-core markets.

 

The table below contains more details on the breakdown of Gafisa’s gross margin in 1Q15.

 

Table 13. Gafisa Segment – Gross Margin (R$000)

 

1Q15

4Q14

Q/Q (%)

1Q14

Y/Y (%)

Net Revenue

340,058

490,947

-31%

326,750

4%

Gross Profit

98,147

101,114

-3%

88,890

10%

Gross Margin

28.9%

20.6%

830 bps

27.2%

170 bps

(-) Financial Costs

(27,355)

(49,692)

-45%

(27,640)

-1%

Adjusted Gross Profit

125,502

150,806

-17%

116,530

8%

Adjusted Gross Margin

36.9%

30.7%

620 bps

35.7%

120 bps

           

 

 

15

 

 

 

 


 
 

 

Table 14. Gafisa Segment – Gross Margin Composition (R$000)

 

SP + RJ

Other Markets

1Q15

Net Revenue

337,414

2,643

340,058

Adjusted Gross Profit

125,130

372

125,502

Adjusted Gross Margin

37.1%

14.1%

36.9%

       

 

Selling, General and Administrative Expenses (SG&A)

SG&A expenses totaled R$43.0 million in the 1Q15, a decrease of 16.5% y-o-y and of 21.7% q-o-q.

 

Selling expenses decreased 25.8% y-o-y, reflecting the lower volume of launches, and went down by 45.7% q-o-q, due to the partial recognition of expenses related to 3Q14 launches, which were concentrated at the end of period and recorded in the subsequent period. 

 

The segment’s general and administrative expenses reached R$28.9 million in 1Q15, in line with the previous quarter and a y-o-y reduction of 11.0% compared to 1Q14, mainly due to the reduction in Personnel expenses.

 

The reduction in the level of SG&A expenses in the Gafisa segment reflects the Company's commitment to improve operational efficiency and achieve costs and expenses that are appropriate for the current point of the business cycle and business outlook.

 

Table 15. Gafisa Segment – SG&A Expenses (R$000)

 

1Q15

4Q14

Q/Q (%)

1Q14

Y/Y (%)

Selling Expenses

14,092

25,930

-46%

18,995

-26%

G&A Expenses

28,887

28,947

0%

32,449

-11%

Total SG&A Expenses

42,979

54,877

-22%

51,444

-16%

Launches

75,227

-

-

289,145

-74%

Net Pre-Sales

179,807

177,294

1%

187,555

-4%

Net Revenue

340,058

490,947

-31%

326,750

4%

           

 

The Other Operating Revenues/Expenses line totaled R$28.5 million, an increase of 23.0% compared to the 4Q14, and a decrease of 43.0% compared to the previous year. This increase reflects the higher level of litigation expenses related to increased deliveries of older projects held in 2012, 2013 and 2014.

 

The table below contains more details on the breakdown of this expense.

 

Table 16. Gafisa Segment – Other Operating Revenues/ Expenses (R$000)

 

1Q15

4Q14

Q/Q(%)

1Q14

Y/Y(%)

Litigation expenses

(19,965)

(21,450)

-7%

(16,002)

25%

Expenses w/ upgrading the balance of the stock options program for AUSA shares

-

(3,816)

-

-

-

Other

(8,556)

2,072

-513%

(3,946)

117%

Total

(28,521)

(23,194)

23%

(19,948)

43%

 

Strong deliveries over the past two years, including delayed projects in other markets, were instrumental in the increase of the contingency level. Given Gafisa’s narrowed footprint to São Paulo and Rio de Janeiro and the delivery of outstanding legacy projects in other markets, the Company expects to record a reduction in this potential liability over the course of the coming years.

 

16

 

 

 

 


 
 

Adjusted EBITDA

 

Adjusted EBITDA for the Gafisa segment totaled R$58.3 million in 1Q15, up 6.3% compared to R$54.8 million in the prior year period, but a seasonal reduction compared to R$81.8 million recorded in 4Q14. Y-o-Y, 1Q15 EBITDA was impacted by the following factors: (i) increase in revenues; (ii) decrease of R$8.5 million in the level of SG&A Expenses; and (iii) addition of R$8.6 million in expenses related to contingencies, recognized on Other Revenues/Expenses. It is worth noting that adjusted EBITDA for the Gafisa segment does not include equity income from Alphaville.

 

The adjusted EBITDA margin, using the same criteria, presented a slight expansion, reaching 17.1%, compared with a margin of 16.8% in the previous year, and 16.7% in 4Q14.

 

Table 17. Gafisa Segment – Adjusted EBITDA (R$000)

 

1Q15

4Q14

Q/Q (%)

1Q14

Y/Y (%)

Net (Loss) Profit

20,205

36,819

-45%

(2,331)

967%

(+) Financial Results

9,744

(9,065)

207%

7,824

25%

(+) Income taxes

7,350

(11,072)

166%

4,022

83%

(+) Depreciation & Amortization

8,279

33,346

-75%

11,206

-26%

(+) Capitalized interests

27,355

49,692

-45%

27,640

-1%

(+) Expense w Stock Option Plan

2,090

2,087

0%

3,570

-41%

(+) Minority Shareholders

228

774

-71%

(548)

142%

(-) Alphaville Effect Result

(16,960)

(20,738)

-18%

(3,427)

395%

Adjusted EBITDA

58,289

81,843

-29%

54,810

6%

Net Revenue

340,058

490,947

-31%

326,750

4%

Adjusted EBITDA Margin

17.1%

16.7%

47 bps

16.8%

30 bps

1) EBITDA is adjusted by expenses associated with stock option plans, as this is a non-cash expense.

 

 

Backlog of Revenues and Results

The backlog of results to be recognized under the PoC method was R$294.1 million in 1Q15. The consolidated margin for the quarter was 39.6%, an increase of 280 bps compared to the result posted last year.

 

Table 18. Gafisa Segment – Results to be recognized (REF) (R$000)

 

1Q15

4Q14

Q/Q (%)

1Q14

Y/Y (%)

Revenues to be recognized

742,154

894,344

-17%

1,429,230

-48%

Costs to be recognized (units sold)

(448,061)

(538,090)

-17%

(902,957)

-50%

Results to be recognized

294,093

356,254

-17%

526,273

-44%

Backlog Margin

39.6%

39.8%

-20 bps

36.8%

280 bps

 

 

 

17

 

 

 

 


 
 

 

 

Tenda Segment

Focuses on affordable residential developments, classified within the Range II of Minha Casa, Minha Vida Program.500.

 

Operating Results

Launches and Sales

First quarter launches totaled R$238.3 million and included 6 projects/phases in the states of São Paulo, Rio de Janeiro, Bahia and Pernambuco. The brand accounted for 76% of launches in the quarter.

 

During 1Q15, gross sales reached R$299.9 million, dissolutions were R$56.3 million, totaling net pre-sales of R$243.5 million. The result is much higher than the same period of the previous year and the best result in terms of net pre-sales since the 4Q10.

 

Sales from units launched during 1Q15 accounted for 18.6% of total sales.

 

 

 

 


Table 19. Tenda Segment – Launches and Pre-sales (R$000)

 

1Q15

4Q14

Q/Q (%)

1Q14

Y/Y (%)

Launches

238,354

241,549

-1%

181,445

31%

PresSales

243,537

126,594

92%

51,767

370%

 

 

18

 

 

 

 


 
 

 

 

Sales over Supply (SoS)

 

In 1Q15, sales velocity (sales over supply) was 23.3%, and considering the last 12 months, Tenda SoS ended 1Q15 at 42.2%.

 

Below is a breakdown on Tenda SoS, divided between legacy and New Model throughout 1Q15.

 

Tabela 20. SoS Gross Revenue (Ex-Dissolutions)       

 

1Q14

2Q14

3Q14

4Q14

1Q15

New Model

29.8%

32.2%

20.3%

22.0%

32.7%

Legacy

30.9%

35.8%

28.3%

17.5%

20.1%

Total

30.5%

34.3%

24.4%

20.2%

28.6%

 

Tabela 21. SoS Net Revenue

 

1Q14

2Q14

3Q14

4Q14

1Q15

New Model

18.8%

25.3%

11.8%

18.8%

30.9%

Legacy

-1.6%

17.7%

-2.0%

5.0%

7.0%

Total

6.4%

20.8%

4.8%

13.3%

23.3%

 

 

Dissolutions

The level of dissolutions in the Tenda segment totaled R$56.3 million in 1Q15, a decrease of 15.0% from 4Q14 and of 70.8% compared to 1Q14.

 

 

 

 

 

As expected, the amendment to the process of recognizing new sales in August 2014 reduced the level of dissolutions during the period. Approximately 77.6% of the dissolutions in the period were related to old projects.

 

 

Table 22. PSV Dissolutions – Tenda Segment (R$ thousand and % of gross sales by model)

 

1Q14

% GS

2Q14

% GS

3Q14

% GS

4Q14

% GS

1Q15

% GS

New Model

34,715

36.8%

24,977

21.5%

31,640

42.1%

18,003

14.3%

12,594

4.2%

Legacy Projects

158,450

105.2%

92,637

50.6%

114,697

107.1%

48,281

71.7%

43,737

14.6%

Total

193,164

78.9%

117,614

39.3%

146,337

80.3%

66,285

34.4%

56,332

18.8%

 

 

 
 

19

 

 

 

 


 

 

Table 23. Tenda Segment – Net Pre-sales by Market (R$ million)

 

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

New Model

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Sales

-

-

-

-

13.6

57.0

59.7

84.5

94.3

116.3

75.2

125.6

232.6

Dissolutions

-

-

-

-

-

(2.1)

(7.4)

(6.3)

(34.2)

(25.1)

(31.6)

(18.0)

(12.6)

Net Sales

-

-

-

-

13.6

54.9

52.3

78.2

60.2

91.2

43.5

107.6

220.0

Legacy Projects

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Sales

249.1

344.9

293.8

287.9

225.6

270.7

223.9

154.2

150.6

183.0

107.1

67.3

67.3

Dissolutions

(339.6)

(329.1)

(263.7)

(317.6)

(232.5)

(155.7)

(126.0)

(68.8)

(159.0)

(92.5)

(114.7)

(48.3)

(43.7)

Net Sales

(90.4)

15.7

30.0

(29.7)

(6.9)

115.0

97.9

85.4

(8.4)

90.6

(7.6)

19.0

23.5

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

Dissolutions (Units)

3.157

2.984

2.202

2.509

1.700

1.172

924

491

1.270

820

948

428

367

Gross Sales

249.1

344.9

293.8

287.9

239.3

327.7

283.6

238.7

244.9

299.3

182.2

192.9

299.9

Dissolutions

(339.6)

(329.1)

(263.7)

(317.6)

(232.5)

(157.8)

(133.5)

(75.1)

(193.2)

(117.6)

(146.3)

(66.3)

(56.3)

Net Sales

(90.4)

15.7

30.0

(29.7)

6.8

169.8

150.1

163.6

51.8

181.7

35.9

126.6

243.5

Total (R$)

(90.4)

15.7

30.0

(29.7)

6.8

169.8

150.1

163.6

51.8

181.7

35.9

126.6

243.5

MCMV

(95.7)

21.5

8.0

(3.6)

36.2

142.6

119.2

122.4

57.2

151.4

39.0

116.7

217.7

Out of MCMV

6.3

(5.7)

22.1

(26.0)

(29.4)

29.2

30.9

41.2

(5.4)

30.3

(3.1)

9.9

25.8

Tenda remains focused on the completion and delivery of legacy projects, and is dissolving contracts with ineligible clients, so as to sell the units to new qualified customers.

 

Tenda had 367 units cancelled and returned to inventory in the first quarter, and another 106 units already in inventory after dissolutions were resold to qualified customers during the same period. The sale and transfer process plays an important role in the New Tenda Business Model. It is expected that within a period of up to 90 days, the effective sale and transfer process will be complete.

 

Tenda Segment Transfers

In the 1Q15, 1,387 units were transferred to financial institutions, representing R$174.0 million in net pre-sales.

Table 24. Tenda Segment – PSV Transferred – Tenda (R$000)

 

1Q13

2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

New Model

-

26,609

52,466

42,921

49,776

69,563

59,736

67,621

114,939

Legacy Projects

274,358

249,699

230,613

145,038

139,721

154,155

100,361

74,773

59,110

PSV transferred1

274,358

276,308

283,079

187,959

189,497

223,717

160,097

142,393

174,049

1) PSV transferred refers to the conclusion of the transfer operation.

 

Tenda Segment Delivered Projects

 

During 1Q15, Tenda delivered 6 projects/phases and 1,687 units, reaching a PSV of R$216.3 million. It is worth noting that from Tenda’s legacy projects, there are only two remaining construction sites, with 900 remaining units to be delivered in the next months.

 

Inventory

 

The market value of Tenda inventory was R$803.5 million at the end of the 1Q15, down 3.0% when compared to R$828.7 million at the end of 4Q14, even taking into consideration the large volume of launches in the quarter. Inventory related to the remaining units for the Tenda segment totaled R$311.8 million or 38.8% of the total, down 14.6% over 4Q14 and 37.0% as compared to the prior year period. During the quarter, inventory comprising units within the Minha Casa Minha Vida program totaled R$628.9 million, or 78.3% of total inventory, while units outside the program totaled R$174.6 million in the 1Q15, up 6.8% q-o-q due to a revision in the pricing policy of some projects outside MCMV, and down 32.9% y-o-y.

 

20

 

 

 

 


 
 

 

Table 25. Tenda Segment – Inventory at Market Value (R$000) – by Region

 

Inventories FP 4Q14

Launches

Dissolutions

Pre-Sales

Price Adjustment + Others

Inventories FP 1Q15

% Q/Q

São Paulo

217,194

114,273

16,124

(108,325)

(368)

238,898

10%

Rio Grande do Sul

26,601

-

7,259

(9,122)

(4,934)

19,805

-26%

Rio de Janeiro

227,920

33,660

5,769

(65,152)

(777)

201,420

-12%

Bahia

121,101

51,181

2,611

(48,831)

3,198

129,260

7%

Pernambuco

32,818

39,240

1,790

(22,608)

1,363

52,603

60%

Minas Gerais

118,514

-

18,583

(36,987)

(5,211)

94,900

-20%

Others

84,517

-

4,195

(8,845)

(13,258)

66,609

-21%

Total Tenda

828,665

238,354

56,332

(299,869)

(19,988)

803,495

-3%

MCMV

665,152

238,354

24,069

(241,759)

(56,907)

628,909

-5%

Out of MCMV

163,514

-

32,262

(58,109)

36,919

174,586

7%

¹ The quarter adjustments reflect updates related to project scope, expected launch date and inflationary adjustments to landbank during the period..

 

Table 26. Tenda Segment – Inventory at Market Value (R$000) – Construction Status

 

Not Initiated

Up to 30%
built

30% to 70% built

More than 70% built

Finished Units¹

Total 1Q15

New Model - MCMV

122,068

194,328

103,065

71,040

1,159

491,661

Legacy – MCMV

-

-

56,348

8,415

72,485

137,248

Legacy – Out of MCMV

-

-

-

26,281

148,305

174,586

Total Tenda

122,068

194,328

159,413

105,736

221,949

803,495

1) Inventory at market value includes projects in partnership. This indicator is not comparable to the accounting inventory, due to the implementation of new accounting practices on behalf of CPC’s 18, 19 and 36.

 

Tenda Segment Landbank

 

Tenda segment landbank, with a PSV of approximately R$4.1 billion, is comprised of 112 different projects/phases, of which 16% are located in São Paulo, 13% in Rio Grande do Sul, 28% in Rio de Janeiro, 5% in Minas Gerais, 31% in Bahia and 7% in Pernambuco. Altogether these amount to more than 30 thousand units.

 

Table 27. Tenda Segment – Landbank (R$000)

 

PSV

(% Tenda)

% Swap
Total

% Swap Units

% Swap Financial

Potential Units
(% Tenda)

Potential Units
(100%)

São Paulo

663,898

0%

0%

0%

4,292

4,292

Rio Grande do Sul

518,399

15%

15%

2%

3,660

3,860

Rio de Janeiro

1,136,324

9%

9%

0%

7,943

8,023

Bahia

1,278,855

11%

11%

0%

10,120

10,420

Pernambuco

285,985

26%

26%

0%

2,190

2,240

Minas Gerais

191,035

56%

56%

0%

1,190

1,272

Total

4,074,495

13%

13%

0%

29,396

30,107

 

 

 

21

 

 


 
 

 

Table 28. Tenda Segment – Changes in the Landbank (4Q14 x 1Q15 - R$000)

 

Initial
Landbank

Land Acquisition

Dissolutions

Launches

Adjusts

Final
Landbank

São Paulo

665,129

90,708

114,273

114,273

22,334

663,898

Rio Grande do Sul

461,128

61,864

-

(4,593)

(4,593)

518,399

Rio de Janeiro

1,091,156

72,716

33,660

6,112

6,112

1,136,324

Bahia

1,249,572

82,982

51,181

(2,519)

(2,519)

1,278,855

Pernambuco

324,361

-

39,240

864

39,240

285,985

Minas Gerais

163,540

27,495

-

0

0

191,035

Total

3,954,886

335,765

238,354

22,198

22,198

4,074,495

 

In 1Q15, the Company acquired 12 new land plots with potential PSV of R$335.8 million, representing an acquisition cost of R$24.5 million, of which 94% was paid for in cash and 6% in swap agreements.

 

New Model Update and Turnaround

 

Tenda starts 2015 keeping the growth pace of its New Business Model launches, which is based on three pillars: operational efficiency, risk management, and capital discipline.

 

Currently, the Company continues to operate in six macro regions: São Paulo, Rio de Janeiro, Belo Horizonte, Porto Alegre, Salvador and Recife, with a total of 27 projects and a launched PSV of R$1,165.5 million to date. Below is a brief description of the performance of these projects, except for projects launched at the end of 1Q15.

 

It is worth noting that the Tenda segment has delivered 7 projects, totaling 2,459 units and R$313.9 million in PSV, all of them reaching the performance and profitability drivers established for the New Model.

 

 

Table 29. Tenda – New Model Monitoring 2013, 2014 and 2015

 

Novo Horizonte

Vila Cantuária

Itaim Paulista

Verde Vida F1

Jaraguá

Viva Mais

Campo Limpo

Launch

mar/13

mar/13

may/13

jul/13

aug/13

nov/13

dec/13

State

SP

BA

SP

BA

SP

RJ

SP

Units

580

440

240

339

260

300

300

Total PSV (R$000)

67.8

45.9

33.1

37.9

40.9

40.4

48.0

Sales

580

436

239

332

258

290

299

% Sales

100%

99%

100%

98%

99%

97%

100%

SoS Avg (Month)

14%

6%

8%

5%

12%

6%

10%

Transferred

580

431

239

313

258

205

297

% Transferred (Sales)

100%

99%

100%

94%

100%

71%

99%

Work Progress

100%

100%

100%

100%

100%

100%

100%

 

 

22

 

 

 

 


 
 

 

 

Verde Vida F2

Pq. Rio Maravilha

Candeias

Pq das Flores

Palácio Imperial

Vila Florida

Rio da Prata

Recanto Abrantes

Monte Alegre

Pq. Santo André

Res. das Palmeiras

Terra Brasilis

Vila Atlântica

Reserva das Árvores

Launch

fev/14

mar/14

mar/14

apr/14

may/14

mai/14

aug/14

sep/14

oct/14

nov/14

dec/14

dec/14

dec/14

dez/14

State

BA

RJ

PE

SP

RJ

MG

RJ

BA

SP

SP

SP

BA

BA

RJ

Units

340

440

432

100

259

432

312

340

200

160

260

300

240

500

Total PSV (R$ 000)

42.4

63.8

58.8

16.4

38.6

60.4

49.6

41.7

31.0

28.8

41.6

36.8

30.6

72.8

Sales

322

294

314

96

70

229

139

184

131

87

233

101

78

132

% Sales

95%

67%

73%

96%

27%

53%

45%

54%

66%

54%

90%

34%

33%

26%

SoS Avg (Month)

5%

5%

6%

9%

3%

5%

6%

9%

12%

12%

25%

11%

11%

9%

Transferred

273

216

230

94

23

156

87

111

90

45

175

50

0

3

% Transferred (Sales)

85%

73%

73%

98%

33%

68%

63%

60%

69%

52%

75%

50%

0%

2%

Work Progress

94%

92%

48%

99%

4%

6%

61%

52%

82%

42%

17%

1%

12%

18%

 

 

 

Res. das Orquídeas

Vera Cruz

Campo de Aviação 1

Jardins Itaquera

Laranjeiras

Viena F1

Launch

jan/15

feb/15

feb/15

mar/15

mar/15

mar/15

State

SP

RJ

PE

SP

SP

BA

Units

280

220

304

200

220

440

Total PSV (R$ 000)

46.9

33.7

39.2

33.7

33.6

51.2

Sales

160

4

48

 -

 -

% Sales

57%

2%

16%

 -

 -

 -

SoS Avg (Month)

22%

1%

15%

 -

 -

 -

Transferred

77

0

24

 -

 -

 -

% Transferred (Sales)

48%

0%

50%

 -

 -

 -

Work Progress

3%

2%

2%

 -

 -

 

The run-off of legacy projects is on schedule and expected to be concluded in 2015, with all remaining units to be delivered within the next months.

 

 

23

 

 

 

 


 
 

Financial Result

Revenues

Tenda’s net revenue in 1Q15 totaled R$179.4 million, an increase of 13.3% compared with the previous quarter, due to the increased volume of net sales as a result of the lower level of dissolutions in the period. As shown in the table below, revenues from new projects, which have increased as a portion of total revenues, accounted for 71.8% of Tenda’s revenues in 1Q15, while revenues from older projects accounted for the remaining 28.2%.

Table 30. Tenda – Pre-Sales and Recognized Revenues (R$000)

 

 

1Q15

 

 

 

1Q14

 

 

Launches

Pre-Sales

% Sales

Revenue

% Revenue

Pre-Sales

% Sales

Revenue

% Revenue

2015

45,280

19%

7,864

16%

-

-

-

-

2014

167,696

69%

91,592

51%

20,256

39.1%

-

-

2013

7,033

3%

29,471

16%

40,255

77.8%

58,245

55.0%

≤ 2012

23,528

10%

50,516

28%

-8,744

-16.9%

44,215

41.7%

Landbank Sale

-

0%

-

0%

-

-

3,491

3.3%

Total

243,537

100%

179,443

100%

51,767

100.0%

105,951

100.0%

Legacy

23,528

10%

50,516

28%

-8,744

-16.9%

47,706

45.0%

New Model

220,009

90%

128,927

72%

60,511

116.9%

58,245

55.0%

 

Gross Profit & Margin

Gross profit in 1Q15 reached R$51.1 million, compared to R$49.5 million in 4Q14, and well above the R$8.5 million in the year ago quarter. Gross margin for the quarter reached 28.5%, compared to 31.3% in 4Q14 and 8.0% in the prior-year period. The year-over-year improvement in gross margin is due to the increased participation of projects launched under the New Business Model, which are more profitable, on Tenda’s revenue levels, as has been observed in recent quarters.  Both the reduction in volume of older projects, with only two projects still under development (to be delivered in the coming months), and the increase in the number of projects launched under the New Model, contributed to the consolidation of results.  

The adjusted gross margin ended the 1Q15 at 30.0%, up from the 28.6% recorded in the previous quarter, and substantially higher y-o-y.

Below is Tenda’s gross margin breakdown in 1Q15. It is worth noting that the gross margin for the first projects under Tenda’s New Business Model also benefits from the use of older landbank, resulting in increased profitability.

Table 31. Tenda – Gross Margin (R$000)

 

1Q15

4Q14

Q/Q(%)

1Q14

Y/Y(%)

Net Revenue

179,443

158,329

13%

105,951

69%

Gross Profit

51,053

49,533

3%

8,458

504%

Gross Margin

28.5%

31.3%

-280 bps

8.0%

2,050 bps

(-) Financial Costs

(2,747)

4,271

-164%

(7,105)

-61%

Adjusted Gross Profit

53,800

45,262

19%

15,563

246%

Adjusted Gross Margin

30.0%

28.6%

140 bps

14.7%

1,530 bps

 

 

24

 

 

 

 


 
 

Selling, General and Administrative Expenses (SG&A)

 

During 1Q15, selling, general and administrative expenses totaled R$27.8 million, a 21.6% decrease compared to R$35.4 million in 4Q14, and of 9.6% y-o-y.

 

Selling expenses totaled R$13.0 million in 1Q15, a 10.5% increase y-o-y and 16.1% rise q-o-q, due to the ongoing expansion in launches volume and gross sales of the Tenda segment.

 

Regarding G&A expenses, there was a reduction of 22.1% compared to 1Q14, reaching R$14.8 million, mainly as a result of the reversal of the residual balance of the Profit Sharing provision of R$5.6 million, which was accrued during 2014 and reversed in 1Q15.

 

Since the beginning of 2013, another step taken by the Tenda segment to improve its operational and financial cycle is a reduction in the cost structure to a level more compatible with the current stage of the Company’s business model, in order to achieve better profitability.

 

Table 32. Tenda – SG&A Expenses (R$000)

 

1Q15

4Q14

Q/Q(%)

1Q14

Y/Y(%)

Selling Expenses

13,021

11,212

16%

11,787

10%

General & Admin Expenses

14,783

24,235

-39%

18,970

-22%

Total SG&A Expenses

27,804

35,447

-22%

30,757

-10%

Launches

238,354

241,549

-1%

181,445

31%

Net Pre-Sales

243,537

126,594

92%

51,767

370%

Net Revenue

179,443

158,329

13%

105,951

69%

 

 

The Other Operating Revenues/ Expenses line totaled an expense of R$5.0 million, a decrease of 80.3% compared to the 4Q14, and of 16.7% compared to the previous year. It is worth noting that in 4Q14, this line was impacted by a R$14.0 million revision related to judicial deposits. The table below contains more details on the breakdown of this expense.

 

 

Table 33. Tenda Segment – Other Revenues/Operating Expenses (R$000)

 

1Q15

4Q14

Q/Q(%)

1Q14

Y/Y(%)

Litigation Expenses

(6,105)

(14,331)

-57%

(10,146)

-40%

Other

1,071

(11,199)

110%

4,102

-74%

Total

(5,034)

(25,530)

-80%

(6,044)

-17%

 

Over the past two years, the strong volume of deliveries related to delayed projects resulted in increased contingencies in the Tenda segment. With the last legacy projects planned to be delivered over the next months, and the increased contribution of New Model projects demonstrating strong operational performance, the Company expects to see a reduction in the volume of such expenses over the coming years.

 

Adjusted EBITDA

Adjusted EBITDA was positive R$21.1 million in 1Q15, compared to negative R$24.9 million last year and negative R$30.9 million in 4Q14. For the year, adjusted EBITDA was negative R$67.5 million, compared to negative R$45.6 million last year.

 

The increasing participation of projects under the New Model in Tenda’s revenue mix, due to the conclusion of old projects and increase in launches since 2013, has resulted in better gross margins in recent quarters. Combined

25

 

 

 

 


 
 

 

The increasing participation of projects under the New Model in Tenda’s revenue mix, due to the conclusion of old projects and increase in launches since 2013, has resulted in better gross margins in recent quarters. Combined with the better performance of and efficiencies in Tenda’s cost structure, the result was a significant increase in 1Q15 EBITDA in the Tenda segment.

 

Adjusted EBITDA margin reached 11.8% in 1Q15.

 

Table 34. Tenda – Adjusted EBITDA (R$000)

 

1Q15

4Q14

Q/Q(%)

1Q14

Y/Y(%)

Net (Loss) Profit

11,446

(28,774)

140%

(37,460)

131%

(+) Financial Results

(1,528)

(1,031)

48%

90

-1,798%

(+) Income taxes

4,810

(1,085)

543%

2,575

87%

(+) Depreciation & Amortization

3,390

4,191

-19%

2,816

20%

(+) Capitalized interests

2,747

(4,271)

164%

7,105

-61%

(+) Expenses with Stock Option Plan

527

526

0%

19

2,674%

(+) Minority Shareholders

(278)

(412)

-32%

(58)

379%

Adjusted EBITDA

21,114

(30,856)

168%

(24,913)

185%

Net Revenue

179,443

158,329

13%

105,951

69%

Adjusted EBITDA Margin

11.8%

-19.5%

3,125 bps

-23.5%

3,528 bps

11) EBITDA is adjusted by expenses associated with stock option plans, as this is a non-cash expense.

2) Tenda does not hold equity interest in Alphaville. In 4Q13, the result of the sale of the participation in Alphaville was excluded, which was allocated to Tenda.

 

 

Backlog of Revenues and Results

The backlog of results to be recognized under the PoC method was R$73.5 million in 1Q15. The consolidated margin for the quarter was 39.0%.

 

Table 35. Results to be recognized (REF) (R$000)

 

1Q15

4Q14

Q/Q(%)

1Q14

Y/Y(%)

Revenues to be recognized

188,447

130,851

44%

212,031

-11%

Costs to be recognized (units sold)

(114,973)

(90,661)

27%

(144,550)

-20%

Results to be Recognized

73,474

40,190

83%

67,482

9%

Backlog Margin

39.0%

30.7%

829 bps

31.8%

720 bps

 

 

26

 

 

 

 


 
 

Balance Sheet and Consolidated Financial Results

Cash and Cash Equivalents

On March 31, 2015, cash and cash equivalents, and securities, totaled R$1.1 billion.

 

Accounts Receivable

At the end of the 1Q15, total consolidated accounts receivable decreased 24.5% y-o-y to R$2.8 billion, and was 1.8% below the R$2.9 billion recorded in the 4Q14.

Gafisa and Tenda segments have approximately R$540.8 million in accounts receivable from finished units, out of which R$232.4 million is currently being transferred to financial institutions.

Table 36. Total Receivables (R$000)

 

1Q15

4Q14

Q/Q(%)

1Q14

Y/Y(%)

Receivables from developments (off balance sheet)

965,855

1,064,033

-9%

1,703,437

-43%

Receivables from PoC – ST (on balance sheet)

1,476,007

1,440,498

2%

1,721,676

-14%

Receivables from PoC – LT (on balance sheet)

417,746

384,821

9%

332,120

26%

Total

2,837,861

2,889,352

-2%

3,757,233

-24%

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.

 

Cash Generation

 

The Company’s operating cash generation reached R$15.1 million in 1Q15. The Gafisa segment contributed with  cash generation of R$44.6 million, anchored by greater efficiency in its operational cycle and the Company’s good performance in transferring/receiving process of units sold to financing agents (R$198.0 million was transferred during the period). The Tenda segment, even taking into consideration good sales speed and performance in its transfer process, with R$107.8 million transferred during the period, had its operating cash impacted by a higher cash disbursement related to the need to realign its landbank. As a result, it reported operating cash consumption of R$29.5 million.

                                                                             

While consolidated operating cash generation reached R$15.1 million, the Company ended 1Q15 with operating cash consumption of R$69.8 million. It is worth highlighting that this result does not include the R$22.1 million

used in the share buyback program during the quarter.

 

Table 37. Cash Generation (R$000)

 

1Q14

2Q14

3Q14

4Q14

1Q15

Availabilities

1,563,226

1,279,568

1,463,425

1,157,254

1,116,169

Change in Availabilities(1)

(460,937)

(283,658)

183,857

(306,200)

(41,085)

Total Debt + Investor Obligations

2,967,050

2,687,851

2,848,249

2,597,554

2,651,383

Change in Total Debt + Inventor Obligations (2)

(216,158)

(279,199)

160,399

(250,695)

53,829

Other Investments

329,524

332,711

332,711

426,509

208,740

Change in Other Investments (3)

265,284

3,187

-

93,798

25,162

Cash Generation in the period (1) - (2) + (3)

20,505

(1,273)

23,488

38,293

(69,753)

Cash Generation Final

20,505

19,233

42,721

81,014

(69,753)

 

 

 

27

 

 

 

 


 
 

 

Liquidity

At the end of March 2015, the Company’s Net Debt/Equity ratio reached 50.0%, slightly higher than the 47.1% in the previous quarter. Excluding project finance, the Net Debt/Equity ratio was negative 15.7%.

The Company's consolidated gross debt reached R$2.6 billion at the end of 1Q15, in line with the 4Q14 and 10.6% lower than the R$2.9 billion at the end of 1Q14. In the 1Q15, the Company amortized R$177.4 million in debt, of which R$155.1 million was project finance and R$22.3 million was corporate debt. Throughout the year there were disbursements of R$153.1 million, allowing for a net amortization in the quarter of R$24.3 million. It is worth noting that since the end of 2013, after the settlement of the sale of the 70% stake in Alphaville, the Company recorded net amortization of R$1.1 billion of its debt.

 

Table 38. Debt and Investor Obligations (R$000)

 

1Q15

4Q14

Q/Q(%)

1Q14

Y/Y(%)

Debentures – FGTS (A)

914,209

891,650

3%

985,084

-7%

Debentures – Working Capital (B)

356,359

297,449

20%

473,333

-25%

Project Financing SFH – (C)

1,103,283

1,128,514

-2%

1,011,377

9%

Working Capital (D)

264,102

268,911

-2%

474,041

-44%

Total (A)+(B)+(C)+(D) = (E)

2,637,953

2,586,524

2%

2,943,835

-10%

Investor Obligations (F)

13,430

11,030

22%

23,215

-42%

Total Debt (E)+(F) = (G)

2,651,383

2,597,554

2%

2,967,050

-11%

Cash and Availabilities (H)

1,116,168

1,157,254

-4%

1,563,226

-29%

Net Debt (G)-(H) = (I)

1,535,215

1,440,300

7%

1,403,824

9%

Equity + Minority Shareholders (J)

3,070,891

3,058,403

0%

3,129,511

-2%

(Net Debt) / (Equity) (I)/(J) = (K)

50.0%

47.1%

290 bps

44.9%

513 bps

(Net Debt – Proj Fin) / Equity (I)-((A)+(C))/(J) = (L)

-15.7%

-19.0%

325 bps

-18.9%

323 bps

 

The Company ended the first quarter of 2015 with R$1.1 billion in total debt due in the short term. It should be noted, however, that 70.7% of this volume relates to debt linked to the Company's projects. Currently, the average cost of consolidated debt is 12.84% p.y, or 102.4% of the CDI.

 

Table 39. Debt Maturity (R$000)

(R$ 000)

Average Cost (y.y.)

Total

Until Mar/16

Until Mar/17

Until Mar/18

Until Mar/19

After Mar/19

Debentures - FGTS (A)

TR + 9.25% - 9.8205%

914,209

364,986

349,556

199,667

-

-

Debentures – Working Capital (B)

CDI + 1.90% - 1.95% / IPCA + 7.96% - 8.22%

356,359

163,870

26,496

63,942

83,238

18,813

Project Financing SFH (C)

TR + 8.30% - 12.00% / 117.0% CDI / 12.87%

1,103,283

401,210

474,826

164,992

62,255

-

Working Capital (D)

CDI + 2.20% / 117.9% CDI

264,102

144,905

98,095

21,102

-

-

Total (A)+(B)+(C)+(D) = (E)

 

2,637,953

1,074,971

948,973

449,703

145,493

18,813

Investor Obligations (F)

CDI + 0.59%

13,430

8,717

3,573

1,140

-

-

Total Debt (E)+(F) = (G)

 

2,651,383

1,083,688

952,546

450,843

145,493

18,813

% Total Maturity per period

-

41%

36%

17%

5%

1%

Volume of maturity of Project finance as % of total debt  ((A)+ (C))/ (G)

-

71%

87%

81%

43%

0%

Volume of maturity of Corporate debt as % of total debt ((B)+(D) + (F))/ (G)

-

29%

13%

19%

57%

100%

Ratio Corporate Debt / Mortgages

24% / 76%

-

-

-

-

-

 

 

28

 

 

 

 


 
 

 

Financial Result                                

Revenue

 

On a consolidated basis, net revenue in the 1Q15 totaled R$519.5 million, down 20.0% over the 4Q14 and up 20.1% from the prior-year quarter. In the quarter, the Gafisa segment represented 65.5% of consolidated revenues, while Tenda accounted for 34.5%.

 

Gross Profit & Margin

 

Gross profit in 1Q15 was R$149.2 million, compared to R$150.6 million in 4Q14, and R$97.3 million in the prior year quarter. Gross margin for the quarter reached 28.7%, up 6.2 p.p. over the previous year and 5.2 p.p. from 4Q14. Adjusted gross profit reached R$179.3 million, with a margin of 34.5%, compared to 30.2% in the 4Q14 and 30.5% in the previous year. The return of the gross margin to prior quarter levels following 4Q14 non-recurring impacts, combined with the increased contribution of New Model projects at Tenda, accounted for the improvement in the consolidated adjusted gross margin.

 

The gross margin has improved during the last two years as Gafisa and Tenda legacy projects are concluded, reducing their impact on the Company’s results. At the same time, projects launched in core markets and under the Tenda segment’s New Model, which are more profitable, had a larger contribution to the Company’s consolidated results over recent quarters.

 

Table 40. Gafisa Group – Gross Margin (R$000)

 

1Q15

4Q14

Q/Q(%)

1Q14

Y/Y(%)

Net Revenue

519,501

649,276

-20%

432,701

20%

Gross Profit

149,200

150,647

-1%

97,348

53%

Gross Margin

28.7%

23.2%

550 bps

22.5%

620 bps

(-) Financial Costs

(30,102)

(45,421)

-34%

(34,745)

-13%

Adjusted Gross Profit

179,302

196,068

-9%

132,093

36%

Adjusted Gross Margin

34.5%

30.2%

430 bps

30.5%

399 bps

 

Selling, General and Administrative Expenses (SG&A)

 

SG&A expenses totaled R$70.8 million in 1Q15, down 13.9% y-o-y. Compared with 4Q14, there was a decrease of 21.6%.

 

Table 41. Gafisa Group – SG&A Expenses (R$000)

 

1Q15

4Q14

Q/Q(%)

1Q14

Y/Y(%)

Selling Expenses

27,113

37,142

-27%

30,782

-12%

General and Admin Expenses

43,670

53,182

-18%

51,419

-15%

Total SG&A Expenses

70,783

90,324

-22%

82,201

-14%

Launches

313,581

241,549

30%

535,379

-41%

Net Pre-Sales

423,344

303,888

39%

239,323

77%

Net Revenue

519,501

649,276

-20%

432,701

20%

 

29

 

 

 

 


 
 

 

 

Given the substantial decrease in the volume of legacy projects and current market conditions, the Company is seeking to streamline its cost and expense structure and SG&A. In the coming quarters, the Company is looking to improve productivity and increase the efficiency and assertiveness of its operations.

The Other Operating Revenues/ Expenses line totaled an expense of R$33.6 million, down 31.1% compared to the 4Q14, and up 29.1% compared to the previous year.

The table below contains more details on the breakdown of this expense.

Table 42. Gafisa Group – Other Operating Revenues/ Expenses (R$000)

 

1Q15

4Q14

Q/Q(%)

1Q14

Y/Y(%)

Litigation expenses

(26,070)

(35,781)

-27%

(26,148)

0%

Expenses w/ upgrading the balance of the stock options program for AUSA shares

-

(3,816)

-

-

-

Other

(7,485)

(9,127)

-18%

156

-4,898%

Total

(33,555)

(48,724)

-31%

(25,992)

29%

 

 

Consolidated Adjusted EBITDA

 

Consolidated adjusted EBITDA, including Alphaville equity income, totaled R$96.4 million in the 1Q15, up from R$71.7 million in 4Q14 and the R$26.5 million in the prior-year period. Consolidated adjusted EBITDA margin using the same criteria was 18.6%, compared with a 6.1% margin reported in the previous year and 11.0% reported in 4Q14.

 

Table 43. Gafisa Group – Consolidated Adjusted EBITDA (R$000)

 

1Q15

4Q14

Q/Q(%)

1Q14

Y/Y(%)

Net (Loss) Profit

31,651

8,045

293%

(39,791)

180%

(+) Financial Results

8,216

(10,096)

181%

7,914

4%

(+) Income taxes

12,160

(12,157)

200%

6,597

84%

(+) Depreciation & Amortization

11,669

37,537

-69%

14,022

-17%

(+) Capitalized interests

30,102

45,421

-34%

34,745

-13%

(+) Expenses with Stock Option Plan

2,617

2,613

0%

3,589

-27%

(+) Minority Shareholders

(50)

362

-114%

(606)

-92%

Adjusted EBITDA

96,363

71,725

34%

26,470

264%

Net Revenue

519,501

649,276

-20%

432,701

20%

Adjusted EBITDA Margin

18.6%

11.0%

750 bps

6.1%

1,250 bps

1) EBITDA adjusted by expenses associated with stock option plans. as this is a non-cash expense.

2) Consolidated EBITDA considers the equity income from Alphaville.

 

Depreciation and Amortization

 

Depreciation and amortization in the 1Q15 reached R$11.7 million, a reduction of 16.8%, compared to R$14.0 million recorded in the 1Q14, due to the higher expense from sales booth depreciation in the period. When compared to 4Q14, there was a reduction of 75.2%, due to the following factors: (i) non-recurring impact of R$ 14.5 million recorded in 4Q14, related to goodwill amortization due to the full incorporation of a subsidiary; and (ii) higher expense with sales booth depreciation in 4Q14.

 

 

Financial Results

 

Net financial result was negative R$8.2 million in the 1Q15, in line with the net financial result of negative R$7.9 million in 1Q14 and lower than the net financial result of positive R$10.1 million in the 4Q14, due to the non-recurring effect related to the full incorporation of a subsidiary. Financial revenues totaled R$32.6 million, a 26.2% y-o-y decrease due to the lower cash volume registered in the period. Financial expenses reached R$40.8

30

 

 

 

 


 
 

Financial Results

Net financial result was negative R$8.2 million in the 1Q15, in line with the net financial result of negative R$7.9 million in 1Q14 and lower than the net financial result of positive R$10.1 million in the 4Q14, due to the non-recurring effect related to the full incorporation of a subsidiary. Financial revenues totaled R$32.6 million, a 26.2% y-o-y decrease due to the lower cash volume registered in the period. Financial expenses reached R$40.8 million, compared to R$52.1 million in 1Q14, impacted by the decrease in the level of gross indebtness in the period.

 

Taxes

 

Income taxes, social contribution and deferred taxes for 1Q15 amounted to a credit of R$12.2 million, due to the Company’s improved financial performance in the period.

 

Net Income

 

Gafisa Group ended the 1Q15 with a net profit of R$31.6 million. Excluding the equity income from Alphaville, the Company recorded net income of R$14.7 million in the quarter, compared to a net loss of R$36.4 million recorded in 1Q14 and of R$12.7 million in 4Q14.

 

Table 44. Consolidated – Net Income (R$000)

 

1Q15

4Q14

Q/Q(%)

1Q14

Y/Y(%)

Net Revenue

519,501

649,276

-20%

432,701

20%

Gross Profit

149,200

150,647

-1%

97,348

53%

Gross Margin

28.7%

23.2%

550 bps

22.5%

620 bps

Adjusted Gross Profit1

179,302

196,068

-9%

132,093

35.7%

Adjusted Gross Margin1

34.5%

30.2%

430 bps

30.5%

399 bps

Adjusted EBITDA2

96,363

71,725

34%

26,470

264%

Adjusted EBITDA Margin

18.6%

11.0%

750 bps

6.1%

1,250 bps

Net Income (ex- the sale of AUSA)

31,651

8,045

293%

(39,791)

-180%

( - ) Alphaville Equity Income

(16,960)

(20,738)

-18%

3,427

595%

Net Income (ex- AUSA
Sale and Equity Income)

14,691

(12,693)

216%

(36,364)

140%

1) Adjusted by capitalized interests;

2) EBITDA adjusted by expenses associated with stock option plans. as this is a non-cash expense;

3) Consolidated EBITDA includes the effect of Alphaville equity income.

 

Backlog of Revenues and Results

 

The backlog of results to be recognized under the PoC method reached R$367.6 million in the 1Q15. The consolidated margin for the quarter was 39.5%.

 

Table 45. Gafisa Group – Results to be recognized (REF) (R$000)

 

1Q15

4Q14

Q/Q(%)

1Q14

Y/Y(%)

Revenues to be recognized

930,601

1,025,195

-9%

1,641,262

-43%

Costs to be recognized (units sold)

(563,034)

(628,751)

-10%

(1,047,507)

-46%

Results to be Recognized

367,567

396,444

-7%

593,755

-38%

Backlog Margin

39.5%

38.7%

83 bps

36.2%

332 bps

 

 

 

31

 

 

 

 


 
 

 

Alphaville net revenues reached R$ 240 million in 1Q15

 

São Paulo, May 7th, 2015 – Alphaville Urbanismo SA releases its results for the 1st quarter of the year.

      

Financial Results

 

In the first quarter of 2015, net revenues were R$ 240 million, 58.7% above the same period of 2014.

 

 

 

1Q15

1Q14

Net revenue

240

151

58,7%

Net profit

35

-9

N/A

Net margin

15%

-6%

 

 

Net profit in the first quarter of 2015 was R$ 35 million, representing an increase of R$ 44 million considering 1Q14.

 

 

 
  For further information, please contact our Investor Relations team at ri@alphaville.com.br or +55 11 3038-7164

 

 

32

 

 

 

 


 
 

 

Financial Statements Gafisa Segment

 

1Q15

4Q14

Q/Q(%)

1Q14

Y/Y(%)

Net Revenue

340,058

490,947

-31%

326,750

4%

Operating Costs

(241,911)

(389,833)

-38%

(237,860)

2%

Gross Profit

98,147

101,114

-3%

88,890

10%

Gross Margin

28.9%

20.6%

827 bps

27.2%

166 bps

Operating Expenses

(60,622)

(83,658)

-28%

(79,923)

-24%

Selling Expenses

(14,092)

(25,930)

-46%

(18,995)

-26%

General and Administrative Expenses

(28,885)

(28,947)

0%

(32,449)

-11%

Other Operating Revenues/Expenses

(28,521)

(23,194)

23%

(15,991)

78%

Depreciation and Amortization

(8,279)

(33,346)

-75%

(11,206)

-26%

Equity income

1,.157

27,759

-31%

(1,282)

1,594%

Operational Result

37,527

17,456

115%

8,967

318%

Financial Income

19,277

22,218

-13%

31,160

-38%

Financial Expenses

(29,021)

(13,153)

121%

(38,984)

-26%

Net Income Before Taxes on Income

27,783

26,521

5%

1,143

2,331%

Deferred Taxes

(2,012)

(1,315)

53%

(292)

589%

Income Tax and Social Contribution

(5,338)

12,387

143%

(3,730)

43%

Net Income After Taxes on Income

20,433

37,593

-46%

(2,879)

810%

Minority Shareholders

228

774

-71%

(548)

142%

Net Result

20,205

36,819

-45%

(2,331)

967%

 

33

 

 

 

 


 
 

 

Financial Statements Tenda Segment

 

1Q15

4Q14

Q/Q(%)

1Q14

Y/Y(%)

Net Revenue

179,443

158,329

13%

105,951

69%

Operating Costs

(128,390)

(108,796)

18%

(97,493)

32%

Gross Profit

51,053

49,533

3%

8,458

504%

Gross Margin

28.5%

31.3%

-283 bps

8.0%

2,047 bps

Operating Expenses

(36,603)

(80,835)

-55%

(43,311)

-15%

Selling Expenses

(13,021)

(11,212)

16%

(11,787)

10%

General and Administrative Expenses

(14,783)

(24,235)

-39%

(18,970)

-22%

Other Operating Revenues/Expenses

(5,034)

(25,530)

-80%

(10,003)

-50%

Depreciation and Amortization

(3,390)

(4,191)

-19%

(2,816)

20%

Equity pickup

(375)

(15,667)

-98%

265

-242%

Operational Result

14,450

(31,302)

146%

(34,853)

141%

Financial Income

13,335

15,942

-16%

13,036

2%

Financial Expenses

(11,807)

(14,911)

-21%

(13,126)

-10%

Net Income Before Taxes on Income

15,978

(30,271)

153%

(34,943)

146%

Deferred Taxes

(3,288)

1,851

-278%

759

-533%

Income Tax and Social Contribution

(1,522)

(766)

99%

(3,334)

-54%

Net Income After Taxes on Income

11,168

(29,186)

138%

(37,518)

130%

Minority Shareholders

(278)

(412)

-33%

(58)

379%

Net Result

11,446

(28,774)

140%

(37,460)

131%

 

34

 

 

 

 


 
 

 

Consolidated Financial Statements

 

1Q15

4Q14

Q/Q(%)

1Q14

Y/Y(%)

Net Revenue

519,501

649,276

-20%

432,701

20%

Operating Costs

(370,301)

(498,629)

-26%

(335,353)

10%

Gross Profit

149,200

150,647

-1%

97,348

53%

Gross Margin

28.7%

23.2%

552 bps

22.5%

622 bps

Operating Expenses

(97,225)

(164,493)

-41%

(123,234)

-21%

Selling Expenses

(27,113)

(37,142)

-27%

(30,782)

-12%

General and Administrative Expenses

(43,668)

(53,182)

-18%

(51,419)

-15%

Other Operating Revenues/Expenses

(33,555)

(48,724)

-31%

(25,994)

29%

Depreciation and Amortization

(11,669)

(37,537)

-69%

(14,022)

-17%

Equity pickup

18,782

12,092

55%

(1,017)

1947%

Operational Result

51,977

(13,846)

475%

(25,886)

301%

Financial Income

32,612

38,160

-15%

44,196

-26%

Financial Expenses

(40,828)

(28,064)

45%

(52,110)

-22%

Net Income Before Taxes on Income

43,761

(3,750)

1,267%

(33,800)

229%

Deferred Taxes

(5,300)

536

-1,089%

467

-1,235%

Income Tax and Social Contribution

(6,860)

11,621

-159%

(7,064)

3%

Net Income After Taxes on Income

31,601

8,407

276%

(40,397)

178%

Minority Shareholders

(50)

362

-114%

(606)

92%

Net Result

31,651

8,045

293%

(39,791)

180%

           
 

35

 

 

 

 


 
 

 

 

Balance Sheet Gafisa Segment

 

1Q15

4Q14

Q/Q(%)

1Q14

Y/Y(%)

Current Assets

 

 

 

 

 

Cash and cash equivalents

680,412

662,682

3%

968,514

-30%

Receivables from clients

1,074,721

1,126,045

-5%

1,259,692

-15%

Properties for sale

1,225,675

1,144,604

7%

972,509

26%

Other accounts receivable

199,545

179,103

11%

215,806

-8%

Deferred selling expenses

8,584

9,711

-12%

23,206

-63%

Land for sale

6,074

6,074

0%

7,342

-17%

 

3,195,011

3,128,219

2%

3,280,914

-3%

 

 

 

 

 

 

Long-term Assets

 

 

 

 

 

Receivables from clients

384,928

358,721

7%

309,318

24%

Properties for sale

572,410

590,030

-3%

515,780

11%

Financial Instruments

0

0

0%

0

0%

Other

163,184

157,644

4%

220,577

-26%

 

1,120,522

1,106,395

-1%

1,045,675

7%

Intangible

59,949

62,687

-4%

61,332

-2%

Investments

1,947,616

1,912,233

2%

2,061,910

-6%

 

 

 

 

 

 

Total Assets

6,323,098

6,209,534

2%

6,615,987

-4%

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

Loans and financing

537,032

530,851

1%

479,409

12%

Debentures

329,876

314,770

5%

382,234

-14%

Obligations for purchase of land and clients

274,886

279,987

-2%

315,003

-13%

Materials and service suppliers

81,459

71,670

14%

80,811

1%

Taxes and contributions

65,117

68,911

-6%

52,841

23%

Investor Obligations

8,717

9,935

-12%

12,421

-30%

Other

393,962

339,413

10%

388,434

1%

 

1,692,267

1,615,537

3%

1,711,153

-1%

 

 

 

 

 

 

Long-term Liabilities

 

 

 

 

 

Loans and financings

796,607

817,641

-3%

838,017

-5%

Debentures

541,712

484,712

12%

656,982

-18%

Obligations for purchase of land and clients

61,234

80,069

-24%

69,222

-12%

Deferred taxes

27,560

26,809

3%

45,132

-39%

Provision for contingencies

75.190

60,718

24%

67,367

-12%

Investor Obligations

4,713

7,145

-34%

10,794

-56%

Other

65,951

59,445

11%

88,747

-25%

 

1,560,927

1,536,539

2%

1,776,261

-12%

 

 

 

 

 

 

Shareholders' Equity

 

 

 

 

 

Shareholders' Equity

3,066,949

3,055,344

0%

3,106,356

-1%

 Minority Shareholders

2,954

2,114

40%

22,216

-87%

 

3,069,903

3,057,458

0%

3,128,572

-2%

Total Liabilities and Shareholders' Equity

6,323,097

6,209,534

2%

6,615,987

-4%

 

36

 

 

 

 


 
 

 

Balance Sheet Tenda Segment

 

1Q15

4Q14

Q/Q(%)

1Q14

Y/Y(%)

Current Assets

 

 

 

 

 

Cash and cash equivalents

435,756

494,572

-12%

594,712

-27%

Receivables from clients

401,285

314,453

28%

461,984

-13%

Properties for sale

563,291

551,213

2%

526,490

7%

Other accounts receivable

117,337

114,352

3%

126,842

-7%

Prepaid expenses

-

-

0%

7.125

-

Land for sale

107,415

104,489

3%

103,675

4%

 

1,625,084

1,579,079

3%

1,820,828

-11%

Long-term Assets

 

 

 

 

 

Receivables from clients

32,818

26,100

26%

22,802

44%

Properties for sale

196,378

226,495

-13%

137,394

43%

Financial Instruments

-

-

0%

-

0%

Other

72,751

76,629

-5%

83,012

-12%

 

301,947

329,224

-8%

243,208

24%

Intangible

33,935

37,431

-9%

35,314

-4%

Investments

188,315

179,455

5%

208,193

-10%

 

 

 

 

 

 

Total Assets

2,149,281

2,125,189

1%

2,307,543

-7%

Current Liabilities

 

 

 

 

 

Loans and financing

9,084

19,207

-53%

81,049

-89%

Debentures

198,979

189,617

5%

219,201

-9%

Obligations for purchase of land and clients

223,977

210,618

6%

45,197

396%

Materials and service suppliers

20,932

23,461

-11%

25,694

-19%

Taxes and contributions

71,763

71,251

1%

59,894

20%

Other

168,783

157,581

7%

350,550

-52%

 

693,518

671,735

3%

781,585

-11%

Long-term Liabilities

 

 

 

 

 

Loans and financings

24,663

29,726

-17%

86,943

-72%

Debentures

200,000

200,000

0%

200,000

0%

Obligations for purchase of land and clients

14,824

21,068

-30%

13,593

9%

Deferred taxes

11,603

7,931

46%

8,872

31%

Provision for contingencies

68,154

69,734

-2%

57,630

18%

Other

29.935

42.649

-30%

66.584

-55%

 

349,179

371,108

-6%

433,622

-19%

Shareholders' Equity

 

 

 

 

 

Shareholders' Equity

1,070,450

1,058,477

5%

1,067,782

4%

Minority Shareholders

36,134

23,869

51%

24,554

47%

 

1,106,584

1,082,346

2%

1,092,336

1%

Total Liabilities and Shareholders' Equity

2,149,281

2,125,189

1%

2,307,543

-7%

 

37

 

 

 

 


 
 

 
 

Consolidated Balance Sheets

 

1Q15

4Q14

Q/Q(%)

1Q14

Y/Y(%)

Current Assets

 

 

 

 

 

Cash and cash equivalents

1,116,168

1,157,254

-4%

1,563,226

-29%

Receivables from clients

1,476,007

1,440,498

2%

1,721,676

-14%

Properties for sale

1,788,967

1,695,817

5%

1,498,999

19%

Other accounts receivable

295,846

271,319

9%

176,493

68%

Prepaid expenses and others

15,322

15,441

-1%

30,331

-49%

Land for sale

113,489

110,563

3%

111,017

2%

 

4,805,799

4,690,892

2%

5,101,742

-6%

 

 

 

 

 

 

Long-term Assets

 

 

 

 

 

Receivables from clients

417,746

384,821

9%

332,120

26%

Properties for sale

768,789

816,525

-6%

653,174

18%

Other

220,969

219,308

1%

288,631

-23%

 

1,407,504

1,420,654

-2%

1,273,925

9%

Intangible

119,360

125,594

-5%

139,726

-15%

Investments

1,001,235

968,711

3%

1,102,718

-9%

 

 

 

 

 

 

Total Assets

7,333,898

7,205,851

2%

7,618,111

-4%

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

Loans and financing

546,115

550,058

-1%

560,458

-3%

Debentures

528,856

504,387

5%

601,435

-12%

Obligations for purchase of land and clients

498,857

490,605

2%

360,200

38%

Materials and service suppliers

102,391

95,131

8%

138,536

-26%

Taxes and contributions

110,933

114,424

-3%

112,735

-2%

Investor Obligations

8,717

6,317

38%

12,421

-30%

Other

575,615

509,945

13%

540,850

6%

 

2,371,484

2,270,867

4%

2,326,682

2%

 

 

 

 

 

 

Long-term Liabilities

 

 

 

 

 

Loans and financings

821,270

847,367

-3%

924,960

-11%

Debentures

741,712

684,712

8%

856,982

-13%

Obligations for purchase of land and clients

76,059

101,137

-25%

82,815

-8%

Deferred taxes

39,164

34,740

13%

54,004

-27%

Provision for contingencies

143,990

83,479

72%

124,997

15%

Investor Obligations

4,713

4,713

0%

10,794

-56%

Other

64,615

120,433

-46%

107,366

-40%

 

1,891,523

1,876,581

1%

2,161,918

-13%

 

 

 

 

 

 

Shareholders' Equity

 

 

 

 

 

Shareholders' Equity

3,066,952

3,055,345

0%

3,106,358

-1%

Minority Shareholders

3,939

3,058

29%

23,153

-83%

 

3,070,891

3,058,403

0%

3,129,511

-2%

Liabilities and Shareholders' Equity

7,333,898

7,205,851

2%

7,618,111

-4%

 

38

 

 

 

 


 
 

Cash Flow

 

1Q15

1Q14

Income Before Taxes on Income

43,761

(33,798)

Expenses (income) not affecting working capital

44,533

64,453

Depreciation and amortization

11,669

14,022

Impairment allowance

-

(2,294)

Expense on stock option plan

2,618

3,589

Penalty fee over delayed projects

(2,079)

(612)

Unrealized interest and charges. net

16,414

23,956

Equity pickup

(18,782)

1,017

Disposal of fixed asset

216

1,715

Warranty provision

6,925

(3,478)

Provision for contingencies

26,070

26,149

Profit sharing provision

2,914

4,789

Allowance (reversal) for doubtful debts

317

(4,586)

Profit / Loss from financial instruments

2,756

186

Clients

(65,295)

178,657

Properties for sale

(57,683)

(77,087)

Other receivables

10,231

8,236

Deferred selling expenses and pre-paid expenses

120

4,857

Obligations on land purchases

(16,820)

(45,335)

Taxes and contributions

(3,491)

(26,272)

Accounts payable

7,259

59,194

Salaries. payroll charges and bonus provision

4,289

(864)

Other accounts payable

(7,385)

(43,455)

Current account operations

1,514

(58,011)

Paid taxes

(12,160)

(84,682)

Cash used in operating activities

(51,127)

(54,107)

Investments activities

 

 

Purchase of property and equipment

(5,651)

(12,738)

Redemption of securities. restricted securities and loans

1,180,350

1,115,783

Investments in marketable securities. restricted securities

(1,024,416)

(680,534)

Investments increase

(175)

(5,514)

Dividends receivables

-

2,625

Cash used in investing activities

150,108

419,622

Financing activities

 

 

Contributions from venture partners

2,400

(100,464)

Increase in loans and financing

200,321

175,391

Repayment of loans and financing

(165,306)

(315,039)

Stock repurchase

(22,135)

(22,728)

Dividend payments

-

(117,125)

Mutual Operations

587

(11,240)

Net cash provided by financing activities

15,867

(391,205)

Net increase (decrease) in cash and cash equivalents

114,848

(25,690)

At the beginning of the period

109,895

215,193

At the end of the period

224,743

189,503

Net increase (decrease) in cash and cash equivalents

114,848

(25,690)

 

39

 

 

 

 


 
 

About Gafisa

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 approximately 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  upper-middle and upper class segments  through the Gafisa brand, the Company also focuses on low income developments through its Tenda brand. And,, it 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 BM&FBOVESPA (BOVESPA: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.

 
 

40

 
 

SIGNATURE

 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: May 8, 2015
 
Gafisa S.A.
 
By:
/s/ Sandro Gamba

 
Name:   Sandro Gamba
Title:     Chief Executive Officer