gfapr2q15_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 August, 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, August 7, 2015 – Gafisa S.A. (Bovespa: GFSA3; NYSE: GFA), one of Brazil’s leading homebuilders, today reported financial results for the second quarter ended June 30, 2015.

 

2Q15 Conference Call

August 10, 2015

> 9:00 am US EST
In English (simultaneous translation
from Portuguese)
+ 1-516-3001066 US EST
Code: Gafisa

>  10:00 am Brasília Time
In Portuguese
Telephones:
+55-11-3728-5971 (Brazil)
Code: Gafisa

Replay:
+55-11-3127-4999 (Brazil)
Código: 54100222
+55-11-3127-4999 (USA)
Code: 80924629
IR Website:
www.gafisa.com.br/ri

IR Contacts

Danilo Cabrera
Mariana Suarez
Phone: +55 11 3025-9242 / 9978
Email: ri@gafisa.com.br
IR Website:
www.gafisa.com.br/ri

Media Relations

Máquina da Notícia  - Comunicação Integrada
Giovanna Bambicini
Phone: +55 11 3147-7414
Fax: +55 11 3147-7900
E-mail: gafisa@grupomaquina.com

Shares

GFSA3 – Bovespa
GFA – NYSE
Total shares outstanding: : 378.066.1621
Average daily trading volume (90 days²):
R$8.9 million
(1) Including 10.074.707 treasury shares
(2) Until June 30, 2015

GAFISA RELEASES
2Q15 RESULTS

MANAGEMENT COMMENTS AND HIGHLIGHTS

 

The first half of 2015 brought Gafisa another step closer to solid levels of profitability. We are pleased to report that consolidated net income totaled R$60.1 million in the first six months of the year, reversing a loss of R$ 40.6 million recorded in the same period last year. In the second quarter specifically, consolidated net income was R$28.5 million. The Tenda segment accounted for R$20.0 million of the total, maintaining the previous quarter’s performance to end the first half of 2015 with net income of R$ 31.4 million. Tenda’s performance reflects its consolidation and the growing participation of new projects launched under its current business model. The Gafisa segment, in turn, recorded net income of R$8.5 million in the quarter and R$28.7 million in 1H15, as a result of targeted efforts to sell inventory and reduce the level of SG&A.

These results are aligned with the Company’s strategy of improving operating performance and increasing its profitability levels, despite the current market environment. In a period marked by a challenging macroeconomic conditions, the Company’s two brands faced very different operating environments. The performance of the Gafisa segment reflects difficult conditions in the middle and upper income markets, due to interest rate, inflation and exchange rate movements which are directly impacting both consumer and investor confidence. On the other hand, the Tenda segment’s performance remains supported by strong demand from the low income segment.

In this context, we would like to highlight the positive performance achieved by both Gafisa and Tenda’s projects in the quarter, which contributed to the Company’s consolidated results. The consolidated adjusted gross margin reached 33.9% in the quarter. The Gafisa segment is maintaining stable profitability levels in its projects, with an adjusted gross margin of 36.5% in the quarter. At the same time, the consolidation of the New Model within Tenda led the segment to record an adjusted gross margin of 30.1%.

In keeping with the shift to a more conservative strategy amid greater risk aversion in the market, the Gafisa segment launched two projects during the quarter. We would like to highlight once again the focus on reducing inventory levels, which accounted for approximately 72% of net pre-sales totaling R$242.2 million in the quarter. It is also worth noting strong delivery volumes in the Gafisa segment during the period: totaling 1,498 units and R$777.3 million in PSV. In the first half of 2015, 14 projects/phases were delivered, representing 3,345 units and R$1.3 billion in PSV. The level of cancellations, which reached R$115.6 million in 2Q15, reflected the impact of Brazil’s current economic stagnation against Gafisa’s strong volume of deliveries.

 

 

1


 
 

 

 

We ended the second quarter with R$2.1 billion in inventory in the Gafisa segment, with just 19.8% related to completed projects. This percentage was impacted by the volume of deliveries of corporate units and R$105.4 million of units located in discontinued markets, resulting in a decrease of 52% y-o-y and 8% from the previous quarter. The performance of inventory sales once again contributed to the effective sales speed, which was 10.5% in 2Q15, and higher y-o-y.

Amid the continuation of current economic conditions, we expect to take a conservative approach to launch activity throughout the second half 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 an adequate sales and profitability.

In the lower income segment, Tenda was able to sustain positive results and reported net income for the second consecutive quarter. These results reflect the increased operational scale of the New Model and the greater level of efficiency and management of both the financial and operational cycles.

In regards to the expansion of Tenda’s operating volume, 6 projects/phases were launched in 2Q15, accounting for R$229.4 million. The projects/phases are located in the states of São Paulo, Rio de Janeiro, Rio Grande do Sul, Bahia and Pernambuco.

The highlight of the quarter was the strong speed of sales result, which reached 28.2%. This is due to greater product availability after three consecutive quarters of high launch volumes, strong demand in the low income segment and a significant reduction in the volume of dissolutions observed during the period. As a result, net pre-sales increased significantly, totaling R$289.9 million, the highest level since the 4Q10.

The Tenda segment delivered 5 projects during the quarter, representing 1,240 units and accounting for R$177.2 million in PSV, of which 77% (980 units, or R$137.2 million) were under the New Model. In the 6M15, the segment delivered R$239.5 million, with 61% relating to the New Model.

Tenda’s solid operating performance positively impacted its financial results, with adjusted gross income reaching R$73.3 million in 2Q15. 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 a strong speed of sales. Sustainable operating results over the last three quarters reinforces our confidence in the New Model.

On a consolidated basis, Gafisa and Tenda launched R$482.0 million in 2Q15 and R$795.5 million in 6M15, with net pre-sales of R$532.1 million and R$955.5 million, respectively. Adjusted gross profit was R$200.4 million, with a margin of 33.9% in the quarter; over the first six months, adjusted gross profit was R$379.7 million.

A substantial reduction in the volume of old projects and the adaptation to current market conditions led Gafisa to concentrate on achieving greater stability in its cost and expense structure. Selling and administrative expenses were R$89.7 million, down 9.9% on a year-over-year basis. Year-to-date, these expenses totaled R$160.5 million, down 11.7% from 6M14, attesting to the Company’s commitment to streamlining its cost structure.

As a result of these initiatives, consolidated net income totaled R$28.5 million in the quarter and R$60.1 million in the 6M15.

At the end of the 6M15, the Net Debt / Shareholder’s Equity ratio reached 50.4%, consistent with the previous quarter. Excluding financing for projects, the Net Debt / Shareholder’s Equity ratio was negative 11.7%. In the quarter, consolidated operating cash generation reached R$13.1 million, also in line with the previous quarter. The Company ended the 2Q15 with a net cash burn of R$28.1 million, totaling a cash burn of R$97.8 million in the first half. This level of cash burn came as a result of higher disbursements related to Tenda’s land bank in 1Q15 and a slightly lower volume of transfers in the Gafisa segment compared to that of the previous quarter, due to the higher volume of corporate projects delivered in the second half.

 

 

2


 
 

 

 

The process of separating the Gafisa and Tenda business units is moving forward. Since the beginning of 2014, a number of steps have already been completed, while some of the actions are still underway. These include defining the appropriate capital structure for each of the business units. Considering that this is the most crucial 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, as we have previously announced.

Finally, we would like to highlight our satisfaction with the evolution of the business cycles at both Gafisa and Tenda in this first half of 2015. In recent years, both companies have strengthened and improved their operating and financial cycles, positioning them well for the challenges facing the sector and region in 2015. The company remains focused 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.

 

 

 

3


 
 

 

 

MAIN CONSOLIDATED FIGURES

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

 

2Q15

1Q15

Q/Q (%)

2Q14

Y/Y (%)

6M15

6M14

Y/Y (%)

Launches

481,951

313,581

54%

413,744

16%

795,532

949,123

-16%

Launches, Units

2,231

1,950

14%

1,089

105%

4,181

2,955

41%

Net Pre-sales

532,131

423,344

26%

433,018

23%

955,475

672,341

42%

Pre-sales, Units

2,395

1,908

26%

1,628

47%

4,303

2,395

80%

Pre-sales of Launches

108,001

59,716

81%

158,633

-32%

167,717

216,804

-23%

Sales over Supply (SoS)

15.9%

12.8%

310 bps

12.6%

330 bps

25.4%

18.2%

720 bps

Delivered projects (PSV)

954,460

785,748

21%

678,171

41%

1,740,208

1,235,679

41%

Delivered projects, Units

2,738

3,534

-22%

3,689

-26%

6,272

5,485

14%

Net Revenue

591,529

519,501

14%

574,830

3%

1,111,030

1,007,531

10%

Adjusted Gross Profit1

200,386

179,302

12%

205,261

-2%

379,688

337,354

12%

Adjusted Gross Margin1

33.9%

34.5%

-60 bps

35.7%

-180 bps

34.2%

33.5%

70 bps

Adjusted EBITDA2

72,831

96,363

-24%

89,838

-19%

169,194

116,308

45%

Adjusted EBITDA Margin2

12.3%

18.6%

-630 bps

15.6%

-330 bps

15.2%

11.5%

370 bps

Net Income (Loss)

28,487

31,651

-10%

(851)

3.447%

60,137

(40,640)

248%

Backlog Revenues

901,383

930,601

-3%

1,506,001

-40%

901,383

1,506,001

-40%

Backlog Results3

364,238

367,567

-1%

531,924

-32%

364,238

531,924

-32%

Backlog Margin3

40.4%

39.5%

90 bps

35.3%

510 bps

40.4%

35.3%

510 bps

Net Debt + Investor Obligations

1,563,283

1,535,215

2%

1,408,283

11%

1,563,283

1,408,283

11%

Cash and cash equivalents

876,813

1,116,168

-21%

1,279,568

-31%

876,813

1,279,568

-31%

Shareholders’ Equity

3,097,881

3,066,952

1%

3,116,182

-1%

3,097,881

3,116,182

-1%

Shareholders’ Equity + Minority

3,099,492

3,070,891

1%

3,138,131

-1%

3,099,492

3,138,131

-1%

Total Assets

7,072,546

7,333,898

-3%

7,288,403

-3%

7,072,546

7,288,403

-3%

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

50.4%

50.0%

40 bps

44.9%

550 bps

50.4%

44.9%

550 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

 

 

 

 

 

4


 
 

 

 

FINANCIAL RESULTS

·         Net revenue recognized by the “PoC” method was R$348.4 million in the Gafisa segment and
R$243.1 million in the Tenda segment. This resulted in consolidated revenue of R$591.5 million in the second quarter, up 2.9% year on year, and 13.9% from the previous quarter. In 6M15, consolidated net revenue reached R$1.1 billion, an increase of 10.3% compared to 6M14.

·         Adjusted gross profit for 2Q15 was R$200.4 million, up from R$179.3 million in 1Q15 and in line with R$205.3 million in the previous year. Adjusted gross margin reached 33.9% compared to 35.7% in the prior-year period and 34.5% in the 1Q15. Gafisa’s contribution was an adjusted gross profit of R$127.1 million, with an adjusted gross margin of 36.5%, while Tenda’s contribution was an adjusted gross profit of R$73.3 million, with a margin of 30.1% in 2Q15. In the first half, adjusted gross profit totaled R$379.7 million, versus R$337.4 million in the previous year, with an adjusted gross margin of 34.2%.

·         Adjusted EBITDA was R$72.8 million in 2Q15, with a margin of 12.3%. The Gafisa segment reported adjusted EBITDA of R$52.4 million, while the Tenda segment’s adjusted EBITDA was R$15.2 million. In 6M15 consolidated adjusted EBITDA was R$169.2 million, an increase of 45% from R$116.3 million in 6M14. 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$28.5 million in the second quarter. Gafisa reported a net profit of R$8.5 million, while Tenda reported a profit of R$20.0 million. In the first six months, net income reached R$60.1 million.

·         Operating cash generation totaled R$13.1 million in the 2Q15, closing the period with R$19.4 million. Net cash consumption of R$28.1 million was recorded in 2Q15, with accumulated consumption of
R$97.8 million during 6M15.

 

OPERATING RESULTS

·         Launches totaled R$482.0 million in the 2Q15, comprising 8 projects in the states of São Paulo, Rio de Janeiro, Rio Grande do Sul, Bahia and Pernambuco. This launch volume was an increase over the R$313.6 million launched in 1Q15. The Gafisa segment accounted for 52% of the first quarter launches, while the Tenda segment accounted for the remaining 48%. The volume launched in the first half of the year totaled R$795.5 million.

·         Net pre-sales totaled R$532.1 million in 2Q15, of which R$242.2 million related to Gafisa and
R$289.9 million related to Tenda. The result is well above net pre-sales totaling R$433.0 million in the 2Q14. Consolidated sales from launches in the quarter represented 19.3% of the total, while sales from inventory comprised the remaining 80.7%. During 6M15, the Company had reached R$955.5 million in net pre- sales.

·         Consolidated sales over supply (SoS) reached 15.9% in 2Q15, compared to 12.8% in 1Q15 and 12.6%
y-o-y. On a trailing 12-month basis, Gafisa’s SoS was 27.7%, while Tenda’s SoS was 48.5%.

·         Consolidated inventory at market value decreased R$60.7 million in the quarter to a value of R$2.8 billion. Gafisa’s inventory totaled R$2.1 billion while Tenda’s inventory totaled R$738.4 million.

·         Throughout the second quarter, the Company delivered 10 projects/phases, totaling 2,738 units, accounting for R$954.5 million in PSV. The Gafisa segment delivered 1,498 units, while the Tenda segment delivered the remaining 1,240 units. Over the past six months, 25 projects / phases and 6,272 units were delivered, accounting for 1.7 billion in PSV.

 

      

 

 

 

5


 
 

 

ANALYSIS OF RESULTS

GAFISA SEGMENT

Consistent Gross Margin and Reduction in General and Administrative Expenses

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

 

2Q15

1Q15

Q/Q (%)

2Q14

Y/Y (%)

6M15

6M14

Y/Y (%)

Launches

252,585

75,227

236%

314,733

-20%

327,812

668,667

-51%

Net pre-sales

242,185

179,807

35%

251,290

-4%

421,992

438,845

-4%

Net pre-sales of Launches

66,973

14,436

364%

116,334

-42%

81,409

154,249

-47%

Sales over Supply (SoS)

10.5%

8.0%

250 bps

9.8%

70 bps

16.9%

15.9%

100 bps

Delivered projects (Units)

1,498

1,847

-19%

1,504

0%

3,345

2,028

65%

Net Revenue

348,392

340,058

2%

397,907

-12%

688,450

724,657

-5%

Adjusted Gross Profit1

127,101

125,502

1%

151,456

-16%

252,603

267,976

-6%

Adjusted Gross Margin1

36.5%

36.9%

-40 bps

38.1%

160 bps

36.7%

37.0%

-30 bps

Adjusted EBITDA2

52,400

58,289

-10%

83,353

-37%

110,689

138,163

-20%

Adjusted EBITDA Margin2

15.0%

17.1%

-210 bps

20.9%

-590 bps

16.1%

19.1%

-480 bps

Net Income (Loss)

8,452

20,205

-58%

17,132

-51%

28,657

14,801

94%

Backlog Revenues

664,074

742,154

-11%

1,298,089

-49%

664,074

1,298,089

-49%

Backlog Results3

265,190

294,093

-10%

470,361

-44%

265,190

470,361

-44%

Backlog Margin3

39.9%

39.6%

30 bps

36.2%

370 bps

39.9%

36.2%

370 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 second quarter topline performance reflects maintenance in the level of revenues, supported by inventory sales, which represented 72.3% of net sales in the second quarter and 80.7% in 6M15. Another point worth highlighting is the reduction in selling, general and administrative expenses, which were 4.9% lower q-o-q and 12.5% lower y-o-y. This reflects ongoing efforts in the Gafisa segment to increase efficiencies and improve cost management.

2Q15 adjusted gross margin ended at 36.5%, in line with the average levels reported in previous quarters and marginally lower y-o-y, due to a higher recognition of swaps in the period. These profitability levels support the stability of the gross margin in the Gafisa segment, and also highlight the solid performance of the Gafisa segment projects, resulting from the continuous evolution of the Company's business cycle.

Net Income

Net income for the period was R$8.5 million, compared to R$17.1 million in the 2Q14. This decrease is due to a a slight reduction in gross margin, a higher volume of other operating expenses, and the lower contribution of AUSA equity income. 6M15 net income reached R$28.7 million compared to R$14.8 million in 6M14. Excluding the R$5.2 million in equity income from Alphaville, the Gafisa segment’s net income in 2Q15 was R$3.3 million, compared to R$8.7 million recorded in 2Q14. In 6M15, net income was R$6.5 million, compared to R$9.8 million in the previous year.

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

Gafisa Segment (R$ 000)

2Q15

1Q15

2Q14

6M15

6M14

Adjusted Gross Profit

127.1

125.5

151.5

252,6

268,0

Adjusted Gross Margin

36.5%

36.9%

38.1%

36.7%

37%

Net Profit

8.5

20.2

17.1

28.7

14.8

Equity Income from Alphaville¹

5.2

17.0

8.4

22.2

5.0

Net Profit Ex-Alphaville

3.3

3.2

8.7

6.5

9.8

 

 

 

 

6


 
 

 

TENDA SEGMENT

Evolution in Revenue Levels and Increased Profitability Anchored in Operational Consolidation of the New Model

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

 

2Q15

1Q15

Q/Q (%)

2Q14

Y/Y (%)

6M15

6M14

Y/Y (%)

Launches

229,366

238,354

-4%

99,011

132%

467,720

280,456

67%

Net pre-sales

289,946

243,537

19%

181,728

60%

533,483

233,495

129%

Net pre-sales of Launches

41,028

45,280

-9%

42,299

-3%

86,308

62,555

38%

Sales over Supply (SoS)

28.2%

23.3%

490 bps

20.8%

740 bps

41.9%

25.2%

1670 bps

Delivered projects (Units)

1,240

1,687

-27%

2,185

-43%

2,927

3,457

-15%

Net Revenue

243,137

179,443

35%

176,923

37%

422,580

282,874

49%

Adjusted Gross Profit1

73,285

53,800

36%

53,805

36%

127,085

69,368

83%

Adjusted Gross Margin1

30.1%

30.0%

10 bps

30.4%

-30 bps

30.1%

24.5%

560 bps

Adjusted EBITDA2

15,221

21,114

-28%

(1,907)

898%

36,335

(26,820)

235%

Adjusted EBITDA Margin2

6.3%

11.8%

-550 bps

-1.1%

740 bps

8.6%

-9.5%

1,810 bps

Net Income (Loss)

20,035

11,446

75%

(17,983)

211%

31,481

(55,443)

157%

Backlog Revenues

237,309

188,447

26%

207,912

14%

237,309

207,912

14%

Backlog Results3

99,048

73,474

35%

61,563

61%

99,048

61,563

61%

Backlog Margin3

41.7%

39.0%

270 bps

29.6%

1,210 bps

41.7%

29.6%

1,210 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 second quarter of the year marked another step towards the consolidation of Tenda’s operational cycle, supported by an increase in the number of launches in the segment and a 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.

Tenda recorded a strong increase in adjusted gross profit in the quarter, reaching R$73.3 million in 2Q15. In addition, the adjusted gross margin remained stable between 28 - 30%, which is in line with the range observed since 2Q14. This reflects the operational consolidation of projects executed under the New Model, which has demonstrated improved performance and profitability, combined with the decreasing contribution of legacy projects in the segment's revenue mix.

Furthermore, as observed in sequential quarters, adjustments in the cost and expense structure to Tenda’s business cycle positively impacted the quarter’s results. General and administrative expenses decreased by 13.6% compared to the prior year. Importantly, the Tenda segment achieved a reduction in selling expenses despite an increase in the number of launches and gross sales, of 131.7% and 14.8%, respectively, versus the year-ago period.

 

Net Income

In 2Q15 the Tenda segment achieved net income of R$20.0 million, substantially higher than net income of R$11.4 million in 1Q15 and a net loss of R$18.0 million in 2Q14. In 6M15, net income was R$31.4 million, compared to a net loss of R$55.4 million in the previous year, reflecting the improved operating and financial performance of the Tenda segment. Table 5 – Tenda Segment – Net Income (R$ Million)

Tenda Segment (R$ million)

2Q15

1Q15

2Q14

6M15

6M14

Adjusted Gross Profit

73.3

53.8

53.8

127.1

69.4

Adjusted Gross Margin

30.1%

30.0%

30.4%

30.1%

24.5%

Net Profit

20.0

11.4

(18.0)

31.4

(55.4)

 

 

 

 

7


 
 

 

 

RECENT EVENTS

UPDATED STATUS OF THE SPIN-OFF PROCESS AND RECENT DEVELOPMENTS

In the 2Q15, the Company progressed with the evaluation of the potential separation of the Gafisa and Tenda business units. Since commencing the spin-off process 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 necessary changes required to processes and systems, (ii) definition of policies and corporate governance, (iii) preparation for Tenda’s shares to be traded on 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 two Companies. 

Over the last quarter, the Company advanced the separation procedures related to Information Technology (IT), one of the last remaining joint administrative structures. Currently, besides the IT area, the only business units operating on a joint basis are those that will split at the time of the official separation. These business units include Investor Relations, Corporate Legal, Internal Audit and Internal Controls.

Definition of the appropriate capital structure is one main processes that is still ongoing. The Company continues to work with financial institutions in order to achieve the conditions deemed necessary for the desired capital structure model, which takes into consideration the business cycles of each of the business units.

As previously communicated in a Material Fact released to the market on April 29, these discussions are ongoing and are taking longer than had been initially expected. As a result, and considering that the achievement of an appropriate capital structure is a necessary step in the separation process, it is not yet possible to determine when the potential separation will be concluded, 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. During the last quarter, there has been no change in this subject.

The Administrations of Gafisa and Tenda, in accordance with their fiduciary duties, 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.

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

 

 

 

 

 

8


 
 

 

 

GAFISA SEGMENT

Focuses on residential developments within the upper, upper-middle, and middle-income segments, with average unit prices above R$250,000..

Operating Results

Launches and Pre-Sales

Second quarter 2015 launches totaled R$252.6 million, representing 2 projects/phases located in the city of São Paulo. The sales speed of these launches reached 24.4%. In the first 6M15, the Gafisa segment totaled R$ 327.8 million in launches, representing 41.2% of consolidated launches.

 

 

 

 

The Gafisa segment’s 2Q15 gross pre-sales totaled R$357.8 million. Dissolutions reached R$115.6 million and net pre-sales reached R$242.2 million, an increase of 34.7% compared to 1Q15 and stable compared to the previous year. In the first half of the year, the volume of dissolutions was R$ 240.5 million and net sales ended the 6M15 at R$422.0 million. In the quarter, the sales over supply (SoS) of the Gafisa segment was 10.5%, higher than that of 1Q15 and the previous year.

 

The Company continues to concentrate its efforts on the sale of remaining units. As a result, approximately 53.0% of net sales during the period related to projects launched through 2013, resulting in an improvement in the inventory profile of the Gafisa segment.

 

 

 

 

                                                                                                                                                   

 

                                                                                                                                                                    

 

 

 

9


 
 

 

 

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

 

2Q15

1Q15

Q/Q (%)

2Q14

Y/Y (%)

6M15

6M14

Y/Y (%)

Launches

252,585

75,227

236%

314,733

-20%

327,812

668,667

-51%

Pre-Sales

242,185

179,807

35%

251,290

-4%

421,992

438,845

-4%

 

Sales over Supply (SoS)

 

The sales velocity was 10.5% in 2Q15, above the 8.0% recorded in 1Q15 and above 9.8% in the previous year. On a trailing 12 month basis, Gafisa’s SoS reached 27.7%.

 

 

 

Dissolutions

The weak economic conditions during the first half of 2015 directly affected consumer confidence and, accordingly, the level of dissolutions. This scenario has persisted since the end of 2014. Due to the challenging operating environment, the level of dissolutions in the Gafisa segment reached R$115.6 million in 2Q15, a decrease compared to R$124.8 million in 1Q15 and R$119.9 million in the previous year. It is also worth noting that the level of dissolutions in 6M15 has also been impacted by the increased volume of deliveries in the quarter. 1,498 units were delivered in this 2Q15, corresponding to R$777.3 million in PSV; in the first half of the year deliveries totaled 3,165 units and R$1.3 billion in PSV.

 

Over 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. A comprehensive approach 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. This progress has occurred despite deteriorating macroeconomic conditions, especially from the second half of 2014.

 

In 2Q15, 486 Gafisa units were cancelled and 253 units were already resold in the period.

 

 

 

 

 

 

10


 
 

 

 

Inventory

Gafisa is maintaining its focus on inventory reduction initiatives. Projects launched until 2014 represented 72.3% of net sales in the period. In 6M15, inventory as a percentage of sales reached 80.7%. The market value of the Gafisa segment inventory remained stable compared at R$2.1 billion compared to the previous quarter. Finished units outside of core markets accounted for R$105.4 million, or 5.1% of total inventory.

 

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

 

Inventories BoP 1Q15

Launches

Dissolutions

Gross Sales

Adjustments1

Inventories BoP 2Q15

% Q/Q

São Paulo

1,467,350

252,585

90,578

301,659

26,210

1,482,644

1.0%

Rio de Janeiro

488,251

-

19,680

43,308

22,334

496,985

-0.3%

Other Markets

115,036

-

5,389

12,864

2,126

105,435

-8.3%

Total

2,070,637

252,585

115,647

357,832

6,001

2,075,036

0.2%

* 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$410.7 million, or 19.8% of total inventory. Inventory from projects launched outside core markets, currently exclusively comprised of finished units, represent
R$105.4 million, down 52.3% when compared to the R$220.9 million recorded last year and down 8.3% from 1Q15. The Company estimates that by early 2016, it will have monetized a large portion of its inventory in non-core markets, based on the sales rate observed in these markets over the past few quarters.

 

The inventory of completed units increased as a result of more deliveries of corporate projects during the quarter, representing approximately R$474.7 million or 61.1% of PSV delivered. The increase was due to lower liquidity levels for these types of projects.

 

It is worth noting that the largest share of Gafisa’s inventory, approximately 59% or R$1.2 billion, is concentrated in projects that are to be delivered in the second quarter of 2016. This will be reflected in 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 2Q15

São Paulo

253,797

-

920,704

221,013

87,130

1,482,644

Rio de Janeiro

-

41,492

113,277

114,049

218,141

486,958

Other Markets

-

-

-

-

105,435

105,435

Total

253,797

41,492

1,033,980

335,062

410,705

2,075,036

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.

 

 

 

 

 

 

 

11


 
 

 

 

Landbank

The Gafisa segment land bank, with a PSV of approximately R$5.9 billion, is comprised of 30 potential projects/ phases, amounting to nearly 10.8 thousand units, of which 77% are located in São Paulo and 23% in Rio de Janeiro. The largest portion of land acquired through swap agreements is in Rio de Janeiro, impacting the total percentage of land acquired, which reached 59%.

 

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

 

PSV

(% Gafisa)

%Swap
Total

%Swap

Units

%Swap
Financial

Potential Units
(% Gafisa)

Potential Units
(100%)

São Paulo

4,532,063

45.9%

45.0%

0.9%

9,063

11,117

Rio de Janeiro

1,339,778

84.2%

84.2%

0.0%

1,741

2,142

Total

5,871,842

58.6%

58.0%

0.6%

10,805

13,259

 

Table 10. Gafisa Segment – Changes in the Landbank (1Q15 x 2Q15 - R$000)

 

Initial Landbank

Land
Acquisition

Launches

Dissolutions

Adjustments

Final Landbank

São Paulo

4,802,512

-

252,585

-

(17,863)

4,532,063

Rio de Janeiro

1,315,335

85,872

-

(58,370)

(3,058)

1,339,778

Total

6,117,847

85,872

252,585

(58,370)

(20,922)

5,871,842

 

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

 

Gafisa Vendas

During 6M15, Gafisa Vendas, the Company’s independent sales unit, with operations in São Paulo and Rio de Janeiro, accounted for 63% of gross sales of the quarter. Gafisa Vendas currently has a team of 700 highly trained, dedicated consultants, in addition to an online sales force.

 

Delivered Projects

During 2Q15, Gafisa delivered 5 projects/phases totaling 1,498 units and accounting for R$777.3 million in PSV. In 6M15, 14 projects / phases were delivered, representing 3,345 units and R$ 1.3 billion in PSV.

 

Currently, Gafisa has 30 projects under construction, all of them on schedule in regards to the Company’s business plan.

 

Transfers

Over the past few years, the Company has been taking steps to improve the performance of its receivables / transfer process, in an attempt to achieve higher rates of return on invested capital. Currently, our plan 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$169.8 million in PSV in the second quarter.

 

Of second quarter deliveries, of R$777.3 million, 61.1% comprised corporate projects. Financing arrangements for corporate projects differ from that of residential projects, resulting in a smaller contribution to transfer volumes, which impacted cash generation in the quarter.

 

 

 

12


 
 

 

Table 11. Gafisa Segment – Delivered Project

 

2Q15

1Q15

Q/Q (%)

2Q14

Y/Y (%)

6M15

6M14

Y/Y (%)

PSV Transferred ¹

169,829

198,014

-14%

210,677

-19%

367,843

442,753

-17%

Delivered Projects

5

9

0%

8

-38%

14

12

-17%

Delivered Units

1,498

1,847

-19%

1,504

0%

3,345

2,038

65%

Delivered PSV²

777,258

569,459

36%

454,880

71%

1,346,717

913,300

47%

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

2) PSV = Potential sales value of delivered units.

 

Financial Results

Revenues

2Q15 net revenues for the Gafisa segment totaled R$348.4 million, an increase of 2.5% q-o-q and a decrease of 12.4% y-o-y. The decrease compared to the 2Q14 is related to projects whose construction works are more advanced.

 

In 2Q15, approximately 99.6% of Gafisa segment revenues were derived from projects located in Rio de Janeiro/São Paulo, while 0.4% were derived from projects in non-core markets. The table below provides additional details.

 

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

 

 

2Q15

 

 

 

2Q14

 

 

Launches

Pre-sales

%
Sales

Revenue

% Revenue

Pre-sales

%
Sales

Revenue

% Revenue

2015

66,973

27.7%

-

0%

-

-

-

-

2014

57,530

23.8%

54,173

15.5%

116,334

46.3%

5,711

1.4%

2013

39,878

16.5%

76,279

21.9%

11,977

4.8%

63,529

16.0%

≤ 2012

77,804

32.1%

217,939

62.6%

122,979

48.9%

328,667

82.6%

Total

242,185

100%

348,391

100%

251,290

100%

397,907

100%

SP + RJ

234,710

96.9%

346,948

99.6%

216,338

86.1%

388,504

97.6%

Other Markets

7,475

3.1%

1,443

0.4%

34,952

13.9%

9,402

2.4%

 

Gross Profit & Margin

Gross profit for the Gafisa segment in 2Q15 was R$90.3 million, compared to the R$98.1 million in 1Q15, and R$119.1 million in the prior year period. The second quarter gross margin of 25.9% was impacted by an R$11.0 million increase in revenue from projects comprising a higher number of swapped units. In keeping with accounting rules, the gross margin on these projects is lower initially, before normalizing over time.

Excluding financial impacts, the adjusted gross margin reached 36.5% in 2Q15 compared to 36.9% in the 1Q15 and 38.1% in the prior year, reaffirming the maintenance in the levels of profitability in the Gafisa segment. 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 2Q15.

 

 

 

 

 

13


 
 

 

 

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

 

2Q15

1Q15

Q/Q (%)

2Q14

Y/Y (%)

6M15

6M14

Y/Y (%)

Net Revenue

348,392

340,058

2%

397,907

-12%

688,450

724,657

-5%

Gross Profit

90,268

98,147

-8%

119,135

-24%

188,415

208,025

-9%

Gross Margin

25.9%

28.9%

-300 bps

29.9%

-400 bps

27.4%

28.7%

130 bps

(-) Financial Costs

(36,833)

(27,355)

35%

(32,321)

14%

(64,188)

(59,961)

7%

Adjusted Gross Profit

127,101

125,502

1%

151,456

-16%

252,603

267,986

-6%

Adjusted Gross Margin

36.5%

36.9%

-40 bps

38.1%

-160 bps

36.7%

37.0%

-30 bps

 

 

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

 

SP + RJ

Other Markets

2Q15

Net Revenue

346,948

1,443

348,391

Adjusted Gross Profit

127,144

(43)

127,101

Adjusted Gross Margin

36.6%

-3.0%

36.5%

       

 

Selling, General and Administrative Expenses (SG&A)

SG&A expenses totaled R$50.4 million in the 2Q15, a decrease of 15.7% y-o-y and an increase of 17.4% q-o-q. This came as a result of a higher level of selling expenses due to the higher volume of launches compared to 1Q15 and the additional marketing effort required in the current market scenario. In the first half, these expenses totaled R$93.4 million, 16.1% below the R$111.3 million the previous year.

 

Selling expenses decreased 19.2% compared to 2Q14 and increased by 63.0% from 1Q15, also due to the partial recognition of expenses related to the launch held at the end of 1Q15, which were recorded in 2Q15. For the first half of the year, selling expenses decreased by 21.8% compared to the same period last year.

 

The segment’s general and administrative expenses reached R$27.5 million in 2Q15, a decrease of 4.9% compared to the previous quarter and 12.5% y-o-y. In 6M15, general and administrative expenses reached R$56.4 million compared to R$63.9 million in 6M14.

 

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

 

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

 

2Q15

1Q15

Q/Q (%)

2Q14

Y/Y (%)

6M15

6M14

Y/Y (%)

Selling Expenses

22,976

14,092

63%

28,425

-19%

37,068

47,420

-22%

G&A Expenses

27,466

28,887

-5%

31,406

-13%

56,351

63,855

-12%

Total SG&A Expenses

50,442

42,979

17%

59,831

-16%

93,419

111,275

-16%

Launches

252,585

75,227

236%

314,733

-20%

327,812

668,667

-51%

Net Pre-Sales

242,185

179,807

35%

251,290

-4%

421,992

438,845

-4%

Net Revenue

348,392

340,058

2%

397,907

-12%

688,450

724,657

-5%

                   

 

Other Operating Revenues/Expenses reached R$21.4 million in 2Q15, a decrease of 25.0% compared to the 1Q15, and a decrease of 12.2% compared to the previous year.

 

It is worth noting that if the impact of R$ 13.9 million recorded in 2Q14 related to the provisioning of Alphaville’s stock option plan is excluded, this item would have shown an increase of 88.5% over the same period last year, totaling R$49.9 million in 6M15.

 

 

 

 

 

 

14


 
 

 

This increase reflects the higher level of litigation expenses related to increased deliveries of older projects held in 2012, 2013 and 2014.

The Company continues to be more proactive and to mitigate risks associated with potential contingencies. Taking such approach into consideration, this line had a R$ 11.5 million impact in 2Q15.

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

 

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

 

2Q15

1Q15

Q/Q(%)

2Q14

Y/Y (%)

6M15

6M14

Y/Y(%)

Litigation expenses

(24,622)

(19,965)

23%

(10,667)

131%

(44,587)

(26,669)

67%

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

-

-

-

(13,863)

-

-

(13,863)

-

Other

3,244

(8,556)

138%

179

1.712%

(5,312)

192

-2,867%

Total

(21,378)

(28,521)

-25%

(24,351)

-12%

(49,899)

(40,340)

24%

 

A higher volume of deliveries over the past three years, due to the delivery of delayed projects in discontinued markets, led to an increase in the level of contingencies. The Gafisa segment has since concentrated its operations only in the metropolitan regions of São Paulo and Rio de Janeiro. This new strategic positioning, combined with improved internal processes, is expected to result in fewer future legal claims and a subsequent decrease in the amount of expenses related to contingencies.

 

Adjusted EBITDA

Adjusted EBITDA for the Gafisa segment totaled R$52.4 million in 2Q15, a decrease of 37.1% compared to R$83.4 million in the prior year period and down 10.1% compared to R$58.3 million recorded in 1Q15. Adjusted EBITDA for the period was R$110.7 million compared to R$138.2 million in 1H14. Y-o-Y, 2Q15 EBITDA was impacted by the following factors: (i) especially due to a decrease in revenues; (ii) slight decrease in the level of gross margin; and (iii) the addition of R$14.0 million in expenses related to contingencies, recognized as 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, declined to 15.0%, compared with a margin of 20.9% in the previous year, and 17.1% in 1Q15. In 6M15, the EBITDA margin reached 16.1% versus 19.1% the previous year.

 

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

 

2Q15

1Q15

Q/Q (%)

2Q14

Y/Y (%)

6M15

6M14

Y/Y (%)

Net (Loss) Profit

8,452

20,205

-58%

17,132

-51%

28,656

14,801

94%

(+) Financial Results

2,966

9,744

-70%

4,405

-33%

12,710

12,229

4%

(+) Income taxes

278

7,350

-96%

7,208

-96%

7,628

11,230

-32%

(+) Depreciation & Amortization

8,079

8,279

-2%

11,311

-29%

16,358

22,517

-27%

(+) Capitalized interests

36,833

27,355

35%

32,321

14%

64,187

59,961

7%

(+) Expense w Stock Option Plan

1,850

2,090

-11%

20,809

-91%

3,940

24,379

-84%

(+) Minority Shareholders

(848)

228

-472%

(1,441)

-41%

(620)

(1,989)

-69%

(-) Alphaville Effect Result

(5,210)

(16,960)

-69%

(8,392)

-38%

(22,170)

(4,965)

242%

Adjusted EBITDA

52,400

58,289

-10%

83,353

-37%

110,689

138,163

-16%

Net Revenue

348,392

340,058

2%

397,907

-12%

688,450

724,657

94%

Adjusted EBITDA Margin

15.0%

17.1%

-210 bps

20.9%

-590 bps

16.1%

19.1%

-230 bps

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

 

 

 

 

15


 
 

 

 

Backlog of Revenues and Results

The backlog of results to be recognized under the PoC method was R$265.2 million in 2Q15. The consolidated margin for the quarter was 39.9%, an increase of 370 bps compared to the result posted last year.

 

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

 

2Q15

1Q15

Q/Q (%)

2Q14

Y/Y (%)

Revenues to be recognized

664.074

742,154

-11%

1,298,089

-49%

Costs to be recognized (units sold)

(398.884)

(448,061)

-11%

(827,728)

-52%

Results to be recognized

265.190

294,093

-10%

470,361

-44%

Backlog Margin

39,9%

39.6%

30 bps

36.2%

370 bps

 

 

 

 

16


 
 

 

 

TENDA SEGMENT

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

Operating Results

Launches and Sales

Second quarter launches totaled R$229.4 million and included 6 projects/phases in the states of São Paulo, Rio de Janeiro, Rio Grande do Sul, Bahia and Pernambuco. The Tenda segment accounted for 47.6% of launches in the quarter. In the first six months of the year, launch volumes reached R$ 467.7 million.

 

 

 

During 2Q15, gross sales reached R$343.7 million and dissolutions were R$53.8 million, totaling net pre-sales of R$289.9 million, an increase of 19.1% compared to the previous quarter and an increase of 59.6% y-o-y. In 6M15, the volume of dissolutions was R$110.1 million and net pre-sales totaled R$533.5 million, 128.5% higher in comparison to 6M14.

Sales from units launched during 2Q15 accounted for 14.2% of total sales.

 

 
 

 

 


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

 

2Q15

1Q15

Q/Q (%)

2Q14

Y/Y (%)

6M15

6M14

Y/Y (%)

Launches

229,366

238,354

-4%

99,011

132%

467,720

280,456

67%

Pre-Sales

289,946

243,537

19%

181,728

60%

533,483

233,495

129%

 

 

 

 

17


 
 

 

 

Sales over Supply (SoS)

In 2Q15, sales velocity (sales over supply) was 28.2%, and on a trailing 12 month basis, Tenda SoS ended 2Q15 at 48.5%.

 

 

Below is a breakdown of Tenda SoS, broken down by both legacy and New Model projects throughout 2Q15.

Table 20. SoS Gross Revenue (Ex-Dissolutions) 

 

2Q14

3Q14

4Q14

1Q15

2Q15

New Model

25.3%

11.8%

18.8%

30.9%

35.2%

Legacy Projects

17.7%

-2.0%

5.0%

7.0%

12.0%

Total

20.8%

4.8%

13.3%

23.3%

28.2%

 

Table 21. SoS Net Revenue

 

2Q14

3Q14

4Q14

1Q15

2Q15

New Model

32.2%

20.3%

22.0%

32.7%

37.4%

Legacy Projects

35.8%

28.3%

17.5%

20.1%

24.3%

Total

34.3%

24.4%

20.2%

28.6%

33.4%

 

Dissolutions

The level of dissolutions in the Tenda segment totaled R$53.8 million in 2Q15, down 4.6% from 1Q15 and down 54.3% compared to 2Q14.

 

 

 

As expected, the amendment in new sales processing, established in August 2014, reduced the level of dissolutions during the period. Approximately 71% 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)

 

2Q14

% GS

3Q14

% GS

4Q14

% GS

1Q15

% GS

2Q15

% GS

New Model

24,977

21.5%

31,640

42.1%

18,003

14.3%

12,594

4.2%

15,648

4.5%

Legacy Projects

92,637

50.6%

114,697

107.1%

48,281

71.7%

43,737

14.6%

38,115

11.1%

Total

117,614

39.3%

146,337

80.3%

66,285

34.4%

56,332

18.8%

53,763

15.6%

 

 

 

 

 

18


 
 

 

 

 

 

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

 

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

New Model

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Sales

-

-

-

-

13.6

57.0

59.7

84.5

94.3

116.3

75.2

125.6

232.6

268,5

Dissolutions

-

-

-

-

-

(2.1)

(7.4)

(6.3)

(34.2)

(25.1)

(31.6)

(18.0)

(12.6)

(15,7)

Net Sales

-

-

-

-

13.6

54.9

52.3

78.2

60.2

91.2

43.5

107.6

220.0

252,8

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

75,2

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)

(38,1)

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

37,1

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dissolutions (Units)

3.157

2.984

2.202

2.509

1.700

1.172

924

491

1.270

820

948

428

367

373

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

343,7

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)

(53,8)

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

289,9

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

289,9

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

260,0

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

29,9

 

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 373 units cancelled and returned to inventory in the second quarter, and 167 units which were already in inventory 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 2Q15, 2,019 units were transferred to financial institutions, representing R$254.0 million in net pre-sales.

 

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

 

1Q13

2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

New Model

-

26,609

52,466

42,921

49,776

69,563

59,736

67,621

114,939

200,902

Legacy Projects

274,358

249,699

230,613

145,038

139,721

154,155

100,361

74,773

59,110

53,112

PSV transferred1

274,358

276,308

283,079

187,959

189,497

223,717

160,097

142,393

174,049

254,014

1) PSV transferred refers to the conclusion of the transfer operation. 2) PSV = Potential sales volume of the units.

 

Tenda Segment Delivered Projects

 

During 2Q15, Tenda delivered 5 projects/phases and 1,240 units, reaching a PSV of R$177.2 million, ending 6M15 with 2,927 units delivered and a PSV of R$ 393.5 million. It is worth noting that there are only two remaining construction sites from Tenda’s legacy projects, with 640 remaining units to be delivered in the next months.

 

 

 

19


 
 

 

Inventory

The market value of Tenda inventory was R$738.4 million at the end of the 2Q15, down 8.1% when compared to R$803.5 million at the end of 4Q14. Inventory related to the remaining units for the Tenda segment totaled R$272.9 million or 37.0% of the total, down 12.5% versus 1Q15 and 35.3% as compared to 2Q14. During the quarter, inventory comprising units within the Minha Casa Minha Vida program totaled R$596.5 million, or 80.8% of total inventory, while units outside the program totaled R$141.8 million, a decrease of 18.8% q-o-q and 30.0% y-o-y.

 

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

 

Inventories FP 1Q15

Launches

Dissolutions

Pre-Sales

Price Adjustment + Others

Inventories FP 2Q15

% Q/Q

São Paulo

238,898

26,487

10,174

(104,321)

7,047

178,284

-25.4%

Rio Grande do Sul

19,805

46,400

6,814

(29,474)

(144)

43,401

119.1%

Rio de Janeiro

201,420

40,292

9,371

(81,920)

(5,431)

163,732

-18.7%

Bahia

129,260

69,660

4,297

(56,410)

2,699

149,507

15.7%

Pernambuco

52,603

46,527

1,962

(23,446)

(3,579)

74,068

40.8%

Minas Gerais

94,900

-

12,973

(38,335)

(4,820)

64,718

-31.8%

Others

66,609

-

8,171

(9,802)

(331)

64,648

-2.9%

Total Tenda

803,495

229,366

53,763

(343,709)

(4,557)

738,358

-8.1%

MCMV

628,909

229,366

26,221

(286,255)

(1,709)

596,533

-5.1%

Out of MCMV

174,586

-

27,542

(57,454)

(2,848)

141,825

-18.8%

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 2Q15

New Model - MCMV

158,791

192,052

84,680

27,961

2,020

465,505

Legacy – MCMV

-

-

58,751

134

72,143

131,027

Legacy – Out of MCMV

-

-

-

7,397

134,428

141,825

Total Tenda

158,791

192,052

143,431

35,492

208,591

738,358

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

 

The Tenda segment land bank, with a PSV of approximately R$4.0 billion, is comprised of 110 different projects/phases, of which 18% are located in São Paulo, 12% in Rio Grande do Sul, 29% in Rio de Janeiro, 5% in Minas Gerais, 30% in Bahia, and 6% in Pernambuco. In total these amount to more than 28,000 units.

 

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

 

PSV

(% Tenda)

% Swap
Total

% Swap Units

% Swap Financial

Potential Units
(% Tenda)

Potential Units
(100%)

São Paulo

714,679

0.0%

0.0%

0.0%

4,612

4,612

Rio Grande do Sul

471,559

16.3%

0.0%

16.3%

3,340

3,340

Rio de Janeiro

1,176,586

17.4%

17.4%

0.0%

8,105

8,223

Bahia

1,199,945

11.5%

11.5%

0.0%

9,499

9,560

Pernambuco

242,818

15.5%

15.5%

0.0%

1,863

1,888

Minas Gerais

191,035

56.4%

56.4%

0.0%

1,190

1,272

Total

3,996,623

15.2%

12.4%

2.7%

28,609

28,895

 

 

 

 

20


 
 

 

 

 

 

Table 28. Tenda Segment – Changes in the Landbank (1Q15 x 2Q15 - R$000)

 

Initial
Landbank

Land
Acquisition

Launches

Adjustments

Final
Landbank

São Paulo

663,898

80,959

26,487

(3,690)

714,679

Rio Grande do Sul

518,399

-

46,400

(440)

471,559

Rio de Janeiro

1,136,324

81,337

40,292

(782)

1,176,586

Bahia

1,278,855

-

69,660

(9,250)

1,199,945

Pernambuco

285,985

-

46,527

3,360

242,818

Minas Gerais

191,035

-

-

-

191,035

Total

4,074,495

162,296

229,366

(10,802)

3,996,623

 

 

In 2Q15, the Company acquired 4 new land plots with potential PSV of R$162.3 million, representing an acquisition cost of R$20.2 million. The acquisition was financed by 54% cash and 46% swap agreements.

 

New Model Update and Turnaround

 

During 2015, Tenda launched projects under its New Business Model, 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 33 projects and a launched PSV of R$1,394.9 million to date. Below is a brief description of the performance of these projects, except for projects launched at the end of 2Q15.

 

It is worth noting that the Tenda segment has delivered 11 projects, totaling 3,539 units and R$467.5 million in PSV, all of them attaining 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

240

334

260

290

299

% Sales

100%

99%

100%

99%

100%

97%

100%

SoS Avg (Month)

14%

6%

8%

5%

12%

6%

10%

Transferred

580

435

240

321

260

206

298

% Transferred (Sales)

100%

99%

100%

95%

100%

69%

99%

Work Progress

100%

100%

100%

100%

100%

100%

100%

 

 

 

 

21


 
 

 

 

 

 

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

335

412

417

96

140

336

252

295

193

150

250

153

182

229

% Sales

99%

94%

97%

96%

54%

78%

81%

87%

97%

94%

96%

51%

76%

46%

SoS Avg (Month)

5%

6%

7%

9%

4%

6%

7%

10%

13%

12%

15%

8%

13%

8%

Transferred

315

317

322

98

45

266

137

197

173

127

219

128

81

29

% Transferred (Sales)

93%

72%

75%

98%

17%

62%

44%

58%

87%

79%

84%

43%

34%

6%

Work Progress

100%

100%

68%

100%

15%

28%

88%

76%

100%

81%

49%

12%

52%

46%

 

 

Res. das Orquídeas

Vera Cruz

Campo de Aviação 1

Jardins Itaquera

Laranjeiras

Viena F1

Vida Alegre F1

Flor de Liz

Vila Atlantica F2

Mar de Abrantes

Pq. Rio Maravilha F2

Praia da Jangada

Launch

jan/15

feb/15

feb/15

mar/15

mar/15

mar/15

abr/15

mai/15

jun/15

jun/15

jun/15

Jun/15

State

SP

RJ

PE

SP

SP

BA

RS

SP

BA

BA

RJ

PE

Units

280

220

304

200

220

440

320

180

200

360

280

352

Total PSV (R$ 000)

46.9

33.7

39.2

33.7

33.6

51.2

46.4

26.5

25.7

43.9

40.3

46.5

Sales

243

39

98

58

202

54

132

60

-

-

-

-

% Sales

87%

18%

32%

29%

92%

12%

41%

33%

-

-

-

-

SoS Avg (Month)

16%

4%

8%

8%

26%

4%

21%

17%

-

-

-

-

Transferred

215

0

49

26

129

29

54

20

-

-

-

-

% Transferred (Sales)

77%

0%

16%

13%

59%

7%

17%

11%

-

-

-

-

Work Progress

4%

2%

2%

2%

49%

2%

6%

4%

-

-

-

-

 

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 coming months.

 

 

 

22


 
 

 

 

Financial Result

Revenues

Tenda’s net revenues in 2Q15 totaled R$243.1 million, an increase of 35.5% compared with 1Q15, demonstrating an 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 accounted for 73.3% of Tenda’s revenues in 2Q15, while revenues from older projects accounted for the remaining 26.7%.

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

 

 

2Q15

 

 

 

2Q14

 

 

Launches

Pre-Sales

%

Sales

Revenue

% Revenue

Pre-Sales

% Sales

Revenue

% Revenue

2015

107,472

37.1%

24,904

10.2%

-

-

-

-

2014

144,079

49.7%

145,771

60.0%

42,641

23.5%

5,252

3.0%

2013

1,294

0.4%

7,566

3.1%

48,527

26.7%

63,510

35.9%

≤ 2012

37,101

12.8%

64,894

26.7%

90,561

49.8%

111,652

63.1%

Landbank Sale

-

0%

-

0%

-

-

(3,491)

-2.0%

Total

289,946

100%

243,137

100%

181,728

100.0%

176,923

100.0%

Legacy

37,101

12.8%

64,894

26.7%

90,561

49.8%

108,161

61.1%

New Model

252,845

87.2%

178,242

73.3%

91,167

50.2%

68,762

38.9%

 

Gross Profit & Margin

Gross profit in 2Q15 totaled R$68.3 million, compared to R$51.1 million in 1Q15, and R$45.8 million in the 2Q14. Gross margin for the quarter reached 28.1%, compared to 28.5% in 1Q15 and 25.9% in 2Q14. 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. 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 improved results. 

Tenda’s adjusted gross margin ended 2Q15 at 30.1%, in line with the 30.0% recorded in 1Q15, and the 30.4% in 2Q14. During 6M15, Tenda’s adjusted gross margin was 30.1%, above 24.5% in 6M14.

The table below shows Tenda’s gross margin breakdown in 2Q15. 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 land bank, resulting in increased profitability.

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

 

2Q15

1Q15

Q/Q (%)

2Q14

Y/Y (%)

6M15

6M14

Y/Y(%)

Net Revenue

243,137

179,443

35%

176,923

37%

422,580

282,874

49%

Gross Profit

68,275

51,053

34%

45,769

49%

119,328

54,227

120%

Gross Margin

28.1%

28.5%

-40 bps

25.9%

220 bps

28.2%

19.2%

900 bps

(-) Financial Costs

(5,010)

(2,747)

82%

(8,036)

-38%

(7,757)

(15,141)

-49%

Adjusted Gross Profit

73,285

53,800

36%

53,805

36%

127,085

69,368

83%

Adjusted Gross Margin

30.1%

30.0%

10 bps

30.4%

-30 bps

30.1%

24.5%

560 bps

 

 

 

 

23


 
 

 

 

Selling, General and Administrative Expenses (SG&A)

During 2Q15, selling, general and administrative expenses totaled R$39.3 million, a 41.2% decrease compared to R$27.8 million in 1Q15, and stable y-o-y. In 6M15, SG&A totaled R$67.1 million, a 4.8% reduction from 6Q14

 

Selling expenses totaled R$17.7 million in 2Q15, a 20.4% increase y-o-y and a 35.6% increase q-o-q, due to the ongoing expansion in launch volume and gross sales of the Tenda segment. In 6M15, selling expenses increased 16.0% year-over-year to R$ 30.7 million.

 

In regards to G&A expenses, there was a reduction of 13.6% y-o-y and an increase of 46.1% q-o-q. This was mainly driven by 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. YTD, general and administrative expenses totaled R$36.4 million, 17.3% below the R$ 44.0 million recorded in 6M14.

 

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)

 

2Q15

1Q15

Q/Q(%)

2Q14

Y/Y (%)

6M15

6M14

Y/Y(%)

Selling Expenses

17,659

13,021

36%

14,668

20%

30,680

26,455

16%

General & Admin Expenses

21,604

14,783

46%

25,012

-14%

36,387

43,982

-17%

Total SG&A Expenses

39,263

27,804

41%

39,680

-1%

67,067

70,437

-5%

Launches

229,366

238,354

-4%

99,011

132%

467,720

280,456

67%

Net Pre-Sales

289,946

243,537

19%

181,728

60%

533,483

233,495

128%

Net Revenue

243,137

179,443

35%

176,923

37%

422,580

282,874

49%

 

Other Operating Revenues/ Expenses totaled R$11.7 million, a decrease of 22.0% compared to the 2Q14 and an increase of 131.9% compared to 1Q15, mainly due to the write-off of assets related to the revision work of Tenda’s legal deposits. The table below contains details on the breakdown of this expense.

 

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

 

2Q15

1Q15

Q/Q(%)

2Q14

Y/Y (%)

6M15

6M14

Y/Y(%)

Litigation Expenses

(4,796)

(6,105)

-21%

(14,981)

-68%

(10,901)

(25,127)

-57%

Other

(6,877)

1,071

-742%

13

-53,000%

(5,806)

156

-3,822%

Total

(11,673)

(5,034)

132%

(14,968)

-22%

(16,707)

(24,971)

-33%

 

Over the past two years, the strong volume of deliveries related to delayed projects resulted in increased contingencies in the Tenda segment. The Company expects to see a reduction in the volume of such expenses over the coming years based on the delivery of the final legacy projects over the coming months and the increased contribution of New Model projects demonstrating strong operational performance.

 

 

 

 

24


 
 

 

 

Adjusted EBITDA

Adjusted EBITDA was positive R$15.2 million in 2Q15, compared to negative R$1.9 million last year and positive R$21.1 million in 1Q15, impacted by higher selling, general and administrative expenses, and also by an increase in other operating expenses q-o-q, due to non-recurring adjustments. In the first half, adjusted EBITDA was positive R$36.3 million against a negative result of R$26.8 million in the previous 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 improved gross margins in recent quarters. Combined with the better performance of and efficiencies in Tenda’s cost structure, this resulted in a significant increase in EBITDA in the Tenda segment during the period.

 

Adjusted EBITDA margin reached 6.3% in 2Q15 and 8.6% in 1H15.

 

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

 

2Q15

1Q15

Q/Q(%)

2Q14

Y/Y (%)

6M15

6M14

Y/Y(%)

Net (Loss) Profit

20,035

11,446

75%

(17,983)

211%

31,481

(55,443)

157%

(+) Financial Results

(5,651)

(1,528)

270%

(1,333)

324%

(7,179)

(1,243)

478%

(+) Income taxes

(6,032)

4,810

-225%

4,464

-235%

(1,222)

7,039

-117%

(+) Depreciation & Amortization

3,482

3,390

3%

4,666

-25%

6,872

7.482

-8%

(+) Capitalized interests

5,010

2,747

82%

8,036

-38%

7,757

15,141

-49%

(+) Expenses with Stock Option Plan

533

527

1%

6

8,783%

1,061

25

4,144%

(+) Minority Shareholders

(2,156)

(278)

676%

237

-1,010%

(2,434)

179

-1,460%

Adjusted EBITDA

15,221

21,114

-28%

(1,907)

898%

36,335

(26,820)

235%

Net Revenue

243,137

179,443

35%

176,923

37%

422,580

282,874

49%

Adjusted EBITDA Margin

6.3%

11.8%

-550 bps

-1.1%

740 bps

8.6%

-9.5%

1,810 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, which was allocated to Tenda, was excluded.

 

 

Backlog of Revenues and Results

The backlog of results to be recognized under the PoC method was R$99.0 million in 2Q15. The consolidated margin for the quarter was 41.7%.

 

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

 

2Q15

1Q15

Q/Q(%)

2Q14

Y/Y (%)

Revenues to be recognized

237.309

188.447

26%

207.912

14%

Costs to be recognized (units sold)

(138.261)

(114.973)

20%

(146.349)

-6%

Results to be Recognized

99.048

73.474

35%

61.563

61%

Backlog Margin

41,7%

39,0%

270 bps

29,6%

1.210 bps

 

 

  

 

 

 

25


 
 

 

Balance Sheet and Consolidated Financial Results

Cash and Cash Equivalents

On June 30, 2015, cash and cash equivalents, and securities, totaled R$876.8 billion.

 

Accounts Receivable

At the end of the 2Q15, total consolidated accounts receivable decreased 20.7% y-o-y to R$2.8 billion, and remained stable compared to 1Q15. The Gafisa and Tenda segments have approximately R$524.5 million in accounts receivable from finished units, out of which R$226.7 million is currently being transferred to financial institutions.

Table 36. Total Receivables (R$000)

 

2Q15

1Q15

Q/Q(%)

2Q14

Y/Y(%)

Receivables from developments
(off balance sheet)

935,530

965,855

-3%

1,563,052

-40%

Receivables from PoC – ST
(on balance sheet)

1,464,279

1,476,007

-1%

1,709,718

-14%

Receivables from PoC – LT
(on balance sheet)

450,243

417,746

8%

322,356

40%

Total

2,850,052

2,859,608

0%

3,595,126

-21%

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$13.1 million in 2Q15. The Gafisa segment contributed cash generation of R$7.4 million, considering the impact of the bonus payment and profit sharing from the prior year, which is always verified during the second half of the year. It was also impacted by slightly lower transfer volumes compared to the prior quarter, resulting from the delivery of more corporate projects in this semester. The volume of transferring/receiving process of units sold to financing agents reached R$169.8 million during the period, and R$367.8 million YTD. The Tenda segment generated R$5.7 million in cash, with R$180.7 million transferred in 2Q15 and R$285.0 million in 6M15. In 1H15, the Company generated operating cash of R$19.4 million.

                                                                             

While consolidated operating cash generation reached R$13.1 million, the Company ended 2Q15 with operating cash consumption of R$28.1 million, and consumption of R$97.8 million in 1H15. 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)

 

4Q14*

1Q15

2Q15

Availabilities

1,157,254

1,116,169

876,813

Change in Availabilities(1)

 

(41,085)

(239,356)

Total Debt + Investor Obligations

2,597,554

2,651,383

2,440,095

Change in Total Debt + Inventor Obligations (2)

 

53,829

(211,288)

Other Investments

426,509

208,740

208,740

Change in Other Investments (3)

 

25,162

-

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

 

(69,753)

(28,068)

Cash Generation Final

 

(69,753)

(97,821)

*The 4Q14 data refers only to the final balance of the period in order to help in the reconciliation of the balance changes in 2015.

 

 

 

 

 

26


 
 

 

Liquidity

 

At the end of June 2015, the Company’s Net Debt/Equity ratio reached 50.4%, stable compared to 50.0% in the previous quarter. Excluding project finance, the Net Debt/Equity ratio was negative 11.7%.

 

The Company's consolidated gross debt reached R$2.4 billion at the end of 2Q15, a decrease of 7.8% compared to 1Q15 and 9.0% y-o-y. In the 2Q15, the Company amortized R$411.3 million in debt, of which R$269.5 million was project finance and R$141.8 million was corporate debt. However, around R$122.7 million was released, allowing for a net amortization of R$284.5 million. For the 6M15, approximately 55.5% of gross debt with maturity scheduled for 2015 was amortized. During the first half, new releases of R$275.8 million were held, of which R$220.8 million comprised project debt and R$55 million corporate debt, thus allowing for a net amortization in the first six months of R$ 313.0 million.

 

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

 

2Q15

1Q15

Q/Q(%)

2Q14

Y/Y(%)

Debentures – FGTS (A)

784,992

914,209

-14%

925,850

-15%

Debentures – Working Capital (B)

360,025

356,359

1%

310,052

16%

Project Financing SFH – (C)

1,142,459

1,103,283

4%

1,012,618

13%

Working Capital (D)

145,324

264,102

-45%

424,669

-66%

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

2,432,800

2,637,953

-8%

2,673,189

-9%

Investor Obligations (F)

7,296

13,430

-46%

14,662

-50%

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

2,440,096

2,651,383

-8%

2,687,851

-9%

Cash and Availabilities (H)

876,813

1,116,168

-21%

1,279,568

-31%

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

1,563,283

1,535,215

2%

1,408,283

11%

Equity + Minority Shareholders (J)

3,099,492

3,070,891

1%

3,138,131

-1%

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

50.4%

50.0%

40 bps

44.9%

550 bps

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

-11.7%

-15.7%

-400 bps

-16.9%

-520 bps

 

The Company ended the second quarter of 2015 with R$1.1 billion in total debt due in the short term. It should be noted, however, that 72.5% of this volume relates to debt linked to the Company's projects. Currently, the average cost of consolidated debt is 13.49% p.y., or 99.38% of the CDI.

 

 

 

 

 

 

27


 
 

 

Table 39. Debt Maturity (R$000)

(R$ 000)

Average Cost (p.y.)

Total

Until Jun/16

Until Jun/17

Until Jun/18

Until Jun/19

After Jun/19

Debentures - FGTS (A)

TR + 9.08% - 9.8247%

784,992

310,659

324,555

149,778

-

-

Debentures – Working Capital (B)

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

360,025

165,769

26,694

64,402

83,886

19,274

Project Financing SFH (C)

TR + 8.30% - 11.00% / 117.0% CDI / 12.87%

1,142,459

465,997

520,337

117,590

36,542

1,993

Working Capital (D)

CDI + 2.20% / 117.9% CDI

145,324

124,326

20,998

-

-

-

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

 

2,432,800

1,066,751

892,584

331,770

120,428

21,267

Investor Obligations (F)

CDI + 0.59%

7,296

5,016

2,280

-

-

-

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

 

2,440,096

1,071,767

894,864

331,770

120,428

21,267

% Total Maturity per period

-

43.9%

36.7%

13.6%

4.9%

0.9%

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

-

72.5%

94.4%

80.6%

30.3%

9.4%

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

-

27.5%

5.6%

19.4%

69.7%

90.6%

Ratio Corporate Debt / Mortgages

21.0% /
79.0%

-

-

-

-

-

 

Financial Result                                

 

Revenue

 

On a consolidated basis, net revenue in the 2Q15 totaled R$591.5 million, up 13.9% over the 1Q15 and up 2.9% from 2Q14. In the quarter, the Gafisa segment represented 58.9% of consolidated revenues, while Tenda accounted for the remaining 41.1%. In 6M15, consolidated net revenue reached R$1.1 billion, in line with previous year.

 

Gross Profit & Margin

 

Gross profit in 2Q15 was R$158.5 million, compared to R$149.2 million in 1Q15, and R$164.9 million in the prior year quarter. Gross margin for the quarter reached 26.8%, a decline when compared to prior periods.

 

Adjusted gross profit reached R$200.4 million, with a margin of 33.9%, compared to 34.5% in the 1Q15 and 35.7% in the previous year. Supported by stable results in the Gafisa segment, and the higher volume and consolidation of Tenda’s New Business Model operations, the Company has been able to maintain its adjusted gross margin at a healthy level throughout the past few quarters.

 

The gross margin has improved during the last two years as Gafisa and Tenda legacy projects have been concluded, reducing their impact on the Company’s results. At the same time, the contribution of more profitable projects launched in core markets and under the Tenda segment’s New Model has increased during recent quarters.

 

 

 

 

28


 
 

 

 

 

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

 

2Q15

1Q15

Q/Q (%)

2Q14

Y/Y (%)

6M15

6M14

Y/Y (%)

Net Revenue

591,529

519,501

14%

574,830

3%

1,111,030

1,007,531

10%

Gross Profit

158,543

149,200

6%

164,904

-4%

307,743

262,252

17%

Gross Margin

26.8%

28.7%

-190 bps

28.7%

-190 bps

27.7%

26.0%

170 bps

(-) Financial Costs

(41,843)

(30,102)

39%

(40,357)

4%

(71,945)

(75,102)

-4%

Adjusted Gross Profit

200,386

179,302

12%

205,261

-2%

379,688

337,354

12%

Adjusted Gross Margin

33.9%

34.5%

-60 bps

35.7%

-180 bps

34.2%

33.5%

70 bps

 

 

Selling, General and Administrative Expenses (SG&A)

 

SG&A expenses totaled R$89.7 million in 2Q15, up 26.7% q-o-q, due to the higher volume of launches and gross sales in the period, resulting in higher marketing expenses. Compared to the 2Q14, there was a 9.9% reduction. In the 6M15, selling, general and administrative expenses totaled R$160.5 million, 11.7% lower than 1H14.

 

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

 

2Q15

1Q15

Q/Q (%)

2Q14

Y/Y (%)

6M15

6M14

Y/Y (%)

Selling Expenses

40,635

27,113

50%

43,093

-6%

67,748

73,875

-8%

General and Admin Expenses

49,070

43,670

12%

56,418

-13%

92,738

107,837

-14%

Total SG&A Expenses

89,705

70,783

27%

99,511

-10%

160,486

181,712

-12%

Launches

481,951

313,581

54%

413,744

16%

795,532

949,123

-16%

Net Pre-Sales

532,131

423,344

26%

433,018

23%

955,475

672,341

42%

Net Revenue

591,529

519,501

14%

574,830

3%

1,111,030

1,007,531

10%

 

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$33.1 million, down 1.5% compared to the 1Q15, and up 15.9% compared to the previous year. In 6M15, this line reached R$66.6 million.

 

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

 

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

 

2Q15

1Q15

Q/Q (%)

2Q14

Y/Y (%)

6M15

6M14

Y/Y (%)

Litigation expenses

(29,418)

(26,070)

13%

(25,648)

15%

(55,488)

(51,796)

7%

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

-

-

-

(13,863)

-

-

(13,863)

-

Other

(3,633)

(7,485)

-51%

192

-1,992%

(11,118)

348

-3,295%

Total

(33,051)

(33,555)

-2%

(39,319)

-16%

(66,606)

(65,311)

2%

 

 

 

 

29


 
 

 

 

Consolidated Adjusted EBITDA

 

Consolidated adjusted EBITDA, including Alphaville equity income, totaled R$72.8 million in 2Q15, down from R$96.4 million in 1Q15 and R$89.8 million in the prior-year period. Consolidated adjusted EBITDA margin using the same criteria was 12.3%, compared with a 15.6% margin reported in the previous year and 18.6% reported in 1Q15. In 6M15, consolidated EBITDA reached R$169.2 million, with a 15.2% margin.

 

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

 

2Q15

1Q15

Q/Q (%)

2Q14

Y/Y (%)

6M15

6M14

Y/Y (%)

Net (Loss) Profit

28,487

31,651

-10%

(851)

3,447%

60,137

(40,642)

248%

(+) Financial Results

(2,685)

8,216

-133%

3,072

-187%

5,531

10,986

-50%

(+) Income taxes

(5,754)

12,160

-147%

11,672

-149%

6,406

18,269

-65%

(+) Depreciation & Amortization

11,561

11,669

-1%

15,977

-28%

23,230

29,999

-23%

(+) Capitalized interests

41,843

30,102

39%

40,357

4%

71,945

75,102

-4%

(+) Expenses with Stock Option Plan

2,383

2,617

-9%

20,815

-89%

5,001

24,404

-80%

(+) Minority Shareholders

(3,004)

(50)

-5,908%

(1,204)

-150%

(3,055)

(1,810)

-69%

Adjusted EBITDA

72,831

96,363

-24%

89,838

-19%

169,194

116,308

45%

Net Revenue

591,529

519,501

14%

574,830

3%

1,111,030

1,007,531

10%

Adjusted EBITDA Margin

12.3%

18.6%

-630 bps

15.6%

-330 bps

15.2%

11.5%

370 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 2Q15 reached R$11.6 million, stable compared to 1Q15 and down 27.6% compared to R$16.0 million recorded in 2Q14, due to the lower expense from the depreciation of sales booths, used by developers to market projects, in the period. In 1H15, this line totaled R$23.2 million compared to R$30.0 million reported in the previous year.

 

Financial Results

 

Net financial result was positive R$2.7 million in the 2Q15, higher than a negative result of R$3.1 million in 1Q15. Financial revenues totaled R$44.3 million, a 16.6% y-o-y increase due to the higher annual interest rate registered in the period. Financial expenses reached R$41.6 million, compared to R$41.0 million in 2Q14, impacted by the decrease in the level of gross indebtness in the period. YTD, the net financial result was negative
R$ 5.5 million, compared to a net loss of R$ 11.0 million in the same period last year.

 

Taxes

 

Income taxes, social contribution and deferred taxes for 2Q15 amounted to a credit of R$5.8 million, due to the constitution of deferred income tax in the amount of R$8.9 million in a subsidiary. In the first half, income tax and social contribution totaled R$6.4 million.

 

Net Income

 

Gafisa Group ended the 2Q15 with a net profit of R$28.5 million. Excluding the equity income from AUSA, the Company recorded net income of R$23.3 million in the quarter, compared to a net loss of R$9.2 million recorded in 2Q14 and R$14.7 million in 1Q15. In 6M15, net income was positive R$ 60.1 million, including Alphaville’s equity income, compared to a net loss of R$ 40.6 million in the same period last year.

 

 

30


 
 

 

 

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

 

2Q15

1Q15

Q/Q (%)

2Q14

Y/Y (%)

6M15

6M14

Y/Y (%)

Net Revenue

591,529

519,501

14%

574,830

3%

1,111,030

1,007,531

10%

Gross Profit

158,543

149,200

6%

164,904

-4%

307,743

262,252

17%

Gross Margin

26.8%

28.7%

-190 bps

28.7%

-190 bps

27.7%

26.0%

170 bps

Adjusted Gross Profit1

200,386

179,302

12%

205,261

-2%

379,688

337,354

13%

Adjusted Gross Margin1

33.9%

34.5%

-60 bps

35.7%

-180 bps

34.2%

33.5%

70 bps

Adjusted EBITDA2

72,831

96,363

-24%

89,838

-19%

169,194

116,308

45%

Adjusted EBITDA Margin

12.3%

18.6%

-630 bps

15.6%

-330 bps

15.2%

11.5%

370 bps

Net Income (ex- the sale of AUSA)

28,487

31,651

-10%

(851)

-3.447%

60,137

(40,642)

248%

( - ) Alphaville Equity Income

(5,210)

(16,960)

-69%

(8,392)

-38%

(22,170)

(4,965)

347%

Net Income (ex- AUSA
Sale and Equity Income)

23,277

14,691

58%

(9,243)

352%

37,967

(45,607)

183%

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 impact of Alphaville equity income.

 

Backlog of Revenues and Results

 

The backlog of results to be recognized under the PoC method reached R$364.2 million in the 2Q15. The consolidated margin for the quarter was 40.4%.

 

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

 

2Q15

1Q15

Q/Q(%)

2Q14

Y/Y(%)

Revenues to be recognized

901,383

930,601

-3%

1,506,001

-40%

Costs to be recognized (units sold)

(537,145)

(563,034)

-5%

(974,077)

-45%

Results to be Recognized

364,238

367,567

-1%

531,924

-32%

Backlog Margin

40.4%

39.5%

90 bps

35.3%

510 bps

 

 

 

 

31


 
 

 

 

 

Alphaville net revenues reached R$ 507 million in 6M15

 

São Paulo, August 7th, 2015 – Alphaville Urbanismo SA releases its results for the 2nd quarter of the year (2Q and 6M).

      

Financial Results

 

In the second quarter of 2015, net revenues were R$ 267 million, 22.1% above the same period of 2014 and 11.6% higher than 1Q15. Net income was R$ 17 million, 33.2% lower than 2Q14 and 50.7% lower than the previous quarter.

 

 

2Q15

2Q14

1Q15

 

R$

R$

Net Revenue

267

219

22.1%

240

11.6%

Net Income

17

26

-33.2%

35

-50.7%

Margin

6%

12%

 

15%

 

           

 

In the first six months of the year, net revenues totaled R$ 507 million, 36.7% higher than 6M14. Net profit in the quarter was R$ 53 million, representing an increase 209.4% million considering 2Q14.

 

 

6M15

6M14

 

 

R$

Net Revenue

507

371

36.7%

Net Income

53

17

209.4%

Margin

10%

5%

 

         

 


 

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

 

 

 

32


 
 

 

 

 

Financial Statements Gafisa Segment

 

2Q15

1Q15

Q/Q (%)

2Q14

Y/Y (%)

6M15

6M14

Y/Y (%)

Net Revenue

348,392

340,058

2%

397,907

-12%

688,450

724,657

-5%

Operating Costs

(258,124)

(241,911)

7%

(278,772)

-7%

(500,035)

(516,632)

-3%

Gross Profit

90,268

98,147

-8%

119,135

-24%

188,415

208,025

-9%

Gross Margin

25.9%

28.9%

-300 bps

29.9%

-400 bps

27.4%

28.7%

-130 bps

Operating Expenses

(79,420)

(60,622)

63%

(91,831)

-14%

(140,040)

(171,752)

-18%

Selling Expenses

(22,976)

(14,092)

63%

(28,425)

-19%

(37,068)

(47,420)

-22%

General and Administrative Expenses

(27,466)

(28,885)

-5%

(31,406)

-13%

(56,351)

(63,855)

-12%

Other Operating Revenues/Expenses

(21,378)

(28,521)

-25%

(24,351)

-12%

(49,899)

(40,340)

24%

Depreciation and Amortization

(8,079)

(8,279)

-2%

(11,311)

-29%

(16,358)

(22,517)

-27%

Equity income

479

19,157

-97%

3,662

-87%

19,636

2,380

725%

Operational Result

10,848

37,527

-71%

27,304

-60%

48,375

36,273

33%

Financial Income

19,978

19,277

4%

24,160

-17%

39,255

55,320

-29%

Financial Expenses

(22,944)

(29,021)

-21%

(28,565)

-20%

(51,965)

(67,549)

-23%

Net Income Before Taxes on Income

7,882

27,783

-72%

22,899

-66%

35,665

24,044

48%

Deferred Taxes

(1,028)

(2,012)

256%

(91)

7762%

(3,866)

(383)

909%

Income Tax and Social Contribution

750

(5,338)

-229%

(7,117)

-197%

(3,762)

(10,847)

-65%

Net Income After Taxes on Income

7,604

20,433

-63%

15,691

-52%

28,037

12,814

119%

Minority Shareholders

(848)

228

-472%

(1,441)

-41%

(619)

(1,989)

-69%

Net Income

8,452

20,205

-58%

17,132

-51%

28,656

14,803

94%

 

 

 

 

33


 
 

 

 

Financial Statements Tenda Segment

 

2Q15

1Q15

Q/Q (%)

2Q14

Y/Y (%)

6M15

6M14

Y/Y (%)

Net Revenue

243,137

179,443

35%

176,923

37%

422,580

282,874

49%

Operating Costs

(174,862)

(128,390)

36%

(131,154)

33%

(303,252)

(228,647)

33%

Gross Profit

68,275

51,053

34%

45,769

49%

119,328

54,227

120%

Gross Margin

28.1%

28.5%

-40 bps

25.9%

220 bps

28.2%

19.2%

900 bps

Operating Expenses

(62,079)

(36,603)

70%

(60,384)

3%

(98,682)

(103,695)

-5%

Selling Expenses

(17,659)

(13,021)

36%

(14,668)

20%

(30,680)

(26,455)

16%

General and Administrative Expenses

(21,604)

(14,783)

46%

(25,012)

-14%

(36,387)

(43,982)

-17%

Other Operating Revenues/Expenses

(11,673)

(5,034)

132%

(14,968)

-22%

(16,707)

(24,971)

-33%

Depreciation and Amortization

(3,482)

(3,390)

3%

(4,666)

-25%

(6,872)

(7,482)

-8%

Equity income

(7,661)

(375)

1943%

(1,070)

616%

(8,036)

(805)

898%

Operational Result

6,196

14,450

-57%

(14,615)

-142%

20,646

(49,468)

-142%

Financial Income

24,292

13,335

82%

13,805

76%

37,627

26,841

40%

Financial Expenses

(18,641)

(11,807)

58%

(12,472)

49%

(30,448)

(25,598)

19%

Net Income Before Taxes on Income

11,847

15,978

-26%

(13,282)

-189%

27,825

(48,225)

-158%

Deferred Taxes

7,154

(3,288)

-318%

(1,771)

-504%

3,866

(1,012)

-482%

Income Tax and Social Contribution

(1,122)

(1,522)

-26%

(2,693)

-58%

(2,644)

(6,027)

-56%

Net Income After Taxes on Income

17,879

11,168

60%

(17,746)

-201%

29,047

(55,264)

-153%

Minority Shareholders

(2,156)

(278)

676%

237

-1.010%

(2,434)

179

1.460%

Net Income

20,035

11,446

75%

(17,983)

-211%

31,481

(55,443)

-157%

 

 

 

 

34


 
 

 

 

Consolidated Financial Statements

 

2Q15

1Q15

Q/Q (%)

2Q14

Y/Y (%)

6M15

6M14

Y/Y (%)

Net Revenue

591,529

519,501

14%

574,830

3%

1,111,030

1,007,531

10%

Operating Costs

(432,986)

(370,301)

17%

(409,926)

6%

(803,287)

(745,279)

8%

Gross Profit

158,543

149,200

6%

164,904

-4%

307,743

262,252

17%

Gross Margin

26.8%

28.7%

-190 bps

28.7%

-190 bps

27.7%

26.0%

170 bps

Operating Expenses

(141,499)

(97,225)

46%

(152,215)

-7%

(238,722)

(275,447)

-13%

Selling Expenses

(40,635)

(27,113)

50%

(43,093)

-6%

(67,748)

(73,875)

-8%

General and Administrative Expenses

(49,070)

(43,668)

12%

(56,418)

-13%

(92,738)

(107,837)

-14%

Other Operating Revenues/Expenses

(33,051)

(33,555)

-2%

(39,319)

-16%

(66,606)

(65,311)

2%

Depreciation and Amortization

(11,561)

(11,669)

-1%

(15,977)

-28%

(23,230)

(29,999)

-23%

Equity pickup

(7,182)

18,782

-138%

2,592

-377%

11,600

1,575

637%

Operational Result

17,044

51,977

-67%

12,689

34%

69,021

(13,195)

-623%

Financial Income

44,270

32,612

36%

37,965

17%

76,882

82,161

-6%

Financial Expenses

(41,585)

(40,828)

2%

(41,037)

1%

(82,413)

(93,147)

-12%

Net Income Before Taxes on Income

19,729

43,761

-55%

9,617

105%

63,490

(24,181)

-363%

Deferred Taxes

6,126

(5,300)

-100%

(1,862)

-100%

826

(1,395)

-100%

Income Tax and Social Contribution

(372)

(6,860)

-184%

(9,810)

-159%

(7,232)

(16,874)

-62%

Net Income After Taxes on Income

25,483

31,601

-19%

(2,055)

-1,340%

57,084

(42,450)

-234%

Minority Shareholders

(3,004)

(50)

5,908%

(1,204)

150%

(3,053)

(1,810)

69%

Net Result

28,487

31,651

-10%

(851)

-3,447%

60,137

(40,640)

-248%

 

 

 

 

35


 
 

 

 

Balance Sheet Gafisa Segment

 

2Q15

1Q15

Q/Q (%)

2Q14

Y/Y (%)

Current Assets

 

 

 

 

 

Cash and cash equivalents

541,684

680,412

-20%

661,449

-18%

Receivables from clients

1,030,823

1,074,721

-4%

1,285,496

-20%

Properties for sale

1,133,046

1,225,675

-8%

1,050,259

8%

Other accounts receivable

225,848

199,545

13%

256,083

-12%

Deferred selling expenses

4,406

8,584

-49%

19,024

0%

Land for sale

6,074

6,074

0%

7,747

-22%

 

2,941,881

3,195,011

-8%

3,280,058

-10%

 

 

 

 

 

 

Long-term Assets

 

 

 

 

 

Receivables from clients

410,855

384,928

7%

298,596

38%

Properties for sale

715,740

572,410

25%

467,708

53%

Other

171,972

163,184

5%

221,212

-22%

 

1,298,567

1,120,522

16%

987,516

31%

Intangible

60,195

59,949

0%

63,149

-5%

Investments

1,963,775

1,947,616

1%

1,989,855

-1%

 

 

 

 

 

 

Total Assets

6,264,418

6,323,098

-1%

6,320,578

-1%

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

Loans and financing

582,668

537,032

8%

548,548

6%

Debentures

268,943

329,876

-18%

254,466

6%

Obligations for purchase of land and clients

228,010

274,886

-1%

293,195

-7%

Materials and service suppliers

76,943

81,459

-6%

55,888

38%

Taxes and contributions

60,640

65,117

-7%

59,857

1%

Investor Obligations

5,016

8,717

-42%

7,517

-33%

Other

433,116

395,181

10%

364,314

19%

 

1,655,336

1,692,268

0%

1,583,785

7%

 

 

 

 

 

 

Long-term Liabilities

 

 

 

 

 

Loans and financings

668,119

796,607

-16%

756,049

-12%

Debentures

568,589

541,712

5%

582,508

-2%

Obligations for purchase of land and clients

117,839

61,234

21%

66,983

11%

Deferred taxes

28,589

27,560

4%

44,667

-36%

Provision for contingencies

75,190

75,190

0%

67,745

11%

Investor Obligations

4,713

4,713

0%

7,145

-34%

Other

45,109

53,911

-16%

74,555

-39%

 

1,508,148

1,560,927

-6%

1,599,652

-8%

 

 

 

 

 

 

Shareholders' Equity

 

 

 

 

 

Shareholders' Equity

3,097,879

3,066,949

1%

3,116,181

-1%

 Minority Shareholders

3,055

2,954

3%

20,960

-85%

 

3,100,934

3,069,903

1%

3,137,141

-1%

Total Liabilities and Shareholders' Equity

6,264,418

6,323,098

-1%

6,320,578

-1%

 

 

 

36


 
 

 

 

Balance Sheet Tenda Segment

 

2Q15

1Q15

Q/Q (%)

2Q14

Y/Y (%)

Current Assets

 

 

 

 

 

Cash and cash equivalents

335,129

435,756

-23%

618,118

-46%

Receivables from clients

433,456

401,285

8%

424,221

2%

Properties for sale

487,252

563,291

-13%

527,646

-8%

Other accounts receivable

132,872

117,337

13%

131,917

1%

Land for sale

117,452

107,415

9%

98,564

19%

 

1,506,161

1,625,084

-7%

1,800,466

-16%

 

 

 

 

 

 

Long-term Assets

 

 

 

 

 

Receivables from clients

39,388

32,818

20%

23,760

66%

Properties for sale

179,759

196,378

-8%

110,772

62%

Other

64,441

72,751

-11%

86,016

-25%

 

283,588

301,947

-6%

220,549

29%

Intangible

38,018

33,935

12%

39,429

-4%

Investments

155,891

188,315

-17%

193,544

-19%

 

 

 

 

 

 

Total Assets

1,983,658

2,149,281

-8%

2,253,987

-12%

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

Loans and financing

7,655

9,084

-16%

74,395

-90%

Debentures

207,485

198,979

4%

98,928

110%

Obligations for purchase of land and clients

158,181

223,977

-29%

71,442

121%

Materials and service suppliers

32,074

20,932

53%

20,732

55%

Taxes and contributions

73,227

71,763

2%

90,748

-19%

Other

94,995

168,783

-44%

317,403

-70%

 

573,617

693,518

-17%

673,648

-15%

 

 

 

 

 

 

Long-term Liabilities

 

 

 

 

 

Loans and financings

29,341

24,663

19%

58,295

-50%

Debentures

100,000

200,000

-50%

300,000

-67%

Obligations for purchase of land and clients

57,809

14,824

290%

3,175

1,721%

Deferred taxes

4,493

11,603

-61%

10,643

-58%

Provision for contingencies

57,707

68,154

-15%

65,783

-12%

Other

35,695

29,935

19%

67,853

-47%

 

285,045

349,179

-18%

505,749

-44%

 

 

 

 

 

 

Shareholders' Equity

 

 

 

 

 

Shareholders' Equity

1,091,018

1,070,450

2%

1,049,799

4%

Minority Shareholders

33,978

36,134

-6%

24,791

37%

 

1,124,996

1,106,584

2%

1,074,590

5%

Total Liabilities and Shareholders' Equity

1,983,658

2,149,281

-8%

2,253,987

-12%

 

 

 

37


 
 

 

 

Consolidated Balance Sheets

 

2Q15

1Q15

Q/Q (%)

2Q14

Y/Y (%)

Current Assets

 

 

 

 

 

Cash and cash equivalents

876,813

1,116,168

-21%

1,279,568

-31%

Receivables from clients

1,464,279

1,476,007

-1%

1,709,718

-14%

Properties for sale

1,620,297

1,788,967

-9%

1,684,216

3%

Other accounts receivable

322,469

295,846

9%

217,263

48%

Prepaid expenses and others

10,293

15,322

-33%

26,223

-61%

Land for sale

123,526

113,489

9%

-

16%

 

4,417,677

4,805,799

-8%

4,916,988

-10%

 

 

 

 

 

 

Long-term Assets

 

 

 

 

 

Receivables from clients

450,243

417,746

8%

322,356

40%

Properties for sale

895,500

768,789

16%

578,480

55%

Other

221,448

220,969

0%

292,260

-24%

 

1,567,191

1,407,504

11%

1,193,096

31%

Intangible

123,689

119,360

4%

145,657

-15%

Investments

963,989

1,001,235

-4%

1,032,662

-7%

 

 

 

 

 

 

Total Assets

7,072,546

7,333,898

-4%

7,288,403

-3%

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

Loans and financing

590,323

546,115

8%

622,942

-5%

Debentures

476,428

528,856

-10%

353,394

35%

Obligations for purchase of land and clients

386,192

498,857

-14%

364,637

18%

Materials and service suppliers

109,017

102,391

6%

76,619

42%

Taxes and contributions

107,483

110,933

-3%

117,728

-9%

Investor Obligations

5,016

8,717

-42%

7,517

-33%

Other

524,128

575,615

-9%

551,057

-5%

 

2,198,587

2,371,484

-5%

2,093,894

7%

 

 

 

 

 

 

Long-term Liabilities

 

 

 

 

 

Loans and financings

697,460

821,270

-15%

814,345

-14%

Debentures

668,589

741,712

-10%

882,508

-24%

Obligations for purchase of land and clients

175,649

76,059

73%

70,158

88%

Deferred taxes

33,081

39,164

-16%

55,310

-40%

Provision for contingencies

139,208

143,990

-3%

133,528

4%

Investor Obligations

2,280

4,713

-52%

7,145

-68%

Other

58,200

64,615

-10%

93,384

-38%

 

1,774,467

1,891,523

-8%

2,056,378

-16%

 

 

 

 

 

 

Shareholders' Equity

 

 

 

 

 

Shareholders' Equity

3,097,881

3,066,952

1%

3,116,182

-1%

Minority Shareholders

1,611

3,939

-59%

21,949

-93%

 

3,099,492

3,070,891

1%

3,138,131

-1%

Liabilities and Shareholders' Equity

7,072,546

7,333,898

-4%

7,288,403

-3%

 

 

38


 
 

 

 

Cash Flow

 

2Q15

2Q14

6M15

6M14

Income Before Taxes on Income

19,729

9,617

63,490

(24,181)

Expenses (income) not affecting working capital

91,830

114,614

136,363

179,067

Depreciation and amortization

11,561

15,977

23,230

29,999

Impairment allowance

4,375

2,673

4,375

379

Expense on stock option plan

2,383

20,816

5,001

24,405

Penalty fee over delayed projects

1,136

(63)

(943)

(675)

Unrealized interest and charges. net

21,249

46,668

37,663

70,624

Equity pickup

7,182

(2,592)

(11,600)

(1,575)

Disposal of fixed asset

842

482

1,058

2,197

Warranty provision

1,904

(7,479)

8,829

(10,957)

Provision for contingencies

29,418

25,647

55,488

51,796

Profit sharing provision

9,124

11,636

12,038

16,425

Allowance (reversal) for doubtful debts

(1,122)

1,280

(805)

(3,306)

Writeoff of Investments

2,188

-

(2,317)

-

Profit / Loss from financial instruments

1,590

(431)

4,346

(245)

Clients

(12,739)

365

(78,034)

179,022

Properties for sale

14,566

(4,291)

(43,117)

(81,378)

Other receivables

(26,134)

(10,634)

(11,403)

(2,398)

Deferred selling expenses and pre-paid expenses

5,030

4,107

5,150

8,964

Obligations on land purchases

(13,082)

(8,219)

(29,902)

(53,554)

Taxes and contributions

(3,450)

(4,816)

(6,941)

(31,088)

Accounts payable

6,627

(61,917)

13,886

(2,723)

Salaries. payroll charges and bonus provision

(21,686)

(44,962)

(17,397)

(45,826)

Other accounts payable

(49,627)

13,460

(61,512)

(29,995)

Current account operations

(11,536)

(18,699)

(10,022)

(51,270)

Paid taxes

5,754

-

(6,406)

(84,682)

Cash used in operating activities

5,282

(11,375)

(45,845)

(40,042)

Investments activities

 

 

 

 

Purchase of property and equipment

(16,732)

(22,390)

(22,383)

(35,128)

Redemption of securities. restricted securities and loans

952,732

1,428,966

2,133,082

2,544,749

Investments in marketable securities. restricted securities

(783,891)

(1,199,724)

(1,808,307)

(1,880,258)

Investments increase

(787)

9,934

(962)

4,420

Dividends receivables

-

57,676

-

60,301

Cash used in investing activities

151,322

274,262

301,430

694,084

Financing activities

 

 

 

 

Contributions from venture partners

(6,134)

(8,554)

(3,734)

(109,018)

Increase in loans and financing

182,351

203,522

382,672

378,913

Repayment of loans and financing

(408,754)

(520,835)

(574,060)

(835,874)

Stock repurchase

-

(3,186)

(22,135)

(51,354)

Dividend payments

-

-

-

(117,125)

Mutual Operations

4,825

4,642

5,412

(6,598)

Sale of treasury shares

1,811

13,480

1,810

13,480

Result from the sale of treasury shares

(1,217)

(6,570)

(1,216)

(6,570)

Net cash provided by financing activities

(227,118)

(317,501)

(211,251)

(734,146)

Net increase (decrease) in cash and cash equivalents

(70,514)

(54,414)

44,334

(80,104)

At the beginning of the period

224,743

189,503

109,895

215,193

At the end of the period

154,229

135,089

154,229

135,089

Net increase (decrease) in cash and cash equivalents

(70,514)

(54,414)

44,334

(80,104)

 

 

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.

 

 

 

 

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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: August 7, 2015
 
Gafisa S.A.
 
By:
/s/ Sandro Gamba

 
Name:   Sandro Gamba
Title:     Chief Executive Officer