gfapr2q16_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, 2016

(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


 
 

EARNINGS

RELEASE

2Q16

 

FOR IMMEDIATE RELEASE - São Paulo, August 11, 2016 – Gafisa S.A. (Bovespa: GFSA3; NYSE: GFA), one of Brazil’s leading homebuilders, today reported financial results for the second quarter ended June 30, 2016.

 

GAFISA RELEASES
2Q16 RESULTS

 

 

MANAGEMENT COMMENTS AND HIGHLIGHTS

 

 

The Company’s results from the first half of 2016 reflect continued uncertainty in Brazil’s political and economic prospects. This uncertainty stems from an economic slowdown and has greatly impacted the Brazilian real estate market. Gafisa was able to partially mitigate the negative effects of this period, as a result of its diversification in both the medium-high income and the low income segments.

The Gafisa and Tenda segments faced substantially different market environments throughout the quarter. The Gafisa segment has been affected by reduced demand levels in this weak macroeconomic environment. The segment is focused on its strategy of improving operational efficiency and business management, by maintaining a conservative approach in the development of new projects. The Tenda segment, conversely, took advantage of the low-income market’s resilience and continued to expand the scale of its business model, despite macroeconomic conditions.

In 2Q16, the Gafisa segment launched two projects/phases in the city of São Paulo, accounting for R$130.4 million in PSV, ending the first six months with R$210.5 million in new projects launched.

Despite the political and economic headwinds, the segment posted improved results in 2Q16 relative to 1Q16. The recent sales performance in the quarter may signal a marginal rebound in the Brazilian consumer environment. In addition to increased sales, with gross sales totaling R$262.0 million, up 10.5% from 1Q16, dissolutions decreased in the quarter and returned to average levels seen in 2015.

This result reflected positive trends in both Gafisa’s operations and consumer confidence. As a result of these factors, 2Q16 net pre-sales nearly doubled QoQ to R$129.5 million, representing 66% of total net pre-sales in 1S16.

Gafisa segment’s SoS slightly recovered reaching 6.3% in 2Q16, compared to 3.3% in the previous quarter and 10.5% in 2Q15. SoS in the last twelve months reached 26.5%.

               

 

 

 

 

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EARNINGS

RELEASE

2Q16

 

The volume of dissolutions in 2Q16, despite a slight improvement, comes as a result of a high volume of deliveries since the end of 2015, approximately R$1.5 billion in PSV, combined with decreased demand in the current economic scenario. In 2Q16, PSV of R$412.3 million was delivered, ending the first six months with R$517.1 million in delivered projects.

The Gafisa segment ended 2Q16 with 25 projects under construction, all on schedule and within the delivery timeframe, reflecting Gafisa’s commitment to our clients. 2Q16 transfer volume reached R$142.7 million and R$252.7 million in 6M16, showing an appropriate level of operational control and efficiency. Despite the current credit restrictions, Gafisa maintains a strong relationship in partnering with banks for the transfer process.

The Company has maintained a focus on the sale of remaining units. As a result, 72.3% of net sales in 2Q16 and 77.6% in 1H16 were units from inventory. Considering the higher volume of dissolutions related to older projects, net sales in 1H16 were concentrated in more recent projects, impacting the Gafisa segment’s first half revenues.

Despite the expectation of greater visibility into the Brazilian political and economic scenario, the Company is still missing higher visibility related to a recovery in the real estate market and will keep operating on a cautious manner.

In this regard, we will keep our conservative approach, seeking to balance the placement of new products on the market, prioritizing those with higher liquidity, so as to achieve an appropriate level of sales, profitability, and cash flow.

Tenda’s 2Q16 results benefitted from the stable scenario in the low-income segment, with increased launches and fewer dissolutions. These factors were further improved by the policy of immediately transfer after sale, and a reduction in the legacy project portfolio. The Tenda segment continues concentrating its efforts in the new business model. The consolidation of the new model, based on four strategic pillars, has allowed Tenda to post consistent positive operational and financial performance.

In 2Q16, Tenda launches totaled R$414.7 million, the highest levels since 4Q10. The launches were comprised of 12 projects/phases, in the states of São

Paulo, Rio de Janeiro, Rio Grande do Sul, Minas Gerais and Bahia.

 

2Q16 launches accounted for 39.8% of the Tenda segment’s total sales and 25.6% of the segment’s total in 6M16.

The Tenda segment’s SoS reached an impressive level of 26.4%, among the highest in the sector.

2Q16 gross sales reached R$382.9 million and dissolutions remained under control at 15.1% of gross sales, resulting in net pre-sales of R$325.0 million. This marked an increase of 21.9% from the previous quarter and of 12.1% y-o-y. In 6M16, the net pre-sales totaled R$591.5 million.

Since 2013, when Tenda started its new model operations, the segment has launched 72 projects, representing a total of R$2.7 billion in PSV. Of this total, Tenda has delivered R$1.1 billion, comprised of 32 projects/phases. Notably, all projects related to the first year of new model operations (2013) have been completed and delivered on schedule. In relation to the 2014 projects, only one project/phase of 14 projects launched is still waiting delivery. In 2Q16, the Tenda segment delivered 10 projects/phases, corresponding to 1,895 units, and representing R$275.4 million in PSV. In 1H16, the Tenda segment delivered 13 projects/phases, comprising 2,359 units and R$337.1 million in PSV.

For the second half of the year, the Tenda segment will continue focusing on increasing its scale by growing launches and implementing strategies designed to ensure a strong sales pace. The segment will be guided by market behavior and focused on delivering profitability. The consistency of recent results from the new model projects reaffirms management’s confidence in the 2016 business plan.

On a consolidated basis, Gafisa and Tenda launched R$545.0 million in 2Q16, ending the first six months with R$853.7 million in new projects. The Gafisa segment accounted for 24% of 2Q16 launches while Tenda accounted for the remaining 76%. Second quarter 2016 net pre-sales totaled R$454.5 million, an increase of 36.4% quarter-over-quarter. In the quarter, sales from launches accounted for 36.4% of total sales, while the sale of inventory units accounted for the remaining 63.6%. The Gafisa segment accounted for 29% of net

 

 

 

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EARNINGS

RELEASE

2Q16

 

pre-sales while the Tenda segment represented the remaining 71%.

Consolidated adjusted gross profit totaled R$138.3 million with a gross margin of 29.2%, which resulted from a partial recovery in the Gafisa segment’s operating profitability in the period. In 1H16, adjusted gross profit totaled R$248.5 million, with a gross margin of 28.3%.

In the current economic environment, the Company’s main focus is on greater stability in its cost and expense structure. Selling, general and administrative expenses were R$82.2 million in 2Q16, stable y-o-y and down 8.3% q-o-q, reflecting the Company’s efforts in efficiently answering to the adjustments and movements of the real estate market, so that to allow a structure of costs and expenses aligned to current scenario.

As a result of these factors, Gafisa reported a 2Q16 consolidated net loss of R$38.5 million, compared to a loss of R$53.2 million recorded in 1Q16 and net income of R$28.5 million in 2Q15.

At the end of the first six months, the Net Debt/Shareholders’ Equity ratio reached 48.5%, a slight increase compared to 1Q16, although in line with the

Company’s business plan. Excluding project finance, the Net Debt/Shareholders’ Equity ratio was negative at 9.8%.

Consolidated operating cash generation reached R$38.2 million in the quarter, ending the period with a net cash burn of R$32.5 million. In 6M16, the net cash burn totaled R$4.2 million. It is worth noting that in 1H16, the Company’s cash generation was impacted by the decreased volume of deliveries in the Gafisa segment, which we expect to improve on in the second semester of the year.

We will maintain this conservative approach in this second half of 2016, seeking to balance the placement of new products on the market, prioritizing those with higher liquidity, in order to reach adequate sales and profitability levels. The Gafisa segment, through its balanced performance, seeks to manage the effects of this period of economic weakness. The Tenda segment is ready to expand the volume of new projects, backed by the resilience of the low-income market, sustained demand, and the positive results from new model projects.

The Company continues to advance guided by capital discipline, its profitability goals, and value creation for shareholders.

 

 

 

Sandro Gamba                                                                                  Rodrigo Osmo

Chief Executive Officer – Gafisa                                                      Chief Executive Officer – Tenda

 

 

 

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EARNINGS

RELEASE

2Q16

MAIN CONSOLIDATED FIGURES

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

 

2Q16

1Q16

Q/Q(%)

2Q15

Y/Y(%)

6M16

6M15

Y/Y(%)

Launches

545,038

308,648

77%

481,951

13%

853,686

795,532

7%

Launches, Units

3,166

1,860

70%

2,231

42%

5,026

4,181

20%

Net Pre-sales

454,511

333,339

36%

532,131

-15%

787,850

955,475

-18%

Pre-sales, Units

2,202

2,137

3%

2,395

-8%

4,339

4,303

20%

Pre-sales of Launches

165,273

30,116

449%

108,001

53%

195,389

167,717

16%

Sales over supply (SoS)

13.9%

10.6%

330 bps

15.9%

-200 bps

21.8%

25.4%

-360 bps

Delivered projects (PSV)

687,726

166,500

313%

954,460

-28%

854,226

1,740,208

-51%

Delivered projects, Units

3,136

655

379%

2,738

14%

3,791

6,272

-40%

Net Revenue

473,371

405,534

17%

591,529

-20%

878,905

1,111,030

-21%

Adjusted Gross Profit1

138,276

110,239

25%

200,386

-31%

248,515

379,688

-35%

Adjusted Gross Margin1

29.2%

27.2%

200 bps

33.9%

-470 bps

28.3%

34.2%

-590 bps

Adjusted EBITDA2

22,397

15,495

45%

72,831

-69%

37,892

169,196

-78%

Adjusted EBITDA Margin2

4.7%

3.8%

90 bps

12.3%

-760 bps

4.3%

15.2%

-1,090 bps

Net Income (Loss)

(38,439)

(53,227)

28%

28,487

-

(91,665)

60,137

-

Backlog Revenues

667,368

708,871

-6%

901,383

-26%

667,368

901,383

-26%

Backlog Results3

259,864

275,030

-6%

364,238

-29%

259,864

364,238

-29%

Backlog Margin3

38.9%

38.8%

10 bps

40.4%

-150 bps

38.9%

40.4%

-150 bps

Net Debt + Investor Obligations

1,455,766

1,415,038

3%

1,563,283

-7%

1,455,766

1,563,283

-7%

Cash and cash equivalents

618,569

792,076

-22%

876,813

-29%

618,569

876,813

-29%

Shareholders’ Equity

2,998,075

3,043,671

-1%

3,097,881

-3%

2,998,075

3,097,881

-3%

Shareholders’ Equity + Minority

3,001,290

3,046,284

-1%

3,099,492

-3%

3,001,290

3,099,492

-3%

Total Assets

6,548,124

6,779,953

-3%

7,072,546

-7%

6,548,124

7,072,546

-7%

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

48.5%

46.5%

200 bps

50.4%

-190 bps

48.5%

50.4%

-190 bps

 

1)    Adjusted by capitalized interestes.

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)    Cash and cash equivalents,  and titles and securities.

5)    Backlog results include ventures that are subject to restriction due to a suspensive clause.

 

 

 

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EARNINGS

RELEASE

2Q16

 

FINANCIAL RESULTS

 

§  2Q16 net revenue recognized by the “PoC” method was R$212.6 million in the Gafisa segment and
R$260.7 million in the Tenda segment. This resulted in 2Q16 consolidated revenue of R$473.3 million, a decrease of 20.0% year-on-year and an increase of 16.7% from the previous quarter. In 6M16, consolidated net revenue was R$878.9 million, a reduction of 20.9% compared with 6M15.

§  Adjusted gross profit for 2Q16 was R$138.3 million, higher than R$110.2 million in 1Q16 and lower than R$200.4 million recorded in the past year. Adjusted gross margin reached 29.2%, compared to 27.2% in 1Q16 and 33.9% in the 2Q15. The Gafisa segment accounted for an adjusted gross profit of R$65.3 million, with an adjusted gross margin of 30.7%, while the Tenda segment accounted for an adjusted gross profit of R$73.0 million, with a margin of 28.0%. In the first half of the year, adjusted gross profit was R$248.5 million with adjusted gross margin of 28.3%, compared to R$379.7 million in 1H15.

§  Consolidated Adjusted EBITDA was R$22.4 million in 2Q16, with an adjusted EBITDA margin of 4.7%. The Gafisa segment reported adjusted EBITDA of R$12.5 million, while the Tenda segment’s adjusted EBITDA was R$21.8 million. In 1H16, consolidated Adjusted EBITDA was R$37.9 million, 78% lower than R$169.2 million in 1H15. 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 a 2Q16 net loss of R$38.5 million compared to a net loss of R$53.2 million in 1Q16, and net profit of R$28.5 million in 2Q15. The Gafisa segment reported a net loss of R$47.1 million, while the Tenda segment reported a net profit of R$8.6 million. In the 1H16, the Company reported a consolidated net loss of R$91.7 million.

§  Operating cash generation totaled R$38.2 million in 2Q16, finishing the quarter with cash generation of R$134.9 million. Cash burn in the quarter was R$32.5 million, with an accumulated cash burn of R$4.2 million in 6M16.

 

.

 

 

 

OPERATING RESULTS

§  Total Company launches were R$545.0 million in 2Q16, comprised of 14 projects in the states of São Paulo, Rio de Janeiro, Minas Gerais, Bahia and Rio Grande do Sul, up from R$482.0 million launched in 2Q15. The Gafisa segment accounted for 24% of the quarter’s launches, while the Tenda segment accounted for the remaining 76%. First half 2016 launches totaled R$853.7 million.

§  Net pre-sales totaled R$454.5 million in 2Q16, an increase of 36.4% from the R$333.3 million recorded in 1Q16 and 14.6% lower y-o-y. The Gafisa segment accounted for R$129.5 million and the Tenda segment for R$325.0 million in 1Q16. Consolidated sales from launches in the quarter represented 18.6% of the total, while sales from inventory comprised the remaining 81.4%. The Company reached R$787.9 million in net pre-sales in the first six months of the year.

§  Consolidated sales over supply (SoS) reached 13.9% in 2Q16 compared to 10.6% in 1Q16 and 15.9% in 2Q15. On a trailing 12-month basis, Gafisa’s SoS was 26.5%, while Tenda’s SoS was 54.2%.

§  Consolidated inventory at market value remained stable in 2Q16, at R$2.8 billion. Gafisa’s inventory ended the quarter at R$1.9 billion, while Tenda’s inventory totaled R$906.3 million.

§  Throughout the second quarter, the Company delivered 14 projects/phases, totaling 3,136 units, accounting for R$687.7 million in PSV. In regards tp the first six months, the company delivered 19 projects/phases and 3,791 units, accounting for R$854.2 million in PSV.

 

 

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EARNINGS

RELEASE

2Q16

 

ANALYSIS OF RESULTS

Gafisa Segment

Sales Volume, Revenue Level and Profitability Impacted by the
 Challenging Market Environment

 

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

 

2Q16

1Q16

Q/Q(%)

2Q15

Y/Y(%)

6M16

6M15

Y/Y(%)

Launches

130,360

80,104

63%

252,585

-48%

210,464

327,812

-36%

Net pre-sales

129,519

66,842

94%

242,185

-47%

196,361

421,992

-53%

Net pre-sales of launches

35,867

8,187

338%

66,973

-46%

44,054

81,409

-46%

Sales over Supply (SoS)

6.3%

3.3%

300 bps

10.5%

-420 bps

9.3%

16.9%

-760 bps

Delivered projects (Units)

1,241

191

550%

1,498

-17%

1,432

3,345

-57%

Net Revenue

212,628

170,982

24%

348,392

-39%

383,610

688,450

-44%

Adjusted Gross Profit1

65,325

35,979

82%

127,101

-49%

101,304

252,603

-60%

Adjusted Gross Margin1

30.7%

21.0%

970 bps

36.5%

-580 bps

26.4%

36.7%

-1,030 bps

Adjusted EBITDA 2

12,491

(18,140)

-169%

52,400

-76%

(5,649)

110,690

-105%

Adjusted EBITDA Margin 2

5.9%

-10.6%

1,650 bps

15.0%

-910 bps

-1.5%

16.1%

-1,760 bps

Net Income (Loss)

(47,061)

(58,021)

-19%

8,452

-657%

(105,082)

28,656

-467%

Backlog Revenues

366,368

427,365

-14%

664,074

-45%

366,368

664,074

-45%

Backlog Results3

133,975

159,970

-16%

265,190

-49%

133,975

265,190

-49%

Backlog Margin³

36.6%

37.4%

-80 bps

39.9%

-330 bps

36.6%

39.9%

-330 bps

1)      Adjusted by capitalized interestes.

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)      Backlog results include ventures that are subject to restriction due to a suspensive clause.

 

 

The uncertainty in Brazil’s economic and political environment negatively impacted demand in the mid-high income segment and continued to hurt the Gafisa segment’s operational performance. Despite a greater share of projects launched before 2015 in the 2Q16 gross sales mix (68.7% of gross sales), the high volume of dissolutions related to these projects (95.2% of dissolutions in the quarter) ended up concentrating part of the net volume of sales from inventory of more recent projects. Thus, revenues in the quarter were impacted again for the following items: (i) lower volume of net sales in the period; and (ii) higher concentration of net sales in projects with slower evolution of work progress.

The Gafisa segment ended 2Q16 with a gross margin of 12.3% compared to 25.9% in 2Q16 and 2.0% in the past quarter, reflecting a modest rebound from 1Q16. 2Q16 was still impacted by dissolutions related to commercial projects (R$28.4 million – 21.4% of total PSV dissolutions) and due to the effects of pricing pressure related to the resale of cancelled units. Adjusted Gross Margin reached 30.7% in the quarter and 26.4% in the first half of the year.

In 2Q16 the Gafisa segment maintained a level of SG&A expenses more in line with the current level of the business cycle and market demand, posting a y-o-y reduction of 21.2% and ending 1H16 down 10.6% from 1H15.

 

 

 

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EARNINGS

RELEASE

2Q16

Net Income

Net loss for the period was R$47.1 million compared to a loss of R$58.0 million in 1Q16 and a profit of R$8.5 million in 2Q15. Excluding the net loss from Alphaville equity income, which totaled R$12.0 million in the quarter, the Gafisa segment reported a 2Q16 net loss of R$35.1 million, compared to a net loss of R$68.9 million in 1Q16 and net profit of R$3.3 million in 2Q15. In 1H16, the Gafisa segment posted a net loss of R$104.0 million.

 As previously stated, this was due to the following items: (i) volume and mix of net sales in the period, and (ii) the effect of the negative contribution of AUSA equity income, due to the lower operating volume (launches and sales), reflecting on the quarter's revenue level and also to AUSA’s net financial result, impacted by the higher cost of debt, compared to the previous year.In 1H16, net loss including Alphaville reached R$105.1 million.

 

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

 

2Q16

1Q16

2Q15

6M16

6M15

Adjusted Gross Profit

65.3

36.0

127.1

101.3

252.6

Adjusted Gross Margin

30.7%

21.0%

36.5%

26.4%

36.7%

Net Income

(47.1)

(58.0)

8.5

(105.1)

28.7

Equity Income from Alphaville

(12.0)

10.9

5.2

(1.1)

22.2

Net Profit Ex- Alphaville

(35.1)

(68.9)

3.3

(104.0)

6.5

 

 

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EARNINGS

RELEASE

2Q16

 

 

Tenda Segment

Operating and Financial Profitability Supported
by Increased Scale and the Improved Performance of the New Model

 

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

 

2Q16

1Q16

Q/Q(%)

2Q15

Y/Y(%)

6M16

6M15

Y/Y(%)

Launches

414.678

228.544

81%

229.366

81%

643.222

467.720

38%

Net pre-sales

324.992

266.497

22%

289.946

12%

591.489

533.483

11%

Net pre-sales of Launches

129.406

21.930

490%

41.028

215%

151.336

86.308

75%

Sales over Supply ( SoS)

26,4%

23,9%

250 bps

28,2%

-180 bps

39,5%

41,9%

-240 bps

Delivered projects ( Units)

1.895

464

308%

1.240

53%

2.359

2.927

-19%

Net Revenue

260.743

234.552

11%

243.137

7%

495.295

422.580

17%

Adjusted Gross Profit1

72.951

74.260

-2%

73.285

0%

147.211

127.085

16%

Adjusted Gross Margin1

28,0%

31,7%

-370 bps

30,1%

-210 bps

29,7%

30,1%

-40 bps

Adjusted EBITDA2

21.858

22.755

-4%

15.221

44%

44.613

36.335

23%

Adjusted EBITDA Margin2

8,4%

9,7%

130 bps

6,3%

210 bps

9,0%

8,6%

40 bps

Net Income ( Loss)

8.622

4.794

80%

20.035

-57%

13.416

31.481

-57%

Backlog Revenues

301.000

281.506

7%

237.309

27%

301.000

237.309

27%

Backlog Results3

125.889

115.060

9%

99.048

27%

125.889

99.048

27%

Backlog Margin³

41,8%

40,9%

90 bps

41,7%

10 bps

41,8%

41,7%

10 bps

1) Adjusted by capitalized interestes.

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) Backlog results include ventures that are subject to restriction due to a suspensive clause.

 

During 2Q16, the Tenda segment continued to scale its operations, supported by positive demand levels, which stimulated sales and launches.

Adjusted gross margin went down to 28.0% in the second quarter, compared to 31.7% in the 1Q16 and 30.1% in the previous year, as a result of the completion of the receivables portfolio revision, started in 4Q15, which resulted in additional provisioning of R$14.6 million in 2Q16. In April, as a result of major credit constraints, Tenda chose to be more flexible in its discount policy as an initiative to recover sales volume. This initiative was a one-off situation that normalized in subsequent months.

                Selling, general and administrative expenses ended the 1H16 at R$79.7 million, 18.9% higher than 1H15, but in line with the expansion of Tenda’s operations; launch volume increased by 37.5% in 6M16, compared to the same period last year.

Adjusted EBITDA totaled R$21.9 million, with adjusted EBITDA margin of 8.4% in 2Q16. Adjusted EBITDA increased from R$15.2 million in 2Q15 and decreased from R$22.8 million in 1Q16.

 

 

 

8

 


 
 

EARNINGS

RELEASE

2Q16

Net Income

The Tenda segment’s 2Q16 net income was R$8.6 million, up from net income of R$4.8 million recorded in 1Q16 and down from net income of R$20.0 million in 2Q15. In 6M16, net income was R$13.4 million.

The 2Q16 results are attributable to: (i) higher volume of revenues, mitigating the effect of the lower gross margin; and (ii) a lower impact from Other Operating Revenues/Expenses.

 

 

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

 

2Q16

1Q16

2Q15

6M16

6M15

Adjusted Gross Profit

73.0

74.3

73.3

147.2

127.1

Adjusted Gross Margin

28.0%

31.7%

30.1%

29.7%

30.1%

Net Income

8.6

4.8

20.0

13.4

31.4

 

 

9

 


 
 

EARNINGS

RELEASE

2Q16

 

RECENT EVENTS

 

 

UPDATE SHARE BUYBACK PROGRAM

Referring to the current share buyback program, through July 11, 2016, the Company has acquired 4.5 million shares or 55% of the total amount authorized, with a maximum amount of 8,198,565 shares. It is worth mentioning that the Company reaffirms its commitment to capital discipline. The execution of the program is conditional on the maintenance of Gafisa’s Consolidated Net Debt to Equity ratio at a level equal or lower than 60%. The Company’s Executive Officers are authorized to determine the opportunities in which operations will be performed, as well as the amount of shares to be traded. 

 

UPDATE ON THE SEPARATION PROCESS OF THE GAFISA AND TENDA UNITS

In 2016, the Company has continued working on the potential separation of the Gafisa and Tenda business units. Since studies began in February 2014, several activities have been undertaken to enable these two business units to become more independent, both from an operational viewpoint and in terms of capital structure. As previously informed via Material Fact, such procedures are still in progress, but are taking more time to complete than initially planned.

                The Company will keep its shareholders and the market informed about the process and any developments pertaining to the issues mentioned above.

 

 

 

10

 


 
 

EARNINGS

RELEASE

2Q16

 

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 launches totaled R$130.4 million and consisted of 2 projects/phases in São Paulo. The sales speed of these launches reached 21.0%. In 6M16, the Gafisa segment reached R$210.5 million in launches or 23.9% of consolidated launches.

 

 

 

Second quarter gross pre-sales in the Gafisa segment totaled R$262.0 million. Dissolutions in 2Q16 were R$132.5 million, yielding total net pre-sales of R$129.5 million, up 93.8% q-o-q and down 46.5% y-o-y. Out of total dissolutions in the quarter, 21.5% were related to corporate projects, while residential dissolutions corresponded to the remaining 78.5%. In 1H16, net pre-sales totaled R$196.4 million.

Despite headwinds in Brazil’s political and economic scenario, the segment was capable of achieving an improved performance in 2Q16 relative to the previous quarter. Gross sales totaled R$262.0 million, 10.5% higher than the previous quarter. The slight improvement in sales performance from 1Q16 signals a marginal improvement in the consumer environment and a potentially improving scenario in 2H16. Another positive trend in 2Q16 was the lower volume of dissolutions compared to 1Q16, which returned to average levels posted in 2015.

As a main operational guideline for the year, the Company continues to focus its efforts on the sale of remaining units. As a result, 77.6% of net sales for the period were related to projects with launches before 2016. The dissolutions, in turn, were concentrated in the units launched prior to 2014, impacting the level of revenue in the period.

 

                                                    

 

 

 

11

 


 
 

EARNINGS

RELEASE

2Q16

 

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

 

2Q16

1Q16

Q/Q(%)

2Q15

Y/Y(%)

6M16

6M15

Y/Y(%)

Launches

130,360

80,104

63%

252,585

-48%

210,464

327,812

-36%

Pre- Sales

129,519

66,842

94%

242,185

-47%

196,361

421,992

-53%

 

Sales over Supply (SoS)

The Gafisa segment’s SoS for the last twelve months reached 26.5% compared to 27.7% in the same period last year. In the 2Q16, SoS was 6.3% compared to 3.3% in 1Q16 and 10.5% in 2Q15.

 

 

Dissolutions

The weak economic conditions observed in 2016 and the strong recession have directly impacted consumer confidence and, accordingly, the level of gross sales and dissolutions. Due to the challenging operating environment, the level of dissolutions in the Gafisa segment reached R$132.5 million in 2Q16, down sequentially compared to R$170.3 million in 1Q16 and up from R$115.6 million in 2Q15. In 1H16, the total volume of dissolutions was R$302.8 million.

Over the last three years, the Company has been working on initiatives to strengthen the credit review component of its sale process. In doing so, the Company intends to reduce the level of dissolutions throughout the construction and delivery cycle. Given the current economic uncertainties and corresponding effects on the real estate market, the reduction in dissolutions has been slower than expected.

A comprehensive approach in the credit review process at the time of sale has generated a more efficient process of transferring Gafisa customers to financial institutions, even amid an unfavorable economic environment. As an example of the efficiency achieved in this process, only 9.2% of those who asked for transfers in 1H16 have been rejected by the bank’s credit analysis. (i.e. out of the 656 units asking for transfers, only 60 were not accepted)

In recent quarters the Gafisa segment has been able to reduce the level of dissolutions by enabling customers facing financial pressure to swap their units for those that better match their financial position. This exchange process reflects the flexibility of Gafisa’s product portfolio. In 1H16, R$56.2 million of new sales were made to clients who opted for swaps.

In the quarter, 243 Gafisa units were cancelled and 143 units, representing R$73.4 million, were already resold within the period. In 1H16, 500 units were cancelled, with the resale of 259 units in the same period, or R$135.3 million.

 

 

 

 

 

12

 


 
 

EARNINGS

RELEASE

2Q16

 

Inventory

Gafisa is maintaining its focus on inventory reduction initiatives. Projects launched prior to 2016 represented 72.3% of net sales in the period. The market value of the Gafisa segment’s inventory decreased by 3.1% q-o-q, and 7.8% y.o.y, totaling R$1.9 billion. The reduction reflects current market conditions, the effect of sales income in the period, as well as pricing adjustments on some inventory projects. Finished units outside of core markets accounted for R$51.2 million, or 2.7% of total inventory.

 

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

 

Inventories BoP 1Q16

Launches

Dissolutions

Gross Sales

Adjustments¹

Inventories EoP 2Q16

Q/Q (%)

São Paulo

1,432,958

130,360

108,139

(217,823)

(66,661)

1,386,973

-3.2%

Rio de Janeiro

485,622

-

20,520

(29,671)

(980)

475,491

-2.1%

Other Markets

56,346

-

3,804

(14,488)

5,498

51,160

-9.2%

Total

1,974,926

130,360

132,463

(261,982)

(62,143)

1,913,624

-3.1%

¹ The Period Adjustment reflect the updates related to the project scope, release date and pricing update in the period.

 

During the same period, finished units represented R$451.2 million, or 23.6% of total inventory. Inventory from projects launched outside core markets, which is comprised exclusively of finished units, represented R$51.2 million, a decrease of 51.5% when compared to R$105.4 million in 2Q15 and down 9.2% from 1Q16. The Company estimates that through the beginning of 2017, 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.

In regards to Gafisa’s inventory, approximately 46% or R$869.7 million, is concentrated in projects to be delivered after 2Q17 and will not significantly increase the segment’s inventory of finished units in the short term.

 

Table 8 – Gafisa Segment – Inventory at Market Value- Work Status (R$ 000)

 

Not Initiated

Up to 30% built

30% a 70% built

More than 70% built

Finished Units

Total 2Q16

São Paulo

77,501

-

679,702

501,811

127,959

1,386,973

Rio de Janeiro

-

4,404

90,994

107,979

272,114

475,491

Other Markets

-

-

-

-

51,160

51,160

Total

77,501

4,404

770,696

609,790

451,233

1,913,624

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

 

Inventory Delivery Schedule

 

 

 

 

 

13

 


 
 

EARNINGS

RELEASE

2Q16

Landbank

The Gafisa segment landbank, with a PSV of R$5.6 billion, is comprised of 34 land parcels, representing 45 potential projects/phases, and corresponding to nearly 11.1 units. 69% of potential projects/phases are located in São Paulo and 31% are located in Rio de Janeiro. The largest portion of land acquired through swap agreements is located in Rio de Janeiro, impacting the total percentage of land acquired through swaps, to a total of 57.3%.

 

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

 

PSV (% Gafisa)

% Swap
Total

% Swap Units

% Swap Financial

Potential Units
(% Gafisa)

Potential Units (100%)

São Paulo

3,838,867

51%

51%

0%

8,016

8,744

Rio de Janeiro

1,728,250

72%

72%

0%

2,328

2,382

Total

5,567,117

57%

57%

0%

10,344

11,126

¹ The swap percentage is measured compared to historical cost of land acquisition.

² Potential units are net of swaps and refer to the Gafisa’s and/or its partners’ stake in the project.

 

Table 10 - Gafisa Segment - Changes in the Landbank (1Q16 x 2Q16 - R$ 000)

 

Inicial Landbank

Land Acquisition

Launches

Dissolutions

Adjustments

Final Landbank

São Paulo

4,048,411

-

(130,360)

-

(79,184)

3,838,867

Rio de Janeiro

1,661,840

65,693

-

-

717

1,728,250

Total

5,710,251

65,693

(130,360)

-

(78,467)

5,567,117

 

In 2Q16, the Company acquired a new parcel with PSV potential of R$66.7 million and an acquisition cost of R$15.7 million. It was financed by 100% cash and an initial disbursement of R$5.0 million. The disbursement schedule is subject to the launch.

The quarterly adjustments reflect updates related to project scope, expected launch date and other adjustments to the landbank during the period.

 

Gafisa Sales

Gafisa Vendas, the Company’s independent sales unit, with operations in São Paulo and Rio de Janeiro, accounted for 63% of gross sales in the semester.

Gafisa Vendas currently has a team of 579 highly trained, dedicated consultants, in addition to an online sales force.

 

Gafisa Segment Delivered Projects

During 2Q16, 4 projects/phases totaling 1,241 units were delivered, accounting for R$412.3 million in PSV. In 6M16, 6 projects/phases totaling 1,432 units were delivered, accounting for R$517.1 million in PSV. Currently, Gafisa has 25 projects under construction, all of which are on schedule according 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, the Company’s strategy is to transfer 90% of eligible units in a 90-day period after the delivery of the project. In accordance with this policy, transfers totaled R$142.7 million in PSV in the second quarter.

 

 

 

 

14

 


 
 

EARNINGS

RELEASE

2Q16

Table 11 – Gafisa Segment – Delivered Projects

 

2Q16

1Q16

Q/Q(%)

2Q15

Y/Y(%)

6M16

6M15

Y/Y(%)

PSV Transferred ¹

142,697

110,023

30%

169,829

-16%

252,720

367,843

-31%

Delivered Projects

4

2

100%

5

-20%

6

14

-57%

Delivered Units

1,241

191

550%

1,498

-17%

1,432

3,345

-57%

Delivered PSV²

412,307

104,842

293%

777,258

-47%

517,149

1,346,717

-62%

 

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

2) PSV = Potential sales value of delivered units.

 

 

 

 

15

 


 
 

EARNINGS

RELEASE

2Q16

 

 

Financial Results

Revenue

 

2Q16 net revenues for the Gafisa segment totaled R$212.6 million, up 24.4% q-o-q and down 39.0% y-o-y, as a result of higher sales volume compared to 1Q16 and the sales mix, with a higher concentration of projects launched from 2015. In 1H16, net revenue reached R$383.6 million.

In the quarter, 100% of Gafisa segment revenues were derived from projects located in Rio de Janeiro and São Paulo. The table below provides additional details.

 

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

 

 

2Q16

 

 

 

2Q15

 

 

Launches

Pre-Sales

% Sales

Revenue

% Revenue

Pre-Sales

% Sales

Revenue

% Revenue

2016

35,867

28%

5,713

3%

-

0%

-

0%

2015

39,924

31%

38,020

18%

66,973

28%

-

0%

2014

33,996

26%

93,970

44%

57,530

24%

54,173

16%

2013

9,655

7%

49,796

23%

39,878

16%

76,279

22%

≤ 2012

10,077

8%

25,129

12%

77,804

32%

217,940

62%

Total

129,519

100%

212,628

100%

242,185

100%

348,392

100%

SP + RJ

118,835

92%

212,543

100%

234,710

97%

346,949

100%

Other Markets

10,684

8%

85

0%

7,475

3%

1,443

0%

 

Gross Profit & Margin

2Q16 gross profit for the Gafisa segment was R$26.1 million, up from R$3.5 million in 1Q16, and down from R$90.3 million in the prior year period, due to a lower top line result. Gross margin in the quarter reached 12.3%, higher q-o-q, but still negatively impacted by the higher volume of dissolutions, mainly those related to corporate projects (R$28.4 million – 21.4% of total PSV cancelled) and the effect of pricing differences. Excluding financial impacts, adjusted gross margin reached 30.7% in 2Q16 compared to 21.0% in 1Q16 and 36.5% in 2Q15.

The table below contains more details on the breakdown of 2Q16 Gafisa’s gross margin.

 

 

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

 

2Q16

1Q16

Q/Q (%)

2Q15

Y/Y(%)

6M16

6M15

Y/Y(%)

Net Revenue

212,628

170,982

24%

348,392

-39%

383,610

688,450

-44%

Gross Profit

26,084

3,456

655%

90,268

-71%

29,540

188,415

-84%

Gross Margin

12.3%

2.0%

1,030 bps

25.9%

-1,360 bps

7.7%

27.4%

-1,970 bps

(-) Financial Costs

39,241

32,523

21%

(36,833)

-

71,764

(64,188)

-

Adjusted Gross Profit

65,325

35,979

82%

127,101

-49%

101,304

252,603

-60%

Adjusted Gross Margin

30.7%

21.0%

970 bps

36.5%

-580 bps

26.4%

36.7%

-1,030 bps

 

 

 

 

16

 


 
 

EARNINGS

RELEASE

2Q16

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

 

SP + RJ

Other Markets

2Q16

Net Revenue

212,543

85

212,628

Adjusted Gross Profit

65,213

111

65,324

Adjusted Gross Margin

30.7%

130.5%

30.7%

 

 

Selling, General and Administrative Expenses (SG&A)

SG&A expenses totaled R$39.8 million in the 2Q16, down 21.2% y-o-y and 9.1% q-o-q. In the 6M16, these expenses totaled R$83.5 million, 10.6% down from the R$93.4 million in the past year.

While selling expenses decreased 11.9% compared to 2Q15, they increased 20.9% from 1Q16, due to an increased level of launch volumes and higher required sales and marketing investments to stimulate demand. Year-to-date, the sales expenses remained stable compared to 6M15.

The segment’s general and administrative expenses reached R$19.5 million in 2Q16, a decrease of 28.9% compared to the previous year and 27.7% compared to 1Q16. In the quarter, and as an effect of the current market moment, the Company has not provisioned any amount related to profit sharing. In the 6M16, G&A expenses reached R$46.5 million compared to R$56.4 million in 6M15, a decrease of 17.4%.

The improved balance in the Gafisa segment’s SG&A levels reflects the Company's commitment to improving operational efficiency and achieving a level of costs and expenses that is more in line with the current economic outlook.

 

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

 

2Q16

1Q16

Q/Q (%)

2Q15

Y/Y(%)

6M16

6M15

Y/Y(%)

Selling Expenses

(20,245)

(16,746)

21%

(22,976)

-12%

(36,991)

(37,068)

0%

G&A Expenses

(19,524)

(27,002)

-28%

(27,466)

-29%

(46,526)

(56,351)

-17%

Total SG&A Expenses

(39,769)

(43,748)

-9%

(50,442)

-21%

(83,517)

(93,419)

-11%

Launches

130,360

80,104

63%

252,585

-48%

210,464

327,812

-36%

Net Pre-sales

129,519

66,842

94%

242,185

-47%

196,361

421,992

-53%

Net Revenue

212,628

170,982

24%

348,392

-39%

383,610

688,450

-44%

 

Other Operating Revenues/Expenses reached R$19.0 million in 2Q16, a decrease of 11.3% compared to 2Q15, and an increase of 30.1% compared to 1Q16.

The Company continues to be proactive in mitigating risks associated with potential contingencies.

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

 

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

 

2Q16

1Q16

Q/Q (%)

2Q15

Y/Y(%)

6M16

6M15

Y/Y(%)

Litigation Expenses

(15,461)

(15,804)

-2%

(24,622)

-37%

(31,265)

(44,587)

-30%

Other

(3,496)

1,228

-

3,244

-

(2,268)

(5,312)

-57%

Total

(18,957)

(14,576)

30%

(21,378)

-11%

(33,533)

(49,899)

-33%

 

 

 

17

 


 
 

EARNINGS

RELEASE

2Q16

A higher volume of deliveries over the past three years, due to the delivery of delayed projects in legacy regions, led to an increase in the level of contingencies. The Gafisa segment has since concentrated its operations on the metropolitan regions of São Paulo and Rio de Janeiro. This strategic geographical 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 in the following years.

 

Adjusted EBITDA

Adjusted EBITDA for the Gafisa segment was R$12.5 million in 2Q16, an improvement from the negative R$18.1 million in 1Q16 and lower than the R$52.4 million recorded in 2Q15. Year-to-date adjusted EBITDA was negative R$5.6 million compared to the positive result of R$110.7 million in 6M15. 2Q16 Adjusted EBITDA was impacted year-over-year by the following factors: (i) lower revenue in the quarter due to the volume and sales mix; and (ii) decreased gross margin level in 2Q16. As a reminder, adjusted EBITDA for the Gafisa segment does not include equity income from Alphaville.

The adjusted EBITDA margin reached 5.9% in 2Q16, compared to 15.0% in 2Q15, and a negative margin of 10.6% in 1Q16. The adjusted EBITDA margin for the 6M16 was negative 1.5%.

 

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

 

2Q16

1Q16

Q/Q (%)

2Q15

Y/Y(%)

6M16

6M15

Y/Y(%)

Net Profit (Loss)

(47,061)

(58,021)

-19%

8,452

-

(105,082)

28,656

-

(+) Financial Results

2,039

44

4534%

2,966

-31%

2,083

12,710

-84%

(+) Income Taxes

(421)

5,990

-

278

-

5,569

7,628

-27%

(+) Depreciation & Amortization

5,644

9,508

-41%

8,079

-30%

15,152

16,358

-7%

(+) Capitalized interests

39,241

32,523

21%

36,833

7%

71,764

64,187

12%

(+) Expense w stock Option Plan

1,300

1,891

-31%

1,850

-30%

3,191

3,940

-19%

(+) Minority Shareholders

(203)

805

-

(848)

-76%

602

(619)

-

(-) Alphaville Income Effect

11,952

(10,880)

-

(5,210)

-

1,072

(22,170)

-

Adjusted EBITDA

12,491

(18,140)

-

52,400

-76%

(5,649)

110,690

-105%

Net Revenue

212,628

170,982

24%

348,392

-39%

383,610

688,450

-44%

Adjusted EBITDA Margin

5.9%

-10.6%

1,650 bps

15.0%

-910 bps

-1.5%

16.1%

-1,760 bps

              

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

 

Backlog of Revenues and Results

The backlog of results to be recognized under the PoC method totaled R$134.0 million in 2Q16. The consolidated margin was 36.6% in the quarter, compared to 39.9% posted in last year’s second quarter.

Table 18 – Gafisa Segment – Backlog Results (REF) (R$ 000)

 

2Q16

1Q16

Q/Q(%)

2Q15

Y/Y(%)

Backlog Revenues

366,368

427,365

-14%

664,074

-45%

Backlog Costs (units sold)

(232,393)

(267,395)

-13%

(398,884)

-42%

Backlog Results

133,975

159,970

-16%

265,190

-49%

Backlog Margin

36.6%

37.4%

-80 bps

39.9%

-330 bps

                              ¹ Backlog results net of PIS/COFINS taxes (3.65%), and excluding the impact of PVA (Present Value Adjustment) method according to Law 11.638

² Backlog results include ventures that are subject to restriction due to a suspensive clause.

 

18

 


 
 

EARNINGS

RELEASE

2Q16

 

TENDA SEGMENT

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

 

Operating Results | Launches and Sales

Second quarter launches totaled R$414.7 million and included 12 projects/phases in the states of São Paulo, Rio de Janeiro, Minas Gerais, Bahia and Rio Grande do Sul. The Tenda segment accounted for 76.1% of launches in the quarter. In the first half of the year, the launch volume reached R$643.2 million.

 

 

 

During 2Q16, gross sales reached R$382.9 million and dissolutions were R$57.9 million, resulting in total net pre-sales of R$325.0 million, 21.9% higher than the last quarter and 12.1% higher y-o-y. 

In the 6M16, the volume of dissolutions was R$104.2 million and net pre-sales totaled R$591.5 million. In 6M16, 74.4% of total net sales were related to remaining units.

 
 

 


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

 

2Q16

1Q16

Q/Q (%)

2Q15

Y/Y(%)

6M16

6M15

Y/Y(%)

Launches

414,678

228,544

81%

229,366

81%

643,222

467,720

38%

Pre-Sales

324,992

266,497

22%

289,946

12%

591,489

533,483

11%

 

 

 

 

 

19

 


 
 

EARNINGS

RELEASE

2Q16

Sales Over Supply (SoS)

In 2Q16, sales velocity (sales over supply) was 26.4%, and on a trailing 12-month basis, Tenda’s SoS was 54.2%.

 

 

Below is a breakdown of Tenda’s SoS, which includes both legacy and New Model projects.

 

 

2Q15

3Q15

4Q15

1Q16

2Q16

 

 

2Q15

3Q15

4Q15

1Q16

2Q16

New Model

35.2%

27.1%

24.9%

26.9%

28.9%

 

New Model

37,4%

29,6%

27,4%

29,7%

32,2%

Legacy

12.0%

11.4%

5.2%

10.7%

11.9%

 

Legacy

24,3%

19,4%

13,3%

20,7%

25,0%

Total

28.2%

23.0%

20.9%

23.9%

26.4%

 

Total

33,4%

26,9%

24,4%

28,0%

31,1%

 

 

Dissolutions

The level of dissolutions in the Tenda segment totaled R$57.9 million in 2Q16, an increase of 7.8% compared to 2Q15 and 25.3% compared to 1Q16, in line with the increasing volume of gross sales in this quarter.

 

 

Due to its transfer policy, which occurs immediately after the sale, and the reduction of the legacy portfolio, the Tenda segment continues to support a lower volume of dissolutions. The percentage of dissolutions over gross sales reached 15.1%, despite the 58.5% of the legacy projects in this quarter’s total volume of dissolutions.

 

 

Table 22. PSV Dissolutions  Tenda Segment (R$ 000 and % of total gross sales)

 

2Q15

% GS

3Q15

% GS

4Q15

% GS

1Q16

% GS

2Q16

% GS

New Model

15,648

4.5%

19,576

6.8%

22,201

8.0%

20,490

6.6%

24,030

6.3%

Legacy

38,115

11.1%

22,447

7.8%

17,686

6.4%

25,736

8.2%

33,904

8.9%

Total

53,763

15.6%

42,023

14.6%

39,887

14.4%

46,226

14.8%

57,934

15.1%

 

 

20

 


 
 

EARNINGS

RELEASE

2Q16

Tenda remained focused on the completion and delivery of legacy projects. In addition, the Company is dissolving contracts with ineligible clients to sell the related units to new, qualified customers.

During the quarter, 392 units were cancelled and returned to inventory, of which 238 units were resold to qualified customers during the same period. The sale and transfer process plays an important role in Tenda’s business model. It is expected that within a 90-day period, the effective sale and transfer process will be completed.

 

Tenda Segment Transfers

In the 2Q16, 2,051 units were transferred to financial institutions, representing R$261.6 million in net pre-sales.

Table 23 – Tenda Segment - PSV Transferred- Tenda (R$ 000)

 

2Q14

3Q14

4Q14

1Q15

2Q15

3Q15

4Q15

1Q16

2Q16

New Model

69,563

59,736

67,621

114,939

199,423

194,719

165,691

236,120

205,410

Legacy

154,155

100,361

74,773

59,110

61,566

53,912

40,050

30,642

56,184

Total

223,717

160,097

142,393

174,049

260,989

248,631

205,741

266,762

261,594

 

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

 

Tenda Segment Delivered Projects

During 2Q16, Tenda delivered 10 projects/phases and 1,895 units, accounting for a PSV of R$275.4 million. In 6M16, 13 projects/phases and 2,359 units were delivered, accounting for R$337.1 million in PSV.

 

Inventory

The market value of Tenda’s inventory was R$906.3 million at the end of the 2Q16, up 6.7% compared to R$849.1 million at the end of 1Q16. Inventory related to the legacy units totaled R$160.6 million or 17.7% of the total Tenda inventory, down 12.6% versus 1Q16 and 58.9% compared to 2Q15. During the quarter, inventory units within the Minha Casa Minha Vida program totaled R$882.3 million, or 97.3% of total inventory, while units outside the program totaled R$24.0 million, a decrease of 28.8% q-o-q and of 83.0% y-o-y.

 

Table 24 –Tenda Segment – Inventory at Market Value (R$ 000) – by Region

 

Inventory EP 1Q16

Launches

Dissolutions

Pre- Sales

Price

Adjustments

+ Others

Inventory

EP 2Q16

% Q/Q

São Paulo

191,325

103,418

10,801

(89,816)

(7,254)

208,474

9%

Rio Grande do Sul

87,972

43,350

10,218

(45,005)

(2,285)

94,250

7%

Rio de Janeiro

173,575

148,806

16,534

(95,130)

(5,983)

237,802

37%

Bahia

154,492

77,856

5,697

(66,110)

(6,215)

165,720

7%

Pernambuco

91,884

0

2,948

(35,948)

(7,269)

51,615

-44%

Minas Gerais

111,457

41,248

8,267

(38,231)

(3,507)

119,234

7%

Other

38,377

0

3,469

(12,687)

69

29,228

-24%

Total Tenda

849,082

414,678

57,934

(382,927)

(32,444)

906,323

7%

MCMV

815,298

414,678

48,367

(364,225)

(31,845)

882,273

8%

Out of MCMV

33,784

0

9,567

(18,702)

(599)

24,050

-29%

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

 

 

21

 


 
 

EARNINGS

RELEASE

2Q16

Table 25 – Tenda Segment – Inventory at Market Value – Work Status(R$ 000)

 

Not Initiated

Up to 30% built

30% to 70% built

More than 70% built

Finished Units¹

Total 2Q16

New Model – MCMV

225.797

319.898

88.675

96.243

15.078

745.691

Legacy – MCMV

-

-

59.755

-

76.827

136.582

Legacy – Out of MCMV

-

-

-

-

24.050

24.050

Total Tenda

225.797

319.898

148.430

96.243

115.955

906.323

                       

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

Regarding inventory projects, the Tenda segment is still awaiting legal approval for a suspended project with a total PSV of R$59.8 million to move forward with construction.

 

Tenda Segment Landbank

The Tenda segment landbank, with a PSV of approximately R$4.4 billion, is comprised of 130 different projects/phases. Out of these projects/phases, 26% are located in Bahia, 23% in São Paulo, 21% in Rio de Janeiro, 15% in Rio Grande do Sul, 10% in Pernambuco and 5% in Minas Gerais.  In total, these projects/phases reflect more than 33,000 units.

Table 26 – Tenda Segment - Landbank (R$ 000)

 

PSV

(% Tenda)

% Swap
Total

% Swap
Units

% Swap
Financial

Potential

Units
(% Tenda)

Potential

Units
(100%)

São Paulo

1,022,884

0%

0%

0%

6,621

6,621

Rio Grande do Sul

685,383

30%

9%

21%

5,112

5,160

Rio de Janeiro

928,335

19%

19%

0%

6,782

6,871

Bahia

1,146,694

4%

4%

0%

9,133

9,152

Pernambuco

458,090

23%

10%

13%

3,655

3,680

Minas Gerais

209,148

39%

39%

0%

1,506

1,540

Total

4,450,534

14%

9%

6%

32,809

33,024

¹ Swap percentage over the historical cost of land acquisition.

² Potential Units are net of swaps and refer to Tenda’s and/or its partners’ stake in the projects.

 

Table 27 –Tenda Segment – Changes in the Landbank (1Q16 x 2Q16 - R$ 000)

 

Initial Landbank

Land Acquisition

Launches

Adjustments

Final Landbank

São Paulo

1,090,401

32,364

(103,418)

3,537

1,022,884

Rio Grande do Sul

623,399

113,740

(43,350)

(8,406)

685,383

Rio de Janeiro

1,034,112

65,626

(148,806)

(22,597)

928,335

Bahia

1,177,331

46,568

(77,856)

651

1,146,694

Pernambuco

458,291

0

0

(201)

458,090

Minas Gerais

250,906

0

(41,248)

(510)

209,148

Total

4,634,440

258,298

(414,678)

(27,526)

4,450,534

 

In 2Q16, the Tenda segment acquired 7 new land plots with a potential PSV of R$258.3 million. These had an acquisition cost of R$21.9 million, 56% to be paid in cash and 44% to be paid via swap. The Tenda segment also reinstated land parcels with potential PSV of approximately R$65.5 million, which were previously for sale; they were added to Tenda segment’s landbank, due to positive results from new feasibility studies.

 

 

 

22

 


 
 

EARNINGS

RELEASE

2Q16

New Model Update and Turnaround

Tenda is focused on expanding launch volumes under its New Business Model, which is based on three pillars: operational efficiency, risk management, and capital discipline.

The Company continues to operate in six macro regions: São Paulo, Rio de Janeiro, Belo Horizonte, Porto Alegre, Salvador and Recife. Tenda has a total of 72 projects/phases and a launched PSV of R$2.7 billion since 2013. Below is a brief description of the average performance of these projects, per region.

Notably, the Tenda segment has delivered 32 projects/phases since 2013, totaling 8,042 units and R$1.1 billion in PSV, all of them maintaining the performance and profitability drivers established in the New Model.

 

Table 28. Tenda – New Model Monitoring 2013 – 2016

 

SP

RJ

BA

PE

MG

RS

2013

Number of Projects

4

1

2

-

-

-

7

Units launched

1,380

300

779

-

-

-

2,459

Total PSV (R$ 000)

189.7

40.4

83.9

-

-

-

314

Units Sold

1,378

284

774

-

-

-

2,436

% Sold

100%

95%

99%

-

-

-

99%

SoS Avg (Month)

11%

6%

5%

-

-

-

9%

Transfers

1,378

271

762

-

-

-

2,411

% Transferred (Sales)

100%

90%

98%

-

-

-

98%

Work Progress

100%

100%

100%

-

-

-

100%

 

 

SP

RJ

BA

PE

MG

RS

2014

Number of Projects

4

4

4

1

1

-

14

Units launched

720

1,511

1,220

432

432

-

4,315

Total PSV (R$ 000)

117.8

224.8

151.5

58.8

60.4

-

613

Units Sold

705

1,448

1,191

425

383

-

4,152

% Sold

98%

96%

98%

98%

89%

-

96%

SoS Avg (Month)

13%

6%

7%

7%

4%

-

7%

Transfers

704

1,283

1,166

411

376

-

3,940

% Transferred (Sales)

98%

86%

96%

95%

87%

-

91%

Work Progress

100%

100%

99%

100%

100%

-

100%

 

 

SP

RJ

BA

PE

MG

RS

2015

Number of Projects

10

7

5

3

2

3

30

Units launched

2,180

1,751

1,584

944

372

880

7,711

Total PSV (R$ 000)

338.2

252.6

198.5

122.3

53.2

123.6

1,088

Units Sold

2,013

1,115

1,181

713

325

796

6,143

% Sold

92%

64%

75%

76%

87%

90%

80%

SoS Avg (Month)

15%

7%

8%

6%

12%

13%

10%

Transfers

1,889

833

959

549

279

626

5,135

% Transferred (Sales)

87%

49%

63%

59%

75%

71%

67%

Work Progress

81%

65%

74%

77%

60%

74%

74%

 

 

 

23

 


 
 

EARNINGS

RELEASE

2Q16

 

 

SP

RJ

BA

PE

MG

RS

2016

Number of Projects

4

5

4

1

4

3

21

Units launched

820

1,018

1,060

304

780

580

4,562

Total PSV (R$ 000)

131.1

148.8

133.9

38.2

107.7

83.6

643

Units Sold

224

230

266

105

156

110

1,091

% Sold

27%

23%

25%

35%

20%

19%

24%

SoS Avg (Month)

11%

18%

11%

8%

12%

7%

12%

Transfers

132

49

152

57

29

40

459

% Transferred (Sales)

18%

6%

16%

19%

9%

7%

10%

Work Progress

20%

16%

18%

16%

20%

31%

20%

 

 

24

 


 
 

EARNINGS

RELEASE

2Q16

 

Financial Result

Revenues

 

Tenda’s 2Q16 net revenues totaled R$260.7 million, an increase of 7.2% y-o-y, reflecting an increased volume of net sales in the period. As shown in the table below, revenues from new projects represented the majority of total revenues in 2Q16. Tenda’s net revenues totaled R$495.3 million in 6M16, an increase of 17.2% y-o-y, due to the increased level of operations in the period.

Table 29. Tenda - Pre-Sales and Recognized Revenues (R$ 000)

 

2Q16

2Q15

Launches

Pre-Sales

% Sales

Revenue

% Revenue

Pre-Sales

% Sales

Revenue

% Revenue

2016

129,406

40%

38,427

15%

-

0%

-

0%

2015

173,434

53%

220,694

84%

107,472

37%

24,904

10%

2014

1,380

0%

11,205

4%

144,079

50%

145,771

60%

2013

(993)

0%

(884)

0%

1,294

0%

7,566

3%

≤ 2012

21,765

7%

(8,699)

-3%

37,101

13%

64,894

27%

Total

324,992

100%

260,743

100%

289,946

100%

243,137

100%

New Model

303,003

93%

269,441

103%

252,845

87%

178,242

73%

Legacy

21,989

7%

(8,698)

-3%

37,101

13%

64,894

27%

                     

 

Gross Profit and Margin

2Q16 gross profit totaled R$67.4 million, in line with R$68.3 million in 2Q15, and R$68.7 million in the 1Q16. Gross margin for the quarter reached 25.9%, compared to 28.1% in 2Q15 and 29.3% in 1Q16. The reduction in gross margin is a result of the completion of the receivables portfolio review, started in 4Q15, resulting in additional provisioning of R$14.6 million in the 2Q16. It In April, as a result of major credit constraints, Tenda chose to be more flexible in its discount policy as an initiative to recover sales volume. This initiative was a one-off situation that normalized in subsequent months.

It is worth mentioning that the adjusted gross margin remained in the level between 28 and 30%, as it has been since 2Q14, as a result of the consolidation of New Model projects, improved performance and profitability and decreased contribution from legacy projects in the breakdown of Tenda’s revenues. 2Q16 adjusted gross margin was 28.0%, lower than the 30.1% seen in 2015 and the 31.7% in 1Q16. In 6M16, Tenda’s adjusted gross margin reached 29.7%. 

The table below shows Tenda’s gross margin breakdown in 2Q16.

 

Table 30. Tenda – Gross Margin (R$ 000)

 

2Q16

1Q16

Q/Q (%)

2Q15

Y/Y(%)

6M16

6M15

Y/Y(%)

Net Revenue

260,743

234,552

11%

243,137

7%

495,295

422,580

17%

Gross Profit

67,407

68,745

-2%

68,275

-1%

136,152

119,328

14%

Gross Margin

25.9%

29.3%

-340 bps

28.1%

-220 bps

27.5%

28.2%

-70 bps

(-) Financial Costs

5,544

5,515

1%

5,010

11%

11,059

7,757

43%

Adjusted Gross Profit

72,951

74,260

-2%

73,285

0%

147,211

127,085

16%

Adjusted Gross Margin

28.0%

31.7%

-370 bps

30.1%

-210 bps

29.7%

30.1%

-40 bps

 

 

 

25

 


 
 

EARNINGS

RELEASE

2Q16

Selling, General and Administrative Expenses (SG&A)

During 2Q16, selling, general and administrative expenses totaled R$42.4 million, an increase of 8.1% compared to R$39.3 million in 2Q15 and 13.8% compared to R$37.3 million in 1Q16. In 1H16, SG&A increased by 18.9%, totaling R$79.7 million, as a result of a higher volume of Tenda segment operations.

Selling expenses reached R$21.3 million in 2Q16, an increase of 16.4% from 1Q16 and 20.4% from 2Q15, due to a higher launch volume and increased gross sales in the Tenda segment. It is worth noting that despite the 16.4% increase in selling expenses, gross sales volume outpaced the SG&A expense, increasing 22.4% in the quarter. In 6M16, selling expenses increased 28.9%, totaling R$39.5 million.

In 2Q16, general and administrative expenses decreased 2.0% compared to 2Q15 and increased 11.3% in the sequential comparison. The difference is a result of the partial reversal of expenses related to the provision for profit sharing recorded in 1Q16, which had a net effect of R$2.0 million between the quarters. Year-to-date, general and administrative expenses totaled R$40.2 million, 10.5% above the R$36.4 million recorded in 2015 and in line with the level of operations of the Tenda segment.

Another step taken by the Tenda segment to improve its operational and financial cycle since 2013 is the reduction in the cost structure to match the Company’s new business model and achieve better profitability.

 

 

Table 31. Tenda – SG&A Expenses (R$ 000)

 

2Q16

1Q16

Q/Q(%)

2Q15

Y/Y(%)

6M16

6M15

Y/Y(%)

Selling Expenses

(21,270)

(18,272)

16%

(17,659)

20%

(39,542)

(30,680)

29%

General & Admin Expenses

(21,177)

(19,020)

11%

(21,604)

-2%

(40,197)

(36,387)

10%

Total SG&A Expenses

(42,447)

(37,292)

14%

(39,263)

8%

(79,739)

(67,067)

19%

Launches

414,678

228,544

81%

229,366

81%

643,222

467,720

38%

Net Pre-Sales

324,992

266,497

22%

289,946

12%

591,489

533,483

11%

Net Revenue

260,743

234,552

11%

243,137

7%

495,295

422,580

17%

 

The Other Operating Revenues/Expenses totaled an expense of R$7.3 million, a decrease of 52.2% compared to 1Q16, due to the lower impact of the non-recurring effects recorded last quarter.

Below, we present a breakdown of this expense.

 

Table 32 – Tenda Segment– Other Revenues/Operating Expenses (R$ 000)

 

2Q16

1Q16

Q/Q (%)

2Q15

Y/Y(%)

6M16

6M15

Y/Y(%)

Litigation Expenses

(5,597)

(7,084)

-21%

(4,796)

17%

(12,682)

(10,901)

16%

Other

(1,673)

(8,133)

-79%

(6,877)

-76%

(9,805)

(5,806)

69%

Total

(7,270)

(15,217)

-52%

(11,673)

-38%

(22,487)

(16,707)

35%

 

               

26

 


 
 

EARNINGS

RELEASE

2Q16

Adjusted EBITDA

Adjusted EBITDA was R$21.9 million in 2Q16, compared to adjusted EBITDA of R$22.8 million in 1Q16 and R$15.2 million in 2Q15. In 1H16, adjusted EBITDA was R$44.6 million compared to R$36.3 million in the last year.

Adjusted EBITDA margin was 8.4% in 2Q16 compared to an adjusted EBITDA margin of 6.3% in 2Q15 and 9.7% in the previous quarter. The y-o-y increase is attributable to: (i) higher volume of net sales in the period, contributing to a higher level of revenue; and (ii) better performance from Other Operating Revenues/Expenses due to a lower impact from non-recurring effects compared to the previous quarter.

In 1H16, adjusted EBITDA margin reached 19.0%.

 

Table 33. Tenda – Adjusted EBITDA (R$ 000)

 

2Q16

1Q16

Q/Q (%)

2Q15

Y/Y(%)

6M16

6M15

Y/Y(%)

Net (Loss) Profit

8,622

4,794

80%

20,035

-57%

13,416

31,481

-57%

(+) Financial results

450

1,897

-76%

(5,651)

-

2,347

(7,179)

-

(+) Income taxes

3,394

6,755

-50%

(6,032)

-

10,149

(1,222)

-

(+) Depreciation & Amortization

3,040

3,190

-5%

3,482

-13%

6,230

6,872

-9%

(+) Capitalized interests

5,544

5,515

1%

5,010

11%

11,059

7,757

43%

(+) Expenses with stock Option Plan

27

533

-95%

533

-95%

560

1,060

-47%

(+) Minority Shareholders

781

71

1000%

(2,156)

-

852

(2,434)

-

Adjusted EBITDA

21,858

22,755

-4%

15,221

44%

44,613

36,335

23%

Net Revenue

260,743

234,552

11%

243,137

7%

495,295

422,580

17%

Adjusted EBITDA Margin

8.4%

9.7%

-130 bps

6.3%

210 bps

9.0%

8.6%

40 bps

1) 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$125.9 million in 2Q16. The consolidated margin for the quarter was 41.8%.

Table 34. Tenda – Backlog Results (REF)  (R$ 000)

 

2Q16

1Q16

Q/Q(%)

2Q15

Y/Y(%)

Backlog Revenues

301,000

281,506

7%

237,309

27%

Backlog Costs (units sold)

(175,111)

(166,446)

5%

(138,261)

27%

Backlog Results

125,889

115,060

9%

99,048

27%

Backlog Margin

41.8%

40.9%

90 bps

41.7%

10 bps

                                  ¹ Backlog results net of PIS/COFINS taxes and excluding the impact of PVA (Present Value Adjustment) method according to Law 11.638

² Backlog results include ventures that are subject to restriction due to a suspensive clause.

 

 

27

 


 
 

EARNINGS

RELEASE

2Q16

 

Balance Sheet and Consolidated Financial Results

Cash and Cash Equivalents

 

On June 30, 2016, cash and cash equivalents and securities totaled R$618.6 million, down 21.9% from March 31, 2016.

 

Accounts Receivable

At the end of 2Q16, total consolidated accounts receivable reached R$2.3 billion, a decrease of 18.1% y-o-y and a decrease of 4.3% q-o-q.

The Gafisa and Tenda segments have approximately R$561.2. million in accounts receivable from finished units.

Table 35. Total Receivables (R$ 000)

 

2Q16

1Q16

Q/Q(%)

2Q15

Y/Y(%)

Receivables from developments
(off balance sheet)

692,650

735,725

-6%

935,530

-26%

Receivables from PoC- ST
(on balance sheet)

1,285,892

1,328,042

-3%

1,464,279

-12%

Receivables from PoC- LT
(on balance sheet)

354,931

374,614

-5%

450,243

-21%

Total

2,333,473

2,438,381

-4%

2,850,052

-18%

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$38.2 million in 2Q16. The Gafisa segment contributed cash generation of R$19.3 million. The volume of transferred/received units sold to financing agents reached R$142.7 million. The Tenda segment generated R$18.9 million in cash, with R$247.2 million transferred in 2Q16. In the year, the Company presented operating cash generation of R$134.9 million.

While consolidated operating cash generation reached R$38.2 million, the Company ended 2Q16 with net cash consumption of R$32.5 million, totaling R$4.2 million in 1H16. This result does not include the disbursement related to the share buyback program carried out in the period.

 

Table 36. Cash Generation (R$ 000)

 

4Q15*

1Q16

2Q16

Availabilities

712,311

792,076

618,569

Change in Availabilities (1)

 

79,766

(173,507)

Total Debt + Investor Obligations

2,155,688

2,207,114

2,074,335

Change in Total Debt + Investor Obligations (2)

 

51,425

(132,779)

Other Investments

210,761

210,761

218,956

Change in Other Investments (3)

 

-

8,195

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

 

28,340

(32,534)

Cash Generation Final

 

28,340

(4,193)

* The 4Q15 data refers only to the final balance of the period in order to help in the reconciliation of the balance changes in 2015.

**Cash and cash equivalents and titles and Securities

 

 

28

 


 
 

EARNINGS

RELEASE

2Q16

Liquidity

At the end of June 2016, the Company’s Net Debt/Equity ratio reached 48.5% compared to 46.5% in the previous quarter. Excluding project finance, the Net Debt/Equity ratio was negative 9.8%.

The Company's consolidated gross debt reached R$2.1 billion at the end of 2Q16, a decrease of 6.0% q-o-q, and 15.0% y-o-y. In the 2Q16, the Company amortized R$364.5 million in debt, of which R$215.1 million was project finance and R$149.4 million was corporate debt. A total of R$199.3 million was disbursed, allowing for a net amortization of R$165.2 million. R$541.4 million was amortized in 1H16, corresponding to 50.8% of total gross maturities in 2016. New releases of R$357.6 million took place in the first six months, R$325.9 million related to project debts and R$31.7 million related to corporate debt, thus allowing a net amortization in the first six months of R$183.8 million.

 

Table 37. Debt and Investor Obligations

 

2Q16

1Q16

Q/Q(%)

2Q15

Y/Y(%)

Debentures - FGTS (A)

551,968

672,793

-18%

784,992

-30%

Debentures – Working Capital (B)

186,075

186,295

0%

360,025

-48%

Project Financing SFH – (C)

1,196,948

1,187,049

1%

1,142,459

5%

Working Capital (D)

136,969

154,495

-11%

145,324

-6%

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

2,071,960

2,200,632

-6%

2,432,800

-15%

Investor Obligations (F)

2,375

6,482

-63%

7,296

-67%

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

2,074,335

2,207,114

-6%

2,440,096

-15%

Cash and Availabilities (H)

618,569

792,076

-22%

876,813

-29%

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

1,455,766

1,415,038

3%

1,563,283

-7%

Equity + Minority Shareholders (J)

3,001,290

3,046,284

-1%

3,099,492

-3%

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

48.5%

46.5%

200 bps

50.4%

-190 bps

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

-9.8%

-14.6%

480 bps

-11.7%

190 bps

*Cash and cash equivalents and titles and Securities

The Company ended 1H16 with R$1.1 billion in total debt due maturing in the short term. It should be noted, however, that 93.1% of this volume relates to debt linked to the Company's projects. Currently, the average cost of consolidated debt is 14.34% p.y., or 101.50% of the CDI.

Table 38. Debt Maturity

(R$ 000)

Average Cost (p.y.)

Total

Unitl Jun/17

Until Jun/18

Until Jun/19

Until Jun/20

After Jun/20

Debentures - FGTS (A)

TR + 9.02% - 10.19%

551.968

402.190

149.778

-

-

-

Debentures – Working Capital (B)

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

186.075

28.056

39.051

76.925

21.019

21.024

Project Financing SFH (C)

TR + 8.37% - 11.56% / 120.0% - 129.0% CDI

1.196.948

590.563

435.873

122.683

34.656

13.173

Working Capital (D)

CDI + 3.95% / 117.9% CDI / INCC

136.969

43.219

62.811

30.939

-

-

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

 

2.071.960

1.064.028

687.513

230.547

55.675

34.197

Investor Obligations (F)

CDI + 0.59%

2.375

2.375

-

-

-

-

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

 

2.074.335

1.066.403

687.513

230.547

55.675

34.197

% of Total Maturity per period

 

51,4%

33,1%

11,1%

2,7%

1,6%

Project debt maturing as % of total debt ((A)+ (C))/(G)

 

 

93,1%

85,2%

53,2%

62,2%

38,5%

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

 

6,9%

14,8%

46,8%

37,8%

61,5%

Ratio Corporate Debt / Mortgage

15,7% / 84,3%

 

 

 

 

 

 

 

29

 


 
 

EARNINGS

RELEASE

2Q16

 

Consolidated Financial Result

Revenue

 

On a consolidated basis, 2Q16 net revenue totaled R$473.3 million, up 16.7% compared to 1Q16 and down 20.0% from 2Q15. In the quarter, the Gafisa segment represented 44.9% of consolidated revenues, while Tenda accounted for the remaining 55.1%. In the first half of the year, net consolidated revenue reached R$878.9 million.

 

Gross Profit & Margin

Gross profit in 2Q16 was R$93.5 million, compared to R$72.2 million in 1Q16, and R$158.5 million in the prior year period. Gross margin for the quarter reached 19.8% compared to 17.8% in 1Q16 and 26.8% in 2Q15. In the first half of the year, gross profit was R$165.7 million, with a gross margin of 18.9%.

Adjusted gross profit totaled R$138.3 million, with a margin of 29.2%, compared to 27.2% in the 1Q16 and 33.9% in the previous year. In 1H16, adjusted gross profit totaled R$248.5 million with an adjusted gross margin of 28.3%.

Table 39. Gafisa Group– Gross Margin (R$ 000)

 

2Q16

1Q16

Q/Q (%)

2Q15

Y/Y(%)

6M16

6M15

Y/Y(%)

Net Revenue

473,371

405,534

17%

591,529

-20%

878,905

1,111,030

-21%

Gross Profit

93,491

72,201

29%

158,543

-41%

165,692

307,743

-46%

Gross Margin

19.8%

17.8%

200 bps

26.8%

-700 bps

18.9%

27.7%

-880 bps

( - ) Financial Costs

44,785

38,038

18%

41,843

7%

82,823

71,945

15%

Adjusted Gross Profit

138,276

110,239

25%

200,386

-31%

248,515

379,688

-35%

Adjusted Gross Margin

29.2%

27.2%

200 bps

33.9%

-470 bps

28.3%

34.2%

-590 bps

 

Selling, General and Administrative Expenses (SG&A)

SG&A expenses totaled R$82.2 million in 2Q16, down 8.3% compared to 2Q15 and up 1.5%  q.o.q. In 1H16, SG&A totaled R$163.3 million, up 1.7% from 1H15.

 

Table 40.Gafisa Group – SG&A Expenses (R$ 000)

 

2Q16

1Q16

Q/Q (%)

2Q15

Y/Y(%)

6M16

6M15

Y/Y(%)

Selling Expenses

(41,515)

(35,018)

19%

(40,635)

2%

(76,533)

(67,748)

13%

G&A Expenses

(40,701)

(46,022)

-12%

(49,070)

-17%

(86,723)

(92,738)

-6%

Total SG&A Expenses

(82,216)

(81,040)

1%

(89,705)

-8%

(163,256)

(160,486)

2%

Launches

545,038

308,648

77%

481,951

13%

853,686

795,532

7%

Net Pre- Sales

454,511

333,339

36%

532,131

-15%

787,850

955,475

-18%

Net Revenue

473,371

405,534

17%

591,529

-20%

878,905

1,111,030

-21%

 

The Other Operating Revenues/Expenses totaled an expense of R$26.2 million, a decrease of 12.0% from 1Q16 and 20.6% lower y-o-y. In 1H16, Other Operating Revenues/Expenses totaled an expense of R$56.0 million, 15.9% down from 1H15.

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

 

 

30

 


 
 

EARNINGS

RELEASE

2Q16

 

Table 41 –Gafisa Group – Other Operating Revenues/Expenses (R$ 000)

 

2Q16

1Q16

Q/Q (%)

2Q15

Y/Y(%)

6M16

6M15

Y/Y(%)

Litigation expenses

(21,058)

(22,888)

-8%

(29,418)

-28%

(43,946)

(55,488)

-21%

Other

(5,169)

(6,905)

-25%

(3,633)

42%

(12,074)

(11,118)

9%

Total

(26,227)

(29,793)

-12%

(33,051)

-21%

(56,020)

(66,606)

-16%

 

Consolidated Adjusted EBITDA

Consolidated adjusted EBITDA, including Alphaville equity income, totaled R$22.4 million in 2Q16, down from R$72.8 million in the prior-year period and up from R$15.5 million in 1Q16. 2Q16 consolidated adjusted EBITDA was impacted by the following factors: (i) a lower level of revenue in the quarter due to a lower volume of consolidated sales; and (ii) a lower gross margin in the period due to current market pricing. Consolidated adjusted EBITDA margin was 4.7%, compared with the 12.3% margin reported in 2Q15 and 3.8% in 1Q16. In 6M16, consolidated EBITDA reached R$37.9 million, with a margin of R$4.3%.

 

Table 42. Gafisa Group – Consolidated Adjusted EBITDA (R$ 000)

 

2Q16

1Q16

Q/Q (%)

2Q15

Y/Y(%)

6M16

6M15

Y/Y(%)

Net Profit (Loss)

(38,439)

(53,227)

-28%

28,487

-

(91,665)

60,137

-

(+) Financial results

2,489

1,941

28%

(2,685)

-

4,430

5,531

-20%

(+) Income taxes

2,973

12,745

-77%

(5,754)

-

15,718

6,406

145%

(+) Depreciation & Amortization

8,684

12,698

-32%

11,561

-25%

21,382

23,230

-8%

(+) Capitalized interests

44,785

38,038

18%

41,843

7%

82,823

71,945

15%

(+) Expenses with stock Option Plan

1,327

2,424

-45%

2,383

-44%

3,751

5,001

-25%

(+) Minority Shareholders

578

876

-34%

(3,004)

-

1,453

(3,053)

-

Adjusted EBITDA

22,397

15,495

45%

72,831

-69%

37,892

169,197

-78%

Net Revenue

473,371

405,534

17%

591,529

-20%

878,905

1,111,030

-21%

Adjusted EBITDA Margin

4.7%

3.8%

90 bps

12.3%

-760 bps

4.3%

15.2%

-1,090 bps

          1) We adjust our EBITDA for expenses associated with stock options plans, as it is a non-cash expense;

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

 

Depreciation and Amortization

Depreciation and amortization in 2Q16 reached R$8.7 million, down 31.6% compared to 1Q16 and down 24.9% compared to R$11.6 million in 2Q15. D&A is now in line with Company’s current level of operations.

 

Financial Results

2Q16 net financial result was negative R$2.5 million, down from negative R$1.9 million in 1Q16 and from the positive R$2.7 million in 2Q15. Financial revenues were down 48.5% y-o-y, totaling R$22.8 million, due to the lower balance of funds available in the period. Financial expenses reached R$25.3 million, compared to R$41.6 million in 2Q15, due to lower gross debt and a higher share of project-related debt compared to corporate debt, resulting in lower cost of funding. Year-to-date, the net financial result was negative R$4.4 million, compared to a net loss of R$5.5 million in 2Q15. It is worth mentioning that in 1H16, there was a positive result of the mark-to-market of hedging operations against IPCA and CDI-indexed debts.

 

 

31


 
 

EARNINGS

RELEASE

2Q16

Taxes

Income taxes, social contribution and deferred taxes for 2Q16 amounted to an expense of R$3.0 million, due to subsidiaries’ adhesion, especially in Tenda segment related to the Tax Special Regime (RET). In 1H16, the IR & CSLL expense totaled R$15.7 million.

 

Net Income

The Company ended the 2Q16 with a net loss of R$38.5 million. Excluding the equity income from AUSA, the Company recorded a net loss of R$26.5 million, compared to a net loss of R$64.1 million in 1Q16 and net income of R$23.3 million in the same period last year. The Company ended the 1H16 with a net loss of R$91.7 million, including equity income from Alphaville, compared to net income of R$60.1 million in the same period last year.

 

Table 43 - Consolidated - Net Income - (R$ 000)

 

2Q16

1Q16

Q/Q (%)

2Q15

Y/Y(%)

6M16

6M15

Y/Y(%)

Net Revenue

473,371

405,534

17%

591,529

-20%

878,905

1,111,030

-21%

Gross Profit

93,491

72,201

29%

158,543

-41%

165,692

307,743

-46%

Gross Margin

19.8%

17.8%

200 bps

26.8%

-700 bps

18.9%

27.7%

-880 bps

Adjusted Gross Profit1

138,276

110,239

25%

200,386

-31%

248,515

379,688

-35%

Adjusted Gross Margin1

29.2%

27.2%

200 bps

33.9%

-470 bps

28.3%

34.2%

-590 bps

Adjusted EBITDA2

22,397

15,495

45%

72,831

-69%

37,892

169,197

-78%

Adjusted EBITDA Margin

4.7%

3.8%

90 bps

12.3%

-760 bps

4.3%

15.2%

-1,090 bps

Net Income

(38,439)

(53,227)

-28%

28,487

-

(91,665)

60,137

-

( - ) Alphaville Equity Income

(11,952)

10,880

-

5,210

-

(1,072)

22,170

-

Net income ( ex-AUSA equity income)

(26,487)

(64,107)

-59%

23,277

-

(90,594)

37,967

-

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$259.9 million in 2Q16. The consolidated margin for the quarter was 38.9%.

 

Table 44.Gafisa Group – Backlog Results (REF) (R$ 000)

 

2Q16

1Q16

Q/Q %)

2Q15

Y/Y(%)

Backlog Revenues

667,368

708,871

-6%

901,383

-26%

Backlog Costs (units sold)

(407,504)

(433,841)

-6%

(537,145)

-24%

Backlog Results

259,864

275,030

-6%

364,238

-29%

Backlog Margin

38.9%

38.8%

10 bps

40.4%

-150 bps

¹ Backlog results net of PIS/COFINS taxes (3.65%), and excluding the impact of PVA (Present Value Adjustment) method according to Law 11.638

² Backlog results include ventures that are subject to restriction due to a suspensive clause.

 

 

 

 

 

 

32


 
 

EARNINGS

RELEASE

2Q16

 

 

 

 

 

 

 

São Paulo, August 11, 2016 – Alphaville Urbanismo SA releases its results for the 1st semester of 2016.

 

Financial Results

In the first six months of 2016, net revenues totaled R$391 million, 23% below the previous year, and net profit was -R$3.6 million.

 

 

 

1Q16

1Q15

Net Revenue

391

507

-23%

Net Profit

- 3.6

52.6

N/A

Net Margin

-1%

10%

 

 

 

 

 

 

 

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

 

 

 

33


 
 

EARNINGS

RELEASE

2Q16

Financial Statements Gafisa Segment

 

2Q16

1Q16

Q/Q (%)

2Q15

Y/Y(%)

6M16

6M15

Y/Y(%)

Net Revenue

212,628

170,982

24%

348,392

-39%

383,610

688,450

-44%

Operating Costs

(186,544)

(167,526)

11%

(258,124)

-28%

(354,070)

(500,035)

-29%

Gross Profit

26,084

3,456

655%

90,268

-71%

29,540

188,415

-84%

Gross Margin

12.3%

2.0%

1,030 bps

25.9%

-1,360 bps

7.7%

27.4%

-1,970 bps

Operating Expenses

(71,730)

(54,638)

31%

(79,420)

-10%

(126,368)

(140,040)

-10%

Selling Expenses

(20,245)

(16,746)

21%

(22,976)

-12%

(36,991)

(37,068)

0%

General and Administrative Expenses

(19,524)

(27,002)

-28%

(27,466)

-29%

(46,526)

(56,351)

-17%

Other Operating Revenue/Expenses

(18,957)

(14,576)

30%

(21,378)

-11%

(33,533)

(49,899)

-33%

Depreciation and Amortization

(5,644)

(9,508)

-41%

(8,079)

-30%

(15,152)

(16,358)

-7%

Equity Income

(7,360)

13,194

-

479

-

5,834

19,636

-70%

Operational Result

(45,646)

(51,182)

-11%

10,848

-

(96,828)

48,375

-

Financial Income

14,208

26,806

-27%

19,978

-39%

41,014

39,255

-27%

Financial Expenses

(16,247)

(26,850)

-39%

(22,944)

-29%

(43,097)

(51,965)

-17%

Net Income Before taxes on Income

(47,685)

(51,226)

-7%

7,882

-

(98,911)

35,665

-

Deferred Taxes

(1)

964

-

(1,028)

-100%

963

(3,866)

-125%

Income Tax and Social Contribution

422

(6,954)

-

750

-44%

(6,532)

(3,762)

74%

Net Income After Taxes on Income

(47,264)

(57,216)

-17%

7,604

-

(104,480)

28,037

-

Minority Shareholders

(203)

805

-125%

(848)

-76%

602

(619)

-

Net Income

(47,061)

(58,021)

-19%

8,452

-

(105,082)

28,656

-

 

 

 

34

 


 
 

EARNINGS

RELEASE

2Q16

Financial Statements Tenda Segment

 

2Q16

1Q16

Q/Q (%)

2Q15

Y/Y(%)

6M16

6M15

Y/Y(%)

Net Revenue

260,743

234,552

11%

243,137

7%

495,295

422,580

17%

Operating Costs

(193,336)

(165,807)

17%

(174,862)

11%

(359,143)

(303,252)

18%

Gross Profit

67,407

68,745

-2%

68,275

-1%

136,152

119,328

14%

Gross Margin

25.9%

29.3%

-340 bps

28.1%

-220 bps

27.5%

28.2%

-70 bps

Operating Expenses

(54,160)

(55,228)

-2%

(62,079)

-13%

(109,388)

(98,682)

11%

Selling Expenses

(21,270)

(18,272)

16%

(17,659)

20%

(39,542)

(30,680)

29%

General and Administrative Expenses

(21,177)

(19,020)

11%

(21,604)

-2%

(40,197)

(36,387)

10%

Other Operating Revenue/Expenses

(7,270)

(15,217)

-52%

(11,673)

-38%

(22,487)

(16,707)

35%

Depreciation and Amortization

(3,040)

(3,190)

-5%

(3,482)

-13%

(6,230)

(6,872)

-9%

Equity Income

(1,403)

471

-

(7,661)

-82%

(932)

(8,036)

-88%

Operational Result

13,247

13,517

-2%

6,196

114%

26,764

20,646

30%

Financial Income

8,586

8,809

-3%

24,292

-65%

17,395

37,627

-54%

Financial Expenses

(9,036)

(10,706)

-16%

(18,641)

-52%

(19,742)

(30,448)

-35%

Net Income Before taxes on Income

12,797

11,620

10%

11,847

8%

24,417

27,825

-12%

Deferred Taxes

(169)

(3,496)

-95%

7,154

-

(3,665)

3,866

-

Income Tax and Social Contribution

(3,225)

(3,259)

-1%

(1,122)

187%

(6,484)

(2,644)

145%

Net Income After Taxes on Income

9,403

4,865

93%

17,879

-47%

14,268

29,047

-51%

Minority Shareholders

781

71

1000%

(2,156)

-

852

(2,434)

-

Net Income

8,622

4,794

80%

20,035

-57%

13,416

31,481

-57%

 

 

 

35


 
 

EARNINGS

RELEASE

2Q16

Consolidated Financial Statements

 

 

2Q16

1Q16

Q/Q (%)

2Q15

Y/Y(%)

6M16

6M15

Y/Y(%)

Net Revenue

473,371

405,534

17%

591,529

-20%

878,905

1,111,030

-21%

Operating Costs

(379,880)

(333,333)

14%

(432,986)

-12%

(713,213)

(803,287)

-11%

Gross Profit

93,491

72,201

29%

158,543

-41%

165,692

307,743

-46%

Gross Margin

19.8%

17.8%

200 bps

26.8%

-700 bps

18.9%

27.7%

-880 bps

Operating Expenses

(125,890)

(109,866)

15%

(141,499)

-11%

(235,756)

(238,722)

-1%

Selling Expenses

(41,515)

(35,018)

19%

(40,635)

2%

(76,533)

(67,748)

13%

General and Administrative Expenses

(40,701)

(46,022)

-12%

(49,070)

-17%

(86,723)

(92,738)

-6%

Other Operating Revenue/Expenses

(26,227)

(29,793)

-12%

(33,051)

-21%

(56,020)

(66,606)

-16%

Depreciation and Amortization

(8,684)

(12,698)

-32%

(11,561)

-25%

(21,382)

(23,230)

-8%

Equity Income

(8,763)

13,665

-

(7,182)

22%

4,902

11,600

-58%

Operational Result

(32,399)

(37,665)

-14%

17,044

-

(70,064)

69,021

-

Financial Income

22,794

35,615

-18%

44,270

-53%

58,409

76,882

-40%

Financial Expenses

(25,283)

(37,556)

-33%

(41,585)

-39%

(62,839)

(82,413)

-24%

Net Income Before taxes on Income

(34,888)

(39,606)

-12%

19,729

-

(74,494)

63,490

-

Deferred Taxes

(170)

(2,532)

-93%

6,126

-

(2,702)

826

-427%

Income Tax and Social Contribution

(2,803)

(10,213)

-73%

(372)

653%

(13,016)

(7,232)

80%

Net Income After Taxes on Income

(37,861)

(52,351)

-28%

25,483

-

(90,212)

57,084

-

Minority Shareholders

578

876

-34%

(3,004)

-

1,453

(3,053)

-

Net Income

(38,439)

(53,227)

-28%

28,487

-

(91,665)

60,137

-

 

 

 

36


 
 

EARNINGS

RELEASE

2Q16

Balance Sheet Gafisa Segment

 

2Q16

1Q16

Q/Q %)

2Q15

Y/Y(%)

Current Assets

 

 

 

 

 

Cash and cash equivalents

41,190

41,146

0%

66,592

-38%

Securities

263,161

416,008

-37%

475,092

-45%

Receivables from clients

873,183

899,525

-3%

1,030,823

-15%

Properties for sale

1,560,318

1,444,672

8%

1,133,046

38%

Other accounts receivable

106,207

135,939

-22%

225,848

-53%

Deferred selling expenses

1,489

1,656

-10%

4,406

-66%

Land for sale

3,443

6,631

-48%

6,074

-43%

 

2,848,991

2,945,577

-3%

2,941,881

-3%

Long-term Assets

 

 

 

 

 

Receivables from clients

287,401

328,097

-12%

410,855

-30%

Properties for sale

412,917

494,122

-16%

715,740

-42%

Other

143,984

175,099

-18%

171,972

-16%

 

844,302

997,318

-15%

1,298,567

-35%

Intangible. Property and Equipment

55,238

53,671

3%

60,195

-8%

Investments

1,986,262

1,979,277

0%

1,963,775

1%

Total Assets

5,734,793

5,975,843

-4%

6,264,418

-8%

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

Loans and financing

622,546

621,921

0%

582,668

7%

Debentures

255,771

192,684

33%

268,943

-5%

Obligations for Purchase of Land and

advances from customers

221,710

251,101

-12%

228,010

-3%

Material and service suppliers

42,903

50,439

-15%

76,943

-44%

Taxes and Contribution

23,370

59,331

-61%

60,640

-61%

Investor Obligations

-

5,342

-100%

5,016

-100%

Other

385,503

397,516

-3%

433,116

-11%

 

1,551,803

1,578,334

-2%

1,655,336

-6%

Long-term liabilities

 

 

 

 

 

Loans and financings

619,501

633,699

-2%

668,119

-7%

Debentures

307,797

459,344

-33%

568,589

-46%

Obligations for Purchase of Land and

advances from customers

87,646

93,572

-6%

117,839

-26%

Deferred taxes

10,226

10,085

1%

28,589

-64%

Provision for contigencies

107,443

81,542

32%

75,190

43%

Investor Obligations

2,375

1,140

108%

4,713

-50%

Other

45,375

70,186

-35%

45,109

1%

 

1,180,363

1,349,568

-13%

1,508,148

-22%

Shareholders’ Equity

 

 

 

 

 

Shareholders’ Equity

2,998,074

3,043,669

-1%

3,097,879

-3%

Minority Shareholders

4,553

4,272

7%

3,055

49%

 

3,002,627

3,047,941

-1%

3,100,934

-3%

Total Liabilities and Shareholders’ Equity

5,734,793

5,975,843

-4%

6,264,418

-8%

 

 

37


 
 

EARNINGS

RELEASE

2Q16

Balance Sheet Tenda Segment

 

2Q16

1Q16

Q/Q %)

2Q15

Y/Y(%)

Current Assets

 

 

 

 

 

Cash and cash equivalents

116,547

102,571

14%

87,637

33%

Securities

197,671

232,351

-15%

247,492

-20%

Receivables from clients

412,709

428,517

-4%

433,456

-5%

Properties for sale

503,352

513,414

-2%

487,252

3%

Other accounts receivable

104,090

103,485

1%

132,872

-22%

Land for sale

84,060

93,898

-10%

117,452

-28%

 

1,418,429

1,474,236

-4%

1,506,161

-6%

Long-term Assets

 

 

 

 

 

Receivables from clients

67,530

46,517

45%

39,388

71%

Properties for sale

216,894

212,843

2%

179,759

21%

Other

48,649

47,423

3%

64,441

-25%

 

333,073

306,783

9%

283,588

17%

Intangible, Property and Equipment

44,516

41,503

7%

38,018

17%

Investments

160,295

163,820

-2%

155,891

3%

Total Assets

1,956,313

1,986,342

-2%

1,983,658

-1%

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

Loans and financing

11,236

7,586

48%

7,655

47%

Debentures

174,475

207,060

-16%

207,485

-16%

Obligations for Purchase of Land and

Advances from customers

138,672

136,238

2%

158,181

-12%

Material and service suppliers

34,818

29,806

17%

32,074

9%

Taxes and Contributions

65,564

73,531

-11%

73,227

-10%

Other

65,201

72,434

-10%

94,995

-31%

 

489,966

526,655

-7%

573,617

-15%

Long-term liabilities

 

 

 

 

 

Loans and financings

80,634

78,337

3%

29,341

175%

Debentures

-

-

0%

100,000

-100%

Obligations for Purchase of Land and

Advances from customers

97,870

102,869

-5%

57,809

69%

Deferred taxes

10,224

10,090

1%

4,493

128%

Provision for contigencies

52,760

56,237

-6%

57,707

-9%

Other

83,217

79,942

4%

35,695

133%

 

324,705

327,475

-1%

285,045

14%

Shareholders’ Equity

 

 

 

 

 

Shareholders’ Equity

1,104,912

1,096,263

1%

1,091,018

1%

Minority Shareholders

36,730

35,949

2%

33,978

8%

 

1,141,642

1,132,212

1%

1,124,996

1%

Total liabilities and Shareholders’ Equity

1,956,313

1,986,342

-2%

1,983,658

-1%

 

38


 
 

EARNINGS

RELEASE

2Q16

Consolidated Balance Sheets

 

2Q16

1Q16

Q/Q %)

2Q15

Y/Y(%)

Current Assets

 

 

 

 

 

Cash and cash Equivalents

157,737

143,717

10%

154,229

2%

Securities

460,832

648,359

-29%

722,584

-36%

Receivables from clients

1,285,892

1,328,042

-3%

1,464,279

-12%

Proprieties for Sale

2,063,670

1,958,087

5%

1,620,297

27%

Other accounts receivable

206,532

205,249

1%

322,469

-36%

Prepaid expenses and others

5,255

6,474

-19%

10,293

-49%

Land for Sale

87,503

100,529

-13%

123,526

-29%

 

4,267,421

4,390,457

-3%

4,417,677

-3%

Long-term Assets

 

 

 

 

 

Receivable from clients

354,931

374,614

-5%

450,243

-21%

Properties for sale

629,811

706,965

-11%

895,500

-30%

Other

192,631

207,555

-7%

221,448

-13%

 

1,177,373

1,289,134

-9%

1,567,191

-25%

Intangible and Property and Equipment

125,230

120,650

4%

123,689

1%

Investments

978,100

979,712

0%

963,989

1%

Total Assets

6,548,124

6,779,953

-3%

7,072,546

-7%

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

Loans and Financing

633,782

629,508

1%

590,323

7%

Debentures

430,246

399,744

8%

476,428

-10%

Obligations for purchase of land and

Advances from customers

360,382

387,339

-7%

386,192

-7%

Materials and service suppliers

77,721

80,245

-3%

109,017

-29%

Taxes and contributions

88,934

97,074

-8%

107,483

-17%

Other

450,702

481,718

-6%

529,144

-15%

 

2,041,767

2,075,628

-2%

2,198,587

-7%

Long-term Liabilities

 

 

 

 

 

Loans and Financing

700,135

712,036

-2%

697,460

0%

Debentures

307,797

459,344

-33%

668,589

-54%

Obligations for purchase of land and

Advances from customers

185,516

196,441

-6%

175,649

6%

Deferred taxes

20,450

20,175

1%

33,081

-38%

Provision for contigencies

160,203

145,214

10%

139,208

15%

Other

130,966

124,831

5%

60,480

117%

 

1,505,067

1,658,041

-9%

1,774,467

-15%

Shareholders’ Equity

 

 

 

 

 

Shareholders’ Equity

2,998,075

3,043,671

-1%

3,097,881

-3%

Minority Shareholders

3,215

2,613

23%

1,611

100%

 

3,001,290

3,046,284

-1%

3,099,492

-3%

Total liabilities and Shareholders’ Equity

6,548,124

6,779,953

-3%

7,072,546

-7%

 

 

39


 
 

EARNINGS

RELEASE

2Q16

Cash Flow

 

 

2Q16

2Q15

6M16

6M15

Income Before Taxes on Income and Social Contribution

(34,888)

19,729

(74,494)

63,490

Expenses/income not affecting working capital

64,777

91,830

124,645

136,363

Depreciation and amortization

8,684

11,561

21,382

23,230

Provision for realization of non - financial assets - Properties and land for sale

(17,221)

4,375

(17,221)

4,375

Expense with stock option plan and shares

1,327

2,383

3,751

5,001

Penalty provision fee over delayed projects

1,244

1,136

731

(943)

Unrealized interest and financial charges

26,221

21,249

52,728

37,663

Equity income

8,763

7,182

(4,902)

(11,600)

Disposal of fixed asset

1,716

842

3,353

1,058

Provision for warranty

(4,345)

1,904

(9,966)

8,829

Provision for lawsuits

21,058

29,418

43,946

55,488

Profit Participation provision

4,126

9,124

12,468

12,038

Allowance for doubtful credit sales and dissolutions

15,234

(1,122)

30,591

(805)

Write-off of Investment

-

2,188

-

(2,317)

Income from financial instruments

(2,030)

1,590

(12,216)

4,346

Clients

51,251

(12,739)

130,464

(78,034)

Properties for sale

(8,056)

14,566

(37,369)

(43,117)

Other accounts receiveable

(19,136)

(26,134)

(27,000)

(11,403)

Pre-paid expenses

1,219

5,030

1,916

5,150

Obligations on land purchase and advances from clients

(37,882)

(13,082)

(64,036)

(29,902)

Taxes and contribution

(8,140)

(3,450)

(13,123)

(6,941)

Providers

(2,524)

6,627

20,386

13,886

Salaries and payroll charges

(24,679)

(21,686)

(21,329)

(17,397)

Other obligations

(2,886)

(49,627)

(15,683)

(61,512)

Related parts operations

8,862

(11,536)

18,238

(10,022)

Paid taxes

(2,973)

5,754

(15,718)

(6,406)

Net cash Operating Activities

(15,055)

5,282

26,897

(45,845)

Investments Activities

 

 

 

 

Purchase of fixed and intangible asset

(14,980)

(16,732)

(23,447)

(22,383)

Capital raise in subsidiaries

(10,188)

-

(12,639)

-

Redemption of financial aplication

(932,808)

952,732

(1,740,607)

2,133,082

Funding financial investments

1,120,335

(783,891)

1,909,446

(1,808,307)

Net cash of investing activities

162,359

151,322

132,753

301,430

Financing activities

 

 

 

 

Investors obligations

(4,107)

(6,134)

(2,520)

(3,734)

Increase in loans and financing

241,100

182,351

441,389

382,672

Amortization of loans and financing

(395,993)

(408,754)

(572,950)

(574,060)

Stock buyback in treasury

(8,195)

-

(8,195)

(22,135)

Assignment of credit receivables, net

13,835

-

41,809

-

Mutual Operations with related parts

20,071

4,825

15,909

5,412

Sale of treasury shares

1,230

1,811

1,230

1,810

Result from the sale of treasury shares

(1,225)

(1,217)

(1,225)

(1,216)

Net cash of financing activities

(133,284)

(227,118)

(84,553)

(211,251)

Increase (decrease) in cash and cash equivalents

14,020

(70,514)

75,097

44,334

Initial balance of cash and cash equivalents

82,640

224,743

82,640

109,895

Final balance of cash and cash equivalence

157,737

154,229

157,737

154,229

Increase (decrease) of cash and cash equivalents

14,020

(70,514)

75,097

44,334

 

 

40


 
 

EARNINGS

RELEASE

2Q16

 
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.

 

 

 

 

41

 

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 11, 2016
 
Gafisa S.A.
 
By:
/s/ Sandro Gamba

 
Name:   Sandro Gamba
Title:     Chief Executive Officer