gfaitr2q16_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


 
 

 

 

 

 

 

Gafisa S.A.

 

Quarterly information

June 30, 2016

(A free translation of the original report in Portuguese as published in
Brazil containing Quarterly Information (ITR) prepared in
accordance with accounting practices adopted in Brazil)

 

 

 

 

 

 


 
 

Company data 

 

Capital Composition 

1 

Individual financial statements 

 

Balance sheet - Assets 

2 

Balance sheet - Liabilities 

3 

Statement of income 

4 

Statement of comprehensive income (loss) 

5 

Statement of cash flows 

6 

Statements of changes in Equity 

 

01/01/2016 to 06/30/2016 

7 

01/01/2015 to 06/30/2015 

8 

Statement of value added 

9 

Consolidated Financial Statements 

 

Balance sheet - Assets 

10 

Balance sheet - Liabilities 

11 

Statement of income 

12 

Statement of comprehensive income (loss) 

13 

Statement of cash flows 

14 

Statements of changes in Equity 

 

01/01/2016 to 06/30/2016 

15 

01/01/2015 to 06/30/2015 

16 

Statement of value added 

17 

Comments on performance 

18 

Notes to interim financial information 

59 

Other information deemed relevant by the Company 

94 

Reports and statements 

 

Report on review of interim financial information 

97 

Management statement of interim financial information 

99 

Management statement on the report on review of interim financial information 

100 

 

 
 

COMPANY DATA / CAPITAL COMPOSITION

Number of Shares

CURRENT QUARTER

(in thousands)

6/30/2016

Paid-in Capital

 

Common

378,066

Preferred

-

Total

378,066

Treasury shares

 

Common

14,440

Preferred

-

Total

14,440

     

 

 

 

1

 


 
 

INDIVIDUAL FINANCIAL STATEMENTS - BALANCE SHEET - ASSETS (in thousands of Brazilian Reais)

 

CODE

DESCRIPTION

ACTUAL QUARTER

 6/30/2016

PRIOR YEAR

12/31/2015

1

Total Assets

6,401,691

6,492,901

1.01

Current Assets

2,349,043

2,384,773

1.01.01

Cash and cash equivalents

19,166

44,044

1.01.01.01

Cash and banks

19,166

31,823

1.01.01.02

Short-term investments

-

12,221

1.01.02

Short-term investments

218,823

350,343

1.01.02.01

Fair value of short-term investments

218,823

350,343

1.01.03

Accounts receivable

700,909

723,950

1.01.03.01

Trade accounts receivable

700,909

723,950

1.01.03.01.01

Receivables from clients of developments

678,550

705,367

1.01.03.01.02

Receivables from clients of construction and services rendered

22,359

18,583

1.01.04

Inventories

1,277,427

1,135,137

1.01.04.01

Properties for sale

1,277,427

1,135,137

1.01.07

Prepaid expenses

1,198

1,901

1.01.07.01

Prepaid expenses and others

1,198

1,901

1.01.08

Other current assets

131,520

129,398

1.01.08.01

Non current assets for sale

3,443

4,367

1.01.08.03

Other

128,077

125,031

1.01.08.03.01

Other accounts receivable and others

58,848

46,621

1.01.08.03.03

Receivables from related parties

69,229

78,410

1.02

Non current assets

4,052,648

4,108,128

1.02.01

Non current assets

636,832

809,233

1.02.01.03

Accounts receivable

186,914

262,092

1.02.01.03.01

Receivables from clients of developments

186,914

262,092

1.02.01.04

Inventories

292,983

387,375

1.02.01.09

Others non current assets

156,935

159,766

1.02.01.09.03

Others accounts receivable and others

82,449

80,948

1.02.01.09.04

Receivables from related parties

66,717

78,818

1.02.01.09.05

Derivative Financial Instruments

7,769

-

1.02.02

Investments

3,361,576

3,242,765

1.02.02.01

Interest in associates and affiliates

3,273,296

3,154,946

1.02.02.02

Interest in subsidiaries

88,280

87,819

1.02.02.02.01

Interest in subsidiaries - goodwill

88,280

87,819

1.02.03

Property and equipment

23,632

22,819

1.02.03.01

Operation property and equipment

23,632

22,819

1.02.04

Intangible assets

30,608

33,311

1.02.04.01

Intangible assets

30,608

33,311

 

 

2

 


 
 

INDIVIDUAL FINANCIAL STATEMENTS - BALANCE SHEET - LIABILITIES AND EQUITY (in thousands of Brazilian Reais)

CODE

DESCRIPTION

ACTUAL QUARTER

6/30/2016

PRIOR YEAR

 12/31/2015

2

Total Liabilities

6,401,691

6,492,901

2.01

Current liabilities

2,311,476

2,105,504

2.01.01

Social and labor obligations

20,854

26,758

2.01.01.02

Labor obligations

20,854

26,758

2.01.01.02.01

Salaries, payroll charges and profit sharing

20,854

26,758

2.01.02

Suppliers

36,117

32,115

2.01.02.01

Local suppliers

36,117

32,115

2.01.03

Tax obligations

36,518

40,902

2.01.03.01

Federal tax obligations

36,518

40,902

2.01.04

Loans and financing

818,454

783,561

2.01.04.01

Loans and financing

562,684

595,817

2.01.04.02

Debentures

255,770

187,744

2.01.05

Other obligations

1,311,866

1,121,856

2.01.05.01

Payables to related parties

980,078

801,375

2.01.05.02

Other

331,788

320,481

2.01.05.02.01

Dividends and interest on capital payable

17,682

17,682

2.01.05.02.04

Obligations for purchase of properties and advances from customers

158,249

148,989

2.01.05.02.05

Other obligations

123,735

127,123

2.01.05.02.07

Obligations assumed on the assignment of receivables

23,111

12,631

2.01.05.02.08

Derivative financial instruments

9,011

14,056

2.01.06

Provisions

87,667

100,312

2.01.06.01

Tax, labor and civil lawsuits

87,667

100,312

2.01.06.01.01

Tax lawsuits

220

220

2.01.06.01.02

Labor lawsuits

7,975

15,516

2.01.06.01.04

Civil lawsuits

79,472

84,576

2.02

Non current liabilities

1,092,140

1,291,906

2.02.01

Loans and financing

845,207

1,011,180

2.02.01.01

Loans and financing

537,410

542,843

2.02.01.01.01

Loans and financing in local currency

537,410

542,843

2.02.01.02

Debentures

307,797

468,337

2.02.02

Other liabilities

134,308

188,078

2.02.02.02

Other

134,308

188,078

2.02.02.02.03

Obligations for purchase of properties and advances from customers

86,298

143,216

2.02.02.02.04

Other liabilities

9,369

15,028

2.02.02.02.06

Obligations assumed on the assignment of receivables

38,641

22,216

2.02.02.02.07

Derivative financial instruments

-

7,618

2.02.03

Deferred taxes

10,085

10,085

2.02.03.01

Deferred income tax and social contribution

10,085

10,085

2.02.04

Provisions

102,540

82,563

2.02.04.01

Tax, labor and civil lawsuits

102,540

82,563

2.02.04.01.02

Tax and labor lawsuits

53,374

47,719

2.02.04.01.04

Civil lawsuits

49,166

34,844

2.03

Equity

2,998,075

3,095,491

2.03.01

Capital

2,740,662

2,740,662

2.03.02

Capital Reserves

46,328

50,854

2.03.02.04

Granted options

150,745

148,051

2.03.02.05

Treasury shares

-33,200

-25,980

2.03.02.07

Reserve for expenditures with public offering

-71,217

-71,217

2.03.04

Income Reserve

302,750

303,975

2.03.04.01

Legal Reserve

35,316

35,316

2.03.04.02

Statutory Reserve

267,434

268,659

2.03.05

Retained earnings/accumulated losses

-91,665

-

 

 

3

 


 
 

INDIVIDUAL FINANCIAL STATEMENTS - INCOME - (in thousands of Brazilian Reais)

     

CODE

DESCRIPTION

ACTUAL QUARTER

04/01/2016 to 06/30/2016

YEAR TO DATE

 01/01/2016 to

 06/30/2016

SAME QUARTER FROM PREVIOUS YEAR

04/01/2015 to

06/30/2015

YEAR TO DATE FROM

 PREVIOUS YEAR

 01/01/2015 to

 06/30/2015

3.01

Gross Sales and/or Services

159,168

286,141

282,207

552,608

3.01.01

Revenue from real estate development

173,838

311,851

309,310

606,491

3.01.03

Taxes on real estate sales and services

-14,670

-25,710

-27,103

-53,883

3.02

Cost of sales and/or services

-140,052

-264,918

-206,149

-409,323

3.02.01

Cost of real estate development

-140,052

-264,918

-206,149

-409,323

3.03

Gross profit

19,116

21,223

76,058

143,285

3.04

Operating expenses/income

-53,171

-106,302

-41,039

-60,353

3.04.01

Selling expenses

-17,606

-32,017

-19,468

-30,991

3.04.02

General and administrative expenses

-19,523

-46,525

-27,466

-56,350

3.04.05

Other operating expenses

-24,888

-46,683

-28,098

-63,181

3.04.05.01

Depreciation and amortization

-6,028

-14,100

-7,508

-15,397

3.04.05.02

Other operating expenses

-18,860

-32,583

-20,590

-47,784

3.04.06

Income from equity method investments

8,846

18,923

33,993

90,169

3.05

Income (loss) before financial results and income taxes

-34,055

-85,079

35,019

82,932

3.06

Financial

-6,612

-6,586

-9,988

-22,795

3.06.01

Financial income

11,820

35,677

17,276

35,432

3.06.02

Financial expenses

-18,432

-42,263

-27,264

-58,227

3.07

Income before income taxes

-40,667

-91,665

25,031

60,137

3.08

Income and social contribution taxes

2,228

-

3,456

-

3.08.01

Current

2,228

-

3,456

-

3.09

Income (loss) from continuing operation

-38,439

-91,665

28,487

60,137

3.11

Income (loss) for the period

-38,439

-91,665

28,487

60,137

3.99

Earnings per Share – (Reais / Share)

-

-

-

-

3.99.01

Basic Earnings per Share

-

-

-

-

3.99.01.01

ON

-0.10530

-0.25120

0.07750

0.16370

3.99.02

Diluted Earnings per Share

-

-

-

-

3.99.02.01

ON

-0.10530

-0.25120

0.07697

0.16250

 

 

4

 


 
 

INDIVIDUAL FINANCIAL STATEMENTS - COMPREHENSIVE INCOME (LOSS) - (in thousands of Brazilian Reais)

   

CODE

DESCRIPTION

ACTUAL

QUARTER

04/01/2016 to

 06/30/2016

YEAR TO DATE

 01/01/2016 to

 06/30/2016

SAME QUARTER FROM PREVIOUS YEAR

 04/01/2015 to

06/30/2015

YEAR TO DATE FROM PREVIOUS YEAR

01/01/2015 to

 06/30/2015

4.01

Income (loss) for the period

-38,439

-91,665

28,487

60,137

4.03

Comprehensive income (loss) for the period

-38,439

-91,665

28,487

60,137

 

 

 

 

 

 

5

 


 
 

INDIVIDUAL FINANCIAL STATEMENTS - CASH FLOWS - INDIRECT METHOD - (in thousands of Brazilian Reais)

CODE

DESCRIPTION

YEAR TO DATE

 01/01/2016 to

 06/30/2016

YEAR TO DATE FROM

PREVIOUS YEAR

01/01/2015 to

 06/30/2015

6.01

Net cash from operating activities

12,245

-74,260

6.01.01

Cash generated in the operations

-35,596

89,918

6.01.01.01

Income (loss) before income and social contribution taxes

-91,665

60,137

6.01.01.02

Income from equity method investments

-18,923

-90,169

6.01.01.03

Stock options expenses

3,189

3,940

6.01.01.04

Unrealized interest and finance charges, net

41,752

31,077

6.01.01.05

Financial instruments

-12,216

4,346

6.01.01.06

Depreciation and amortization

14,100

15,397

6.01.01.07

Provision for legal claims

30,405

42,532

6.01.01.08

Provision for profit sharing

6,250

12,000

6.01.01.09

Warranty provision

-7,872

10,065

6.01.01.10

Write-off of property and equipment, net

99

142

6.01.01.11

Allowance for doubtful accounts

5,598

313

6.01.01.12

Provision for realization of non-financial assets - properties for sale

-6,302

-

6.01.01.14

Provision for penalties due to delay in construction works

-11

138

6.01.02

Variation in assets and liabilities

47,841

-164,178

6.01.02.01

Trade accounts receivable

84,856

-43,435

6.01.02.02

Properties for sale

-41,596

-74,111

6.01.02.03

Other accounts receivable

-17,744

-8,436

6.01.02.04

Prepaid expenses

703

4,338

6.01.02.05

Obligations for purchase of properties and adv. from customers

-47,658

-40,382

6.01.02.06

Taxes and contributions

-4,384

-790

6.01.02.07

Suppliers

4,002

780

6.01.02.08

Salaries and payable charges

-12,154

-18,171

6.01.02.09

Transactions with related parties

111,779

63,402

6.01.02.10

Other obligations

-29,963

-47,373

6.02

Net cash from investing activities

102,214

192,269

6.02.01

Purchase of property and equipment and intangible assets

-12,309

-12,703

6.02.02

Increase in investments

-16,997

-1,289

6.02.03

Redemption of short-term investments

581,255

1,202,776

6.02.04

Purchase of short-term investments

-449,735

-996,515

6.03

Net cash from financing activities

-139,337

-118,757

6.03.02

Increase in loans, financing and debentures

205,790

302,564

6.03.03

Payment of loans, financing and debentures

-378,622

-392,644

6.03.04

Repurchase of treasury shares

-8,195

-22,135

6.03.06

Loan transactions with related parties

9,448

-3,487

6.03.07

Obligation with investors

-2,433

-3,649

6.03.08

Disposal of treasury shares

1,230

1,810

6.03.09

Result of the disposal of treasury shares

-1,225

-1,216

6.03.10

Assignment of receivables

34,670

-

6.05

Net increase (decrease) of cash and cash equivalents

-24,878

-748

6.05.01

Cash and cash equivalents at the beginning of the period

44,044

33,792

6.05.02

Cash and cash equivalents at the end of the period

19,166

33,044

 

6

 


 
 

INDIVIDUAL STATEMENT OF CHANGES IN EQUITY FROM 01/01/2016 TO 06/30/2016 (in thousands of Brazilian reais)

   

CODE

DESCRIPTION

Capital

Capital reserves,

 stock options and

 treasury shares

Profit reserves

Retained earnings

Other

 comprehensive

income

Total Equity

5.01

Opening balance

2,740,662

50,854

303,975

-

-

3,095,491

5.03

Opening adjusted balance

2,740,662

50,854

303,975

-

-

3,095,491

5.04

Capital transactions with shareholders

-

-4,526

-1,225

-

-

-5,751

5.04.03

Stock option plan

-

2,694

-

-

-

2,694

5.04.04

Treasury shares acquired

-

-8,450

-

-

-

-8,450

5.04.05

Treasury shares sold

-

1,230

-1,225

-

-

5

5.05

Total of comprehensive income (loss)

-

-

-

-91,665

-

-91,665

5.05.01

Net income (loss) for the period

-

-

-

-91,665

-

-91,665

5.07

Closing balance

2,740,662

46,328

302,750

-91,665

-

2,998,075

 

 

 

7

 


 
 

INDIVIDUAL STATEMENT OF CHANGES IN EQUITY FROM 01/01/2015 TO 06/30/2015 (in thousands of Brazilian reais)

CODE

DESCRIPTION

Capital

Capital reserves, stock options and treasury shares

Profit reserves

Retained earnings

Other comprehensive income

Total Equity

5.01

Opening balance

2,740,662

-9,162

323,845

-

-

3,055,345

5.03

Opening adjusted balance

2,740,662

-9,162

323,845

-

-

3,055,345

5.04

Capital transactions with shareholders

-

57,829

-75,430

-

-

-17,601

5.04.03

Stock option plan

-

3,940

-

-

-

3,940

5.04.04

Treasury shares acquired

-

-22,135

-

-

-

-22,135

5.04.05

Treasury shares sold

-

1,810

-1,216

-

-

594

5.04.08

Treasury shares cancelled

-

74,214

-74,214

-

-

-

5.05

Total of comprehensive income (loss)

-

-

-

60,137

-

60,137

5.05.01

Net income (loss) for the period

-

-

-

60,137

-

60,137

5.07

Closing balance

2,740,662

48,667

248,415

60,137

-

3,097,881

 

 

8

 


 
 

INDIVIDUAL STATEMENT OF VALUE ADDED (in thousands of Brazilian Reais)

CODE

DESCRIPTION

YEAR TO DATE

 01/01/2016 to

 06/30/2016

YEAR TO DATE FROM

PREVIOUS YEAR

 01/01/2015 to

 06/30/2015

7.01

Revenues

311,851

606,490

7.01.01

Real estate development, sales and services

317,449

606,803

7.01.04

Allowance for doubtful accounts

-5,598

-313

7.02

Inputs acquired from third parties

-252,123

-406,994

7.02.01

Cost of Sales and/or Services

-208,028

-355,548

7.02.02

Materials, energy, outsourced labor and other

-44,095

-51,446

7.03

Gross value added

59,728

199,496

7.04

Retentions

-14,100

-15,397

7.04.01

Depreciation and amortization

-14,100

-15,397

7.05

Net value added produced by the Company

45,628

184,099

7.06

Total value added received on transfer

54,600

125,601

7.06.01

Income from equity method investments

18,923

90,169

7.06.02

Financial income

35,677

35,432

7.07

Value added total to be distributed

100,228

309,700

7.08

Value added distribution

100,228

309,700

7.08.01

Personnel and payroll charges

52,935

67,646

7.08.02

Taxes and contributions

35,406

65,426

7.08.03

Compensation – Interest

103,552

116,491

7.08.04

Compensation – Company capital

-91,665

60,137

7.08.04.03

Net income (Retained losses)

-91,665

60,137

 

9

 


 
 

CONSOLIDATED FINANCIAL STATEMENTS - BALANCE SHEET - ASSETS (in thousands of Brazilian Reais)

CODE

DESCRIPTION

ACTUAL

QUARTER

 6/30/2016

PRIOR YEAR

12/31/2015

1

Total Assets

6,548,124

6,760,332

1.01

Current Assets

4,267,421

4,316,764

1.01.01

Cash and cash equivalents

157,737

82,640

1.01.01.01

Cash and banks

64,695

69,560

1.01.01.02

Short-term investments

18,491

13,080

1.01.01.03

Funds deposited with third parties

74,551

-

1.01.02

Short-term investments

460,832

629,671

1.01.02.01

Fair value of short-term investments

460,832

629,671

1.01.02.01.02

Short-term investments avaliable for sale

460,832

629,671

1.01.03

Accounts receivable

1,285,892

1,395,273

1.01.03.01

Trade accounts receivable

1,285,892

1,395,273

1.01.03.01.01

Receivables from clients of developments

1,244,142

1,357,122

1.01.03.01.02

Receivables from clients of construction and services rendered

41,750

38,151

1.01.04

Inventories

2,063,670

1,880,377

1.01.07

Prepaid expenses

5,255

7,171

1.01.07.01

Prepaid expenses and others

5,255

7,171

1.01.08

Other current assets

294,035

321,632

1.01.08.01

Non current assets for sale

87,503

105,857

1.01.08.03

Other

206,532

215,775

1.01.08.03.01

Other accounts receivable and others

131,391

120,657

1.01.08.03.02

Receivables from related parties

75,141

95,118

1.02

Non current assets

2,280,703

2,443,568

1.02.01

Non current assets

1,177,373

1,349,404

1.02.01.03

Accounts receivable

354,931

407,091

1.02.01.03.01

Receivables from clients of developments

354,931

407,091

1.02.01.04

Inventories

629,811

750,240

1.02.01.09

Others non current assets

192,631

192,073

1.02.01.09.03

Others accounts receivable and others

87,887

82,880

1.02.01.09.04

Receivables from related parties

96,975

109,193

1.02.01.09.05

Derivative financial instruments

7,769

-

1.02.02

Investments

978,100

967,646

1.02.02.01

Interest in associates and affiliates

978,100

967,646

1.02.03

Property and equipment

51,703

49,176

1.02.03.01

Operation property and equipment

51,703

49,176

1.02.04

Intangible assets

73,527

77,342

1.02.04.01

Intangible assets

48,051

51,866

1.02.04.02

Goodwill

25,476

25,476

 

 

10

 


 
 

CONSOLIDATED FINANCIAL STATEMENTS - BALANCE SHEET - LIABILITIES AND EQUITY (in thousands of Brazilian Reais)

CODE

DESCRIPTION

ACTUAL QUARTER

 6/30/2016

PRIOR YEAR

12/31/2015

2

Total Liabilities

6,548,124

6,760,332

2.01

Current liabilities

2,041,767

2,048,969

2.01.01

Social and labor obligations

51,241

60,102

2.01.01.02

Labor obligations

51,241

60,102

2.01.01.02.01

Salaries, payroll charges and profit sharing

51,241

60,102

2.01.02

Suppliers

77,721

57,335

2.01.03

Tax obligations

88,934

102,057

2.01.03.01

Federal tax obligations

88,934

102,057

2.01.04

Loans and financing

1,064,028

1,061,986

2.01.04.01

Loans and financing

633,782

672,365

2.01.04.01.01

In Local Currency

633,782

672,365

2.01.04.02

Debentures

430,246

389,621

2.01.05

Other obligations

672,176

667,177

2.01.05.01

Payables to related parties

77,192

87,100

2.01.05.02

Other

594,984

580,077

2.01.05.02.01

Dividends and interest on capital payable

17,682

17,682

2.01.05.02.04

Obligations for purchase of properties and advances from customers

360,382

361,420

2.01.05.02.06

Other obligations

172,407

163,437

2.01.05.02.07

Obligations assumed on the assignment of receivables

35,502

23,482

2.01.05.02.08

Derivative financial instruments

9,011

14,056

2.01.06

Provisions

87,667

100,312

2.01.06.01

Tax, labor and civil lawsuits

87,667

100,312

2.01.06.01.01

Tax lawsuits

220

220

2.01.06.01.02

Labor lawsuits

7,975

15,516

2.01.06.01.04

Civil lawsuits

79,472

84,576

2.02

Non current liabilities

1,505,067

1,614,127

2.02.01

Loans and financing

1,007,932

1,088,807

2.02.01.01

Loans and financing

700,135

620,470

2.02.01.01.01

Loans and financing in local currency

700,135

620,470

2.02.01.02

Debentures

307,797

468,337

2.02.02

Other obligations

316,482

366,161

2.02.02.01

Liabilities with related parties

47,347

41,002

2.02.02.02

Other

269,135

325,159

2.02.02.02.03

Obligations for purchase of properties and advances from customers

185,516

248,514

2.02.02.02.04

Other liabilities

28,585

33,216

2.02.02.02.06

Obligations assumed on the assignment of receivables

55,034

35,811

2.02.02.02.07

Derivative financial instruments

-

7,618

2.02.03

Deferred taxes

20,450

16,489

2.02.03.01

Deferred income tax and social contribution

20,450

16,489

2.02.04

Provisions

160,203

142,670

2.02.04.01

Tax, labor and civil lawsuits

160,203

142,670

2.02.04.01.01

Tax lawsuits

3

180

2.02.04.01.02

Labor lawsuits

75,749

77,445

2.02.04.01.04

Civil lawsuits

84,451

65,045

2.03

Equity

3,001,290

3,097,236

2.03.01

Capital

2,740,662

2,740,662

2.03.01.01

Capital

2,740,662

2,740,662

2.03.02

Capital Reserves

46,328

50,854

2.03.02.04

Granted options

150,745

148,051

2.03.02.05

Treasury shares

-33,200

-25,980

2.03.02.07

Reserve for expenditures with public offering

-71,217

-71,217

2.03.04

Income Reserve

302,750

303,975

2.03.04.01

Legal Reserve

35,316

35,316

2.03.04.02

Statutory Reserve

267,434

268,659

2.03.05

Retained earnings/accumulated losses

-91,665

-

2.03.09

Non-controlling interest

3,215

1,745

 

11

 


 
 

CONSOLIDATED FINANCIAL STATEMENTS - INCOME - (in thousands of Brazilian Reais)

   

CODE

DESCRIPTION

ACTUAL

 QUARTER

04/01/2016 to

 06/30/2016

YEAR TO DATE

 01/01/2016 to

06/30/2016

SAME QUARTER

FROM PREVIOUS

 YEAR 04/01/2015 to

06/30/2015

YEAR TO DATE

 FROM PREVIOUS

 YEAR 01/01/2015 to

 06/30/2015

3.01

Gross Sales and/or Services

473,371

878,905

591,529

1,111,030

3.01.01

Revenue from real estate development

513,191

949,735

642,927

1,207,781

3.01.03

Taxes on real estate sales and services

-39,820

-70,830

-51,398

-96,751

3.02

Cost of sales and/or services

-379,880

-713,213

-432,986

-803,287

3.02.01

Cost of real estate development

-379,880

-713,213

-432,986

-803,287

3.03

Gross profit

93,491

165,692

158,543

307,743

3.04

Operating expenses/income

-125,890

-235,756

-141,499

-238,722

3.04.01

Selling expenses

-41,515

-76,533

-40,635

-67,748

3.04.02

General and administrative expenses

-40,701

-86,723

-49,070

-92,738

3.04.05

Other operating expenses

-34,911

-77,402

-44,612

-89,836

3.04.05.01

Depreciation and amortization

-8,684

-21,382

-11,561

-23,230

3.04.05.02

Other operating expenses

-26,227

-56,020

-33,051

-66,606

3.04.06

Income from equity method investments

-8,763

4,902

-7,182

11,600

3.05

Income (loss) before financial results and income taxes

-32,399

-70,064

17,044

69,021

3.06

Financial

-2,489

-4,430

2,685

-5,531

3.06.01

Financial income

22,794

58,409

44,270

76,882

3.06.02

Financial expenses

-25,283

-62,839

-41,585

-82,413

3.07

Income before income taxes

-34,888

-74,494

19,729

63,490

3.08

Income and social contribution taxes

-2,973

-15,718

5,754

-6,406

3.08.01

Current

-2,803

-13,016

-372

-7,232

3.08.02

Deferred

-170

-2,702

6,126

826

3.09

Income (loss) from continuing operation

-37,861

-90,212

25,483

57,084

3.11

Income (loss) for the period

-37,861

-90,212

25,483

57,084

3.11.01

Income (loss) attributable to the Company

-38,439

-91,665

28,487

60,137

3.11.02

Net income attributable to non-controlling interests

578

1,453

-3,004

-3,053

3.99

Earnings per Share – (Reais / Share)

0

0

0

0

3.99.01

Basic Earnings per Share

0

0

0

0

3.99.01.01

ON

-0.10530

-0.25120

0.07750

0.16370

3.99.02

Diluted Earnings per Share

0

0

0

0

3.99.02.01

ON

-0.10530

-0.25120

0.07697

0.16250

 

 

12

 


 
 

CONSOLIDATED FINANCIAL STATEMENTS - COMPREHENSIVE INCOME (LOSS) - (in thousands of Brazilian Reais)

   

CODE

DESCRIPTION

ACTUAL QUARTER

 04/01/2016 to

 06/30/2016

YEAR TO DATE

 01/01/2016 to 06/30/2016

SAME QUARTER FROM

PREVIOUS YEAR

 04/01/2015 to 06/30/2015

YEAR TO DATE FROM

PREVIOUS YEAR

 01/01/2015 to 06/30/2015

4.01

Consolidated Income (loss) for the period

-37,861

-90,212

25,483

57,084

4.03

Consolidated comprehensive income (loss) for the period

-37,861

-90,212

25,483

57,084

4.03.01

Income (loss) attributable to the Company

-38,439

-91,665

28,487

60,137

4.03.02

Net income attributable to the noncontrolling interests

578

1,453

-3,004

-3,053

 

 

 

13

 


 
 

CONSOLIDATED FINANCIAL STATEMENTS - CASH FLOWS - INDIRECT METHOD - (in thousands of Brazilian Reais)

CODE

DESCRIPTION

YEAR TO DATE

 01/01/2016 to

 06/30/2016

YEAR TO DATE FROM

PREVIOUS YEAR

 01/01/2015 to

 06/30/2015

6.01

Net cash from operating activities

26,897

-45,845

6.01.01

Cash generated in the operations

50,151

199,853

6.01.01.01

Income (loss) before income and social contribution taxes

-74,494

63,490

6.01.01.02

Stock options expenses

3,751

5,001

6.01.01.03

Unrealized interest and finance charges, net

52,728

37,663

6.01.01.04

Depreciation and amortization

21,382

23,230

6.01.01.05

Write-off of property and equipment, net

3,353

1,058

6.01.01.06

Provision for legal claims

43,946

55,488

6.01.01.07

Warranty provision

-9,966

8,829

6.01.01.08

Provision for profit sharing

12,468

12,038

6.01.01.09

Allowance for doubtful accounts

30,591

-805

6.01.01.10

Provision for realization of non-financial assets - properties for sale

-17,221

4,375

6.01.01.11

Provision for penalties due to delay in construction works

731

-943

6.01.01.12

Financial instruments

-12,216

4,346

6.01.01.13

Income from equity method investments

-4,902

-11,600

6.01.01.15

Write-off of investments

-

-2,317

6.01.02

Variation in assets and liabilities

-23,254

-245,698

6.01.02.01

Trade accounts receivable

130,464

-78,034

6.01.02.02

Properties for sale

-37,369

-43,117

6.01.02.03

Other accounts receivable

-27,000

-11,403

6.01.02.04

Transactions with related parties

18,238

-10,022

6.01.02.05

Prepaid expenses

1,916

5,150

6.01.02.06

Suppliers

20,386

13,886

6.01.02.07

Obligations for purchase of properties and adv. from customers

-64,036

-29,902

6.01.02.08

Taxes and contributions

-13,123

-6,941

6.01.02.09

Salaries and payable charges

-21,329

-17,397

6.01.02.10

Other obligations

-15,683

-61,512

6.01.02.11

Income tax and social contribution paid

-15,718

-6,406

6.02

Net cash from investing activities

132,753

301,430

6.02.01

Purchase of property and equipment and intangible assets

-23,447

-22,383

6.02.02

Redemption of short-term investments

1,909,446

2,133,082

6.02.03

Purchase of short-term investments

-1,740,607

-1,808,307

6.02.04

Investments

-12,639

-962

6.03

Net cash from financing activities

-84,553

-211,251

6.03.02

Increase in loans, financing and debentures

441,389

382,672

6.03.03

Payment of loans and financing

-572,950

-574,060

6.03.06

Payables to venture partners

-2,520

-3,734

6.03.07

Loan transactions with related parties

15,909

5,412

6.03.08

Repurchase of treasury shares

-8,195

-22,135

6.03.09

Disposal of treasury shares

1,230

1,810

6.03.10

Result of the disposal of treasury shares

-1,225

-1,216

6.03.11

Assignment of receivables

41,809

-

6.05

Net increase (decrease) of cash and cash equivalents

75,097

44,334

6.05.01

Cash and cash equivalents at the beginning of the period

82,640

109,895

6.05.02

Cash and cash equivalents at the end of the period

157,737

154,229

 

14

 


 
 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FROM 01/01/2016 TO 06/30/2016 (in thousands of Brazilian reais)

CODE

DESCRIPTION

Capital

Capital reserves, stock options and treasury shares

Profit reserves

Retained earnings

Other comprehensive income

Total Shareholders equity

Non

 Controlling interest

Total equity Consolidated

5.01

Opening balance

2,740,662

50,854

303,975

-

-

3,095,491

1,745

3,097,236

5.03

Opening adjusted balance

2,740,662

50,854

303,975

-

-

3,095,491

1,745

3,097,236

5.04

Capital transactions with shareholders

-

-4,526

-1,225

-

-

-5,751

17

-5,734

5.04.03

Stock option plan

-

2,694

-

-

-

2,694

-

2,694

5.04.04

Treasury shares adquired

-

-8,450

-

-

-

-8,450

-

-8,450

5.04.05

Treasury shares sold

-

1,230

-1,225

-

-

5

-

5

5.04.09

Acquisition of non controlling interests

-

-

-

-

-

-

17

17

5.05

Total of comprehensive income (loss)

-

-

-

-91,665

-

-91,665

1,453

-90,212

5.05.01

Net income (loss) for the period

-

-

-

-91,665

-

-91,665

1,453

-90,212

5.07

Closing balance

2,740,662

46,328

302,750

-91,665

-

2,998,075

3,215

3,001,290

 

 

 

15

 


 
 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FROM 01/01/2015 TO 06/30/2015 (in thousands of Brazilian reais)

CODE

DESCRIPTION

Capital

Capital reserves, stock options and

 treasury shares

Profit reserves

Retained earnings

Other comprehensive income

Total Shareholders equity

Non

Controlling interest

Total equity Consolidated

5.01

Opening balance

2,740,662

-9,162

323,845

-

-

3,055,345

3,058

3,058,403

5.03

Opening adjusted balance

2,740,662

-9,162

323,845

-

-

3,055,345

3,058

3,058,403

5.04

Capital transactions with shareholders

-

57,829

-75,430

-

-

-17,601

1,606

-15,995

5.04.01

Capital increase

-

-

-

-

-

-

1,606

1,606

5.04.03

Stock option plan

-

3,940

-

-

-

3,940

-

3,940

5.04.04

Treasury shares adquired

-

-22,135

-

-

-

-22,135

-

-22,135

5.04.05

Treasury shares sold

-

1,810

-1,216

-

-

594

-

594

5.04.08

Treasury shares cancelled

-

74,214

-74,214

-

-

-

-

-

5.05

Total of comprehensive income (loss)

-

-

-

60,137

-

60,137

-3,053

57,084

5.05.01

Net income (loss) for the period

-

-

-

60,137

-

60,137

-3,053

57,084

5.07

Closing balance

2,740,662

48,667

248,415

60,137

-

3,097,881

1,611

3,099,492

 

 

 

 

 

16

 


 
 

CONSOLIDATED STATEMENT OF VALUE ADDED (in thousands of Brazilian Reais)

 

CODE

DESCRIPTION

YEAR TO DATE

 01/01/2016 to

 06/30/2016

YEAR TO DATE FROM

 PREVIOUS YEAR

 01/01/2015 to

 06/30/2015

7.01

Revenues

949,735

1,210,097

7.01.01

Real estate development, sale and services

970,246

1,186,968

7.01.04

Allowance for doubtful accounts

-20,511

23,129

7.02

Inputs acquired from third parties

-712,189

-813,494

7.02.01

Cost of sales and/or services

-630,390

-731,342

7.02.02

Materials, energy, outsourced labor and other

-81,799

-82,152

7.03

Gross value added

237,546

396,603

7.04

Retentions

-21,382

-23,230

7.04.01

Depreciation and amortization

-21,382

-23,230

7.05

Net value added produced by the Company

216,164

373,373

7.06

Value added received on transfer

63,311

88,482

7.06.01

Income from equity method investments

4,902

11,600

7.06.02

Financial income

58,409

76,882

7.07

Total value added to be distributed

279,475

461,855

7.08

Value added distribution

279,475

461,855

7.08.01

Personnel and payroll charges

111,550

115,343

7.08.02

Taxes and contributions

106,974

125,420

7.08.03

Compensation – Interest

152,616

160,955

7.08.03.01

Interest

152,616

160,955

7.08.04

Compensation – Company capital

-91,665

60,137

7.08.04.03

Net income (Retained losses)

-91,665

60,137

 

17

 


 
 

 

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 millions in PSV, ending the first six months with R$210.5 millions 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 millions, 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 millions, 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%.

 

18

 


 
 

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 billions in PSV, combined with decreased demand in the current economic scenario. In 2Q16, PSV of R$412.3 millions was delivered, ending the first six months with R$517.1 millions 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 millions and R$252.7 millions 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 millions, 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 millions and dissolutions remained under control at 15.1% of gross sales, resulting in net pre-sales of R$325.0 millions. 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 millions.

Since 2013, when Tenda started its new model operations, the segment has launched 72 projects, representing a total of R$2.7 billions in PSV. Of this total, Tenda has delivered R$1.1 billions, 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 millions in PSV. In 1H16, the Tenda segment delivered 13 projects/phases, comprising 2,359 units and R$337.1 millions 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 millions in 2Q16, ending the first six months with R$853.7 millions in new projects. The Gafisa segment accounted for 24% of 2Q16 launches while Tenda accounted for the remaining 76%.

 

19

 

 
 

Second quarter 2016 net pre-sales totaled R$454.5 millions, 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 pre-sales while the Tenda segment represented the remaining 71%.

Consolidated adjusted gross profit totaled R$138.3 millions 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 millions, 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 millions 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 millions, compared to a loss of R$53.2 millions recorded in 1Q16 and net income of R$28.5 millions 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 millions in the quarter, ending the period with a net cash burn of R$32.5 millions. In 6M16, the net cash burn totaled R$4.2 millions. 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

 

 

 

 

20

 

 


 
 

 

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 short-term investments.

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

 

 

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FINANCIAL RESULTS

§  2Q16 net revenue recognized by the “PoC” method was R$212.6 millions in the Gafisa segment and
R$260.7 millions in the Tenda segment. This resulted in 2Q16 consolidated revenue of R$473.3 millions, 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 millions, a reduction of 20.9% compared with 6M15.

§  Adjusted gross profit for 2Q16 was R$138.3 millions, higher than R$110.2 millions in 1Q16 and lower than R$200.4 millions 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 millions, with an adjusted gross margin of 30.7%, while the Tenda segment accounted for an adjusted gross profit of R$73.0 millions, with a margin of 28.0%. In the first half of the year, adjusted gross profit was R$248.5 millions with adjusted gross margin of 28.3%, compared to R$379.7 millions in 1H15.

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

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

 

 

OPERATING RESULTS

§  Total Company launches were R$545.0 millions 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 millions 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 millions.

§  Net pre-sales totaled R$454.5 millions in 2Q16, an increase of 36.4% from the R$333.3 millions recorded in 1Q16 and 14.6% lower y-o-y. The Gafisa segment accounted for R$129.5 millions and the Tenda segment for R$325.0 millions 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 millions 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 billions. Gafisa’s inventory ended the quarter at R$1.9 billions, while Tenda’s inventory totaled R$906.3 millions.

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

 

22

 


 
 
 

 

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 millions – 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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Net Income

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

 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 millions.

 

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

 

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

 

 

24


 
 
 

 

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

 

25

 


 
 

 

 

Net Income

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

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$ Millions)

 

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

 

 

26


 

 

 

RECENT EVENTS

UPDATE SHARE BUYBACK PROGRAM

Referring to the current share buyback program, through July 11, 2016, the Company has acquired 4.5 millions 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.

 

27

 


 
 

 

GAFISA SEGMENT

Focuses on residential developments within the upper, upper-middle, and middle-income segments, with average unit prices above R$250,000. 00.

Operating Results | Launches and Pre-Sales

Second quarter launches totaled R$130.4 millions 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 millions in launches or 23.9% of consolidated launches.

.

Second quarter gross pre-sales in the Gafisa segment totaled R$262.0 millions. Dissolutions in 2Q16 were R$132.5 millions, yielding total net pre-sales of R$129.5 millions, 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 millions.

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 millions, 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.

 

                                        

                        

                                                                                                                                                                              

 

28

 


 
 

 

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 millions in 2Q16, down sequentially compared to R$170.3 millions in 1Q16 and up from R$115.6 millions in 2Q15. In 1H16, the total volume of dissolutions was R$302.8 millions.

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 millions 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 millions, 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 millions.

 

 

29

 


 
 

 

 

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 billions. 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 millions, 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 millions, or 23.6% of total inventory. Inventory from projects launched outside core markets, which is comprised exclusively of finished units, represented R$51.2 millions, a decrease of 51.5% when compared to R$105.4 millions 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 millions, 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

 

 

 

30

 


 
 

Landbank

The Gafisa segment landbank, with a PSV of R$5.6 billions, 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 millions and an acquisition cost of R$15.7 millions. It was financed by 100% cash and an initial disbursement of R$5.0 millions. 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 millions in PSV. In 6M16, 6 projects/phases totaling 1,432 units were delivered, accounting for R$517.1 millions 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 millions in PSV in the second quarter.

31

 


 
 

 

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.

 

 

32

 


 
 

 

Financial Results

Revenue

2Q16 net revenues for the Gafisa segment totaled R$212.6 millions, 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 millions.

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 millions, up from R$3.5 millions in 1Q16, and down from R$90.3 millions 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 millions – 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

33

 


 
 

 

 

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 millions in the 2Q16, down 21.2% y-o-y and 9.1% q-o-q. In the 6M16, these expenses totaled R$83.5 millions, 10.6% down from the R$93.4 millions 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 millions 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 millions compared to R$56.4 millions 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 millions 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%

 

34

 


 
 

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 millions in 2Q16, an improvement from the negative R$18.1 millions in 1Q16 and lower than the R$52.4 millions recorded in 2Q15. Year-to-date adjusted EBITDA was negative R$5.6 millions compared to the positive result of R$110.7 millions 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 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 millions 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.

 

35

 


 
 

 

TENDA SEGMENT

Focuses on affordable residential developments, classified within the Range II ofMinha Casa Minha Vida Program.00

Operating Results | Launches and Sales

Second quarter launches totaled R$414.7 millions 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 millions.

 

 

 

During 2Q16, gross sales reached R$382.9 millions and dissolutions were R$57.9 millions, resulting in total net pre-sales of R$325.0 millions, 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 millions and net pre-sales totaled R$591.5 millions. 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%

 

36

 


 
 

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

New Model

35.2%

27.1%

24.9%

26.9%

28.9%

Legacy

12.0%

11.4%

5.2%

10.7%

11.9%

Total

28.2%

23.0%

20.9%

23.9%

26.4%

 

 

2Q15

3Q15

4Q15

1Q16

2Q16

New Model

37.4%

29.6%

27.4%

29.7%

32.2%

Legacy

24.3%

19.4%

13.3%

20.7%

25.0%

Total

33.4%

26.9%

24.4%

28.0%

31.1%

 

Dissolutions

The level of dissolutions in the Tenda segment totaled R$57.9 millions 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%

37

 


 
 

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 millions 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 millions. In 6M16, 13 projects/phases and 2,359 units were delivered, accounting for R$337.1 millions in PSV.

Inventory

The market value of Tenda’s inventory was R$906.3 millions at the end of the 2Q16, up 6.7% compared to R$849.1 millions at the end of 1Q16. Inventory related to the legacy units totaled R$160.6 millions 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 millions, or 97.3% of total inventory, while units outside the program totaled R$24.0 millions, 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.

38

 


 
 

 

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 millions to move forward with construction.

Tenda Segment Landbank

The Tenda segment landbank, with a PSV of approximately R$4.4 billions, 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 millions. These had an acquisition cost of R$21.9 millions, 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 millions, which were previously for sale; they were added to Tenda segment’s landbank, due to positive results from new feasibility studies.

 

39

 


 
 

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 billions 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%

 

40

 


 
 

 

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%

 

 

41


 
 

 

Financial Result

Revenues

Tenda’s 2Q16 net revenues totaled R$260.7 millions, 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 millions 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 millions, in line with R$68.3 millions in 2Q15, and R$68.7 millions 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 millions 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

 

42

 


 
 

Selling, General and Administrative Expenses (SG&A)

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

Selling expenses reached R$21.3 millions 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 millions.

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 millions between the quarters. Year-to-date, general and administrative expenses totaled R$40.2 millions, 10.5% above the R$36.4 millions 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 millions, 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%

 

 

 

 

43

 


 
 

Adjusted EBITDA

Adjusted EBITDA was R$21.9 millions in 2Q16, compared to adjusted EBITDA of R$22.8 millions in 1Q16 and R$15.2 millions in 2Q15. In 1H16, adjusted EBITDA was R$44.6 millions compared to R$36.3 millions 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 9.0%.

 

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 millions 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.

 

44

 


 
 

 

Balance Sheet and Consolidated Financial Results

Cash and Cash Equivalents

 

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

Accounts Receivable

At the end of 2Q16, total consolidated accounts receivable reached R$2.3 billions, 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. millions 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 millions in 2Q16. The Gafisa segment contributed cash generation of R$19.3 millions. The volume of transferred/received units sold to financing agents reached R$142.7 millions. The Tenda segment generated R$18.9 millions in cash, with R$247.2 millions transferred in 2Q16. In the year, the Company presented operating cash generation of R$134.9 millions.

While consolidated operating cash generation reached R$38.2 millions, the Company ended 2Q16 with net cash consumption of R$32.5 millions, totaling R$4.2 millions 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 short-term investments.

 

45

 


 
 

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 billions 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 millions in debt, of which R$215.1 millions was project finance and R$149.4 millions was corporate debt. A total of R$199.3 millions was disbursed, allowing for a net amortization of R$165.2 millions. R$541.4 millions was amortized in 1H16, corresponding to 50.8% of total gross maturities in 2016. New releases of R$357.6 millions took place in the first six months, R$325.9 millions related to project debts and R$31.7 millions related to corporate debt, thus allowing a net amortization in the first six months of R$183.8 millions.

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 short-term investments.

The Company ended 1H16 with R$1.1 billions 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 + 9.00% - 10.38%

551,968

402,190

149,778

-

-

-

Debentures – Working Capital (B)

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

186,075

28,056

39,051

76,925

21,019

21,024

Project Financing SFH (C)

TR + 8.35% - 11.71% / 120.0% - 129.0% CDI

1,196,948

590,563

435,873

122,683

34,656

13,173

Working Capital (D)

CDI + 3.95%/ CDI + 4.25% / 125.0% 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%

 

 

 

 

 

 

46

 


 
 

Consolidated Financial Result

Revenue

 

On a consolidated basis, 2Q16 net revenue totaled R$473.3 millions, 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 millions.

Gross Profit & Margin

Gross profit in 2Q16 was R$93.5 millions, compared to R$72.2 millions in 1Q16, and R$158.5 millions 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 millions, with a gross margin of 18.9%.

Adjusted gross profit totaled R$138.3 millions, 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 millions 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 millions in 2Q16, down 8.3% compared to 2Q15 and up 1.5%  q.o.q. In 1H16, SG&A totaled R$163.3 millions, 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 millions, 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 millions, 15.9% down from 1H15.  

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

 

47

 


 
 

 

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 millions in 2Q16, down from R$72.8 millions in the prior-year period and up from R$15.5 millions 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 millions, 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 millions, down 31.6% compared to 1Q16 and down 24.9% compared to R$11.6 millions 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 millions, down from negative R$1.9 millions in 1Q16 and from the positive R$2.7 millions in 2Q15. Financial revenues were down 48.5% y-o-y, totaling R$22.8 millions, due to the lower balance of funds available in the period. Financial expenses reached R$25.3 millions, compared to R$41.6 millions 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 millions, compared to a net loss of R$5.5 millions 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.

 

48

 


 
 

Taxes

Income taxes, social contribution and deferred taxes for 2Q16 amounted to an expense of R$3.0 millions, 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 millions.

Net Income

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

 

 

49

 


 
 

 

 

 

 

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 millions, 23% below the previous year, and net profit was -R$3.6 millions.

 

 

 

6M16

6M15

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

 

 

 

50

 


 
 

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

-

Non controlling interests

(203)

805

-125%

(848)

-76%

602

(619)

-

Net Income

(47,061)

(58,021)

-19%

8,452

-

(105,082)

28,656

-

 

 

 

51

 


 
 

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%

Non controlling interests

781

71

1000%

(2,156)

-

852

(2,434)

-

Net Income

8,622

4,794

80%

20,035

-57%

13,416

31,481

-57%

 

 

 

52

 


 
 

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

-

Non controlling interests

578

876

-34%

(3,004)

-

1,453

(3,053)

-

Net Income

(38,439)

(53,227)

-28%

28,487

-

(91,665)

60,137

-

 

 

 

53

 


 
 

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%

Short term investments

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%

Non-current

 

 

 

 

 

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%

Non-current 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 legal claims and commitments

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%

Equity

 

 

 

 

 

Equity attributable to Shareholders of the Company

2,998,074

3,043,669

-1%

3,097,879

-3%

Equity attributable to non-controlling interest

4,553

4,272

7%

3,055

49%

 

3,002,627

3,047,941

-1%

3,100,934

-3%

Total Liabilities and Equity

5,734,793

5,975,843

-4%

6,264,418

-8%

 

54

 


 
 

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%

Short term investments

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%

Non-current 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%

Non-current 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 legal claims and commitments

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%

Equity

 

 

 

 

 

Equity attributable to Shareholders of the Company

1,104,912

1,096,263

1%

1,091,018

1%

Equity attributable to non-controlling interest

36,730

35,949

2%

33,978

8%

 

1,141,642

1,132,212

1%

1,124,996

1%

Total Liabilities and Equity

1,956,313

1,986,342

-2%

1,983,658

-1%

 

55

 


 
 

Consolidated Balance Sheets

 

2Q16

1Q16

Q/Q %)

2Q15

Y/Y(%)

Current Assets

 

 

 

 

 

Cash and cash Equivalents

157,737

143,717

10%

154,229

2%

Short term investments

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%

Non-current 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%

Non-current 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 legal claims and commitments

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%

Equity

 

 

 

 

 

Equity attributable to Shareholders of the Company

2,998,075

3,043,671

-1%

3,097,881

-3%

Equity attributable to non-controlling interest

3,215

2,613

23%

1,611

100%

 

3,001,290

3,046,284

-1%

3,099,492

-3%

Total Liabilities and Equity

6,548,124

6,779,953

-3%

7,072,546

-7%

 

 

56

 


 
 

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 cash and cash equivalents

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

Provision for penalty for 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 legal claims and commitments

21,058

29,418

43,946

55,488

Provision for profit share

4,126

9,124

12,468

12,038

Allowance for doubtful accounts 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 property and equipment and intangible assets

(14,980)

(16,732)

(23,447)

(22,383)

Investments in subsidiaries

(10,188)

(787)

(12,639)

(962)

Redemption of short-term investments

1,120,335

952,732

1,909,446

2,133,082

Purchase of short-term investments

(932,808)

(783,891)

(1,740,607

(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)

Repurchase os treasury shares

(8,195)

-

(8,195)

(22,135)

Assignment of credit receivables, net

13,835

-

41,809

-

Loan 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 equivalents

157,737

154,229

157,737

154,229

Increase (decrease) of cash and cash equivalents

14,020

(70,514)

75,097

44,334

 

 

 

57

 


 
 

                                                                       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 millions 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.

 

 

 

 

 

 

 

58

 


 

(A free translation from the original in Portuguese into English)

 

Gafisa S.A.

Notes to the individual and consolidated quarterly information

June 30, 2016

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

 

 

1.    Operations

 

Gafisa S.A. ("Gafisa" or "Company") is a publicly traded company with registered office at Avenida das Nações Unidas, 8.501, 19th floor, in the city and state of São Paulo, Brazil and commenced its operations in 1997 with the objectives of: (i) promoting and managing all forms of real estate ventures on its own behalf or for third parties (in the latter case, as construction company and proxy); (ii) selling and purchasing real estate properties; (iii) providing civil construction and civil engineering services; (iv) developing and implementing marketing strategies related to its own and third party real estate ventures; and (v) investing in other companies that share similar objectives.

 

The Company has stocks traded at BM&FBovespa S.A. – Bolsa de Valores, Mercadorias e Futuros and the New York Stock Exchange (NYSE), reporting its information to the Brazilian Securities and Exchange Commission (CVM) and the U.S. Securities and Exchange Commission (SEC).

 

The Company enters into real estate development projects with third parties through specific purpose partnerships (“Sociedades de Propósito Específico” or “SPEs”) or through the formation of consortia and condominiums. Controlled entities substantially share managerial and operating structures, and corporate, managerial and operating costs with the Company. SPEs, condominiums and consortia operate solely in the real estate industry and are linked to specific ventures.

 

 

 

59

 


 

Gafisa S.A.

Notes to the individual and consolidated quarterly information--Continued

June 30, 2016

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

 

2.    Presentation of quarterly information and summary of significant accounting policies

 

2.1.    Basis of presentation and preparation of individual and consolidated quarterly information

 

On August 11, 2016, the Company’s Board of Directors approved these individual and consolidated quarterly information of the Company and authorized their disclosure.

 

The individual quarterly information (Company) and consolidated quarterly information have been prepared and are being presented based on the technical pronouncement CPC 21(R1) – Interim Financial Reporting, using the same accounting practices, judgments, estimates and assumptions adopted in the presentation and preparation of the financial statements for the year ended December 31, 2015. Therefore, the corresponding quarterly information shall be read together with the financial statements as of December 31, 2015.

 

The individual quarterly information, identified as “Company”, have been prepared and are being presented according to the accounting practices adopted in Brazil, including the pronouncements issued by the Committee for Accounting Pronouncements (CPC), approved by the Brazilian Securities and Exchange Commission (CVM) and are disclosed together with the consolidated quarterly information.

 

The consolidated quarterly information of the Company has been prepared and is being presented according to the accounting practices adopted in Brazil, including the pronouncements issued by the CPC, approved by the Brazilian Securities and Exchange Commission (CVM), and according to the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB).

 

The individual quarterly information of the Company is not considered in compliance with the International Financial Reporting Standards (IFRS), once it considers the capitalization of interest on qualifying assets of investees in the separate quarterly information of the Company. In view of the fact that there is no difference between the Company’s and the consolidated equity and profit or loss, the Company opted for presenting the accompanying individual and consolidated information in only one set.

 

The consolidated quarterly information is specifically in compliance with the International Financial Reporting Standards (IFRS) applicable to real estate development entities in Brazil, including the Guideline OCPC 04 - Application of the Technical Interpretation ICPC 02 to the Brazilian Real Estate Development Entities, in relation to the treatment of the recognition of revenue from this sector and involves certain matters related to application of the continuous transfer of the risks, benefits and control over the real estate units sales.

 

 

 

 

 

 

 

 

60

 


 

Gafisa S.A.

Notes to the individual and consolidated quarterly information--Continued

June 30, 2016

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

 

2.    Presentation of financial statements and summary of significant accounting policies--Continued

 

2.1.    Basis of presentation and preparation of individual and consolidated quarterly information--Continued

 

The quarterly information has been prepared on a going concern basis. Management makes an assessment of the Company’s ability to continue as going concern when preparing the quarterly information.

All amounts reported in the accompanying quarterly information are in thousands of Reais, except as otherwise stated.

The other explanations related to this note were not subject to significant changes in relation to the disclosures in Note 2.1 to the individual and consolidated financial statements as of December 31, 2015.

 

2.1.1.    Consolidated quarterly information

 

The accounting practices have been applied consistently by all subsidiaries included in the consolidated quarterly information and the subsidiaries have the same fiscal year as the Company. See further details in Note 9.

The other explanations related to this note were not subject to significant changes in relation to the disclosures in Note 2.1.1 to the individual and consolidated financial statements as of December 31, 2015.

 

3.    New standards, changes and interpretation of standards issued and not yet adopted

 

There is no other standard, change to standards or interpretation issued and not yet adopted that could, on the Management’s opinion, have significant impact arising from its adoption on its quarterly information.

 

The other explanations related to this note were not subject to significant changes in relation to the disclosures in Note 3 to the individual and consolidated financial statements as of December 31, 2015.

 

 

 

 

 

 

61

 


Gafisa S.A.

Notes to the individual and consolidated quarterly information--Continued

June 30, 2016

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

 

4.    Cash and cash equivalents and short-term investments

 

4.1.    Cash and cash equivalents

 

 

Company

Consolidated

 

06/30/2016

12/31/2015

06/30/2016

12/31/2015

 

 

 

 

 

Cash and banks

19,166

31,823

64,695

69,560

Securities purchased under resale agreements (a)

-

12,221

18,491

13,080

Funds deposited with third parties (b)

-

-

74,551

-

Total cash and cash equivalents (Note 20.ii.a and 20.iii)

19,166

44,044

157,737

82,640

(a)     As of June 30, 2016, the securities purchased under resale agreement include interest earned through the balance sheet date, ranging from 75% to 101.5% of Interbank Deposit Certificates (CDI) (from75% to 100.5% of CDI in 2015). All investments are carried out with what management considers being top tier financial institutions.

(b)     Amount deposited with Itaú Corretora de Valores S.A., for settling, on July 01, 2016, the 16th interest installment and the 10th amortization installment related to the first debenture placement of the subsidiary Tenda (Note 31 (i)).

 

The other explanations related to this note were not subject to significant changes in relation to the disclosures in Note 4.1 to the financial statements as of December 31 2015.

 

4.2.    Short-term investments

 

 

Company

Consolidated

 

06/30/2016

12/31/2015

06/30/2016

12/31/2015

 

 

 

 

 

Fixed-income funds

129,828

192,409

177,088

279,486

Government bonds (LFT)

5,150

10,081

14,995

18,631

Corporate securities (LF/DPGE)

31,124

51,835

90,628

95,801

Securities purchased under resale agreements

11,714

11,890

16,882

25,548

Bank certificates of deposit (a)

26,419

54,491

85,681

101,733

Restricted cash in guarantee to loans

7,497

20,515

7,528

31,633

Restricted credits

7,091

9,122

68,030

76,839

Total short-term investments (Note 20.i.d, 20.ii.a and 20.iii)

218,823

350,343

460,832

629,671

(a)   As of June 30, 2016, Bank Certificates of Deposit (CDBs) include interest earned through the balance sheet date, varying from 72% to 104.5% (from 90% to 107% in 2015) of Interbank Deposit Certificates (CDI) rate. The CDBs earn an average income in excess of those from securities purchased under resale agreements; however, the Company invests in short term (up

to 20 working days) through securities purchased under resale agreements taking into account the exemption of IOF, which is not granted in the case of CDBs. 

 

The other explanations related to this note were not subject to significant changes in relation to the disclosures in Note 4.2 to the financial statements as of December 31, 2015.

 

 

 

 

 

 

62

 


Gafisa S.A.

Notes to the individual and consolidated quarterly information--Continued

June 30, 2016

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

 

 

5.   Trade accounts receivable from real estate development and services

 

 

Company

Consolidated

 

06/30/2016

12/31/2015

06/30/2016

12/31/2015

 

 

 

 

 

Real estate development and sales

898,092

1,001,351

1,746,709

1,895,795

( - ) Allowance for doubtful accounts and cancelled contracts

(17,963)

(12,365)

(121,041)

(100,530)

( - ) Present value adjustments

(14,665)

(21,527)

(26,595)

(31,052)

Services and construction and other receivables

22,359

18,583

41,750

38,151

Total trade accounts receivable of development and services (Note 20.ii.a)

887,823

986,042

1,640,823

1,802,364

 

 

 

 

 

Current portion

700,909

723,950

1,285,892

1,395,273

Non-current portion

186,914

262,092

354,931

407,091

 

The current and non-current portions have the following maturities:

 

 

Company

Consolidated

Maturity

06/30/2016

12/31/2015

06/30/2016

12/31/2015

 

 

 

 

 

Overdue:

 

 

 

 

Up to 90 days

36,150

116,229

60,574

207,838

From 91 to 180 days

16,718

14,568

25,801

50,985

Over 180 days

84,548

74,727

323,048

290,247

 

137,416

205,524

409,423

549,070

 

 

 

 

 

Maturity:

 

 

 

 

2016

348,904

543,781

646,848

925,543

2017

252,186

148,568

461,644

286,138

2018

102,496

62,256

144,565

83,266

2019

37,420

20,254

63,061

34,518

2020 onwards

42,029

39,551

62,918

55,411

 

783,035

814,410

1,379,036

1,384,876

 

 

 

 

 

( - ) Adjustment to present value

(14,665)

(21,527)

(26,595)

(31,052)

( - ) Allowance for doubtful account and cancelled contracts

(17,963)

(12,365)

(121,041)

(100,530)

 

887,823

986,042

1,640,823

1,802,364

 

 

The change in the allowance for doubtful accounts and cancelled contracts for the period ended June 30, 2016 is summarized as follows:

 

 

 

Company

 

06/30/2016

 

 

Balance at December 31, 2015

(12,365)

Additions (Note 22)

(5,997)

Write-offs (Note 22)

399

Balance at June 30, 2016

(17,963)

 

 

Consolidated

 

Receivables

Properties for

sale (Note 6)

Net

 

 

 

 

Balance at December 31, 2015

(100,530)

21,764

(78,766)

Additions (Notes 22 and 23)

(20,910)

-

(20,910)

Write-offs (Notes 22 and 23)

399

(10,080)

(9,681)

Balance at June 30, 2016

(121,041)

11,684

(109,357)

 

 

 

 

 

 

 

 

 

63

 


 

Gafisa S.A.

Notes to the individual and consolidated quarterly information--Continued

June 30, 2016

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

 

 

 

5.    Trade accounts receivable from real estate development and services--Continued

 

In the period ended June 30, 2016, the Company entered into the following Real Estate Receivables Agreement (CCI) transaction, which is aimed at the assignment by the assignor to the assignee of a portfolio comprising select business real estate receivables performed and to be performed arising out of Gafisa and its subsidiaries. The assigned portfolio, discounted to present value, is recorded under the heading “obligations assumed on the assignment of receivables”.

 

Transaction date

Assigned

accounting

portfolio

Portfolio discounted to present value

Transaction balance at June 30, 2016 (Note 14)

Company

Consolidated

 

 

 

 

 

03/04/2016

27,954

27,334

21,452

25,256

05/09/2016

17,827

17,504

13,218

16,553

 

In the transactions above, the Company and its subsidiaries are jointly responsible until the time of the transfer of the collateral to the securitization company.

 

The other explanations related to this note were not subject to significant changes in relation to the disclosures in Note 5 to the financial statements as of December 31, 2015.

 

 

6.    Properties for sale

 

Company

Consolidated

 

06/30/2016

12/31/2015

06/30/2016

12/31/2015

 

 

 

 

 

Land

781,815

775,814

1,461,413

1,443,460

( - ) Adjustment to present value

(8,400)

(9,639)

(20,914)

(16,771)

Property under construction

537,110

545,701

881,259

857,619

Real estate cost in the recognition of the provision for cancelled contracts (Note 5)

-

-

11,684

21,764

Completed units

265,322

216,073

368,530

333,036

( - ) Provision for realization of properties for sale

(5,437)

(5,437)

(8,491)

(8,491)

Total properties for sale

1,570,410

1,522,512

2,693,481

2,630,617

 

 

 

 

Current portion

1,277,427

1,135,137

2,063,670

1,880,377

Non-current portion

292,983

387,375

629,811

750,240

 

In the period ended  June 30, 2016, there was no change in the provision for impairment of properties for sale.

 

The other explanations related to this note were not subject to significant changes in relation to the disclosures in Note 6 to the individual and consolidated financial statements as of December 31, 2015.

 

7.    Other accounts receivable and others

 

 

Company

Consolidated

 

06/30/2016

12/31/2015

06/30/2016

12/31/2015

 

 

 

 

 

Advances to suppliers

1,654

1,578

6,851

7,102

Recoverable taxes (IRRF, PIS, COFINS, among other)

22,637

20,712

66,996

66,289

Judicial deposit (Note 16)

117,004

105,275

140,539

125,358

Other

2

4

4,892

4,788

 

 

 

 

Total other accounts receivable and others

141,297

127,569

219,278

203,537

 

 

 

 

Current portion

58,848

46,621

131,391

120,657

Non-current portion

82,449

80,948

87,887

82,880

 

 

 

64

 


 
 

Gafisa S.A.

Notes to the individual and consolidated quarterly information--Continued

June 30, 2016

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

 

 

 

8.    Assets held for sale

 

8.1 Land available for sale

        

       The changes in land available for sale are summarized as follows:

 

 

Company

Consolidated

 

Cost

Provision for impairment

Net balance

Cost

Provision for impairment

Net balance

 

 

 

 

 

 

 

Balance at December 31, 2015

19,457

(15,090)

4,367

147,673

(41,816)

105,857

Additions

2,264

-

2,264

4,058

-

4,058

Transfer from (to) properties for sale, net

-

-

-

(26,483)

-

(26,483)

Reversal/Write-offs

(9,490)

6,302

(3,188)

(13,150)

17,221

4,071

Balance at June 30, 2016

12,231

(8,788)

3,443

112,098

(24,595)

87,503

 

 

 

 

 

 

Gafisa segment

 

 

 

12,231

(8,788)

3,443

Tenda segment

 

 

 

99,867

(15,807)

84,060

 

The other explanations related to this note were not subject to significant changes in relation to the disclosures in Note 8.1 to the financial statements as of December 31, 2015.

65

 


 
 

Gafisa S.A.

Notes to the individual and consolidated quarterly information--Continued

June 30, 2016

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

 

 

 

9.    Investments in subsidiaries and jointly controlled investees

 

(i)      Ownership interest

 

(a)     Information on subsidiaries and jointly-controlled investees

 

 

 

 

 

 

 

 

 

 

 

Company

Consolidated

 

 

Interest in capital - %

Total assets

Total liabilities

Equity and advance for future capital increase

Profit (loss) for the period

Investments

Income from equity method investments

Investments

Income from equity method investments

Direct investees

 

06/30/2016

12/31/2015

06/30/2016

06/30/2016

06/30/2016

12/31/2015

 

06/30/2016

06/30/2015

06/30/2016

12/31/2015

06/30/2016

06/30/2015

06/30/2016

12/31/2015

06/30/2016

06/30/2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construtora Tenda S/A

-

100%

100%

1,956,314

851,401

1,104,913

1,090,935

 

13,416

31,481

1,104,913

1,090,935

13,416

31,481

-

-

-

-

Alphaville Urbanismo S.A

-

30%

30%

2,669,630

1,944,684

724,946

728,519

 

(3,572)

52,605

217,484

218,556

(1,072)

22,184

217,484

218,556

(1,072)

22,184

Gafisa SPE 26 Ltda.

-

100%

100%

176,911

9,750

167,161

167,361

 

(200)

(958)

167,161

167,361

(200)

(958)

-

-

-

-

Gafisa SPE- 130 Emp. Imob. Ltda.

-

100%

100%

125,822

48,049

77,773

53,323

 

2,776

2,412

77,773

53,323

2,776

2,412

-

-

-

-

Gafisa SPE-111 Emp. Imob. Ltda.

-

100%

100%

116,270

51,260

65,010

79,764

 

(14,754)

9,939

65,010

79,764

(14,754)

9,939

-

-

-

-

Gafisa SPE-116 Emp. Imob. Ltda.

(a)

50%

50%

178,408

59,242

119,166

103,372

 

15,794

8,571

59,583

51,686

7,897

4,285

59,583

51,686

7,897

4,285

Gafisa SPE-89 Emp. Imob. Ltda.

-

100%

100%

81,297

26,944

54,353

60,362

 

(2,809)

1,780

54,353

60,362

(2,809)

1,780

-

-

-

-

Maraville Gafsa SPE Emp. Imob. Ltda.

-

100%

100%

77,837

24,322

53,515

48,883

 

4,632

(263)

53,515

48,883

4,632

(263)

-

-

-

-

Gafisa SPE - 127 Emp. Imob. Ltda.

-

100%

100%

95,260

46,125

49,135

35,718

 

3,017

3,465

49,135

35,718

3,017

3,465

-

-

-

-

Gafisa SPE-51 Emp. Imob. Ltda.

-

100%

100%

53,607

6,957

46,650

46,825

 

(176)

281

46,650

46,825

(176)

281

-

-

-

-

Gafisa SPE - 121 Emp. Imob. Ltda.

-

100%

100%

91,790

45,883

45,907

46,897

 

(990)

14,066

45,907

46,897

(990)

14,066

-

-

-

-

Gafisa SPE 72 Emp. Imob. Ltda.

-

100%

100%

55,533

11,300

44,233

44,275

 

(42)

(165)

44,233

44,275

(42)

(165)

-

-

-

-

Gafisa SPE-110 Emp. Imob. Ltda.

-

100%

100%

44,680

4,158

40,522

40,879

 

(357)

(3,281)

40,522

40,879

(357)

(3,281)

-

-

-

-

Gafisa SPE - 122 Emp. Imob. Ltda.

-

100%

100%

117,308

78,578

38,730

31,624

 

4,150

4,724

38,730

31,624

4,150

4,724

-

-

-

-

Gafisa SPE - 120 Emp. Imob. Ltda.

-

100%

100%

41,670

3,861

37,809

36,621

 

1,189

2,369

37,809

36,621

1,189

2,369

-

-

-

-

Manhattan Square Emp. Im. Res. 02 Ltda

-

100%

100%

36,037

613

35,424

35,424

 

-

-

35,424

35,424

-

-

-

-

-

-

SPE Parque Ecoville Emp. Imob. Ltda

-

100%

100%

90,043

55,149

34,894

34,984

 

(91)

(1,661)

34,894

34,984

(91)

(1,661)

-

-

-

-

Gafisa SPE-104 Emp. Imob. Ltda.

-

100%

100%

82,645

51,886

30,759

3,428

 

1,078

(306)

30,759

3,428

1,078

(306)

-

-

-

-

Gafisa SPE-107 Emp. Im. Ltda.

-

100%

100%

32,551

3,025

29,526

29,442

 

84

(259)

29,526

29,442

84

(259)

-

-

-

-

Gafisa SPE- 129 Emp. Im. Ltda.

-

100%

100%

63,441

35,023

28,418

24,012

 

4,406

1,952

28,418

24,012

4,406

1,952

-

-

-

-

Gafisa SPE - 126 Emp. Im. Ltda.

-

100%

100%

91,708

64,305

27,403

22,834

 

4,569

2,813

27,403

22,834

4,569

2,813

-

-

-

-

Gafisa SPE-41 Emp. Im, Ltda.

-

100%

100%

28,059

1,580

26,479

26,469

 

9

103

26,479

26,469

9

103

-

-

-

-

Verdes Pracas Inc. Imob SPE Ltda.

-

100%

100%

26,304

69

26,235

26,225

 

10

13

26,235

26,225

10

13

-

-

-

-

Gafisa e Ivo Rizzo SPE-47 Em. Im. Ltda.

(a)

80%

80%

32,545

422

32,123

31,749

 

3

(28)

25,698

25,399

2

(22)

25,698

25,399

2

(22)

Varandas Grand Park Em. Im. Ltda

(a)(c)

50%

50%

112,971

64,839

48,132

43,587

 

1,684

(1,193)

24,066

21,794

1,318

(1,202)

24,066

21,794

1,318

(1,202)

Gafisa SPE-112 Emp. Imob. Ltda.

-

100%

100%

29,646

7,941

21,705

21,736

 

(31)

3

21,705

21,736

(31)

3

-

-

-

-

Sitio Jatiuca Emp. Imob. SPE Ltda

(a)

50%

50%

46,736

4,172

42,564

41,470

 

1,096

1,417

21,282

20,735

548

708

21,282

20,735

548

708

Gafisa SPE-134 Emp. Imob. Ltda.

-

100%

100%

37,152

18,115

19,037

2,083

 

(388)

-

19,037

2,083

(388)

-

-

-

-

-

Edsp 88 Participações S.A.

-

100%

100%

33,082

14,816

18,266

17,454

 

812

(907)

18,266

17,454

812

(907)

-

-

-

-

Manhattan Square Em. Im. Com. 02 Ltda

-

100%

100%

18,019

61

17,958

17,955

 

-

-

17,958

17,955

-

-

-

-

-

-

Gafisa SPE 46 Emp. Imob. Ltda.

-

100%

100%

30,883

12,986

17,897

17,740

 

157

182

17,897

17,740

157

182

-

-

-

-

Parque Arvores Empr. Imob. Ltda.

(a)(c)

50%

50%

39,898

6,114

33,784

33,378

 

395

96

16,892

16,689

203

930

16,892

16,689

203

930

Fit 13 Spe Empr. Imob. Ltda.

(b)

50%

50%

34,370

653

33,717

34,487

 

(770)

132

16,858

17,244

(385)

66

-

-

-

-

Gafisa SPE 30 Emp. Imob. Ltda.

-

100%

100%

63,729

47,398

16,331

16,196

 

135

89

16,331

16,196

135

89

-

-

-

-

Gafisa SPE-106 Emp. Imob. Ltda.

-

100%

100%

16,663

1,056

15,607

15,623

 

(16)

(9)

15,607

15,623

(16)

(9)

-

-

-

-

Gafisa SPE-92 Emp. Imob. Ltda.

-

100%

100%

16,705

1,102

15,603

15,474

 

129

127

15,603

15,474

129

127

-

-

-

-

Diodon Participações Ltda

-

100%

100%

17,919

2,911

15,008

14,962

 

46

314

15,008

14,962

46

314

-

-

-

-

Gafisa SPE 71 Emp. Imob. Ltda.

-

100%

100%

16,250

2,319

13,931

14,060

 

(129)

(122)

13,931

14,060

(129)

(122)

-

-

-

-

Gafisa SPE - 123 Emp. Imob. Ltda.

-

100%

100%

93,098

79,811

13,287

15,683

 

(2,395)

(2,914)

13,287

15,683

(2,395)

(2,914)

-

-

-

-

Gafisa SPE 33 Emp. Imob. Ltda.

-

100%

100%

14,673

1,535

13,138

13,385

 

(247)

(23)

13,138

13,385

(247)

(23)

-

-

-

-

Alto da Barra de Sao Miguel Em. Im. Ltda

(a)

50%

50%

24,834

1,372

23,462

23,504

 

(44)

655

11,731

11,752

(22)

328

11,731

11,752

(22)

328

Gafisa SPE 65 Emp. Imob. Ltda.

-

100%

100%

19,993

8,317

11,676

11,602

 

74

122

11,676

11,602

74

122

-

-

-

-

Blue I SPE Plan., Prom., Inc. Venda Ltda.

-

100%

100%

11,592

541

11,051

11,051

 

-

212

11,051

11,051

-

212

-

-

-

-

Città Ville SPE Emp. Imob. Ltda.

(b)

50%

50%

22,453

535

21,918

22,195

 

(278)

131

10,959

11,098

(139)

66

-

-

-

-

Gafisa SPE- 132 Emp. Imob. Ltda.

-

100%

100%

53,430

42,737

10,693

-

 

(111)

(1)

10,693

-

(111)

(1)

-

-

-

-

 

66

 


 
 

Gafisa S.A.

Notes to the individual and consolidated quarterly information--Continued

June 30, 2016

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

 

 

 

9.      Investments in subsidiaries and jointly controlled investees--Continued

 

(i)      Ownership interest --Continued

 

(a)     Information on subsidiaries and jointly-controlled investees --Continued

 

 

 

 

 

 

 

 

 

 

 

Company

Consolidated

 

 

Interest in capital - %

Total assets

Total liabilities

Equity and advance for future capital increase

Profit (loss) for the period

Investments

Income from equity method investments

Investments

Income from equity method investments

Direct investees

 

06/30/2016

12/31/2015

06/30/2016

06/30/2016

06/30/2016

12/31/2015

 

06/30/2016

06/30/2015

06/30/2016

12/31/2015

06/30/2016

06/30/2015

06/30/2016

12/31/2015

06/30/2016

06/30/2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gafisa SPE 36 Emp. Imob. Ltda.

-

100%

100%

26,087

17,184

8,903

8,857

 

46

833

8,903

8,857

46

833

-

-

-

-

Gafisa SPE-81 Emp. Imob. Ltda.

-

100%

100%

85,733

76,897

8,836

8,978

 

(142)

2,029

8,836

8,978

(142)

2,029

-

-

-

-

Atins Emp. Imob.s Ltda.

(a)

50%

50%

30,697

13,403

17,294

15,777

 

(534)

(38)

8,647

7,888

(267)

(19)

8,647

7,888

(267)

(19)

Gafisa SPE-77 Emp. Imob. Ltda.

-

65%

65%

26,057

13,048

13,009

9,552

 

3,868

578

8,456

6,209

2,605

1,748

-

-

-

-

Parque Aguas Empr. Imob. Ltda.

(a)(c)

50%

50%

17,271

1,305

15,966

15,264

 

1,091

182

7,983

7,632

351

77

7,983

7,632

351

77

Gafisa SPE-38 Emp. Imob. Ltda.

-

100%

100%

8,020

58

7,962

7,967

 

(5)

(2)

7,962

7,967

(5)

(2)

-

-

-

-

Gafisa SPE-109 Emp. Imob. Ltda.

-

100%

100%

9,010

1,827

7,183

7,189

 

(6)

(75)

7,183

7,189

(6)

(75)

-

-

-

-

Gafisa SPE-37 Emp. Imob. Ltda.

-

100%

100%

7,642

885

6,757

6,727

 

30

51

6,757

6,727

30

51

-

-

-

-

Gafisa SPE-90 Emp. Imob. Ltda.

-

100%

100%

11,507

5,031

6,476

6,477

 

-

(47)

6,476

6,477

-

(47)

-

-

-

-

Dubai Residencial Empr. Imob. Ltda.

(a)(c)

50%

50%

11,573

593

10,980

10,562

 

190

184

5,490

5,281

209

(2,271)

5,490

5,281

209

(2,271)

Gafisa SPE-87 Emp. Imob. Ltda.

-

100%

100%

23,593

18,268

5,325

5,393

 

(68)

2,108

5,325

5,393

(68)

2,108

-

-

-

-

Gafisa SPE-113 Emp. Imob. Ltda.

-

60%

60%

59,562

50,849

8,713

7,521

 

(6,850)

(2,788)

5,228

4,513

(4,110)

(1,673)

5,228

4,513

(4,110)

(1,673)

Prime Grand Park Emp. Imob. Spe Ltda.

(a)(c)

50%

50%

14,860

4,597

10,263

9,846

 

(44)

(995)

5,131

4,923

(23)

(612)

5,131

4,923

(23)

(612)

Performance Gafisa General Severiano Ltda

(a)

50%

0%

25,828

15,579

10,249

-

 

-

-

5,125

-

-

-

5,125

-

-

-

OCPC01 Adjustment – capitalized interests

(d)

 

 

-

-

-

-

 

-

-

31,789

31,675

114

5,958

-

-

-

-

Other (*)

-

 

 

255,051

169,180

85,871

90,051

 

(195)

(5,174)

67,562

73,142

(881)

(2,341)

25,570

29,398

311

121

Subtotal

 

 

 

7,732,257

4,132,621

3,599,636

3,463,711

 

29,642

124,810

2,897,443

2,779,093

24,156

98,685

439,910

426,246

5,345

22,834

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Indirect investees - Gafisa:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Saí Amarela S.A.

(a)

50%

50%

2,407

121

2,286

2,314

 

34

(115)

-

-

-

-

1,143

1,126

17

(58)

Gafisa SPE-51 Emp. Imob. Ltda.

(a)

60%

60%

1,241

325

916

1,662

 

(127)

799

-

-

-

-

550

997

(76)

480

Other (*)

 

 

 

806

109

697

466

 

368

33

-

-

-

-

348

73

180

98

Indirect jointly-controlled investees Gafisa

 

 

 

4,454

555

3,899

4,442

 

275

717

-

-

-

-

2,041

2,196

121

520

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Indirect investees - Tenda:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acedio SPE Emp. Imob. Ltda.

-

55%

55%

4,677

3,999

678

676

 

2

(1,320)

-

-

-

-

373

372

1

(726)

Maria Inês SPE Emp. Imob. Ltda.

-

60%

60%

21,236

152

21,084

21,050

 

57

69

-

-

-

-

12,650

12,630

34

41

Fit 02 SPE Emp. Imob. Ltda.

-

60%

60%

10,098

94

10,004

9,882

 

420

99

-

-

-

-

6,002

5,929

252

59

Fit Jardim Botânico SPE Emp. Imob. Ltda.

-

55%

55%

10,588

188

10,400

9,999

 

301

(5,641)

-

-

-

-

5,720

5,554

166

(3,102)

Fit 11 SPE Emp. Imob. Ltda.

-

70%

70%

35,629

6,200

29,429

32,062

 

(53)

(98)

-

-

-

-

20,600

22,443

(37)

(69)

Fit 31 SPE Emp. Imob. Ltda.

-

70%

70%

15,966

934

15,032

16,455

 

(1,258)

(1,713)

-

-

-

-

10,522

11,518

(881)

(1,199)

Fit 34 SPE Emp. Imob. Ltda.

-

70%

70%

34,500

500

34,000

33,634

 

380

982

-

-

-

-

23,800

23,544

266

689

Fit 03 SPE Emp. Imob. Ltda.

-

80%

80%

11,473

1,067

10,406

11,404

 

(998)

253

-

-

-

-

8,325

9,123

(798)

203

Imbuí I SPE Emp. Imob. Ltda.

-

50%

50%

9,024

268

8,756

8,723

 

32

(15)

-

-

-

-

4,378

4,362

16

(8)

Città Ipitanga SPE Emp. Imob. Ltda.

-

50%

50%

12,656

594

12,062

11,761

 

302

(200)

-

-

-

-

6,031

5,880

151

(100)

Grand Park - Pq. dos Pássaros SPE Em. Im.

-

50%

50%

27,209

2,937

24,272

22,466

 

1,806

3,191

-

-

-

-

12,136

11,233

903

1,595

Citta Itapua Emp. Imob. SPE Ltda.

-

50%

50%

18,755

1,483

17,272

18,015

 

(742)

(96)

-

-

-

-

8,636

9,007

(371)

(48)

SPE Franere Gafisa 08 Emp. Imob. LTDA.

-

50%

50%

54,628

6,526

48,102

47,831

 

274

(2,910)

-

-

-

-

24,051

23,916

137

(1,455)

Fit 13 SPE Emp. Imob. Ltda.

(b)

50%

50%

34,370

653

33,717

34,487

 

(771)

132

-

-

-

-

17,070

17,840

(771)

137

Other (*)

-

 

 

99,055

2,571

96,485

69,986

 

26,495

(284)

-

-

-

-

2

-

(1)

(4,054)

Indirect jointly-controlled investees - Tenda

-

 

 

399,864

28,166

371,699

348,431

 

26,247

(7,551)

-

-

-

-

160,296

163,351

(933)

(8,037)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subtotal

 

 

 

8,136,575

4,161,342

3,975,234

3,816,584

 

56,164

117,976

2,897,443

2,779,093

24,156

98,685

602,247

591,793

4,533

15,317

 

 

 

67

 


 
 

Gafisa S.A.

Notes to the individual and consolidated quarterly information--Continued

June 30, 2016

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

 

 

 

9.    Investments in subsidiaries and jointly controlled investees--Continued

 

(i)      Ownership interest --Continued

 

(a)     Information on subsidiaries and jointly-controlled investees —Continued

 

 

 

 

 

 

 

 

 

 

 

 

Company

Consolidated

 

 

Interest in capital - %

Total assets

Total liabilities

Equity and advance for future capital increase

Profit (loss) for the period

Investments

Income from equity method investments

Investments

Income from equity method investments

Direct investees

 

06/30/2016

12/31/2015

06/30/2016

06/30/2016

06/30/2016

12/31/2015

 

06/30/2016

06/30/2015

06/30/2016

12/31/2015

06/30/2016

06/30/2015

06/30/2016

12/31/2015

06/30/2016

06/30/2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill on acquisition of subsidiaries

(e)

 

 

 

 

 

 

 

 

 

25,476

25,476

 

 

-

-

 

 

Goodwill based on inventory surplus

-

 

 

 

 

 

 

 

 

 

62,804

62,343

 

 

-

-

 

 

Addition to remeasurement of investment in associate

(f)

 

 

 

 

 

 

 

 

 

375,853

375,853

 

 

375,853

375,853

 

 

Total investments

 

 

 

 

 

 

 

 

 

 

3,361,576

3,242,765

24,156

98,685

978,100

967,646

4,533

15,317

(*)Includes companies with investment balances below R$ 5,000.

 

 

 

 

 

 

 

 

 

 

 

 

 

Company

Consolidated

 

Interest in capital - %

Total assets

Total liabilities

Equity and advance for future capital increase

Profit (loss) for the period

Investments

Income from equity method investments

Investments

Income from equity method investments

Direct investees

06/30/2016

12/31/2015

06/30/2016

06/30/2016

06/30/2016

12/31/2015

 

06/30/2016

06/30/2015

06/30/2016

12/31/2015

06/30/2016

06/30/2015

06/30/2016

12/31/2015

06/30/2016

06/30/2015

Provision for net capital deficiency (g):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Manhattan Residencial 01 Spe Ltda

50%

50%

30,847

118,211

(87,364)

(89,319)

 

(534)

(5,544)

(43,682)

(44,627)

(267)

(3,929)

(43,682)

(44,627)

(267)

(3,929)

Gafisa Vendas Interm. Imobiliaria Ltda

100%

100%

24,148

34,735

(10,587)

(8,239)

 

(5,947)

(2,643)

(10,587)

(8,239)

(5,947)

(2,643)

-

-

-

-

Manhattan Comercial 01 Spe Ltda

50%

50%

12,765

21,531

(8,766)

(7,887)

 

92

(1,128)

(4,383)

(4,350)

46

(564)

(4,383)

(4,350)

46

(564)

Other (*)

 

 

28,043

28,990

(947)

(2,557)

 

(197)

(2,825)

(907)

(2,511)

935

(1,380)

(5,423)

(5,424)

590

776

Total provision for net capital deficiency

 

 

95,803

203,467

(107,664)

(108,002)

 

(6,586)

(12,140)

(59,559)

(59,727)

(5,233)

(8,516)

(53,488)

(54,401)

369

(3,717)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Income from equity method investments

 

 

 

 

 

 

 

 

 

 

 

18,923

90,169

 

 

4,902

11,600

(a)    Joint venture.

(b)    Joint venture with Tenda associates.

(c)    The Company recorded expense of R$354 in Income from equity method investments for the period ended June 30, 2016 related to the recognition, by jointly-controlled entities, of adjustments in the prior year, in accordance with the ICPC09 (R2) – Individual, Separate and Consolidated Financial Statements and the Equity Method of Accounting.

(d)    Charges of the Company not appropriated to the profit or loss of subsidiaries, as required by paragraph 6 of OCPC01.

(e)    See breakdown in Note 11.

(f)     Amount related to the addition to the remeasurement of the portion of the remaining investment of 30% in the associate AUSA, in the amount of R$375,853, arising from the sale of control over the entity.

(g)    The provision for net capital deficiency is recorded in the heading “Other payables” (Note 15).

 

(b)    Change in investments

 

 

 

 

 

 

 

Company

Consolidated

 

 

 

 

Balance at December 31, 2015

 

3,242,765

967,646

Income from equity method investments

 

24,156

4,533

Capital contribution (decrease)

 

99,720

4,870

Acquisition of interests

 

5,586

5,124

Dividends receivable

 

(7,425)

(4,871)

Usufruct of shares

 

(3,200)

-

Other investments

 

(26)

798

Balance at June 30, 2016

 

3,361,576

978,100

 

 

68

 


 
 

(A free translation from the original in Portuguese into English)

 

Gafisa S.A.

 

Notes to the individual and consolidated quarterly information

June 30, 2016

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

 

 

 

10Property and equipment

 

 

 

Company

Consolidated

 

Type

12/31/2015

Addition

Write-off

100% depreciated items

06/30/2016

12/31/2015

Addition

Write-off

100% depreciated items

06/30/2016

Cost

 

 

 

 

 

 

 

 

 

 

Hardware

14,018

1,445

-

(3,970)

11,493

28,143

5,297

(455)

(5,575)

27,410

Leasehold improvements and installations

9,367

223

-

(3,432)

6,158

17,449

1,727

-

(3,465)

15,711

Furniture and fixtures

675

-

-

-

675

5,503

-

-

-

5,503

Machinery and equipment

2,640

-

-

-

2,640

4,039

-

-

(1)

4,038

Molds

-

-

-

-

-

13,067

1,638

-

-

14,705

Sales stands

12,041

4,141

(99)

(795)

15,288

15,724

4,588

(1,182)

(1,322)

17,808

 

38,741

5,809

(99)

(8,197)

36,254

83,925

13,250

(1,637)

(10,363)

85,175

 

 

 

 

 

 

 

 

 

 

Accumulated depreciation

 

 

 

 

 

 

 

 

 

 

Hardware

(7,191)

(1,354)

-

3,970

(4,575)

(13,474)

(2,771)

-

5,575

(10,670)

Leasehold improvements and installations

(4,838)

(878)

-

3,432

(2,284)

(7,918)

(1,602)

-

3,465

(6,055)

Furniture and fixtures

(282)

(34)

-

-

(316)

(3,664)

(276)

-

-

(3,940)

Machinery and equipment

(1,344)

(132)

-

-

(1,476)

(1,898)

(203)

-

1

(2,100)

Molds

-

-

-

-

-

(3,379)

(1,411)

-

-

(4,790)

Sales stands

(2,267)

(2,598)

99

795

(3,971)

(4,416)

(4,005)

1,182

1,322

(5,917)

 

(15,922)

(4,996)

99

8,197

(12,622)

(34,749)

(10,268)

1,182

10,363

(33,472)

 

 

 

 

 

 

 

 

 

 

 

Total property and equipment

22,819

813

-

-

23,632

49,176

2,982

(455)

-

51,703

 

The other explanations related to this note were not subject to significant changes in relation to the disclosures in Note 10 to the financial statements as of December 31, 2015.

 

11.  Intangible assets

 

 

 

Company

 

12/31/2015

 

 

 

06/30/2016

 

Balance

Addition

Write-down / amortization

100% amortized items

Balance

 

 

 

 

 

 

Software – Cost

75,409

3,448

-

(17,148)

61,709

Software – Depreciation

(47,187)

-

(6,624)

17,148

(36,663)

Other

5,089

2,953

(2,480)

-

5,562

Total intangible assets

33,311

6,401

(9,104)

-

30,608

 

 

 

Consolidated

 

12/31/2015

 

 

 

06/30/2016

 

Balance

Addition

Write-down / amortization

100% amortized items

Balance

Goodwill

 

 

 

 

 

AUSA

25,476

-

-

-

25,476

 

 

 

 

 

 

Software – Cost

110,559

7,909

(1,716)

(29,384)

87,368

Software – Depreciation

(65,408)

-

(12,430)

29,384

(48,454)

Other

6,715

2,953

(531)

-

9,137

 

51,866

10,862

(14,677)

-

48,051

 

 

 

 

 

Total intangible assets

77,342

10,862

(14,677)

-

73,527

 

In the end of each fiscal year, the Company evaluates the recovery of the carrying value of goodwill and the addition to the remeasurement of the portion of the remaining investment of 30% in the associate AUSA, as disclosed in Note 9. In the period ended June 30, 2016, the Company did not find the existence of any indication of loss on the carrying value of goodwill.

 

The other explanations related to this note were not subject to significant changes in relation to the disclosures in Note 11 to the financial statements as of December 31, 2015.

 

 

 

 

 

 

 

69

 


 
 

(A free translation from the original in Portuguese into English)

 

Gafisa S.A.

 

Notes to the individual and consolidated quarterly information

June 30, 2016

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

 

 

 

12.  Loans and financing

 

 

 

 

Company

Consolidated

Type

Maturity

Annual interest rate

06/30/2016

12/31/2015

06/30/2016

12/31/2015

 

 

 

 

 

 

 

National Housing System - SFH /SFI

July 2016 to

April 2021

8.30% to 14.00% + TR

120% to 129% of CDI

1,001,621

1,014,092

1,196,948

1,161,707

Certificate of Bank Credit - CCB

 

July 2016 to

June 2019

 

 

125% of CDI

0.59%/3.95%/4.25% + CDI

INCC

 

98,473

124,568

136,969

131,128

Total loans and financing (Notes 20.i.d, 20.ii.a and 20.iii)

1,100,094

1,138,660

1,333,917

1,292,835

 

 

 

 

 

 

Current portion

 

 

562,684

595,817

633,782

672,365

Non-current portion

 

 

537,410

542,843

700,135

620,470

 

 

(i)                 In the period ended  June 30, 2016, the Company made payments in the total amount of R$33,977, of which R$15,122 related to principal and R$18,855 to interest.

 

The maturities of the current and non-current installments are as follows:

 

 

Company

 

Consolidated

Maturity

06/30/2016

12/31/2015

 

06/30/2016

12/31/2015

 

 

 

 

 

 

2016

183,114

595,817

 

206,419

672,365

2017

610,461

385,555

 

689,462

440,418

2018

301,545

153,288

 

357,902

166,996

2019

4,974

4,000

 

55,186

12,049

2020 onwards

-

-

 

24,948

1,007

 

1,100,094

1,138,660

 

1,333,917

1,292,835

 

The Company and its subsidiaries have restrictive covenants under certain loans and financing that limit their ability to perform certain actions, such as the issuance of debt, and that could require the early redemption or refinancing of loans if the Company does not fulfill such covenants. The ratio and minimum and maximum amounts required under such restrictive covenants as of  June 30, and December 31, 2015 are disclosed in Note 13.

 

The following table shows the summary of financial expenses and charges and the capitalized rate in the account “properties for sale”.

 

 

Company

Consolidated

 

06/30/2016

06/30/2015

06/30/2016

06/30/2015

 

 

 

 

Total financial charges for the period

112,858

126,608

148,627

155,526

Capitalized financial charges

(91,934)

(89,772)

(117,133)

(111,059)

 

 

 

 

Financial expenses (Note 24)

20,924

36,836

31,494

44,467

 

 

 

 

Financial charges included in “Properties for sale”:

 

 

 

 

 

 

 

 

 

Opening balance

287,806

220,959

354,551

276,613

Capitalized financial charges

91,934

89,772

117,133

111,059

Charges recognized in profit or loss (Note 23)

(56,890)

(53,775)

(82,823)

(71,945)

 

 

 

 

Closing balance

322,850

256,956

388,861

315,727

 

The other explanations related to this note were not subject to significant changes in relation to the disclosures in Note 12 to the financial statements as of December 31, 2015.

 

 

 

 

70

 


 
 

(A free translation from the original in Portuguese into English)

 

Gafisa S.A.

 

Notes to the individual and consolidated quarterly information

June 30, 2016

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

 

 

 

13.  Debentures

 

 

 

 

 

 

Company

Consolidated

Program/placement

Principal - R$

Annual interest

Final maturity

06/30/2016

12/31/2015

06/30/2016

12/31/2015

 

 

 

 

 

 

 

 

Seventh placement (i)

375,000

TR + 10.384%

December 2017

377,492

452,568

377,492

452,568

Eighth placement / second series

5,787

IPCA + 7.96%

October 2016

9,140

8,395

9,140

8,395

Ninth placement (ii)

112,596

CDI + 1.90%

July 2018

111,641

130,394

111,641

130,394

Tenth placement (iii)

55,000

IPCA + 8.22

January 2020

65,294

64,724

65,294

64,724

First placement (Tenda) (iv)

170,000

TR + 9.00%

October 2016

-

-

174,476

201,877

 

 

 

 

 

 

 

 

Total debentures (Note 20.i.d, 20.ii.a and 20.iii)

563,567

656.081

738.043

857.958

 

 

 

 

 

 

 

 

Current portion

 

 

 

255,770

187,744

430,246

389,621

Non-Current portion

 

 

 

307,797

468,337

307,797

468,337

 

 

In the period ended June 30, 2016, the Company made the following payments:

 

 

Principal

Interest

Total amortization

(i)

75,000

26,459

101,459

(ii)

19,430

8,502

27,932

(iii)

-

4,775

4,775

(iv)

30,000

7,151

37,151

 

 

The maturities of current and non-current portions are as follows:

 

 

 

Company

Consolidated

Maturity

06/30/2016

12/31/2015

06/30/2016

12/31/2015

 

 

 

 

 

2016

103,567

187,744

278,043

389,621

2017

341,032

344,690

341,032

344,690

2018

76,925

83,485

76,925

83,485

2019

21,019

20,078

21,019

20,078

2020

21,024

20,084

21,024

20,084

 

563,567

656,081

738,043

857,958

 

 

 

 

 

 

 

 

 

 

71

 


 
 

(A free translation from the original in Portuguese into English)

 

Gafisa S.A.

 

Notes to the individual and consolidated quarterly information

June 30, 2016

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

 

 

 

13.  Debentures--Continued

 

The Company is in compliance with the financial debt covenants at the reporting date of this quarterly information. The ratios and minimum and maximum amounts required under such restrictive covenants as of June 30, 2016 and December 31, 2015 are as follows:

 

 

06/30/2016

12/31/2015

Seventh placement

 

 

Total account receivable plus inventory required to be below zero or 2.0 times over net debt less venture debt (3)

-17.31 times

-14.12 times

Total debt less venture debt (3), less cash and cash equivalents and short-term investments (1), cannot exceed 75% of equity plus noncontrolling interests

-9.85%

-12.19%

Total receivables plus unappropriated income plus total inventory of finished units required to be 1.5 time over the net debt plus payable for purchase of properties plus unappropriated cost

2.28 times

2.25 times

 

 

 

Eighth placement - first and second series and Loans and Financing

 

 

Total account receivable plus inventory of finished units required to be below zero or 2.0 times over net debt less venture debt

-9.12 times

-7.73 times

Total debt less venture debt, less cash and cash equivalents and short-term investments (1), cannot exceed 75% of equity plus noncontrolling interests

-9.85%

-12.19%

 

 

 

Ninth placement

 

 

Total account receivable plus inventory required to be below zero or 2.0 times over net debt

3.52 times

3.71 times

Net debt cannot exceed 100% of equity plus noncontrolling interests

48.43%

46.44%

 

 

 

Tenth placement

 

 

Total account receivable plus inventory required to be below zero or 2.0 times over net debt less venture debt (3)

-17.31 times

-14.12 times

Total debt less venture debt (3), less cash and cash equivalents and short-term investments (1), cannot exceed 75% of equity plus noncontrolling interests

-9.85%

-12.19%

 

 

 

 

 

 

 

First placement – Tenda

 

 

Total accounts receivable plus inventory required to be equal to or 2.0 times over net debt less debt with secured guarantee (3) or below zero, considering that TR(4) plus TE (4) is always above zero.

-5.09 times

-6.79 times

Net debt less debt with secured guarantee (3) required to be not in excess of 50% of equity.

-28.44%

-21.47%

Total receivables plus unappropriated income plus total inventory of finished units required to be over 1.5 time the net debt plus payable for purchase of properties plus unappropriated cost or below zero

2.80 times

2.47 times

 

(1)   Cash and cash equivalents and short-term investments refer to cash and cash equivalents and marketable securities.

(2)   Total receivables, whenever mentioned, refers to the amount reflected in the Balance Sheet plus the amount not shown in the Balance Sheet

(3)   Venture debt and secured guarantee debt refer to SFH debts, defined as the sum of all disbursed borrowing contracts which funds were provided by SFH, as well as the debt related to the seventh placement.

 (4)  Total inventory.

 

 

The other explanations related to this note were not subject to significant changes in relation to the disclosures in Note 13 to the financial statements as of December 31, 2015.

 

72

 


 
 

(A free translation from the original in Portuguese into English)

 

Gafisa S.A.

 

Notes to the individual and consolidated quarterly information

June 30, 2016

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

 

 

 

14.  Obligations assumed on assignment of receivables

 

The Company’s transactions of assignment of receivables portfolio are as follows:

 

 

Company

Consolidated

 

06/30/2016

12/31/2015

06/30/2016

12/31/2015

 

 

 

 

 

Assignment of receivables:

 

 

 

 

Obligation CCI Jun/11

2,144

3,164

3,441

4,775

Obligation CCI Dec/11

1,952

2,071

2,081

2,236

Obligation CCI Jul/12

229

368

229

368

Obligation CCI Nov/12

-

-

3,931

4,351

Obligation CCI Dec/12

5,456

7,541

5,456

7,541

Obligation CCI Nov/13

2,002

2,858

5,105

6,362

Obligation CCI Nov/14

3,178

4,646

5,189

6,696

Obligation CCI Dec/15

11,292

13,053

21,634

24,558

Obligation CCI Mar/16 (Note 5)

21,452

-

25,256

-

Obligation CCI May/16 (Note 5)

13,218

-

16,553

-

FIDC obligation

829

1,146

1,661

2,406

Total obligations assumed on assignment of receivables (Note 20.iii)

61,752

34,847

90,536

59,293

 

 

 

 

Current portion

23,111

12,631

35,502

23,482

Non-current potion

38,641

22,216

55,034

35,811

 

The other explanations related to this note were not subject to significant changes in relation to the disclosures in Note 14 to the financial statements as of December 31, 2015.

 

15.  Other payables

 

 

Company

Consolidated

 

06/30/2016

12/31/2015

06/30/2016

12/31/2015

 

 

 

 

 

Provision for penalties for delay in

construction works

1,393

1,404

3,944

3,213

Cancelled contract payable

18,740

11,014

34,850

24,053

Warranty provision

34,086

41,958

49,681

59,647

Deferred sales taxes (PIS and COFINS) in long term

4,579

8,368

11,822

13,129

Provision for net capital deficiency (Note 9)

59,559

59,727

53,488

54,401

Long-term suppliers (Note 20.i.d)

3,406

5,652

6,370

7,508

Payables to venture partners (Note 20.i.d, 20.ii and 20.iii)

2,280

4,713

2,375

4,895

Share-based payment - Phantom Shares (Note 18.3)

1,385

889

1,385

889

Other liabilities

7,676

8,426

37,077

28,918

 

 

 

 

 

Total other payables

133,104

142,151

200,992

196,653

 

 

 

 

 

Current portion

123,735

127,123

172,407

163,437

Non-current portion

9,369

15,028

28,585

33,216

 

 

       The other explanations related to this note were not subject to significant changes in relation to the disclosures in Note 15 to the financial statements as of December 31, 2015.

 

 

 

 

 

 

 

 

 

73

 


 
 

(A free translation from the original in Portuguese into English)

 

Gafisa S.A.

 

Notes to the individual and consolidated quarterly information

June 30, 2016

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

 

 

 

16.  Provisions for legal claims and commitments

 

 

In the period ended June 30, 2016, the changes in the provision are summarized as follows:

 

 

Company

Civil lawsuits

Tax proceedings

Labor claims

Total

Balance at December 31, 2015

119,420

220

63,235

182,875

Additional provision (Note 23)

23,628

3

6,774

30,405

Payment and reversal of provision not used

(14,410)

(3)

(8,660)

(23,073)

Balance at June 30, 2016

128,638

220

61,349

190,207

 

 

 

 

Current portion

79,472

220

7,975

87,667

Non-current portion

49,166

-

53,374

102,540

 

Consolidated

Civil lawsuits

Tax proceedings

Labor claims

Total

Balance at December 31, 2015

149,621

400

92,961

242,982

Additional provision (Note 23)

31,181

13

12,752

43,946

Payment and reversal of provision not used

(16,879)

(190)

(21,989)

(39,058)

Balance at June 30, 2016

163,923

223

83,724

247,870

 

 

 

 

 

Current portion

79,472

220

7,975

87,667

Non-current portion

84,451

3

75,749

160,203

 

(a)     Civil lawsuits, tax proceedings and labor claims

 

As of June 30, 2016, the Company and its subsidiaries have deposited in court the amount of R$117,004 (R$105,275 in 2015) in the Company’s statement, and R$140,539 (R$125,358 in 2015) in the consolidated statement (Note 7).

 

   

Company

Consolidated

 

 

06/30/2016

12/31/2015

06/30/2016

12/31/2015

 

 

 

 

 

 

Civil lawsuits

 

74,047

71,327

89,825

81,919

Tax proceedings

 

19,805

13,744

21,970

14,222

Labor claims

 

23,152

20,204

28,744

29,217

Total

 

117,004

105,275

140,539

125,358

 

(i)   Lawsuits in which likelihood of loss is rated as possible

 

As of June 30, 2016, the Company and its subsidiaries are aware of other claims and civil, labor and tax risks. Based on the history of probable processes and the specific analysis of main claims, the measurement of the claims with likelihood of loss considered possible amounted to R$784,072 (R$810,163 in 2015), based on average past outcomes adjusted to current estimates, for which the Company’s Management believes it is not necessary to recognize a provision for occasional losses. The change in the period was caused by the variation in the volume of lawsuits with smaller amounts and review of the involved amounts.

 

   

Company

Consolidated

 

 

06/30/2016

12/31/2015

06/30/2016

12/31/2015

 

 

 

 

 

 

Civil lawsuits

 

239,640

235,975

472,733

469,841

Tax proceedings

 

33,528

32,543

241,940

263,540

Labor claims

 

40,035

38,967

69,399

76,782

 

313,203

307,485

784,072

810,163

 

 

 

 

74

 


 
 

(A free translation from the original in Portuguese into English)

 

Gafisa S.A.

 

Notes to the individual and consolidated quarterly information

June 30, 2016

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

 

 

 

16.  Provisions for legal claims and commitments--Continued

 

(b)     Payables related to the completion of real estate ventures

 

The other explanations related to this note were not subject to material changes in relation to the disclosures in Note 16(i)(b) to the financial statements as of December 31, 2015.

 

(c)      Other commitments

 

In addition to the commitments mentioned in Notes 6, 12 and 13, the Company has commitments related to the rental of 33 real estate where its facilities are located, at a monthly cost of R$1,128 adjusted by the IGP-M/FGV variation. The rental term is from 1 to 10 years and there is a fine in case of cancelled contracts corresponding to three-month rent or in proportion to the contract expiration time.

 

       The other explanations related to this note were not subject to significant changes in relation to the disclosures in Note 15 to the financial statements as of December 31, 2015.

 

 

17.  Payables for purchase of properties and advances from customers

 

 

 

Company

Consolidated

 

Maturity

06/30/2016

12/31/2015

06/30/2016

12/31/2015

 

 

 

 

 

 

Payables for purchase of properties

July 2016 to August 2020

117,778

139,320

345,831

362,800

Adjustment to present value

 

(8,484)

(9,723)

(21,599)

(17,039)

Advances from customers

 

 

 

 

 

Development and sales

 

18,524

19,337

30,093

39,743

Barter transaction - Land

 

116,729

143,271

191,573

224,430

 

 

 

 

 

 

Total payables for purchase of properties and advances from customers

 

244,547

292,205

545,898

609,934

 

 

 

 

 

 

Current portion

 

158,249

148,989

360,382

361,420

Non-current portion

 

86,298

143,216

185,516

248,514

 

 

18.  Equity

 

18.1.  Capital

 

As of June 30, 2016 and December 31, 2015, the Company's authorized and paid-in capital amounts to R$2,740,662, in both periods represented by 378,066,162  registered common shares, without par value, of which 14,440,416 (10,584,756 as of December 31, 2015) were held in treasury.

 

According to the Company’s articles of incorporation, capital may be increased without need of making amendment to it, upon resolution of the Board of Directors, which shall set the conditions for issuance up to the limit of 600,000,000 (six hundred millions) common shares.

 

On March 31, 2016, the Company approved the creation of a new program to repurchase its common shares aimed at holding them in treasury and later selling or cancelling them, over a period of 18 months, up to the limit of 8,198,565 shares. In the period ended June 30, 2016, 4,378,600 shares in the total amount of R$8,450 were acquired. Additionally, the Company transferred 522,941 (1,221,860 in 2015) shares in the total amount of R$1,230 (R$3,022 in 2015) related to the exercise of options of the stock option plan comprising common shares by the beneficiaries, for which it received the total amount of R$5 (R$599 in 2015).

 

 

 

 

75

 


 
 

(A free translation from the original in Portuguese into English)

 

Gafisa S.A.

 

Notes to the individual and consolidated quarterly information

June 30, 2016

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

 

 

 

18.  Equity--Continued

 

18.1.  Capital --Continued

 

 

Treasury shares

 

 

Type

GFSA3

R$

%

Market value (*) R$ thousand

Carrying value R$ thousand

Acquisition date

Number

Weighted average price

% - on shares outstanding

06/30/2016

12/31/2015

06/30/2016

12/31/2015

11/20/2001

599,486

2.8875

0.17%

1,229

1,457

1,731

1,731

Changes in 2013:

 

 

 

 

 

 

 

Acquisition

18,500,000

3.8561

5.12%

37,925

44,955

71,339

71,339

Changes in 2014:

 

 

 

 

 

 

 

Acquisition

43,738,235

2.6353

12.12%

89,663

106,284

115,265

115,265

Transfer

(5,463,395)

3.2183

-1.51%

(11,200)

(13,276)

(17,583)

(17,583)

Cancellations

(27,493,039)

3.3351

-7.62%

(56,361)

(66,808)

(91,693)

(91,693)

Changes in 2015:

 

 

 

 

 

 

 

Acquisition

11,925,330

2.0257

3.30%

24,447

28,979

24,157

24,157

Transfer

(1,221,860)

2.4733

-0.34%

(2,504)

(2,970)

(3,022)

(3,022)

Cancellations

(30,000,000)

2.4738

-8.31%

(61,500)

(72,900)

(74,214)

(74,214)

Changes in 2016:

 

 

 

 

-

 

-

Acquisition

4,378,600

1.9298

1.21%

8,976

-

8,450

-

Transfer

(522,941)

2.3521

-0.14%

(1,072)

-

(1,230)

-

 

14,440,416

2.2991

4.00%

29,603

25,721

33,200

25,980

(*)Market value calculated based on the closing share price on June 30, 2016 at R$2.05 (R$2.43 in 2015), not considering the effect of occasional volatilities.

 

The Company holds shares in treasury acquired in 2001 in order to guarantee the performance of lawsuits (Note 16(a)(i)).

 

The change in the number of outstanding shares is as follows:

 

 

Common shares - In thousands

Outstanding shares as of December 31, 2015

367,481

Repurchase of treasury shares

(4,379)

Transfer related to the stock option plan

523

Shares held by the management members of the Company

(2,606)

Outstanding shares as of June 30, 2016

361,019

 

 

Weighted average shares outstanding

364,977

 

 

18.2.  Stock option plan

 

Expenses for granting stocks recorded under the account “General and administrative expenses” (Note 23) in the periods ended June 30, 2016 and 2015, are as follows:

 

 

06/30/2016

06/30/2015

 

 

 

Gafisa

3,189

3,940

Tenda

562

1,061

 

3,751

5,001

 

(i)    Gafisa

 

The Company has a total of five stock option plans comprising common shares, launched in 2012, 2013, 2014, 2015 and 2016 which follows the rules established in the Stock Option Plan of the Company.

 

 

 

 

 

 

 

76

 


 
 

(A free translation from the original in Portuguese into English)

 

Gafisa S.A.

 

Notes to the individual and consolidated quarterly information

June 30, 2016

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

 

18.  Equity--Continued

 

18.2.  Stock option plan -- Continued

 

(i)    Gafisa--Continued

 

The granted options entitle their holders (beneficiaries) to purchase common shares of the Company’s capital, after periods that vary from one to five years of employment in the Company (essential condition to exercise the option), and expire  six to ten years after the grant date.

 

The fair value of options is set on the grant date, and it is recognized as expense in profit or loss (as contra-entry to equity) during the vesting period of the plan, to the extent the services are provided by employees and management members.

 

The changes in options outstanding in the period ended June 30, 2016 and year ended December 31, 2015, which include their respective weighted average exercise prices, are as follows:

 

 

2016

2015

 

Number of options

Weighted average exercise price (Reais)

Number of options

Weighted average exercise price (Reais)

Options outstanding at the beginning of the year

11,743,379

1.83

9,542,643

1.49

Options granted

2,209,869

2.62

3,567,201

2.24

Options exercised (i)

(530,816)

0.01

(1,221,860)

(0.49)

Options expired

-

-

(32,000)

(3.05)

Options forfeited

-

-

(112,605)

(0.01)

 

 

 

 

 

Options outstanding at the end of the period

13,422,432

2.03

11,743,379

1.83

(i) In the period ended June 30, 2016, the amount received for exercised options was R$5 (R$599 in the year ended December 31, 2015).

 

Options outstanding and exercisable as of June 30, 2016, are as follows:

 

Options outstanding

Options exercisable

Number of options

Weighted average remaining contractual life (years)

Weighted average exercise price (Reais)

Number of options

Weighted average exercise price (Reais)

 

 

 

 

 

13,422,432

4.32

2.03

1,927,083

2.68

 

During the period ended June 30, 2016, the Company granted 2,209,869 options in connection with its stock option plans comprising common shares (3,567,201 options granted in 2015).

 

The fair value of the new granted options totaled R$1,265 (R$3,232 in 2015), which was determined based on the following assumptions:

 

 

2016

2015

Pricing model

Binomial

Binomial

Exercise price of options (R$)

R$2.62

R$2.24

Weighted average price of options (R$)

R$2.62

R$2.24

Expected volatility (%) – (*)

53%

52%

Expected option life (years)

5.78 years

5.58 years

Dividend income (%)

1.98%

2.24%

Risk-free interest rate (%)

14.13%

13.64%

(*) The volatility was determined based on the regression analyses of the relation of the volatility of the Gafisa S.A.’s shares with the Ibovespa index.

 

 

 

77

 


 
 

(A free translation from the original in Portuguese into English)

 

Gafisa S.A.

 

Notes to the individual and consolidated quarterly information

June 30, 2016

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

 

18.  Equity--Continued

 

18.2.  Stock option plan --Continued

 

 (ii)   Tenda

 

The subsidiary Tenda has a total of three stock options comprising common shares for its employees and management members, launched in 2014 and 2016, that follows the rules established in its Stock Option Plan.

 

The changes in options outstanding in the period ended June 30, 2016 and year ended December 31, 2015, which include their respective weighted average exercise prices, are as follows:

 

 

2016

2015

 

Number of options

Weighted average exercise price (Reais)

Number of options

Weighted average exercise price (Reais)

Options outstanding at the beginning of the year

42,259,687

0.84

42,259,687

0.76

Options granted

1,637,067

0.88

-

-

Options forfeited

(1,100,400)

0.84

-

-

Options outstanding at the end of the period

42,796,354

0.84

42,259,687

0.76

 

The options outstanding and exercisable as of June 30, 2016 are as follows:

 

Options outstanding

Options exercisable

Number of options

Weighted average remaining contractual life (years)

Weighted average exercise price (Reais)

Number of options

Weighted average exercise price (Reais)

 

 

 

 

 

42,796,354

2.61

0.84

-

-

 

 

The fair value of the options granted in 2014 and 2016 totaled R$8,927, which was determined based on the following assumptions:

 

 

2016

2014

Pricing model

Black-Scholes

Black-Scholes

Exercise price of options (R$)

R$0.88

R$0.85

Weighted average price of options (R$)

R$0.88

R$0.84

Expected volatility (%) – (*)

26.70%

31.30%

Expected life of options (years)

4.51 years

2.55 years

Risk-free interest rate (%) – (**)

12.67% to 12.77%

12.77% to 12.84%

  (*) The volatility was determined based on the history of the BM&FBOVESPA Real Estate Index (IMOBX).

  (**)The market risk-free interest rate for the option term in the grant moment varied between 11.66% and 12.84%.

 

18.3.  Share-based payment – Phantom Shares

 

In the period ended June 30, 2015, a cash-settled share-based payment program was approved, with fixed terms and conditions. The beneficiaries were granted the right to receive an amount equivalent to 1,143,145 phantom shares, together with the stock option plan for the year 2016. The phantom shares have the same grace and expiration period of the options, and can be partially or fully exercised during the established period.

 

As of June 30, 2016, the amount of R$1,385 (R$889 in 2015), related to the fair value of the phantom shares granted, is recognized in the heading “Other payables” (Note 15).

 

The other explanations related to this note were not subject to significant changes in relation to the disclosures in Note 18 to the individual and consolidated financial statements as of December 31, 2015.

 

 

 

 

 

78

 


 
 

(A free translation from the original in Portuguese into English)

 

Gafisa S.A.

 

Notes to the individual and consolidated quarterly information

June 30, 2016

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

 

19.  Income tax and social contribution

 

(i)      Current income tax and social contribution

 

The reconciliation of the effective tax rate for the periods ended June 30, 2016 and 2015 is as follows:

 

 

Company

Consolidated

 

06/30/2016

06/30/2015

06/30/2016

06/30/2015

 

 

 

 

 

Profit (loss) before income tax and social contribution, and statutory interest

(91,665)

60,137

(74,494)

63,490

Income tax calculated at the applicable rate - 34%

31,166

(20,447)

25,328

(21,586)

Net effect of subsidiaries and ventures taxed by presumed profit and Special Taxation Regime (RET)

-

-

8,885

16,613

Tax losses (tax loss carryforwards used)

-

-

(2,208)

(184)

Income from equity method investments

6,434

30,273

1,667

3,560

Stock option plan

(2,072)

(1,393)

(2,263)

(1,754)

Other permanent differences

(5,020)

(1,218)

(8,908)

(2,120)

Charges on payables to venture partners

(338)

910

(41)

1,009

Tax credits recognized (not recognized)

(30,170)

(8,125)

(38,178)

(1,944)

-

-

(15,718)

(6,406)

 

 

 

 

 

Tax expenses - current

-

-

(13,016)

(7,232)

Tax income - deferred

-

-

(2,702)

826

 

 (ii)   Deferred income tax and social contribution

 

As of June 30, 2016 and December 31, 2015, deferred income tax and social contribution are from the following sources:

 

 

Company

Consolidated

 

06/30/2016

12/31/2015

06/30/2016

12/31/2015

Assets

 

 

 

 

Provisions for legal claims

64,670

62,178

82,609

82,614

Temporary differences – PIS and COFINS deferred

7,358

10,636

13,202

16,404

Provisions for realization of non-financial assets

1,849

1,849

7,419

11,776

Temporary differences – CPC adjustment

22,195

40,089

26,722

44,748

Other provisions

71,129

60,745

116,465

85,912

Income tax and social contribution loss carryforwards

80,829

75,768

314,946

317,282

Tax benefits of subsidiaries

28,165

28,165

28,165

28,165

Tax credits not recognized

(30,170)

-

(311,175)

(272,997)

 

246,025

279,430

278,353

313,904

 

 

 

 

Liabilities

 

 

 

 

Negative goodwill

(92,385)

(92,385)

(92,385)

(92,385)

Temporary differences –CPC adjustment

(130,675)

(131,096)

(132,246)

(130,929)

Differences between income taxed on cash basis

and recorded on an accrual basis

(33,050)

(66,034)

(74,172)

(107,079)

 

(256,110)

(289,515)

(298,803)

(330,393)

 

 

 

 

Total net

(10,085)

(10,085)

(20,450)

(16,489)

 

 

The Company has income tax and social contribution loss carryforwards for offset in the following amounts:

 

 

 

Company

 

06/30/2016

 

12/31/2015

 

Income tax

Social contribution

 

Total

 

Income tax

Social contribution

 

Total

Balance of income tax and social contribution loss carryforwards

237,731

237,731

 

 

222,849

222,849

 

Deferred tax asset (25%/9%)

59,433

21,396

80,829

 

55,712

20,056

75,768

Recognized deferred tax asset

59,433

21,396

80,829

 

55,712

20,056

75,768

Unrecognized deferred tax asset

-

-

-

 

-

-

-

 

 

 

 

 

 

79

 


 
 

(A free translation from the original in Portuguese into English)

 

Gafisa S.A.

 

Notes to the individual and consolidated quarterly information

June 30, 2016

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

 

19.  Income tax and social contribution--Continued

 

(ii)      Deferred income tax and social contribution --Continued

 

 

 

 

Consolidated

 

06/30/2016

 

12/31/2015

 

Income tax

Social contribution

 

Total

 

Income tax

Social contribution

 

Total

Balance of income tax and social contribution loss carryforwards

926,310

926,310

-

 

933,182

933,182

 

Deferred tax asset (25%/9%)

231,578

83,368

314,946

 

233,296

83,986

317,282

Recognized deferred tax asset

59,433

21,396

80,829

 

55,712

20,056

75,768

Unrecognized deferred tax asset

172,145

61,972

234,117

 

177,584

63,930

241,514

 

Based on the estimate of projections for generation of future taxable profit of Gafisa, the estimated recovery of the Company’s balance of deferred income tax and social contribution is as follows:

 

 

Company and Consolidated

 

Income tax and social contribution loss

 

Income tax and social contribution loss

 

 

 

 

2016

31,366

 

10,665

2017

8,282

 

2,816

2018

3,056

 

1,039

2019

27,174

 

9,239

2020 to 2026

167,853

 

57,070

 

237,731

 

80,829

 

 

The other explanations related to this note were not subject to significant changes in relation to the disclosures in Note 19 to the financial statements as of December 31, 2015.

 

20.  Financial instruments

 

The Company and its subsidiaries engage in operations involving financial instruments. These instruments are managed through operational strategies and internal controls aimed at providing liquidity, return and safety. The use of financial instruments with the objective of hedging is achieved through a periodical analysis of exposure to the risk that the management intends to cover (exchange, interest rate, etc.) which is submitted to the corresponding Management bodies for approval and performance of the proposed strategy. The control policy consists of continuously monitoring the contracted conditions in relation to the prevailing market conditions. The Company and its subsidiaries do not use derivatives or any other risky assets for speculative purposes. The result from these operations is consistent with the policies and strategies devised by Company management. The Company and its subsidiaries operations are subject to the following risk factors:

 

 (i)    Risk considerations

 

a)    Credit risk

 

There was no significant change in relation to the credit risks disclosed in Note 20(i)(a) to the financial statements as of December 31, 2015.

 

 

 

 

 

 

 

80

 


 
 

(A free translation from the original in Portuguese into English)

 

Gafisa S.A.

 

Notes to the individual and consolidated quarterly information

June 30, 2016

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

 

20.  Financial instruments--Continued

 

(i)     Risk considerations --Continued

 

b)    Derivative financial instruments

 

The Company holds derivative instruments to mitigate the risk arising from its exposure to index and interest volatility recognized at their fair value in profit or loss for the year. Pursuant to its treasury policies, the Company does not own or issue derivative financial instruments other than for hedging purposes.

 

As of June 30, 2016, the Company had derivative contracts for hedging purposes in relation to interest fluctuations, with final maturity between June 2016 and January 2020. The derivative contracts are as follows:

 

Consolidated

   

Reais

Percentage

Validity

Gain (loss) not realized by derivative instruments - net

   

 

 

 

 

 

Companies

Swap agreements (Fixed for CDI)

Face value

Original Index – asset position

Swap – liability position

Beginning

End

06/30/2016

12/31/2015

 

 

 

 

 

 

 

 

 

Gafisa S/A

Banco Votorantim S.A.

55,000

Fixed 14.2672%

CDI + 1.6344%

12/21/2015

06/20/2016

-

(637)

Gafisa S/A

Banco Votorantim S.A.

27,500

Fixed 11.1136%

CDI + 0.2801%

06/20/2016

12/20/2016

(391)

(641)

Gafisa S/A

Banco Votorantim S.A.

27,500

Fixed 15.1177%

CDI + 1.6344%

12/20/2016

06/20/2017

52

(399)

Gafisa S/A

Banco Votorantim S.A.

130,000

CDI + 1.90%

118% CDI

07/22/2014

07/26/2018

(786)

(2,216)

Gafisa S/A

Banco HSBC

194,000

Fixed 12.8727%

120% CDI

09/29/2014

10/08/2018

(4,476)

(15,907)

Gafisa S/A

Banco Votorantim S.A.

55,000

IPCA + 8.22%

120% CDI

03/17/2015

01/20/2020

4,359

(1,874)

             

(1,242)

(21,674)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current

(9,011)

(14,056)

 

 

 

 

 

Non-current

7,769

(7,618)

 

 

During the period ended June 30, 2016, the amount of R$12,216 (R$(4,346) in 2015) in the Company’s and consolidated statements, which refers to net result of the interest swap transaction, arising from the payment in the amount of R$8,216, and the positive value change based on the market of R$20,432, was recognized in the “financial income (expenses)” line in the statement of profit or loss for the year, allowing correlation between the impact of such transactions and interest rate fluctuation in the Company’s balance sheet (Note 24).

 

       The estimated fair value of derivative financial instruments contracted by the Company was determined based on information available in the market and specific valuation methodologies. However, considerable judgment was necessary for interpreting market data to produce the estimated fair value of each transaction, which may vary upon the financial settlement of transactions.

 

c)    Interest rate risk

 

There was no significant change in relation to the interest rate risks disclosed in Note 20(i)(c) to the financial statements as of December 31, 2015.

 

 

 

 

 

 

 

81

 


 
 

(A free translation from the original in Portuguese into English)

 

Gafisa S.A.

 

Notes to the individual and consolidated quarterly information

June 30, 2016

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

 

20.  Financial instruments--Continued

 

(i)     Risk considerations --Continued

 

d)    Liquidity risk

 

There was no significant change in relation to the liquidity risks disclosed in Note 20(i)(d) to the financial statements as of December 31, 2015.

 

The maturities of financial instruments, loans, financing, suppliers, payables to venture partners and debentures are as follows:

 

 

Company

Period ended June 30, 2016

Less than 1 year

1 to 3 years

4 to 5 years

More than 5 years

Total

Loans and financing (Note 12)

562,684

537,410

-

-

1,100,094

Debentures (Note 13)

255,770

286,773

21,024

-

563,567

Payables to venture partners (Note 15)

2,280

-

-

-

2,280

Suppliers (Note 15 and Note 20.ii.a)

36,117

3,406

-

-

39,523

 

856,851

827,589

21,024

-

1,705,464

 

 

Consolidated

Period ended June 30, 2016

Less than 1 year

1 to 3 years

4 to 5 years

More than 5 years

Total

Loans and financing (Note 12)

633,782

652,305

47,830

-

1,333,917

Debentures (Note 13)

430,246

286,773

21,024

-

738,043

Payables to venture partners (Note 15)

2,375

-

-

-

2,375

Suppliers (Note 15 and Note 20.ii.a)

77,721

6,370

-

-

84,091

 

1,144,124

945,448

68,854

-

2,158,426

 

Fair value classification

 

The Company uses the same classification disclosed in Note 21(i)(d) to the financial statements as of December 31, 2015 to determine and disclose the fair value of financial instruments by the valuation technique.

 

The classification level of fair value for financial instruments measured at fair value through profit or loss of the Company as of June 30, 2016 and December 31, 2015 is as follows:

 

 

Company

Consolidated

 

Fair value classification

As of June 30, 2016

Level 1

Level 2

Level 3

Level 1

Level 2

Level 3

 

 

 

 

 

 

 

Financial assets

 

 

 

 

 

 

Short-term investments (Note 4.2)

-

218,823

-

-

460,823

-

 

 

Company

Consolidated

 

Fair value classification

As of December 31, 2015

Level 1

Level 2

Level 3

Level 1

Level 2

Level 3

 

 

 

 

 

 

 

Financial assets

 

 

 

 

 

 

Short-term investments (Note 4.2)

-

350,343

-

-

629,671

-

 

 

 

 

 

 

 

 

 

82

 


 
 

(A free translation from the original in Portuguese into English)

 

Gafisa S.A.

 

Notes to the individual and consolidated quarterly information

June 30, 2016

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

 

20.  Financial instruments--Continued

 

(i)     Risk considerations --Continued

 

d)    Liquidity risk --Continued

 

Fair value classification --Continued

 

       In addition, the fair value classification of financial instruments liabilities measured at fair value through profit or loss is as follow:

 

Company

Consolidated

 

Fair value classification

As of June 30, 2016

Level 1

Level 2

Level 3

Level 1

Level 2

Level 3

 

 

 

 

 

 

 

Financial liabilities

 

 

 

 

 

 

Derivative financial instruments (Note 20.i.b)

-

1,242

-

-

1,242

-

 

 

Company

Consolidated

 

Fair value classification

As of December 31, 2015

Level 1

Level 2

Level 3

Level 1

Level 2

Level 3

 

 

 

 

 

 

 

Financial liabilities

 

 

 

 

 

 

Derivative financial instruments (Note 20.i.b)

-

21,674

-

-

21,674

-

 

In the period ended June 30, 2016, there were no transfers between the Levels 1 and 2 fair value classifications, nor were transfers between Levels 3 and 2 fair value classifications.

 

 (ii)   Fair value of financial instruments

 

a)    Fair value measurement

 

The Company uses the same methods and assumptions disclosed in Note 20(ii)(a) to the financial statements as of December 31, 2015 to estimate the fair value for each financial instrument type for which the estimate of values is practicable.

 

The most significant carrying values and fair values of financial assets and liabilities as of June 30, 2016 and December 31, 2015, classified into Level 2 of the fair value classification, are as follows:

 

 

Company

 

06/30/2016

12/31/2015

 

Carrying value

Fair value

Carrying value

Fair value

 

 

 

 

Financial assets

 

 

 

 

Cash and cash equivalents (Note 4.1)

19,166

19,166

44,044

44,044

Short-term investments (Note 4.2)

218,823

218,823

350,343

350,343

Trade accounts receivable (Note 5)

887,823

887,823

986,042

986,042

 

 

 

 

 

Financial liabilities

 

 

 

 

Loans and financing (Note 12)

1,100,094

1,097,080

1,138,660

1,095,844

Debentures (Note 13)

563,567

578,463

656,081

633,238

Payables to venture partners (Note 15)

2,280

2,729

4,713

5,472

Derivative financial instruments (Note 20(i)(b))

1,242

1,242

21,674

21,674

Suppliers (Note 20(i)(d))

39,523

39,523

32,115

32,115

 

 

 

 

 

 

 

83

 


 
 

(A free translation from the original in Portuguese into English)

 

Gafisa S.A.

 

Notes to the individual and consolidated quarterly information

June 30, 2016

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

 

20.  Financial instruments--Continued

 

(ii)    Fair value of financial instruments -- Continued

 

a)      Fair value measurement --Continued

 

 

Consolidated

 

06/30/2016

12/31/2015

 

Carrying value

Fair value

Carrying value

Fair value

 

 

 

 

Financial assets

 

 

 

 

Cash and cash equivalents (Note 4.1)

157,737

157,737

82,640

82,640

Short-term investments (Note 4.2)

460,832

460,832

629,671

629,671

Trade accounts receivable (Note 5)

1,640,823

1,640,823

1,802,364

1,802,364

 

 

 

 

 

Financial liabilities

 

 

 

 

Loans and financing (Note 12)

1,333,917

1,315,687

1,292,835

1,237,222

Debentures (Note 13)

738,043

750,350

857,958

828,387

Payables to venture partners (Note 15)

2,375

2,729

4,895

5,472

Derivative financial instruments (Note 20(i)(b))

1,242

1,242

21,674

21,674

Suppliers (Note 20(i)(d))

84,091

84,091

57,335

57,335

 

There was no significant change in relation to the other information disclosed in Note 20(ii)(a) to the financial statements as of December 31, 2015.

 

b)      Risk of debt acceleration

 

There was no significant change in relation to the risks of debt acceleration disclosed in Note 20(ii)(b) to the financial statements as of December 31, 2015.

 

c)      Market risk

 

There was no significant change in relation to the market risks disclosed in Note 20(ii)(c) to the financial statements as of December 31, 2015. 

 

 (iii)  Capital stock management

 

The explanations related to this note were not subject to significant changes in relation to the disclosures in Note 20(iii) to the financial statements as of December 31,2015.

 

The Company included in its net debt structure: loans and financing, debentures, obligations assumed on assignment of receivables and payables to venture partners less cash and cash equivalents and short-term investments (cash and cash equivalents and short-term investments):

 

 

 

Company

Consolidated

 

06/30/2016

12/31/2015

06/30/2016

12/31/2015

 

 

 

 

 

Loans and financing (Note 12)

1,100,094

1,138,660

1,333,917

1,292,835

Debentures (Note 13)

563,567

656,081

738,043

857,958

Obligations assumed on assignment of receivables (Note 14)

61,752

34,847

90,536

59,293

Payables to venture partners (Note 15)

2,280

4,713

2,375

4,895

( - ) Cash and cash equivalents and

short-term investments (Notes 4.1 and 4.2)

(237,989)

(394,387)

(618,569)

(712,311)

Net debt

1,489,704

1,439,914

1,546,302

1,502,670

Equity

2,998,075

3,095,491

3,001,290

3,097,236

Equity and net debt

4,487,779

4,535,405

4,547,592

4,599,906

 

 

 

 

 

84

 


 
 

(A free translation from the original in Portuguese into English)

 

Gafisa S.A.

 

Notes to the individual and consolidated quarterly information

June 30, 2016

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

 

20.  Financial instruments--Continued

 

 (iv)  Sensitivity analysis

 

The sensitivity analysis of financial instruments for the period ended March 31, 2016, except swap contracts, which are analyzed through their due dates, describing the risks that may incur material losses on the Company’s profit or loss, as provided for by CVM, through Rule No. 475/08, in order to show a 10%, 25% and 50% increase/decrease in the risk variable considered.

 

As of June 30, 2016, as well as derivative instruments, the Company has the following financial instruments:

 

a)   Short-term investments, loans and financing, and debentures linked to Interbank Deposit Certificates (CDI);

b)   Loans and financing linked to the Referential Rate (TR) and CDI, and debentures indexed to the CDI, National Consumer Price Index – Extended (IPCA) and TR;

c)   Accounts receivable, linked to the National Civil Construction Index (INCC).

 

For the sensitivity analysis in the period ended June 30, 2016, the Company considered the interest rates of investments, loans and accounts receivables, the CDI rate at 14.13%, the Referential Rate (TR) at 1.88%, the National Civil Construction Index (INCC) rate at 6.46%, and the National Consumer Price Index – Extended (IPCA) at 8.84% . The scenarios considered were as follows:

 

Scenario I – Probable: 10% increase/decrease in the risk variables used for pricing

Scenario II – Possible: 25% increase/decrease in the risk variables used for pricing

Scenario III – Remote: 50% increase/decrease in the risk variables used for pricing

 

The Company shows in the following chart the sensitivity to risks to which the Company is exposed, based on the above scenarios, as of June 30, 2016. The effects on equity are basically the same ones on profit or loss.

 

   

Scenario

   

I

II

III

III

II

I

Instrument

Risk

Increase 10%

Increase 25%

Increase 50%

Decrease 50%

Decrease 25%

Decrease 10%

 

 

 

 

 

 

 

Short-term investments

Increase/Decrease of CDI

5,118

12,795

25,591

(25,591)

(12,795)

(5,118)

Loans and financing

Increase/Decrease of CDI

(5,563)

(13,909)

(27,816)

27,816

13,909

5,563

Debentures

Increase/Decrease of CDI

(1,382)

(3,455)

(6,911)

6,911

3,455

1,382

Derivative financial instruments

Increase/Decrease of CDI

(3,730)

(8,811)

(16,860)

18,744

8,934

3,361

 

 

 

 

 

 

 

Net effect of CDI variation

 

(5,557)

(13,380)

(25,996)

27,880

13,503

5,188

 

 

 

 

 

 

 

Loans and financing

Increase/Decrease of TR

(1,650)

(4,126)

(8,252)

8,252

4,126

1,650

Debentures

Increase/Decrease of TR

(1,119)

(2,797)

(5,595)

5,595

2,797

1,119

 

 

 

 

 

 

 

Net effect of TR variation

 

(2,769)

(6,923)

(13,847)

13,847

6,923

2,769

 

 

 

 

 

 

 

Debentures

Increase/Decrease of IPCA

(605)

(1,512)

(3,024)

3,024

1,512

605

 

 

 

 

 

 

 

Net effect of IPCA variation

 

(605)

(1,512)

(3,024)

3,024

1,512

605

 

 

 

 

 

 

 

Accounts receivable

Increase/Decrease of INCC

9,914

24,785

49,570

(49,570)

(24,785)

(9,914)

Loans and financing

Increase/Decrease of INCC

(40)

(100)

(201)

201

100

40

 

 

 

 

 

 

 

Net effect of INCC variation

 

9,874

24,685

49,369

(49,369)

(24,685)

(9,874)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

85

 


 
 

(A free translation from the original in Portuguese into English)

 

Gafisa S.A.

 

Notes to the individual and consolidated quarterly information

June 30, 2016

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

 

21.  Related parties

 

21.1.  Balances with related parties

 

The transactions between the Company and related companies are made under conditions and prices established between the parties.

 

 

Company

Consolidated

Current accounts

06/30/2016

12/31/2015

06/30/2016

12/31/2015

Assets

 

 

 

 

Current account:

 

 

 

 

Total SPEs

44,764

55,023

67,680

86,010

Condominium and consortia and third party’s works

7,461

9,108

7,461

9,108

Loan receivable

66,717

78,818

96,975

109,193

Dividends receivable

17,004

14,279

-

-

 

135,946

157,228

172,116

204,311

 

 

 

 

Current portion

69,229

78,410

75,141

95,118

Non-current

66,717

78,818

96,975

109,193

 

 

 

 

Liabilities

 

 

 

 

Current account:

 

 

 

 

Total SPEs and Tenda

(972,252)

(790,895)

(69,366)

(76,620)

Loan payable

(7,826)

(10,480)

(55,173)

(51,482)

 

(980,078)

(801,375)

(124,539)

(128,102)

 

 

 

 

Current portion

(980,078)

(801,375)

(77,192)

(87,100)

Non-current

-

-

(47,347)

(41,002)

 

The composition, nature and condition of loan receivable and payable by the Company are shown below. Loan maturities range from July  2016 to the duration of the respective ventures.

         

 

Company

 

 

 

06/30/2016

12/31/2015

Nature

Interest rate

 

 

 

 

 

Tembok Planej. E Desenv. Imob. Ltda. (Vistta Laguna)

-

11,044

Construction

12% p.a. + IGPM

Acquarelle Civilcorp Incorporações Ltda.

180

287

Construction

12% p.a. + IGPM

Manhattan Residencial I

52,985

53,862

Construction

10% p.a. + TR

Target Offices & Mall

9,584

3,105

Construction

12% p.a. + IGPM

Scena Laguna - Tembok Planej. e Desenv. Imob. Ltda.

3,968

10,520

Construction

12% p.a. + IGPM

Total receivable - Company

66,717

78,818

   

 

 

 

 

 

Gafisa Spe-113 Empr Imob

-

3,788

Construction

100% of CDI

Dubai Residencial

3,150

2,650

Construction

6% p.a.

Parque Arvores

2,563

2,270

Construction

6% p.a.

Parque Aguas

2,113

1,772

Construction

6% p.a.

Total payable - Company

7,826

10,480

Construction

6% p.a.

 

 

Consolidated

 

 

 

06/30/2016

12/31/2015

Nature

Interest rate

 

 

 

 

 

Tembok Planej. E Desenv. Imob. Ltda. (Vistta Laguna)

-

11,044

Construction

12% p.a. + IGPM

Acquarelle Civilcorp Incorporações Ltda.

180

287

Construction

12% p.a. + IGPM

Manhattan Residencial I

52,986

53,862

Construction

10% p.a. + TR

Target Offices & Mall

9,584

3,105

Construction

12% p.a. + IGPM

Scena Laguna - Tembok Planej. e Desenv. Imob. Ltda.

3,968

10,520

Construction

12% p.a. + IGPM

Fit Campolim SPE Emp. Imob. Ltda.

14,223

14,097

Construction

113.5% of 126.5% of CDI

Acedio SPE Emp. Imob. Ltda.

3,394

3,260

Construction

113.5% of 126.5% of CDI

Atua Construtora e Incorporadora S.A.

12,167

12,168

Construction

113.50% to 112% of CDI

Other

473

850

Construction

Several

Total receivable - Consolidated

96,975

109,193

 

 

 

 

 

 

 

Fit 34 SPE Empreendimentos Imobiliários Ltda.

22,754

21,925

Construction

6% p.a.

Fit 03 SPE Empreendimentos Imobiliários Ltda.

8,210

7,912

Construction

6% p.a.

Fit 11 SPE Empreendimentos Imobiliários Ltda.

6,133

5,910

Construction

6% p.a.

Gafisa Spe-113 Empr Imob

-

3,788

Construction

100% of CDI

Parque dos Pássaros

5,255

2,725

Construction

6% p.a.

Dubai Residencial

3,150

2,650

Construction

6% p.a.

Parque Arvores

2,563

2,270

Construction

6% p.a.

Parque Aguas

2,113

1,772

Construction

6% p.a.

Fit 31 SPE Empreendimentos Imobiliários Ltda.

1,347

1,298

Construction

6% p.a.

Araçagy

3,648

1,232

Construction

6% p.a.

Total payable - Consolidated

55,173

51,482

 

 

 

In the period ended June 30, 2016 the recognized financial income from interest on loans amounted to R$2,617 (R$4,594 in 2015) in the Company’s  statement and R$2,617 (R$20,051 in 2015) in the consolidated statement (Note 24).

 

 

 

 

 

86

 


 
 

(A free translation from the original in Portuguese into English)

 

Gafisa S.A.

 

Notes to the individual and consolidated quarterly information

June 30, 2016

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

 

21.  Related parties --Continued

 

21.1.  Balances with related parties --Continued

 

Information regarding management transactions and compensation is described in Note 25.

 

The other explanation related to this note was not subject to significant changes in relation to those reported in Note 21 to the financial statements as of December 31, 2015.

 

21.2.  Endorsements, guarantees and sureties

 

The financial transactions of the subsidiaries are guaranteed by the endorsement or surety in proportion to the interest of the Company in the capital stock of such companies, in the amount of R$1,409,530 as of June 30, 2016 (R$1,067,950 as of December 31, 2015).

 

 

22.  Net operating revenue

 

 

Company

Consolidated

 

06/30/2016

06/30/2015

06/30/2016

06/30/2015

Gross operating revenue

 

 

 

 

Real estate development, sale, barter transactions and construction services

317,449

606,804

970,246

1,184,652

(Recognition) Reversal of allowance for doubtful accounts and provision for cancelled contracts (Note 5)

(5,598)

(313)

(20,511)

23,129

Taxes on sale of real estate and services

(25,710)

(53,883)

(70,830)

(96,751)

Net operating revenue

286,141

552,608

878,905

1,111,030

 

 

 

23.  Costs and expenses by nature

 

These are represented by the following:

 

 

 

Company

Consolidated

 

06/30/2016

06/30/2015

06/30/2016

06/30/2015

Cost of real estate development and sale:

 

 

 

 

Construction cost

(126,735)

(224,430)

(417,163)

(472,022)

Land cost

(59,650)

(81,906)

(138,571)

(152,855)

Development cost

(16,905)

(21,370)

(56,336)

(52,999)

Capitalized financial charges (Note 12)

(56,890)

(53,775)

(82,823)

(71,945)

Maintenance / warranty

(4,738)

(27,842)

(8,240)

(31,142)

Provision for cancelled contracts (Note 5)

-

-

(10,080)

(22,324)

Total cost of real estate development and sale

(264,918)

(409,323)

(713,213)

(803,287)

 

 

 

 

Commercial expenses:

 

 

 

 

Product marketing expenses

(14,519)

(12,774)

(38,584)

(27,924)

Brokerage and sale commission

(8,086)

(8,451)

(18,606)

(18,474)

Customer Relationship Management (CRM) and corporate marketing expenses

(8,801)

(7,922)

(18,012)

(17,318)

Other

(611)

(1,844)

(1,331)

(4,032)

Total commercial expenses

(32,017)

(30,991)

(76,533)

(67,748)

 

 

 

 

General and administrative expenses:

 

 

 

 

Salaries and payroll charges

(16,890)

(19,780)

(35,884)

(37,938)

Employee benefits

(2,171)

(2,349)

(3,982)

(3,992)

Travel and utilities

(356)

(473)

(1,111)

(1,110)

Services

(5,093)

(5,821)

(11,764)

(12,269)

Rents and condominium fees

(4,399)

(4,489)

(6,954)

(6,597)

IT

(7,836)

(6,609)

(8,322)

(12,473)

Stock option plan (Note 18.3)

(3,189)

(3,940)

(3,751)

(5,001)

Reserve for profit sharing (Note 25.iii)

(6,250)

(12,000)

(12,468)

(12,038)

Other

(341)

(889)

(2,487)

(1,320)

Total general and administrative expenses

(46,525)

(56,350)

(86,723)

(92,738)

 

 

 

 

 

Other income (expenses), net:

 

 

 

 

Expenses with lawsuits (Note 16)

(30,405)

(42,532)

(43,946)

(55,488)

Expenses with the adjustment to the stock option plan balance of AUSA

(3,401)

-

(3,401)

-

Other

1,223

(5,252)

(8,673)

(11,118)

Total other income/(expenses), net

(32,583)

(47,784)

(56,020)

(66,606)

 

87

 


 
 

(A free translation from the original in Portuguese into English)

 

Gafisa S.A.

 

Notes to the individual and consolidated quarterly information

June 30, 2016

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

 

24.  Financial income (expenses)

 

 

Company

Consolidated

 

06/30/2016

06/30/2015

06/30/2016

06/30/2015

Financial income

 

 

 

 

Income from financial investments

19,592

30,162

38,331

52,699

Derivative transactions (Note 20 (i) (b))

12,216

-

12,216

-

Financial income on loans (Note 21)

2,617

4,594

2,617

20,051

Other financial income

1,252

676

5,245

4,132

Total financial income

35,677

35,432

58,409

76,882

 

 

 

 

 

Financial expenses

 

 

 

 

Interest on funding, net of capitalization (Note 12)

(20,924)

(36,836)

(31,494)

(44,467)

Amortization of debenture cost

(1,366)

(1,966)

(1,366)

(1,966)

Payables to venture partners

(761)

(1,131)

(761)

(1,131)

Banking expenses

(2,513)

(1,822)

(4,444)

(2,805)

Derivative transactions (Note 20 (i) (b))

-

(4,346)

-

(4,346)

Discount in securitization transaction

(16,699)

(12,126)

(24,774)

(27,698)

Total financial expenses

(42,263)

(58,227)

(62,839)

(82,413)

 

 

25.  Transactions with management and employees

 

(i)     Management compensation

 

The amounts recorded in the account “general and administrative expenses” for the periods ended  June 30, 2016 and 2015, related to the compensation of the Company’s key management personnel are as follows:

 

Management compensation

 

Period ended June 30, 2016

Board of Directors

Statutory Board

Fiscal Council

 

 

 

 

Number of members

7

5

3

Fixed compensation for the period (in R$)

 

 

 

Salary / Fees

847

1,650

98

Direct and indirect benefits

-

173

-

Monthly compensation (in R$)

141

304

16

Total compensation

847

1,823

98

Profit sharing (Note 25 (iii))

-

1,138

-

Total compensation and profit sharing

847

2,961

98

 

 

 

Management compensation

 

Period ended June 30, 2015

Board of Directors

Statutory Board

Fiscal Council

 

 

 

 

Number of members

7

5

3

Fixed compensation for the period (in R$)

 

 

 

Salary / Fees

847

1,650

99

Direct and indirect benefits

-

192

-

Monthly compensation (in R$)

141

307

17

Total compensation

847

1,842

99

Profit sharing (Note 25 (iii))

-

2,276

-

Total compensation and profit sharing

847

4,118

99

 

The amount related to the stock compensation of the Company’s management members was R$1,825 for the period ended June 30, 2016 (R$2,653 in 2015).

 

The maximum aggregate compensation of the Company’s management members for the year 2016 was established at R$19,823, as approved at the Annual Shareholders’ Meeting held on April 25, 2016.

 

On the same occasion the compensation limit of the members of the Company’s Fiscal Council for their next term of office that ends in the Annual Shareholders’ Meeting to be held in 2017, was approved at R$245.

 

 

 

 

88

 


 
 

(A free translation from the original in Portuguese into English)

 

Gafisa S.A.

 

Notes to the individual and consolidated quarterly information

June 30, 2016

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

 

 

25.  Transactions with management and employees --Continued

 

(i)     Management compensation --Continued

 

       The subsidiary Tenda has an administrative structure segregated from the Company, therefore, the amounts recorded in the heading “General and Administrative Expenses” in the consolidated balance are added by the compensation of its Management members and are as follows:

 

 

Management compensation

 

Period ended June 30, 2016

Board of Directors

Statutory Board

Fiscal Council

 

 

 

 

Number of members

10

11

3

Fixed compensation for the period (in R$)

 

 

 

Salary / Fees

161

2,576

30

Direct and indirect benefits

-

362

-

Monthly compensation (in R$)

27

490

5

Total compensation

161

2,938

30

Profit sharing (Note 25 (iii))

-

2,832

-

Total compensation and profit sharing

161

5,770

30

 

 

 

Management compensation

 

Period ended June 30, 2015

Board of Directors

Statutory Board

Fiscal Council

 

 

 

 

Number of members

10

10

3

Fixed compensation for the period (in R$)

 

 

 

Salary / Fees

156

2,427

29

Direct and indirect benefits

-

346

-

Monthly compensation (in R$)

26

462

5

Total compensation

156

2,773

29

Profit sharing (Note 25 (iii))

-

2,938

-

Total compensation and profit sharing

156

5,711

29

 

The amount related to the stock compensation of the subsidiary Tenda’s management members was R$515 for the period ended June 30, 2016 (R$980 in 2015).

 

The maximum aggregate compensation of the subsidiary Tenda’s management members for the year 2016 was established at R$14,696, for fixed and share-based compensation, as approved at the Annual Shareholders’ Meeting held on April 22, 2016.

 

On the same occasion the compensation limit of the Fiscal Council members for their next term of office that ends in the Annual Shareholders’ meeting to be held in 2017 was approved at R$149.

 

 

(ii)    Sales

 

In the period ended June 30, 2016, there were no with units sold to the Management and the total receivables is R$1,292 (R$1,610 in 2015).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

89

 


 
 

(A free translation from the original in Portuguese into English)

 

Gafisa S.A.

 

Notes to the individual and consolidated quarterly information

June 30, 2016

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

 

25.  Transactions with management and employees --Continued

 

 

(iii)   Profit sharing

 

In the period ended June 30, 2016, the Company recorded a provision for profit sharing amounting to R$6,250 in the Company’s  statement (R$12,000 in 2015) and R$12,468 in the consolidated statement (R$12,038 in 2015) in the account “General and Administrative Expenses" (Note 23).

 

 

Company

Consolidated

 

06/30/2016

06/30/2015

06/30/2016

06/30/2015

 

 

 

 

 

Executive officers

1,138

2,276

3,970

5,214

Other employees

5,112

9,724

10,526

16,038

Reclassification in subsidiary Tenda

-

-

-

(3,550)

Reversal in subsidiary Tenda

-

-

(2,028)

(5,664)

 

6,250

12,000

12,468

12,038

 

The other explanation related to this note was not subject to significant changes in relation to those reported in Note 25 to the financial statements as of December 31, 2015.

 

 

26.  Insurance

 

       For the period ended June 30, 2016 insurance contracts were not subject to significant changes in relation to those disclosed in Note 26 to the financial statements as of December 31, 2015.

 

 

27.  Earning (loss) per share

 

The following table shows the calculation of basic and diluted earnings and loss per share. In view of the loss for the period ended June 30, 2016, shares with dilutive potential are not considered, because the impact would be antidilutive.

 

 

 

 

 

06/30/2016

06/30/2015

Basic numerator

 

 

Proposed dividends and interest on equity

-

-

Undistributed profit (loss)

(91,665)

60,137

Undistributed profit (loss), available for the holders of common shares

(91,665)

60,137

 

 

 

Basic denominator (in thousands of shares)

 

 

Weighted average number of shares

364,977

367,420

 

 

 

Basic earning (loss) per share in Reais

(0.2512)

0.1637

 

Diluted numerator

 

 

Proposed dividends and interest on equity

-

-

Undistributed earning (loss)

(91,665)

60,137

Undistributed earning (loss), available for the holders of common shares

(91,665)

60,137

 

 

 

Diluted denominator (in thousands of shares)

 

 

Weighted average number of shares

364,977

367,420

Stock options

2,114

2,697

Anti-dilutive effect

(2,114)

-

Diluted weighted average number of shares

364,977

370,117

 

 

 

Diluted earning (loss) per share in Reais

(0.2512)

0.1625

 

 

The other explanation related to this note was not subject to significant changes in relation to those reported in Note 27 to the financial statements as of December 31, 2015.

 

 

 

 

90

 


 
 

(A free translation from the original in Portuguese into English)

 

Gafisa S.A.

 

Notes to the individual and consolidated quarterly information

June 30, 2016

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

 

28.  Segment information

 

The quarterly information of the business segments of the Company is as follows:

 

 

   

Consolidated

 

Gafisa

Tenda

06/30/2016

Net operating revenue

383,610

495,295

878,905

Operating costs

(354,070)

(359,143)

(713,213)

 

 

 

Gross profit

29,540

136,152

165,692

 

 

 

Selling expenses

(36,991)

(39,542)

(76,533)

General and administrative expenses

(46,526)

(40,197)

(86,723)

Other income / (expenses), net

(33,533)

(22,487)

(56,020)

Depreciation and amortization

(15,152)

(6,230)

(21,382)

Financial expenses

(43,097)

(19,742)

(62,839)

Financial income

41,014

17,395

58,409

Tax expenses

(5,569)

(10,149)

(15,718)

 

 

 

Profit / (loss) for the period attributed to the shareholders of the Company

(105,081)

13,416

(91,665)

 

 

 

Customers (short and long terms)

1,160,584

480,239

1,640,823

Inventories (short and long terms)

1,973,235

720,246

2,693,481

Other assets

1,457,992

755,828

2,213,820

 

 

 

Total assets

4,591,811

1,956,313

6,548,124

 

 

 

 

Total liabilities

2,732,163

814,671

3,546,834

 

 

   

Consolidated

 

Gafisa

Tenda

06/30/2015

Net operating revenue

688,450

422,580

1,111,030

Operating costs

(500,035)

(303,252)

(803,287)

 

 

 

Gross profit

188,415

119,328

307,743

 

 

 

Selling expenses

(37,068)

(30,680)

(67,748)

General and administrative expenses

(56,351)

(36,387)

(92,738)

Other income / (expenses), net

(49,899)

(16,707)

(66,606)

Depreciation and amortization

(16,358)

(6,872)

(23,230)

Financial expenses

(51,965)

(30,448)

(82,413)

Financial income

39,255

37,627

76,882

Tax expenses

(7,628)

1,222

(6,406)

 

 

 

Profit/(loss) for the period attributed to the shareholders of the Company

28,656

31,481

60,137

 

 

 

Customers (short and long term)

1,441,678

472,844

1,914,522

Inventories (short and long term)

1,848,786

667,011

2,515,797

Other assets

1,798,424

843,803

2,642,227

 

 

 

Total assets

5,088,888

1,983,658

7,072,546

 

 

 

 

Total liabilities

3,114,392

858,662

3,973,054

 

The other explanations related to this note did not suffer significant changes in relation to the disclosures made in Note 28 to the financial statements as of December 31, 2015.

 

 

 

 

 

 

 

 

 

 

91

 


 
 

(A free translation from the original in Portuguese into English)

 

Gafisa S.A.

 

Notes to the individual and consolidated quarterly information

June 30, 2016

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

 

29.  Real estate ventures under construction – information and commitments

 

In order to meet the provisions of paragraphs 20 and 21 of ICPC 02, the recognized revenue amounts and incurred costs are shown in the statement of profit or loss, and the advances received are shown in the account “Payables for purchase of property and advances from customer”. The Company presents the following information on the ventures under construction as of June 30, 2016 and December 31, 2015:

 

 

Consolidated

 

 

06/30/2016

12/31/2015

 

 

 

 

Unappropriated sales revenue of units sold

 

669,206

777,679

Unappropriated estimated cost of units sold

 

(393,736)

(445,265)

Unappropriated estimated cost of units in inventory

 

(681,280)

(795,995)

 

 

 

 

(i) Unappropriated sales revenue of units sold

 

 

 

Ventures under construction:

 

 

 

Contracted sales revenue

 

2,483,106

2,761,219

Appropriated sales revenue

 

(1,813,900)

(1,983,540)

Unappropriated sales revenue (a)

 

669,206

777,679

 

(ii) Unappropriated estimated cost of units sold

 

 

 

Ventures under construction:

 

 

 

Estimated cost of units

 

(1,487,721)

(1,626,339)

Incurred cost of units

 

1,093,985

1,181,074

Unappropriated estimated cost (b)

 

(393,736)

(445,265)

 

(iii) Unappropriated estimated costs of units in inventory

 

 

 

Ventures under construction:

 

 

 

Estimated cost of units

 

(1,562,540)

(1,724,372)

Incurred cost of units

 

881,260

928,377

Unappropriated estimated cost

 

(681,280)

(795,995)

 

(a)   The unappropriated sales revenue of units sold are measured by the face value of contracts, plus the contract adjustments and deducted from cancellations, not considering related taxes and adjustment to present value, and do not include ventures that are subject to restriction due to a suspensive clause (legal period of 180 days in which the Company can cancel a development) and therefore is not appropriated to profit or loss.

(b)   The unappropriated estimated cost of units sold does not include financial charges, which are appropriated to properties for sale and profit or loss (cost of real estate sold) in proportion to the real estate units sold to the extent they are incurred.

 

       As of June 30, 2016, the percentage of assets consolidated in the quarterly information related to ventures included in the equity segregation structure of the development stood at 39.4% (33.1% in 2015).

 

 

 

 

 

 

 

 

 

92

 


 
 

(A free translation from the original in Portuguese into English)

 

Gafisa S.A.

 

Notes to the individual and consolidated quarterly information

June 30, 2016

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

 

30.  Communication with regulatory bodies

 

The explanations related to this note were not subject to significant changes in relation to those reported in Note 30 to the financial statements as of December 31, 2015.

 

31.  Subsequent events

 

(i)  Funds deposited with third parties

 

On July 1, 2016, the subsidiary Tenda made the payment of the 16th interest installment and the 10th amortization installment related to its first debenture placement, in the total amount of R$74,551, of which R$70,000 of principal and R$4,551 of interests (Notes 4.1(b)).

 

 

***

 

93

 


 
 

(A free translation from the original in Portuguese into English)

 

Gafisa S.A.

 

 

Other information deemed relevant by the Company

 

1.    SHAREHOLDERS HOLDING MORE THAN 5% OF THE VOTING CAPITAL AND TOTAL NUMBER OF OUTSTANDING SHARES

 

 

6/30/2016

 

Common shares

Shareholder

Shares

%

Treasury shares

14,440,416

3.82%

FUNCEF – Fundação dos Economiários Federais

23,835,800

6.30%

Polo

69,108,486

18.28%

Pátria Investimentos

21,171,700

5.60%

Outstanding shares

249,509,760

66.00%

     

Total shares

378,066,162

100.00%

     

6/30/2015

 

Common shares

Shareholder

Shares

%

Treasury shares

10,074,707

2.66%

FUNCEF – Fundação dos Economiários Federais

23,835,800

6.30%

Polo

52,547,486

13.90%

Outstanding shares

291,608,169

77.13%

     

Total shares

378,066,162

100.00%

 

 

 

 

 

 

 

 

 

 

 

 

94

 


 
 

(A free translation from the original in Portuguese into English)

 

Gafisa S.A.

 

Other information deemed relevant by the Company

 

2.    SHARES HELD BY PARENT COMPANIES, MANAGEMENT AND BOARD

 

 

6/30/2016

Common shares

Shares

%

Shareholders holding effective control of the Company

114,115,986

30.18%

Board of Directors

592,609

0.16%

Executive directors

2,012,962

0.53%

Fiscal council

-

-

Executive control, board members, officers and fiscal council

116,721,557

30.87%

Treasury shares

14,440,416

3.82%

Outstanding shares in the market (*)

246,904,189

65.31%

Total shares

378,066,162

100.00%

6/30/2015

Common shares

Shares

%

Shareholders holding effective control of the Company

76,383,286

20.20%

Board of Directors

592,609

0.16%

Executive directors

1,734,945

0.46%

Fiscal council

-

-

Executive control, board members, officers and fiscal council

78,710,840

20.82%

Treasury shares

10,074,707

2.66%

Outstanding shares in the market (*)

289,280,615

76.52%

Total shares

378,066,162

100.00%

(*) Excludes shares of effective control, management, board and in treasury.

 

 

 

 

 

95

 


 
 

(A free translation from the original in Portuguese into English)

 

Gafisa S.A.

 

Other relevant information

 

3 – COMMITMENT CLAUSE

 

The Company, its shareholders, directors and board members undertake to settle, through arbitration, any and all disputes or controversies that may arise between them, related to or originating from, particularly, the application, validity, effectiveness, interpretation, breach and the effects thereof, of the provisions of Law No. 6404/76, the Company's By-Laws, rules determined by the Brazilian Monetary Council (CMN), by the Central Bank of Brazil and by the Brazilian Securities Commission (CVM), as well as the other rules that apply to the operation of the capital market in general, in addition to those established in the New Market Listing Regulation, Participation in the New Market Contract and in the Arbitration Regulation of the Chamber of Market Arbitration.

 

 

96

 


 
 

(A free translation from the original in Portuguese into English)

 

Gafisa S.A.

 

Report on the review of quarterly information - ITR

 

 

To the shareholders, Board of Directors and Officers

Gafisa S.A.

São Paulo - SP

 

We have reviewed the accompanying individual and consolidated interim financial information of Gafisa S.A. (“Company”), identified as Company and Consolidated, respectively, contained in the Quarterly Information (ITR) for the quarter ended June 30, 2016, which comprises the balance sheet as at June 30, 2016 and the respective statement of operations, statement of comprehensive income (loss) for the quarter and six-month period then ended, and the statement of changes in equity and statement of cash flows for the six-month period then ended, including explanatory notes.

 

The Company’s management is responsible for the preparation of individual interim financial information in accordance with the Technical Pronouncement of the Accounting Pronouncements Committee (CPC) 21 (R1) – Interim Financial Reporting and the consolidated interim financial information in accordance with CPC 21 (R1) and IAS 34 – Interim Financial Reporting, issued by the International Accounting Standards Board (IASB) which considers the Technical Orientation - OCPC 04 - Application of the Technical Interpretation ICPC 02 to the Brazilian Real Estate Development Entities, edited by the Accounting Pronouncements Committee (CPC) and approved by the Brazilian Securities and Exchange Commission (CVM) and the Brazilian Federal Accounting Council (CFC), as well as for the presentation of these information in compliance with the rules issued by the CVM, applicable to the preparation of Quarterly Information (ITR). Our responsibility is to express a conclusion on this interim financial information based on our review.

 

Scope of review

We conducted our review according to the Brazilian and international review standards of interim financial information (NBC TR 2410 – Review of Interim Financial Information Performed by the Auditor of the Entity, and ISRE 2410 - Review of Interim Financial Information Performed by the Independent Auditor of the Entity, respectively). A review of interim financial information consists of inquiries, mainly of the people responsible for the financial and accounting matters, and the application of analytical and other review procedures. The scope of a review is significantly narrower than that of an audit conducted in accordance with audit standards and, accordingly, it did not permit us to obtain assurance that we took notice of all significant matters that could have been raised in an audit. Therefore, we did not express an audit opinion.

 

Conclusion from the individual and consolidated interim financial information prepared in accordance with CPC 21(R1)

Based on our review, we are not aware of any fact that makes us believe that the individual and consolidated interim financial information included in the Quarterly Information referred to above was not prepared, in all material respects, in accordance with CPC 21 (R1) applicable to the preparation of Quarterly Information (ITR), and presented in compliance with the rules issued by the CVM.

 

 

 

 

 

97

 


 
 

(A free translation from the original in Portuguese into English)

 

Gafisa S.A.

 

Conclusion from the consolidated interim information prepared in accordance with IAS 34, which considers the Technical Orientation - OCPC 04 – Application of the Technical Interpretation ICPC 02 to the Brazilian Real Estate Development Entities, edited by Accounting Pronouncements Committee (CPC) and approved by the Brazilian Securities and Exchange Commission (CVM) and the Brazilian Federal Accounting Council (CFC)

Based on our review, we are not aware of any fact that makes us believe that the consolidated interim financial information included in the Quarterly Information referred to above was not prepared, in all material respects, in accordance with IAS 34, issued by the IASB, which considers the Technical Orientation - OCPC 04 - Application of technical interpretation ICPC02 to the Brazilian Real Estate Development Entities, issued by the Accounting Pronouncements Committee (CPC), and approved by the CVM and the Brazilian Federal Accounting Council (CFC) applicable to the preparation of Quarterly Information (ITR), and presented in compliance with the rules issued by the CVM.

 

Emphasis of matter

As described in Note 2, the individual (Company) and consolidated interim financial information was prepared in accordance with accounting practices adopted in Brazil (CPC21 (R1)). The consolidated interim financial information prepared in accordance with the IFRS applicable to the Brazilian Real Estate development entities IAS34 for interim financial information also considers the Technical Orientation OCPC04, edited by the Accounting Pronouncements Committee (CPC). This Technical Orientation refers to the revenue recognition of this sector and comprises other matters related to the meaning and adoption of the concept of continuous transfer of the risks, benefits and control over real estate unit sales, as further described in Note 2. Our conclusion is not modified in view of this matter.

 

Other matters

 

Statement of value added

We have also reviewed the individual and consolidated statements of value added for the six-month period ended June 30, 2016, prepared under the responsibility of the Company’s management, the presentation of which in the interim financial information is required by the rules of the Brazilian Securities and Exchange Commission (CVM) applicable to Quarterly Information (ITR), and as supplementary information under International Financial Reporting Standards (IFRS), whereby no statement of value added presentation is required. These statements have been subject to the same review procedures previously described and, based on our review, we are not aware of any fact that makes us believe that they were not prepared, in all material respects, according to the individual and consolidated interim financial information taken as a whole.

 

São Paulo, August 11, 2016

 

KPMG Auditores Independentes

CRC 2SP014428/O-6

 

 

Giuseppe Masi

Accountant CRC 1SP176273/O-7

 

 

 

 

98

 


 
 

(A free translation from the original in Portuguese into English)

 

Gafisa S.A.

 

Reports and statements \ Management statement of interim financial information

 

 

Management statement of interim financial information

 

STATEMENT

 

Gafisa S.A. management, CNPJ 01.545.826/0001-07, located at Av. Nações Unidas, 8501, 19th floor, Pinheiros, São Paulo, states as per article 25 of CVM Instruction 480 issued in December 07, 2009:

 

i)    Management has reviewed, discussed and agreed with the auditor’s conclusion expressed on the report on review interim financial Information for the period ended June 30, 2016; and

 

ii)   Management has reviewed and agreed with the interim information for the period ended June 30, 2016.

 

São Paulo, August 11, 2016

 

GAFISA S.A.

 

Management

 

 

 

99

 


 
 

(A free translation from the original in Portuguese into English)

 

Gafisa S.A.

 

Reports and Statements \

Management statement on the report on review of interim financial information

 

 

Management Statement on the Review Report

 

STATEMENT

 

Gafisa S.A. management, CNPJ 01.545.826/0001-07, located at Av. Nações Unidas, 8501, 19th floor, Pinheiros, São Paulo, states as per article 25 of CVM Instruction 480 issued in December 07, 2009:

 

i)    Management has reviewed, discussed and agreed with the auditor’s conclusion expressed on the report on review interim financial Information for the period ended June 30, 2016; and

 

ii)   Management has reviewed and agreed with the interim information for the period ended June 30, 2016.

 

São Paulo, August 11, 2016

 

GAFISA S.A.

 

Management

 

 

100

 

 

 

 

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 26, 2016
 
Gafisa S.A.
 
By:
/s/ Sandro Gamba

 
Name:   Sandro Gamba
Title:     Chief Executive Officer