gfaitr1q16_6k.htm - Generated by SEC Publisher for SEC Filing
 
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 

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

March 31, 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 03/31/2016 

7 

01/01/2015 to 03/31/2015 

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 03/31/2016 

15 

01/01/2015 to 03/31/2015 

16 

Statement of value added 

17 

Comments on performance 

18 

Notes to interim financial information 

59 

Other information deemed relevant by the Company 

92 

Reports and statements 

 

Report on review of interim financial information 

95 

Management statement of interim financial information 

97 

Management statement on the report on review of interim financial information  98 

 


 
 

 

COMPANY DATA / CAPITAL COMPOSITION

Number of Shares

CURRENT QUARTER

(in thousands)

3/31/2016

Paid-in Capital

 

Common

378,066

Preferred

0

Total

378,066

Treasury shares

 

Common

10,584

Preferred

0

Total

10,584

     

 

1


 
 

 

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

 

CODE

DESCRIPTION

ACTUAL QUARTER 3/31/2016

PRIOR YEAR 12/31/2015

1

Total Assets

6,537,728

6,492,901

1.01

Current Assets

2,349,824

2,384,773

1.01.01

Cash and cash equivalents

26,601

44,044

1.01.01.01

Cash and banks

14,501

31,823

1.01.01.02

Short-term investments

12,100

12,221

1.01.02

Short-term investments

334,633

350,343

1.01.02.01

Fair value of short-term investments

334,633

350,343

1.01.03

Accounts receivable

678,656

723,950

1.01.03.01

Trade accounts receivable

678,656

723,950

1.01.03.01.01

Receivables from clients of developments

656,249

705,367

1.01.03.01.02

Receivables from clients of construction and services rendered

22,407

18,583

1.01.04

Inventories

1,172,707

1,135,137

1.01.04.01

Properties for sale

1,172,707

1,135,137

1.01.07

Prepaid expenses

1,390

1,901

1.01.07.01

Prepaid expenses and others

1,390

1,901

1.01.08

Other current assets

135,837

129,398

1.01.08.01

Non current assets for sale

6,631

4,367

1.01.08.03

Other

129,206

125,031

1.01.08.03.01

Other accounts receivable and others

48,544

46,621

1.01.08.03.03

Receivables from related parties

80,662

78,410

1.02

Non current assets

4,187,904

4,108,128

1.02.01

Non current assets

793,435

809,233

1.02.01.03

Accounts receivable

245,859

262,092

1.02.01.03.01

Receivables from clients of developments

245,859

262,092

1.02.01.04

Inventories

374,472

387,375

1.02.01.09

Others non current assets

173,104

159,766

1.02.01.09.03

Others accounts receivable and others

85,745

80,948

1.02.01.09.04

Receivables from related parties

82,628

78,818

1.02.01.09.05

Derivative Financial Instruments

4,731

-

1.02.02

Investments

3,341,333

3,242,765

1.02.02.01

Interest in associates and affiliates

3,253,514

3,154,946

1.02.02.02

Interest in subsidiaries

87,819

87,819

1.02.02.02.01

Interest in subsidiaries - goodwill

87,819

87,819

1.02.03

Property and equipment

21,240

22,819

1.02.03.01

Operation property and equipment

21,240

22,819

1.02.04

Intangible assets

31,896

33,311

1.02.04.01

Intangible assets

31,896

33,311

 

 

 

2


 
 

 

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

CODE

DESCRIPTION

ACTUAL QUARTER 3/31/2016

PRIOR YEAR 12/31/2015

2

Total Liabilities

6,537,728

6,492,901

2.01

Current liabilities

2,228,770

2,105,504

2.01.01

Social and labor obligations

35,137

26,758

2.01.01.02

Labor obligations

35,137

26,758

2.01.01.02.01

Salaries, payroll charges and profit sharing

35,137

26,758

2.01.02

Suppliers

40,176

32,115

2.01.02.01

Local suppliers

40,176

32,115

2.01.03

Tax obligations

39,987

40,902

2.01.03.01

Federal tax obligations

39,987

40,902

2.01.04

Loans and financing

748,991

783,561

2.01.04.01

Loans and financing

556,307

595,817

2.01.04.02

Debentures

192,684

187,744

2.01.05

Other obligations

1,261,404

1,121,856

2.01.05.01

Payables to related parties

923,290

801,375

2.01.05.02

Other

338,114

320,481

2.01.05.02.01

Dividends and interest on capital payable

17,689

17,682

2.01.05.02.04

Obligations for purchase of properties and advances from customers

173,102

148,989

2.01.05.02.05

Other obligations

117,789

127,123

2.01.05.02.07

Obligations assumed on the assignment of receivables

19,598

12,631

2.01.05.02.08

Derivative financial instruments

9,936

14,056

2.01.06

Provisions

103,075

100,312

2.01.06.01

Tax, labor and civel lawsuits

103,075

100,312

2.01.06.01.01

Tax lawsuits

220

220

2.01.06.01.02

Labor lawsuits

15,566

15,516

2.01.06.01.04

Civel lawsuits

87,289

84,576

2.02

Non current liabilities

1,265,287

1,291,906

2.02.01

Loans and financing

1,031,662

1,011,180

2.02.01.01

Loans and financing

572,318

542,843

2.02.01.01.01

Loans and financing in local currency

572,318

542,843

2.02.01.02

Debentures

459,344

468,337

2.02.02

Other liabilities

139,513

188,078

2.02.02.02

Other

139,513

188,078

2.02.02.02.03

Obligations for purchase of properties and advances from customers

92,257

143,216

2.02.02.02.04

Other liabilities

11,534

15,028

2.02.02.02.06

Obligations assumed on the assignment of receivables

35,722

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

84,027

82,563

2.02.04.01

Tax, labor and civel lawsuits

84,027

82,563

2.02.04.01.02

Tax and labor lawsuits

47,874

47,719

2.02.04.01.04

Civel lawsuits

36,153

34,844

2.03

Equity

3,043,671

3,095,491

2.03.01

Capital

2,740,662

2,740,662

2.03.02

Capital Reserves

78,241

76,834

2.03.02.04

Granted options

149,458

148,051

2.03.02.07

Reserve for expenditures with public offering

-71,217

-71,217

2.03.04

Income Reserve

277,995

277,995

2.03.04.01

Legal Reserve

35,316

35,316

2.03.04.02

Statutory Reserve

268,659

268,659

2.03.04.09

Treasury shares

-25,980

-25,980

2.03.05

Retained earnings/accumulated losses

-53,227

-

 

 

 

 

3


 
 

 

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

CODE

DESCRIPTION

YEAR TO DATE 01/01/2016 to 03/31/2016

YEAR TO DATE FROM PREVIOUS YEAR 01/01/2015 to 03/31/2015

3.01

Gross Sales and/or Services

126,973

270,401

3.01.01

Revenue from real estate development

138,013

297,181

3.01.03

Taxes on real estate sales and services

-11,040

-26,780

3.02

Cost of sales and/or services

-124,866

-203,174

3.02.01

Cost of real estate development

-124,866

-203,174

3.03

Gross profit

2,107

67,227

3.04

Operating expenses/income

-53,132

-19,313

3.04.01

Selling expenses

-14,411

-11,523

3.04.02

General and administrative expenses

-27,002

-28,884

3.04.05

Other operating expenses

-21,796

-35,082

3.04.05.01

Depreciation and amortization

-8,072

-7,889

3.04.05.02

Other operating expenses

-13,724

-27,193

3.04.06

Equity pick-up

10,077

56,176

3.05

Income (loss) before financial results and income taxes

-51,025

47,914

3.06

Financial

26

-12,807

3.06.01

Financial income

13,673

18,156

3.06.02

Financial expenses

-13,647

-30,963

3.07

Income before income taxes

-50,999

35,107

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

-53,227

31,651

3.11

Income (loss) for the period

-53,227

31,651

3.99

Earnings per Share – (Reais / Share)

   

3.99.01

Basic Earnings per Share

   

3.99.01.01

ON

-0.1452

0.0862

3.99.02

Diluted Earnings per Share

   

3.99.02.01

ON

-0.1452

0.0856

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4


 
 

 

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

CODE

DESCRIPTION

YEAR TO DATE 01/01/2016 to 03/31/2016

YEAR TO DATE FROM PREVIOUS YEAR 01/01/2015 to 03/31/2015

4.01

Income (loss) for the period

-53,227

31,651

4.03

Comprehensive income (loss) for the period

-53,227

31,651

 

 

 

5


 
 

 

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

CODE

DESCRIPTION

YEAR TO DATE 01/01/2016 to 03/31/2016

YEAR TO DATE FROM PREVIOUS YEAR 01/01/2015 to 03/31/2015

6.01

Net cash from operating activities

-8,183

-60,089

6.01.01

Cash generated in the operations

-15,987

38,269

6.01.01.01

Income (loss) before income and social contribution taxes

-50,999

35,107

6.01.01.02

Equity pick-up

-10,077

-56,176

6.01.01.03

Stock options expenses

1,891

2,091

6.01.01.04

Unrealized interest and finance charges, net

21,327

14,706

6.01.01.05

Financial instruments

-10,184

2,756

6.01.01.06

Depreciation and amortization

8,072

7,889

6.01.01.07

Provision for legal claims

15,169

18,711

6.01.01.08

Provision for profit sharing

6,250

6,000

6.01.01.09

Warranty provision

-4,102

7,244

6.01.01.10

Write-off of property and equipment, net

99

142

6.01.01.11

Allowance for doubtful accounts

6,572

626

6.01.01.14

Provision for penalties due to delay in construction works

-5

-827

6.01.02

Variation in assets and liabilities

7,804

-98,358

6.01.02.01

Trade accounts receivable

51,252

-15,747

6.01.02.02

Properties for sale

-24,667

-51,809

6.01.02.03

Other accounts receivable

-10,039

150

6.01.02.04

Prepaid expenses

511

930

6.01.02.05

Obligations for purchase of properties and adv. from customers

-26,846

-17,686

6.01.02.06

Taxes and contributions

-915

1,787

6.01.02.07

Suppliers

8,061

9,531

6.01.02.08

Salaries and payable charges

2,129

983

6.01.02.09

Transactions with related parties

36,194

-14,627

6.01.02.10

Other obligations

-25,648

-8,414

6.01.02.11

Income tax and social contribution payable

-2,228

-3,456

6.02

Net cash from investing activities

8,439

25,921

6.02.01

Purchase of property and equipment and intangible assets

-5,177

-5,234

6.02.02

Increase in investments

-2,094

-503

6.02.03

Redemption of short-term investments

186,244

701,769

6.02.04

Purchase of short-term investments

-170,534

-670,111

6.03

Net cash from financing activities

-17,699

34,912

6.03.02

Increase in loans, financing and debentures

73,284

178,731

6.03.03

Payment of loans, financing and debentures

-108,699

-119,893

6.03.04

Receivables credit assignment , net

24,176

-

6.03.06

Loan transactions with related parties

-6,460

-1,791

6.03.08

Repurchase of treasury shares

-

-22,135

6.05

Net increase (decrease)x of cash and cash equivalents

-17,443

744

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

26,601

34,536

 

 

 

6


 
 

 

INDIVIDUAL STATEMENT OF CHANGES IN EQUITY FROM 01/01/2016 TO 03/31/2016 (in thousands of Brazilian reais)

CODE

DESCRIPTION

Capital

Capital reserves, stock options and treasury shares

Profit reserves

Retained earnings

Others 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

-

1,407

-

-

-

1,407

5.04.03

Realization of granted options

-

1,407

-

-

-

1,407

5.05

Total of comprehensive income (loss)

-

-

-

-53,227

-

-53,227

5.05.01

Net income (loss) for the period

-

-

-

-53,227

-

-53,227

5.07

Closing balance

2,740,662

52,261

303,975

-53,227

-

3,043,671

 

 

 

 

 

7


 
 

 

INDIVIDUAL STATEMENT OF CHANGES IN EQUITY FROM 01/01/2015 TO 03/31/2015 (in thousands of Brazilian reais)

   

CODE

DESCRIPTION

Capital

Capital reserves, stock options and treasury shares

Profit reserves

Retained earnings

Others comprehensive income

Total Equity

5.01

Opening balance

2,740,662

-19,824

334,507

-

-

3,055,345

5.03

Opening adjusted balance

2,740,662

-19,824

334,507

-

-

3,055,345

5.04

Capital transactions with shareholders

-

54,170

-74,214

-

-

-20,044

5.04.03

Realization of granted options

-

2,091

-

-

-

2,091

5.04.04

Repurchase of treasury shares

-

-22,135

-

-

-

-22,135

5.04.08

Treasury shares canceled

-

74,214

-74,214

-

-

-

5.05

Total of comprehensive income (loss)

-

-

-

31,651

-

31,651

5.05.01

Net income (loss) for the period

-

-

-

31,651

-

31,651

5.07

Closing balance

2,740,662

34,346

260,293

31,651

-

3,066,952

 

 

 

 

8


 
 
 

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

CODE

DESCRIPTION

YEAR TO DATE 01/01/2016 to 03/31/2016

YEAR TO DATE FROM PREVIOUS YEAR 01/01/2015 to 03/31/2015

7.01

Revenues

138,013

297,181

7.01.01

Real estate development, sale and services

144,585

297,807

7.01.04

Allowance for doubtful accounts

-6,572

-626

7.02

Inputs acquired from third parties

-117,641

-203,790

7.02.01

Cost of Sales and/or Services

-98,818

-178,212

7.02.02

Materials, energy, outsourced labor and other

-18,823

-25,578

7.03

Gross added value

20,372

93,391

7.04

Retentions

-8,072

-7,889

7.04.01

Depreciation and amortization

-8,072

-7,889

7.05

Net added value produced by the Company

12,300

85,502

7.06

Added value received on transfer

23,750

74,332

7.06.01

Equity pick-up

10,077

56,176

7.06.02

Financial income

13,673

18,156

7.07

Total added value to be distributed

36,050

159,834

7.08

Added value distribution

36,050

159,834

7.08.01

Personnel and payroll charges

29,358

33,635

7.08.02

Taxes and contributions

18,080

36,020

7.08.03

Compensation – Interest

41,839

58,528

7.08.04

Compensation – Company capital

-53,227

31,651

 

60

 

9


 
 
 

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

CODE

DESCRIPTION

ACTUAL QUARTER 3/31/2016

PRIOR YEAR 12/31/2015

1

Total Assets

6,779,953

6,760,332

1.01

Current Assets

4,390,457

4,316,764

1.01.01

Cash and cash equivalents

143,717

82,640

1.01.01.01

Cash and banks

56,067

69,560

1.01.01.02

Short-term investments

50,499

13,080

1.01.01.03

Resources custody of third parties

37,151

-

1.01.02

Short-term investments

648,359

629,671

1.01.02.01

Fair value of short-term investments

648,359

629,671

1.01.02.01.02

Short-term investments avaliable for sale

648,359

629,671

1.01.03

Accounts receivable

1,328,042

1,395,273

1.01.03.01

Trade accounts receivable

1,328,042

1,395,273

1.01.03.01.01

Receivables from clients of developments

1,271,881

1,357,122

1.01.03.01.02

Receivables from clients of construction and services rendered

56,161

38,151

1.01.04

Inventories

1,958,087

1,880,377

1.01.07

Prepaid expenses

6,474

7,171

1.01.07.01

Prepaid expenses and others

6,474

7,171

1.01.08

Other current assets

305,778

321,632

1.01.08.01

Non current assets for sale

100,529

105,857

1.01.08.03

Other

205,249

215,775

1.01.08.03.01

Other accounts receivable and others

118,196

120,657

1.01.08.03.02

Receivables from related parties

87,053

95,118

1.02

Non Current assets

2,389,496

2,443,568

1.02.01

Non current assets

1,289,134

1,349,404

1.02.01.03

Accounts receivable

374,614

407,091

1.02.01.03.01

Receivables from clients of developments

374,614

407,091

1.02.01.04

Inventories

706,965

750,240

1.02.01.09

Others non current assets

207,555

192,073

1.02.01.09.03

Others accounts receivable and others

89,696

82,880

1.02.01.09.04

Receivables from related parties

113,128

109,193

1.02.01.09.05

Derivative financial instruments

4,731

-

1.02.02

Investments

979,712

967,646

1.02.02.01

Interest in associates and affiliates

979,712

967,646

1.02.03

Property and equipment

46,829

49,176

1.02.03.01

Operation property and equipment

46,829

49,176

1.02.04

Intangible assets

73,821

77,342

1.02.04.01

Intangible assets

48,345

51,866

1.02.04.02

Goodwill

25,476

25,476

 

 

 

 

 

 

 

 

 

 

61

 

10


 
 
 

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

CODE

DESCRIPTION

ACTUAL QUARTER 3/31/2016

PRIOR YEAR 12/31/2015

2

Total Liabilities

6,779,953

6,760,332

2.01

Current liabilities

2,075,628

2,048,969

2.01.01

Social and labor obligations

71,793

60,102

2.01.01.02

Labor obligations

71,793

60,102

2.01.01.02.01

Salaries, payroll charges and profit sharing

71,793

60,102

2.01.02

Suppliers

80,245

57,335

2.01.03

Tax obligations

97,074

102,057

2.01.03.01

Federal tax obligations

97,074

102,057

2.01.04

Loans and financing

1,029,252

1,061,986

2.01.04.01

Loans and financing

629,508

672,365

2.01.04.01.01

In Local Currency

629,508

672,365

2.01.04.02

Debentures

399,744

389,621

2.01.05

Other obligations

694,189

667,177

2.01.05.01

Payables to related parties

84,386

87,100

2.01.05.02

Other

609,803

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

387,339

361,420

2.01.05.02.06

Other obligations

163,494

163,437

2.01.05.02.07

Obligations assumed on the assignment of receivables

31,352

23,482

2.01.05.02.08

Derivative financial instruments

9,936

14,056

2.01.06

Provisions

103,075

100,312

2.01.06.01

Tax, labor and civel lawsuits

103,075

100,312

2.01.06.01.01

Tax lawsuits

220

220

2.01.06.01.02

Labor lawsuits

15,566

15,516

2.01.06.01.04

Civel lawsuits

87,289

84,576

2.02

Non current liabilities

1,658,041

1,614,127

2.02.01

Loans and financing

1,171,380

1,088,807

2.02.01.01

Loans and financing

712,036

620,470

2.02.01.01.01

Loans and financing in local currency

712,036

620,470

2.02.01.02

Debentures

459,344

468,337

2.02.02

Other obligations

321,272

366,161

2.02.02.01

Liabilities with related parties

43,426

41,002

2.02.02.02

Other

277,846

325,159

2.02.02.02.03

Obligations for purchase of properties and advances from customers

196,441

248,514

2.02.02.02.04

Other liabilities

30,628

33,216

2.02.02.02.06

Obligations assumed on the assignment of receivables

50,777

35,811

2.02.02.02.07

Derivative financial instruments

-

7,618

2.02.03

Deferred taxes

20,175

16,489

2.02.03.01

Deferred income tax and social contribution

20,175

16,489

2.02.04

Provisions

145,214

142,670

2.02.04.01

Tax, labor and civel lawsuits

145,214

142,670

2.02.04.01.01

Tax lawsuits

178

180

2.02.04.01.02

Labor lawsuits

78,502

77,445

2.02.04.01.04

Civel lawsuits

66,534

65,045

2.03

Equity

3,046,284

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

78,241

76,834

2.03.02.04

Granted options

149,458

148,051

2.03.02.07

Reserve for expenditures with public offering

-71,217

-71,217

2.03.04

Income Reserve

277,995

277,995

2.03.04.01

Legal Reserve

35,316

35,316

2.03.04.02

Statutory Reserve

268,659

268,659

2.03.04.09

Treasury shares

-25,980

-25,980

2.03.05

Retained earnings/accumulated losses

-53,227

-

2.03.09

Non-controlling interest

2,613

1,745

 

62

 

11


 
 
 

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

 

CODE

DESCRIPTION

YEAR TO DATE 01/01/2016 to 03/31/2016

YEAR TO DATE FROM PREVIOUS YEAR 01/01/2015 to 03/31/2015

3.01

Gross Sales and/or Services

405,534

519,501

3.01.01

Revenue from real estate development

436,544

564,854

3.01.03

Taxes on real estate sales and services

-31,010

-45,353

3.02

Cost of sales and/or services

-333,333

-370,301

3.02.01

Cost of real estate development

-333,333

-370,301

3.03

Gross profit

72,201

149,200

3.04

Operating expenses/income

-109,866

-97,223

3.04.01

Selling expenses

-35,018

-27,113

3.04.02

General and administrative expenses

-46,022

-43,668

3.04.05

Other operating expenses

-42,491

-45,224

3.04.05.01

Depreciation and amortization

-12,698

-11,669

3.04.05.02

Other operating expenses

-29,793

-33,555

3.04.06

Equity pick-up

13,665

18,782

3.05

Income (loss) before financial results and income taxes

-37,665

51,977

3.06

Financial

-1,941

-8,216

3.06.01

Financial income

25,431

32,612

3.06.02

Financial expenses

-27,372

-40,828

3.07

Income before income taxes

-39,606

43,761

3.08

Income and social contribution taxes

-12,745

-12,160

3.08.01

Current

-10,213

-6,860

3.08.02

Deferred

-2,532

-5,300

3.09

Income (loss) from continuing operation

-52,351

31,601

3.11

Income (loss) for the period

-52,351

31,601

3.11.01

Income (loss) attributable to the Company

-53,227

31,651

3.11.02

Net income attributable to non-controlling interests

876

-50

3.99

Earnings per Share – (Reais / Share)

   

3.99.01

Basic Earnings per Share

   

3.99.01.01

ON

-0.1452

0.0862

3.99.02

Diluted Earnings per Share

   

3.99.02.01

ON

-0.1452

0.0856

 

12


 
 
 

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

CODE

DESCRIPTION

YEAR TO DATE 01/01/2016 to 03/31/2016

YEAR TO DATE FROM PREVIOUS YEAR 01/01/2015 to 03/31/2015

4.01

Consolidated Income (loss) for the period

-52,351

31,601

4.03

Consolidated comprehensive income (loss) for the period

-52,351

31,601

4.03.01

Income (loss) attributable to Gafisa

-53,227

31,651

4.03.02

Net income attributable to the noncontrolling interests

876

-50

 

 

 

13


 
 
 

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

CODE

DESCRIPTION

YEAR TO DATE 01/01/2016 to 03/31/2016

YEAR TO DATE FROM PREVIOUS YEAR 01/01/2015 to 03/31/2015

6.01

Net cash from operating activities

41,952

-51,127

6.01.01

Cash generated in the operations

20,262

88,294

6.01.01.01

Income (loss) before income and social contribution taxes

-39,606

43,761

6.01.01.02

Stock options expenses

2,424

2,618

6.01.01.03

Unrealized interest and finance charges, net

26,507

16,414

6.01.01.04

Depreciation and amortization

12,698

11,669

6.01.01.05

Write-off of property and equipment, net

1,637

216

6.01.01.06

Provision for legal claims

22,888

26,070

6.01.01.07

Warranty provision

-5,621

6,925

6.01.01.08

Provision for profit sharing

8,342

2,914

6.01.01.09

Allowance for doubtful accounts

15,357

317

6.01.01.11

Provision for penalties due to delay in construction works

-513

-2,079

6.01.01.12

Financial instruments

-10,186

2,756

6.01.01.13

Equity pick-up

-13,665

-18,782

6.01.01.15

Write-off of investments

-

-4,505

6.01.02

Variation in Assets and Liabilities

21,690

-139,421

6.01.02.01

Trade accounts receivable

79,213

-65,295

6.01.02.02

Properties for sale

-29,313

-57,683

6.01.02.03

Other accounts receivable

-7,864

10,231

6.01.02.04

Transactions with related parties

9,376

1,514

6.01.02.05

Prepaid expenses

697

120

6.01.02.06

Suppliers

22,910

7,259

6.01.02.07

Obligations for purchase of properties and adv. from customers

-26,154

-16,820

6.01.02.08

Taxes and contributions

-4,983

-3,491

6.01.02.09

Salaries and payable charges

3,350

4,289

6.01.02.10

Other obligations

-12,797

-7,385

6.01.02.11

Income tax and social contribution paid

-12,745

-12,160

6.02

Net cash from investing activities

-29,606

150,108

6.02.01

Purchase of property and equipment and intangible assets

-8,467

-5,651

6.02.02

Redemption of short-term investments

-807,799

1,180,350

6.02.03

Purchase of short-term investments

789,111

-1,024,416

6.02.04

Investments

-1,451

-175

6.02.05

Dividends received

-1,000

-

6.03

Net cash from financing activities

48,731

15,867

6.03.02

Increase in loans, financing and debentures

200,289

200,321

6.03.03

Payment of loans and financing

-176,957

-165,306

6.03.06

Payables to venture partners

1,587

2,400

6.03.07

Loan transactions with related parties

-4,162

587

6.03.08

Repurchase of treasury shares

-

-22,135

6.03.09

Selling of treasury shares

27,974

-

6.05

Net increase (decrease) of cash and cash equivalents

61,077

114,848

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

143,717

224,743

 

65

 

14


 
 
 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FROM 01/01/2016 TO 03/31/2016 (in thousands of Brazilian reais)

CODE

DESCRIPTION

Capital

Capital reserves, stock options and treasury shares

Profit reserves

Retained earnings

Others 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

-

1,407

-

-

-

1,407

-8

1,399

5.04.03

Realization of granted options

-

1,407

-

-

-

1,407

-

1,407

5.04.08

Acquisition of participation in transaction with minority shareholders

-

-

-

-

-

-

-8

-8

5.05

Total of comprehensive income (loss)

-

-

-

-53,227

-

-53,227

876

-52,351

5.05.01

Net income (loss) for the period

-

-

-

-53,227

-

-53,227

876

-52,351

5.07

Closing balance

2,740,662

52,261

303,975

-53,227

-

3,043,671

2,613

3,046,284

 

15


 
 
 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FROM 01/01/2015 TO 03/31/2015 (in thousands of Brazilian reais)

CODE

DESCRIPTION

Capital

Capital reserves, stock options and treasury shares

Profit reserves

Retained earnings

Others comprehensive income

Total Shareholders equity

Non Controlling interest

Total equity Consolidated

5.01

Opening balance

2,740,662

-19,824

334,507

-

-

3,055,345

3,058

3,058,403

5.03

Opening adjusted balance

2,740,662

-19,824

334,507

-

-

3,055,345

3,058

3,058,403

5.04

Capital transactions with shareholders

-

54,170

-74,214

-

-

-20,044

931

-19,113

5.04.01

Capital increase

-

-

-

-

-

-

931

931

5.04.03

Realization of granted options

-

2,091

-

-

-

2,091

-

2,091

5.04.04

Repurchase of treasury shares

-

-22,135

-

-

-

-22,135

-

-22,135

5.04.08

Treasury shares canceled

-

74,214

-74,214

-

-

-

-

-

5.05

Total of comprehensive income (loss)

-

-

-

31,651

-

31,651

-50

31,601

5.05.01

Net income (loss) for the period

-

-

-

31,651

-

31,651

-50

31,601

5.07

Closing balance

2,740,662

34,346

260,293

31,651

-

3,066,952

3,939

3,070,891

 

16


 
 
 

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

 

CODE

DESCRIPTION

YEAR TO DATE 01/01/2016 to 03/31/2016

YEAR TO DATE FROM PREVIOUS YEAR 01/01/2015 to 03/31/2015

7.01

Revenues

436,544

569,359

7.01.01

Real estate development, sale and services

451,901

560,333

7.01.04

Allowance for doubtful accounts

-15,357

9,026

7.02

Inputs acquired from third parties

-337,232

-384,576

7.02.01

Cost of sales and/or services

-295,295

-340,199

7.02.02

Materials, energy, outsourced labor and other

-41,937

-44,377

7.03

Gross added value

99,312

184,783

7.04

Retentions

-12,698

-11,669

7.04.01

Depreciation and amortization

-12,698

-11,669

7.05

Net added value produced by the Company

86,614

173,114

7.06

Added value received on transfer

39,096

51,394

7.06.01

Equity pick-up

13,665

18,782

7.06.02

Financial income

25,431

32,612

7.07

Total added value to be distributed

125,710

224,508

7.08

Added value distribution

125,710

224,508

7.08.01

Personnel and payroll charges

56,193

50,376

7.08.02

Taxes and contributions

53,971

67,803

7.08.03

Compensation – Interest

68,773

74,678

7.08.04

Compensation – Company capital

-53,227

31,651

 


17


 
 
 

EARNINGS

RELEASE

1Q16

 

FOR IMMEDIATE RELEASE - São Paulo, May 5, 2016 – Gafisa S.A. (Bovespa: GFSA3; NYSE: GFA), one of Brazil’s leading homebuilders, today reported financial results for the first quarter ended March 31, 2016.

               

GAFISA RELEASES
1Q16 RESULTS

 

MANAGEMENT COMMENTS AND HIGHLIGHTS

 

The first quarter of 2016 was characterized by continued economic deterioration and political uncertainty in Brazil. These market conditions came as a result of high interest rates and rising inflation and unemployment rates, which in turn, pressured the Brazilian real estate market. The Gafisa Group, due to its diversification in both the medium-high income and the low income segments, have been fairly resilient in this challenging period.

The Gafisa and Tenda segments each faced substantially different operating environments throughout the first quarter. The Gafisa segment was significantly impacted by the poor macroeconomic environment. It seeked to maintain a conservative launch strategy, while also focusing on operational and project-level improvements. The Tenda segment, conversely, benefited from greater resilience in the low-income market, and was able to consistently expand the scale of its business model.

In 1Q16, the Gafisa segment recorded a reduction in the volume of launches from the previous quarter and also faced an increased level of dissolutions, which impacted the results of the period. The segment launched one project in the first quarter in São Paulo, representing R$80.1 million in PSV, with sales starting in the last week of March.

The Gafisa segment’s operating performance reflected impacts from both a difficult macroeconomic environment and political instability. This was particularly notable in January and February. Gross pre-sales totaled R$237.1 million in the first quarter, with dissolutions reaching R$170.3 million, resulting in net pre-sales of R$66.8 million. The result was down 72.7% compared to the previous quarter, and decreased 62.8% compared to 1Q15.

 

               

 

 

18


 
 

EARNINGS

RELEASE

1Q16

 

 

As a result of the market difficulties, Gafisa segment’s SoS was 3.3% in 1Q16, compared to 10.8% in the previous quarter and 8.0% in 1Q15. Gafisa segment’s SoS in the last twelve months reached 28.9%, compared to 27.9% in the same period last year. The volume of dissolutions in the Gafisa segment was higher than the last 12 month average, and a key driver of quarterly results. The increase came as a result of a high level of project deliveries in 4Q15, which accounted for R$1.0 billion in PSV, approximately 43.3% of total delivered PSV last year.

One of the main operating guidelines which the Company has emphasized since the start of 2015 is its focus on the sale of inventory units. As a result, 87.8% of net sales during the 1Q16 were related to inventory. However, given the higher volume of dissolutions related to projects launched before 2015, net sales of 2015 launches inventory represented 82.0% of total net sales of remaining units, mainly reflected in Gafisa segment’s capacity of generating revenues.

We ended 1Q16 with 24 projects under construction, all on schedule and within the delivery timeframe, reflecting our commitment to clients. In 1Q16, we delivered 2 projects accounting for 191 units, and representing R$104.8 million in PSV. The transfer volume reached R$110.0 million, showing our good level of operational controls and efficiency, which despite the current credit restrictions, still manages to partner with banks in the transfer process.

We expect the current market conditions to continue in the coming months, considering consumer confidence levels, decreases in household income and limited financing availability. It appears that the country will take some time to exit the current downturn, which ultimately delays our expectation for a recovery in the real estate market. In light of this, we may see a more restrictive liquidity environment, which may impact pricing levels, margins and sales volumes. We maintain a conservative approach moving into the rest of 2016 in regards to the placement of new products in the market. We are prioritizing those projects with more liquidity, in order to reach adequate sales and profitability levels.

Tenda’s 1Q16 results reflect a more comfortable scenario in the low-income market, with relevant launches and decreasing dissolutions, specially due to the transfer policy, which occurs immediately after the sale, as well as from the reduction in its legacy portfolio. The Tenda segment continues to concentrate on increasing the scale of its new business model.  The consolidation of Tenda’s new model is based on four strategic pillars – aluminum mold, contracted launches, sales in own stores, and the transfer of sales to financial institutions. Another competitive advantage of the Tenda segment is its concentration in the six main metropolitan areas of the country - São Paulo, Rio de Janeiro, Belo Horizonte, Porto Alegre, Salvador and Recife. These factors enabled Tenda to achieve excellent operating and financial results, with resumption of net income, which  reached R$4.8 million in 1Q16.

Compared to 1Q15, the Tenda segment recorded launches of R$228.5 million 1Q16, comprised of 9 new projects/phases in the states of São Paulo, Rio Grande do Sul, Minas Gerais, Bahia and Pernambuco. Launches represented 8.2% of the Tenda segment's total sales in the period, and the quarter's SoS reached 23.9%, up from the 23.3% recorded in 1Q15.

1Q16 gross sales reached R$312.7 million and dissolutions remained at a moderate R$46.2 million, resulting in net pre-sales of R$266.5 million, an increase of 12.2% sequentially and 9.4% higher year on year.

In 1Q16, the volume of dissolutions decreased by 17.9% year on year, and increased 15.9% sequentially, in line with a higher gross sales volume. Percentage of dissolutions over gross sales reached 14.8%.

Since 2013, when the new model operations started, Tenda has launched 60 projects, representing a total of R$2.2 billion in PSV. Of this total, Tenda has delivered R$845.1 million, comprised of 22 projects/
phases. Notably, all projects related to the first year of new model operations (2013) have been completed and delivered within the agreed time. In relation to the 2014 projects, only 3 of the 14 projects launched that year are still waiting delivery and are scheduled to be delivered within the next months. In 1Q16, the Tenda segment delivered 3 projects/phases corresponding to 464 units, and representing R$61.7 million in PSV.

In the coming quarters, Tenda will continue to focus on increasing its scale by growing  launches and implementing strategies designed to ensure a strong sales pace, guided by market behavior. The consistency of the segment’s results from new model projects reaffirms management’s confidence in the 2016 business plan.

 

19


 
 

EARNINGS

RELEASE

1Q16

 

On a consolidated basis, launches totaled R$308.6 million in 1Q16, a decrease of 1.6% year over year and of 54.8% quarter over quarter. The Gafisa segment accounted for 26% of 1Q16 launches, while Tenda accounted for the remaining 74%. First quarter 2016 net pre-sales totaled R$333.3 million, a decrease of 21.3% year over year and a 30.9% sequential reduction. In the quarter, sales from launches represented 9.0% of total sales, while the sale of inventory units represented 91.0%. The Gafisa segment accounted for 20% of net pre-sales while the Tenda segment represented 80%. 1Q16 consolidated adjusted gross profit was R$110.2 million, at a margin of 27.2%.

In the current economic environment, the Company’s focus on greater stability in its cost and expense structure is paramount. Selling and administrative expenses were R$81.0 million in 1Q16, 14.2% lower compared to 4Q15, confirming the Company's efforts to respond to changes and movements in real estate market conditions, thus providing a cost structure more adequate to the current environment.

As a result of all this factors, Gafisa reported a consolidated net loss of R$53.2 million in 1Q16, compared to the R$31.6 million profit recorded in the previous year period.

At the end of the year, the Net Debt/
Shareholders Equity ratio reached 46.5%, the lowest level since 3Q14. Excluding project finance, the Net Debt/Shareholder Equity ratio was negative 14.6%.

One of the positive highlights in the quarter was the consolidated operating cash generation, which reached R$94.3 million, ending the quarter with net cash generation of R$28.3 million.

Our positive cash flow performance and the maintenance of a low level of leverage reinforces the Company's conservative approach to capital discipline, which remains a priority during this period of macroeconomic uncertainty in Brazil.

We will maintain this conservative approach throughout the year, seeking to balance the placement of new products on the market, prioritizing those projects with more liquidity in order to reach adequate sales and profitability levels. The Gafisa segment, through its consistent and balanced performance, is focused on improving the return on invested capital. The Tenda segment is ready to expand the volume of new projects, backed by the positive results achieved from the new model and the resilience of the low-income market. 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


 
 

EARNINGS

RELEASE

1Q16

MAIN CONSOLIDATED FIGURES

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

 

1Q16

4Q15

Q/Q(%)

1Q15

Y/Y(%)

Launches

308,648

682,905

-55%

313,581

-2%

Launches, Units

1,860

2,660

-30%

1,950

-5%

Net Pre-sales

333,339

482,648

-31%

423,344

-21%

Pre-sales, Units

2,137

2,256

-5%

1,908

12%

Pre-sales of Launches

30,116

321,502

-91%

59,716

-50%

Sales over supply (SoS)

10.6%

14.1%

-350 bps

12.8%

-220 bps

Delivered projects (PSV)

166,500

1,239,270

-87%

785,748

-79%

Delivered projects, Units

655

3,121

-79%

3,534

-81%

Net Revenue

405,534

559,246

-27%

519,501

-22%

Adjusted Gross Profit1

110,239

189,319

-42%

179,302

-39%

Adjusted Gross Margin1

27.2%

33.9%

-670 bps

34.5%

-730 bps

Adjusted EBITDA2

15,495

78,026

-80%

96,366

-84%

Adjusted EBITDA Margin2

3.8%

14.0%

-1,020 bps

18.5%

-1,470 bps

Net Income (Loss)

(53,227)

827

-

31,651

-

Backlog Revenues

708,871

764,024

-7%

930,601

-24%

Backlog Results3

275,030

310,127

-11%

367,567

-25%

Backlog Margin3

38.8%

40.6%

-180 bps

39.5%

-70 bps

Net Debt + Investor Obligations

1,415,038

1,443,377

-2%

1,535,215

-8%

Cash and cash equivalents

792,076

712,311

11%

1,116,168

-29%

Shareholders’ Equity

3,043,671

3,095,491

-2%

3,066,952

-1%

Shareholders’ Equity + Minority

3,046,284

3,097,236

-2%

3,070,891

-1%

Total Assets

6,779,953

6,760,332

0%

7,333,898

-8%

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

46.5%

46.6%

-10 bps

50.0%

-350 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 Adjustement) method according to Law 11.638.

 

 

 

 

21


 
 

EARNINGS

RELEASE

1Q16

 

FINANCIAL RESULTS

§  1Q16 net revenue recognized by the “PoC” method was R$171.0 million in the Gafisa segment and
R$234.5 million in the Tenda segment. This resulted in consolidated revenue of R$405.5 million, a decrease of 21.9% year-on-year and a decrease of 27.5% from the previous quarter.

§  Adjusted gross profit for 1Q16 was R$110.2 million, lower than than R$179.3 million recorded in 1Q15 and down from R$189.3 million in 4Q15. Adjusted gross margin reached 27.2%, compared to 34.5% in 1Q15 and 33.9% in the 4Q15. The Gafisa segment accounted for an adjusted gross profit of R$36.0 million, with an adjusted gross margin of 21.0%, while the Tenda segment accounted for an adjusted gross profit of R$74.2 million, with a margin of 31.7%.  

§  Consolidated Adjusted EBITDA was R$15.5 million in 1Q16, with an adjusted EBITDA margin of 3.8%. The Gafisa segment reported negative adjusted EBITDA of R$18.1 million, while the Tenda segment’s adjusted EBITDA was positive R$22.8 million. Please note that consolidated adjusted EBITDA includes Alphaville equity income, while the Gafisa segment’s adjusted EBITDA is net of this effect.

§  The Company reported net loss of R$53.2 million in 1Q16, compared with net income of R$0.8 million in 4Q15 and the profit of R$31.6 milllion in 1Q15. The Gafisa segment reported a net loss of R$58.0 million, while the Tenda segment reported a profit of R$4.8 million.

§  Operating cash generation totaled R$94.3 million in 1Q16. Net cash generated in the quarter was R$28.3 million.

 

.

 

 

OPERATING RESULTS

§  Launches totaled R$308.6 million in 1Q16, comprising 10 projects in the states of São Paulo, Rio Grande do Sul, Minas Gerais, Bahia and Pernambuco, in line with the R$313.6 million launch volumes in 1Q15. The Gafisa segment accounted for 26% of the quarter’s launches, while the Tenda segment accounted for the remaining 74%.

§  Net pre-sales totaled R$333.3 million, 21.3% lower than the R$423.3 million recorded in 1Q15 and 30.9% lower q-o-q. The Gafisa segment reached R$66.8 million and the Tenda segment reached R$266.5 million in 1Q16. Consolidated sales from launches in the quarter represented 9.0% of the total, while sales from inventory comprised the remaining 91.0%.

§  Consolidated sales over supply (SoS) reached 10.6% in 1Q16 compared to 14.1% in 4Q15, and 12.8%
in 1Q15. On a trailing 12-month basis, Gafisa’s SoS was 28.9%, while Tenda’s SoS was 55.0%.

§  Consolidated inventory at market value presented a reduction of 3.6% in 1Q16, and stood at R$2.8 billion. Gafisa’s inventory ended the quarter at R$2.0 billion, while Tenda’s inventory totaled R$849.1 million.

§  Throughout the first quarter, the Company delivered 5 projects/phases, totaling 655 units, accounting for R$166.5 million in PSV.

 

 

 

 

 

22


 
 

EARNINGS

RELEASE

1Q16

ANALYSIS OF RESULTS

Gafisa Segment

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

 

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

 

1Q16

4Q15

Q/Q(%)

1Q15

Y/Y(%)

Launches

80,104

380,270

-79%

75,227

6%

Net pre-sales

66,842

245,196

-73%

179,807

-63%

Net pre-sales of launches

8,187

129,227

-94%

14,436

-43%

Sales over Supply (SoS)

3.3%

10.8%

-750 bps

8.0%

-470 bps

Delivered projects (Units)

191

1,641

-88%

1,847

-90%

Net Revenue

170,982

352,424

-51%

340,058

-50%

Adjusted Gross Profit1

35,979

127,392

-72%

125,502

-71%

Adjusted Gross Margin1

21.0%

36.1%

-1,510 bps

36.9%

-1,590 bps

Adjusted EBITDA 2

(18,140)

49,858

-

58,291

-

Adjusted EBITDA Margin 2

-10.6%

14.1%

-2,470 bps

17.1%

-2,770 bps

Net Income (Loss)

(58,021)

13,818

-

20,205

-

Backlog Revenues

427,365

497,561

-14%

742,154

-42%

Backlog Results3

159,970

192,355

-17%

294,093

-46%

Backlog Margin³

37.4%

38.7%

-130 bps

39.6%

-220 bps

1)         Adjusted by capitalized interestes.

2)         Adjuested by expensives 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 Adjustement) method according to Law 11.638.

 

The 1Q16 results were marked by a lower volume of net sales, resulting from the high volume of dissolutions related to uncertainty in the political and economic environment. Despite the higher share of projects launched before 2015 in the gross sales mix (74.7% of gross sales), the high volume of dissolutions in these projects (97.8% of dissolutions in the quarter) resulted in a concentration in net sales of inventory from more recent projects. Thus, revenues in the quarter were impacted not only by the lower volume of net sales, but also by the concentration of net sales in projects with slower evolution of work progress. These factors impacted the segment's profitability in the first quarter.

Gross margin in 1Q16 was mainly impacted by the following factors:

 (i)     R$25.3 million net effect, due to the volume of dissolutions higher than average, mainly those related to corporate projects - 25.2% of total dissolved PSV during the period. Commercial units have a direct financing model, whose balance is adjusted only after the delivery (IGMP + 12.0% p.y. interest). Due to this adjustment, the reversed revenue is higher, generating a stronger impact when cost and revenue are reversed;

 (ii)    R$6,6 million, related to the increase in provisions for doubtful accounts and dissolutions for customers who present significant evidence regarding the risk of dissolution of their contracts;

 

 

 

 

23


 
 

EARNINGS

RELEASE

1Q16

 

 (iii)   R$6,9 million, related to other effects, such as a difference in the pricing seen in the resale of dissolved units, especially in the case of corporate projects, in order to reach the liquidity needed in the current market conditions.

 

Thus, the Gafisa segment ended the 1Q16 with gross margin of 2.0%; excluding the abovementioned effects, the gross margin of the Gafisa segment would have reached 20.0%, more adherent to the 23.9% margin recorded in 4Q15. In turn, adjusted gross margin was 21.0% in 1Q16, or 35.5% excluding the effects above.

In this quarter, we highlight the efforts of the Gafisa segment in maintaining a level of SG&A expenses more aligned to the current level of our business cycle and the challenges and outlook for the Gafisa segment market, with a slight increase in the annual comparison even considering a 9.4% inflation (IPCA) measured in the period.

 

Net Income

Net income for the period was a loss of R$58.0 million compared to a profit of R$13.8 million in 4Q15 and of R$20.2 million in the 1Q15. As we previously stated, this was due to the  higher volume of dissolutions in the period, mainly related to projects launched before 2015, reflecting on the volume and on the mix of net sales in the period, with a consequent effect in revenue and profitability levels of the quarter. Excluding the R$10.9 million in equity income from Alphaville, the Gafisa segment had a net loss in 1Q16 of R$68.9 million, compared to the loss of R$12.9 million recorded in 4Q15 and a R$3.2 million profit in 1Q15.

 

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

 

1Q16

4Q15

1Q15

Adjusted Gross Profit

36.0

127.4

125.5

Adjusted Gross Margin

21.0%

36.1%

36.9%

Net Income

(58.0)

13.8

20.2

Equity Income from Alphaville

10.9

26.7

17.0

Net Profit Ex- Alphaville

(68.9)

(12.9)

3.2

 

 

 

 

 

24


 
 

EARNINGS

RELEASE

1Q16

 

Tenda Segment

Maintenance of Operational and Financial Profitability Supported
by the Performance of the New Model

 

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

 

1Q16

4Q15

Q/Q(%)

1Q15

Y/Y(%)

Launches

228,544

302,635

-24%

238,354

-4%

Net pre-sales

266,497

237,452

12%

243,537

9%

Net pre-sales of Launches

21,930

192,275

-89%

45,280

-52%

Sales over Supply ( SoS)

23.9%

20.9%

300 bps

23.3%

60 bps

Delivered projects ( Units)

464

1,480

-69%

1,687

-72%

Net Revenue

234,552

206,822

13%

179,443

31%

Adjusted Gross Profit1

74,260

61,927

20%

53,800

38%

Adjusted Gross Margin1

31.7%

29.9%

180 bps

30.0%

170 bps

Adjusted EBITDA2

22,755

1,464

1,454%

21,114

8%

Adjusted EBITDA Margin2

9.7%

0.7%

900 bps

11.8%

-210 bps

Net Income ( Loss)

4,794

(12,991)

-

11,446

-58%

Backlog Revenues

281,506

266,463

6%

188,447

49%

Backlog Results3

115,060

117,772

-2%

73,474

57%

Backlog Margin³

40.9%

44.2%

-330 bps

39.0%

190 bps

1)   Adjusted by capitalized interestes.

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

3)   Backlog results net of PIS/COFINS taxes, and excluding the impact of PVA (Present Value Adjustement) method according to Law 11.638.

 

The Tenda segment posted another profitable quarter in 1Q16, after the effects of the non-recurring items recorded at the end of 2015.

In this period, the Tenda segment maintained efficient operating performance, supported by positive sales performance. This resulted in an improved adjusted gross margin for Tenda, which reached 31.7% in the period, slightly higher than the previous quarters.

Adjusted EBITDA totaled R$22.8 million, with adjusted EBITDA margin reaching 9.7% in 1Q16, higher y-o-y, which was impacted by the non-recurring items recorded in 4Q15, and slightly lower than the 1Q15 margin, which in turn benefited from the reversal of provision for bonus of R$5.6 million.

 

Net Income

The Tenda segment achieved net income of R$4.8 million in 1Q16, a reversal from the net loss of R$13.0 million recorded in 4Q15, which was impacted by the non-recurring items recorded. This was a decrease from the net income of R$11.4 million of 1Q15, which benefited from the reversal of R$5.6 million provision related to bonus provisioning.

 

 

 

 

 

25


 
 

EARNINGS

RELEASE

1Q16

 

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

 

1Q16

4Q15

1Q15

Adjusted Gross Profit

74.3

61.9

53.8

Adjusted Gross Margin

31.7%

29.9%

30.0%

Net Income

4.8

(13.0)

11.4

RECENT EVENTS

 

ALLOCATION OF THE 2015 FISCAL YEAR RESULTS

In accordance with Article 47, paragraph 2 (b) of the Bylaws, 25% of the balance of net income of the fiscal year will be allocated for the payment of the statutory dividend to all shareholders after the deductions provided for in the Bylaws and adjusted pursuant to article 202 of Brazilian Corporate Law.

Due to the R$74.4 million income calculated in the year ended on December 31, 2015, the Company's management proposed, at the Annual General Meeting held on April 25, 2016, the distribution of approximately R$17.7 million, about R$0.048 per share. This distribution will allow shareholders to gauge a dividend yield of approximately 2.0%, based on the 2015 closing price.

 

UPDATE SHARE BUYBACK PROGRAM

Reaffirming its commitment to generating shareholder value, on March 3, 2016, the Company approved the creation of the fourth share buyback program, up to a maximum of 8.2 million common shares which, when added to the 10.6 million shares currently held in treasury, correspond to 5% of the total common shares issued by the Company. The goal of the Program is to efficiently use the Company’s available funds, aiming at medium and long-term profitability. A portion of the shares to be acquired will be allocated for the exercise of the options and/or shares to be granted in the Stock Option Plan, as approved at the Company’s Extraordinary General Meeting.

The Company also reaffirms its commitment to capital discipline. The execution of the program is conditioned to the maintenance of Gafisa’s Consolidated Net Debt to Equity ratio in 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 effectively traded. 

 

 

 

 

 

 

26


 
 

EARNINGS

RELEASE

1Q16

GAFISA SEGMENT

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

 

 

 

Operating Results | Launches and Pre-Sales

First quarter launches totaled R$80.1 million and consisted of 1 project/phase in São Paulo, which started sales in the last week of March. The sales speed of this launch reached 10.2%.

 

 

.

                                                                                                                                                                                                 Launches (R$ million)


 

First quarter gross pre-sales in the Gafisa segment totaled R$237.1 million. Dissolutions in 1Q16 were R$170.3 million, yielding total net pre-sales of R$66.8 million, down 72.7% q-o-q and down 62.8% y-o-y.

It is worth noting that in 1Q16 operating performance was impacted quite heavily, especially in January and February due to the continued deterioration of the macroeconomic environment and the troubled political scenario, also taking into account seasonal characteristics. Results in March reached R$101.1 million in net pre-sales, closer to last year’s result, signaling an improvement when compared to the first two months of the year.

As seen in 2015, and one of the main current operational guidelines for the year, the Company continues to focus its efforts on the sale of remaining units. As a result, 96.5% of gross sales for the period were related to units in inventory. However, due to the higher volume of dissolutions of projects launched before 2015, which accounted for 97.8% of total volume, the breakdown of net sales of inventory in the quarter ended up concentrated in units launched in 2015, which accounted for 82.0% of total net sales of remaining units and for 72.0% of total net sales in the period.

 

                                       

                        

                               

                                                                                                                                                              

                            

 

 

 

27


 
 

EARNINGS

RELEASE

1Q16

 

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

 

1Q16

4Q15

Q/Q(%)

1Q15

Y/Y(%)

Launches

80,104

380,270

-79%

75,227

6%

Pre- Sales

66,842

245,196

-73%

179,807

-63%

 

 

Sales over Supply (SoS)

The Gafisa segment’s SoS of the last twelve months reached 28.9% compared to 27.9% in the same period last year. In the 1Q16, SoS was 3.3%, compared to 10.8% in the previous quarter and to 8.0% in 1Q15.

Dissolutions

The weak economic conditions observed in 2016 have directly impacted consumer confidence and, accordingly, the level of dissolutions. Due to the challenging operating environment, the level of dissolutions in the Gafisa segment reached R$170.3 million in 4Q15, an increase compared to R$125.3 million in 4Q15 and R$124.8 million in 1Q15. Notably, the level of dissolutions was higher than the LTM average, especially due to the strong volume of projects delivered in 4Q15, totaling R$1.0 billion in PSV, approximately 43% of the total PSV delivered in the FY2015.

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. However, given the current uncertainties in the economic environment and its effects on the real estate market, it has not been possible to reduce the volume of dissolutions in a more effective manner.

Notably, 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 a unfavorable economic environment. As an example of the efficiency achieved in this process, of all customers who asked for transfers in 1Q16, only 3.5% have been rejected in the bank’s credit analysis, i.e. out of the 318 units asking for transfers, only 11 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 the quarter, 257 Gafisa units were cancelled and 116 units, representing R$61.9 million, were already resold within the period.

 

 

 

 

 

 

 

28


 
 

EARNINGS

RELEASE

1Q16

Inventory

Gafisa is maintaining its focus on inventory reduction initiatives. Projects launched prior to the end of 2015 represented 87.8% of net sales in the period. The market value of the Gafisa segment’s inventory presented a decreased by 2.7% q-o-q, and of 4.6% y.o.y, totaling R$2.0 billion. The reduction reflects current market conditions and the effect of the sales income in the period, as well as pricing adjustments on several legacy projects. Finished units outside of core markets accounted for R$56.3 million, or 2.8% of total inventory.

 

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

 

Inventories BoP 4Q15

Launches

Dissolutions

Gross Sales

Adjustments¹

Inventories EoP 1Q15

Q/Q (%)

São Paulo

1,460,326

80,104

147,120

(207,729)

(46,863)

1,432,958

-2%

Rio de Janeiro

496,231

-

22,201

(20,832)

(11,978)

485,622

-2%

Other Markets

72,697

-

954

(8,556)

(8,749)

56,346

-22%

Total

2,029,254

80,104

170,275

(237,117)

(67,590)

1,974,926

-3%

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$430.1million, or 21.8% of total inventory. Inventory from projects launched outside core markets, which is comprised exclusively of finished units, represented R$56.3 million, a decrease of 51.0% when compared to the R$115.0 million recorded last year and down 22.5% from 4Q15. 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 45%, or R$890.6 million, is concentrated in projects to be delivered from 1Q17 on, not representing an immediate increase in the segment’s volume of inventory of finished units.

 

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

 

Not Initiated

Up to 30% built

30% a 70% built

More than 70% built

Finished Units

Total 1Q16

São Paulo

73,948

-

729,798

511,500

117,712

1,432,958

Rio de Janeiro

-

4,700

89,295

135,603

256,024

485,622

Outros Mercados

-

-

-

-

56,346

56,346

Total

73,948

4,700

819,093

647,103

430,082

1,974,926

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

 

 

 

 

 

29


 
 

EARNINGS

RELEASE

1Q16

 

Inventory Delivery Schedule

Landbank

The Gafisa segment landbank, with a PSV of R$5.7 billion, is comprised of 26 potential projects/ phases, amounting to nearly 11.5 units. 71% of potential projects/phases are located in São Paulo and 29% in Rio de Janeiro. The largest portion of land acquired through swap agreements is in Rio de Janeiro, impacting the total percentage of land acquired, totaling 59.3%.

 

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

 

PSV (% Gafisa)

% Swap
Total

% Swap Units

% Swap Financial

Potential Units
(% Gafisa)

Potential Units (100%)

São Paulo

4,048,411

50%

50%

0%

8,388

9,218

Rio de Janeiro

1,661,840

75%

75%

0%

2,271

2,271

Total

5,710,251

59%

59%

0%

10,659

11,489

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 (4Q15 x 1Q16 - R$ 000)

 

Inicial Landbank

Land Acquisition

Launches

Dissolutions

Adjustments

Final Landbank

São Paulo

4,286,656

-

(80,104)

-

(158,141)

4,048,411

Rio de Janeiro

1,666,187

-

-

-

(4,347)

1,661,840

Total

5,952,843

-

(80,104)

-

(162,488)

5,710,251

 

In 1Q16, the Company did not acquire new land plots.

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

 

Gafisa Sales

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

Gafisa Vendas currently has a team of 600 highly trained, dedicated consultants, in addition to an online sales force.

 

 

 

 

 

30


 
 

EARNINGS

RELEASE

1Q16

 

Gafisa Segments Delivered Projects

During 1Q16, 2 projects/phases totaling 191 units were delivered, accounting for R$104.8 million in PSV. Currently, Gafisa has 24 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 up to 90 days after the delivery of the project. In accordance with this policy, transfers totaled R$110.0 million in PSV in the first quarter.

 

 

Table 11 – Gafisa Segment – Delivered Projects

 

1Q16

4Q15

Q/Q(%)

1Q15

Y/Y(%)

PSV Transferred ¹

110,023

241,800

-54%

198,014

-44%

Delivered Projects

2

8

-75%

9

-78%

Delivered Units

191

1,641

-88%

1,847

-90%

Delivered PSV²

104,842

1,027,824

-90%

569,459

-82%

1) PSV refers to potential sales value of the units transferred to financial institutions.
2) PSV = Potential sales value of delivered units.

 

 

 

 

31


 
 

EARNINGS

RELEASE

1Q16

 

Financial Results

                                 Revenue

1Q16 net revenues for the Gafisa segment totaled R$171.0 million, a decrease of 51.5% q-o-q and a decrease of 49.7% y-o-y, as a direct effect of the lower sales volume in the period, due to the high volume of dissolutions, and also due to higher net sales concentrated in projects launched since 2015, which accounted for 82.0% of total net sales in 1Q16.

As previously explained, the 1Q16 results were marked by a lower volume of net sales, resulting from the high volume of dissolutions related to uncertainty in the political and economic environment. Despite the higher share of projects launched before 2015 in the gross sales mix (74.7% of gross sales), the high volume of dissolutions in these projects (97.8% of dissolutions in the quarter) resulted in a concentration in net sales of inventory from more recent projects. Thus, revenues in the quarter were impacted not only by the lower volume of net sales, but also by the concentration of net sales in projects with slower evolution of work progress. These factors impacted the segment's profitability in the first quarter.

In 1Q16, 98.6% of Gafisa segment revenues were derived from projects located in Rio de Janeiro and São Paulo, while 1.4% were derived from projects in non-core markets. The table below provides additional details.

 

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

 

 

1Q16

 

 

 

1Q15

 

 

Launches

Pre-Sales

% Sales

Revenue

%

Revenue

Pre-Sales

% Sales

Revenue

% Revenue

2016

8,187

12%

-

0%

-

0%

-

0%

2015

48,099

72%

29,218

17%

14,436

8%

-

0%

2014

19,578

29%

70,682

41%

59,353

33%

41,343

12%

2013

27,252

41%

54,485

32%

27,125

15%

58,455

17%

≤ 2012

(36,274)

-54%

16,598

10%

78,893

44%

240,260

71%

Total

66,842

100%

170,982

100%

179,807

100%

340,058

100%

SP + RJ

59,240

89%

168,668

99%

163,980

91%

337,414

99%

Other Markets

7,602

11%

2,314

1%

15,827

9%

2,643

1%

 

Gross Profit & Margin

Gross profit for the Gafisa segment in 1Q16 was R$3.5 million, a decrease from R$84.2 million in 4Q15, and from R$98.1 million in the prior year period, due to the lower top line result in the period.

Gross margin in 1Q16 was mainly impacted by the following factors:

(i)      R$25.3 million net effect due to the volume of dissolutions higher than average, mainly those related to corporate projects - 25.2% of total dissolved PSV during the period. Commercial units have a direct financing model, whose balance is adjusted only after the delivery (IGMP + 12.0% p.y. interest). Due to this adjustment, the reversed revenue is higher, generating a stronger impact when cost and revenue are reversed;

(ii)     R$6.6 million related to the increase in provisions for doubtful accounts and dissolutions;

(iii)    R$6.9 million related to other effects, such as a difference in the pricing seen in the resale of dissolved units, especially in the case of corporate projects, in order to better reflect current market conditions.

 

 

 

 

32


 
 

EARNINGS

RELEASE

1Q16

 

The Company constitutes provision for doubtful accounts and dissolutions for customers who present significant evidenc regarding the risk of dissolution of their contracts. In 1Q16, the additional impact related to the provision for doubtful accounts and dissolutions was R$6.6 million, in order to better reflect current market conditions.

Excluding financial impacts, the adjusted gross margin reached 21.0% in 1Q16 compared to 36.1% in the 4Q15 and 36.9% no 1Q15, impacted by the factors previously explained. Excluding these factors, adjusted gross margin ended 1Q16 at 35.5%.

The table below contains more details on the breakdown of Gafisa’s gross margin in 1Q16.

 

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

 

1Q16

4Q15

Q/Q (%)

1Q15

Y/Y(%)

Net Revenue

170,982

352,424

-51%

340,058

-50%

Gross Profit

3,456

84,191

-96%

98,147

-96%

Gross Margin

2.0%

23.9%

-2,190 bps

28.9%

-2,690 bps

(-) Financial Costs

32,523

43,201

-25%

27,355

19%

Adjusted Gross Profit

35,979

127,392

-72%

125,502

-71%

Adjusted Gross Margin

21.0%

36.1%

-1,510 bps

36.9%

-1,590 bps

 

 

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

 

SP + RJ

Other Markets

1Q16

Net Revenue

168,372

2,610

170,982

Adjusted Gross Profit

35,053

926

35,979

Adjusted Gross Margin

20.8%

35.5%

21.0%

 

 

Selling, General and Administrative Expenses (SG&A)

SG&A expenses totaled R$43.7 million in the 1Q16, stable y-o-y and down 20.9% q-o-q, as a result of the smaller selling expense in the period.

Selling expenses decreased 56.3% compared to 4Q15 and up 18.8% from 1Q15, explained by the current Market environment and the consequent need for higher sales and marketing investments.

The segment’s general and administrative expenses reached R$27.0 million in 1Q16, a decrease of 6.5% compared to the previous year and an increase of 58.8% q-o-q. Explained by the partial reversal of provision for bonus, recorded in the last quarter, that had a net effect of R$9.0 million between the quarters. It is worth noting that despite the inflation of 9.4% recorded in the last 12 months, the Gafisa segment has managed to reduce its nominal volume of general and administrative expenses.

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

 

 

 

 

 

 

33


 
 

EARNINGS

RELEASE

1Q16

 

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

 

1Q16

4Q15

Q/Q(%)

1Q15

Y/Y(%)

Selling Expenses

(16,746)

(38,338)

-56%

(14,092)

19%

G&A Expenses

(27,002)

(17,004)

59%

(28,885)

-7%

Total SG&A Expenses

(43,748)

(55,342)

-21%

(42,977)

2%

Launches

80,104

380,270

-79%

75,227

6%

Net Pre-sales

66,842

245,196

-73%

179,807

-63%

Net revenue

170,982

352,424

-51%

340,058

-50%

 

Other Operating Revenues/Expenses reached R$14.6 million in 1Q16, a decrease of 46.3% compared to 4Q15, and 48.9% compared to 1Q15.This y-o-y increase reflects the smaller levels of litigation expenses in the first quarter, due to the seasonal effect.

The Company continues to be proactive and to mitigate risks associated with potential contingencies. Among a few initiatives that have been implemented during the year, we highlight: (i) agreements policy; (ii) new remuneration model of attorney fees; (iii) legal committee for ongoing litigation monitoring.

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

 

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

 

 

1Q16

4Q15

Q/Q(%)

1Q15

Y/Y(%)

Litigation expenses

(15,804)

(23,087)

-32%

(19,965)

-21%

Other

1,228

(4,042)

-

(8,556)

-

Total

(14,576)

(27,129)

-46%

(28,521)

-49%

 

  The strong volume of deliveries over the past three years, due to the delivery of delayed projects in discontinued markets, led to an increase in the level of contingencies. The Gafisa segment has since concentrated its operations only in the metropolitan regions of São Paulo and Rio de Janeiro. This new strategic 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 totaled a negative result of R$18.1 million in 1Q16, below when compared to the positive Adjusted EBITDA of R$49.9 million in 4Q15 and R$58.3 million compared to the same period last year. The 1Q16 Adjusted EBITDA was impacted by the following factors: (i) lower revenue in the quarter due to the volume and sales mix; and (ii) decreased gross margin in the period. Note that adjusted EBITDA for the Gafisa segment does not include equity income from Alphaville.

The adjusted EBITDA margin, using the same criteria, reached -10.6% compared to 14.1% in 4Q15 and 17.1% in 1Q15.

 

 

 

 

 

34


 
 

EARNINGS

RELEASE

1Q16

 

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

 

1Q16

4Q15

Q/Q(%)

1Q15

Y/Y(%)

Net Profit (Loss)

(58,021)

13,818

-

20,205

-

(+) Financial Results

44

13,472

-100%

9,744

-100%

(+) Income Taxes

5,990

(1,827)

-

7,350

-19%

(+) Depreciation & Amortization

9,508

7,805

22%

8,279

15%

(+) Capitalized interests

32,523

43,201

-25%

27,355

19%

(+) Expense w stock Option Plan

1,891

1,966

-4%

2,090

-10%

(+) Minority Shareholders

805

(1,873)

-

228

253%

(-) Alphaville Effect Result

(10,880)

(26,704)

-59%

(16,960)

-36%

Adjusted EBITDA

(18,140)

49,858

-

58,291

-

Net Revenue

170,982

352,424

-51%

340,058

-50%

Adjusted EBITDA Margin

-10.6%

14.1%

-2,470 bps

17.1%

-2,770 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$160.0 million in 1Q16. The consolidated margin was 37.4% in the quarter, compared to 39.6% posted in last year’s first quarter.

 

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

 

1Q16

4Q15

Q/Q(%)

1Q15

Y/Y(%)

Backlog Revenues

427,365

497,561

-14%

742,154

-42%

Backlog Costs (units sold)

(267,395)

(305,206)

-12%

(448,061)

-40%

Backlog Results

159,970

192,355

-17%

294,093

-46%

Backlog Margin

37.4%

38.7%

-130 bps

39.6%

-220 bps

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

 

 

 

 

18

 

 

35


 
 

EARNINGS

RELEASE

1Q16

TENDA SEGMENT

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

 

Operating Results | Launches and Sales

First quarter launches totaled R$228.5 million and included 9 projects/phases in the states of São Paulo, Rio Grande do Sul, Minas Gerais, Bahia and Pernambuco. The Tenda segment accounted for 74.0% of launches in the quarter.

 

 

During 1Q16, gross sales reached R$312.7 million and dissolutions were R$46.2 million, resulting in total net pre-sales of R$266.5 million, 12,2% higher than the last quarter and 9.4% higher y-o-y.  

In the quarter, 91.8% of total net sales were remaining units.

 
 

 

36


 
 

EARNINGS

RELEASE

1Q16

 

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

 

1Q16

4Q15

Q/Q(%)

1Q15

Y/Y(%)

Launches

228,544

302,635

-24%

238,354

-4%

Pre- Sales

266,497

237,452

12%

243,537

9%

 

Sales Over Supply (SoS)

In 1Q16, sales velocity (sales over supply) was 23.9%, and on a trailing 12-month basis, Tenda’s SoS was 55.0%.

 

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

 

 

1Q15

2Q15

3Q15

4Q15

1Q16

New Model

30.9%

35.2%

27.1%

24.9%

26.9%

Legacy

7.0%

12.0%

11.4%

5.2%

10.7%

Total

23.3%

28.2%

23.0%

20.9%

23.9%

Table 20. SoS Gross Revenue (Ex-Dissolutions)                                           Table 21. SoS Net Revenue

 

1Q15

2Q15

3Q15

4Q15

1Q16

New Model

32.7%

37.4%

29.6%

27.4%

29.7%

Legacy

20.1%

24.3%

19.4%

13.3%

20.7%

Total

28.6%

33.4%

26.9%

24.4%

28.0%

 

Dissolutions

The level of dissolutions in the Tenda segment totaled R$46.2 million in 1Q16, a decrease of 17.9% compared to 1Q15 and an increase of 15.9% compared to 4Q15, in line with the higher 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 14.8%, even with the significant participation of 55.7% of the old legacy projects in this quarter’s total volume of dissolutions.

 

 

37


 
 

EARNINGS

RELEASE

1Q16

 

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

 

1Q15

% GS

2Q15

% GS

3Q15

% GS

4Q15

% GS

1Q16

% GS

New Model

12,594

4.2%

15,648

4.5%

19,576

6.8%

22,201

8.0%

20,490

6.6%

Legacy

43,737

14.6%

38,115

11.1%

22,447

7.8%

17,686

6.4%

25,736

8.2%

Total

56,332

18.8%

53,763

15.6%

42,023

14.6%

39,887

14.4%

46,226

14.8%

 

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

In the quarter, 314 units were cancelled and returned to inventory, of which 180 units were already resold to qualified customers during the same period. The sale and transfer process plays an important role in the New Tenda Business Model. It is expected that within a period of up to 90 days, the effective sale and transfer process will be completed.

 

Tenda Segment Transfers

In the 1Q16, 2,037 units were transferred to financial institutions, representing R$266.8 million in net pre-sales.

 

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

 

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

3Q15

4Q15

1Q16

New Model

49,776

69,563

59,736

67,621

114,939

199,423

194,719

165,691

236,120

Legacy

139,721

154,155

100,361

74,773

59,110

61,566

53,912

40,050

30,642

Total

189,497

223,717

160,097

142,393

174,049

260,989

248,631

205,741

266,762

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

 

Tenda Segment Delivered Projects

During 1Q16, Tenda delivered 3 projects/phases and 464 units, accounting for a PSV of R$61.7 million.

 

Inventory

The market value of Tenda inventory was R$849.1 million at the end of the 1Q16, down 5.6% compared to R$899.8 million at the end of 4Q15. Inventory related to the legacy units for the Tenda segment totaled R$183.7 million or 21.6% of the total, down 18.8% versus 4Q15 and 41.1% as compared to 1Q15. During the quarter, inventory comprising units within the Minha Casa Minha Vida program totaled R$815.3 million, or 96.0% of total inventory, while units outside the program totaled R$33.8 million, a decrease of 66.0% q-o-q and of 80.6% y-o-y.

.

 

 

 

38


 
 

EARNINGS

RELEASE

1Q16

 

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

 

Inventory EP 4Q15

Launches

Dissolutions

Pre- Sales

Price

Adjustments

+ Others

Inventory

EP 1Q16

% Q/Q

São Paulo

251,501

27,675

6,218

(92,297)

(1,772)

191,325

-24%

Rio Grande do Sul

76,811

40,236

2,935

(30,692)

(1,318)

87,972

15%

Rio de Janeiro

246,844

0

14,540

(78,606)

(9,203)

173,575

-30%

Bahia

133,795

56,008

7,962

(50,453)

7,180

154,492

15%

Pernambuco

68,351

38,152

410

(18,241)

3,212

91,884

34%

Minas Gerais

71,890

66,473

8,880

(33,273)

(2,513)

111,457

55%

Other

50,621

0

5,281

(9,162)

(8,363)

38,377

-24%

Total Tenda

899,813

228,544

46,226

(312,724)

(12,777)

849,082

-6%

MCMV

800,486

228,544

37,882

(296,691)

45,077

815,298

2%

Out of MCMV

99,327

0

8,344

(16,033)

(57,854)

33,784

-66%

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

.

 

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

 

Not Iniciated

Up to 30% built

30% to 70% built

More than 70% built

Finished Units¹

Total 1Q16

New Model – MCMV

134,207

300,366

176,343

39,238

15,220

665,374

Legacy – MCMV

-

-

57,264

-

92,660

149,924

Legacy – Out of MCMV

-

-

-

-

33,784

33,784

Total Tenda

134,207

300,366

233,607

39,238

141,664

849,082

                       

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

 

Regarding legacy projects, the Tenda segment is still awaiting legal approval for a suspended project with a total PSV of R$57.3 million to move forward with construction.

 

Tenda Segment Landbank

The Tenda segment landbank, with a PSV of approximately R$4.6 billion, is comprised of 126 different projects/phases. Out of these projects/phases 24% are located in São Paulo, 13% in Rio Grande do Sul, 22% in Rio de Janeiro, 5% in Minas Gerais, 25% in Bahia, and 10% in Pernambuco. 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

1,090,401

0%

0%

0%

7,021

7,021

Rio Grande do Sul

623,399

18%

5%

13%

4,596

4,620

Rio de Janeiro

1,034,112

19%

19%

0%

7,325

7,429

Bahia

1,177,331

8%

8%

0%

9,350

9,392

Pernambuco

458,291

23%

10%

13%

3,655

3,680

Minas Gerais

250,906

38%

38%

0%

1,695

1,740

Total

4,634,440

13%

9%

4%

33,642

33,882

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.

 

 

 

 

39


 
 

EARNINGS

RELEASE

1Q16

 

Table 27 –Tenda Segment – Changes in the Landbank (4Q15 x 1Q16 - R$ 000)

 

Initial Landbank

Land Acquisition

Launches

Adjustments

Final Landbank

São Paulo

1,088,294

138,376

(27,675)

(108,594)

1,090,401

Rio Grande do Sul

653,968

0

(40,236)

9,667

623,399

Rio de Janeiro

1,043,191

0

0

(9,079)

1,034,112

Bahia

1,209,478

72,877

(56,008)

(49,016)

1,177,331

Pernambuco

481,380

0

(38,152)

15,063

458,291

Minas Gerais

256,628

64,800

(66,473)

(4,049)

250,906

Total

4,732,938

276,053

(228,544)

(146,008)

4,634,440

 

In 1Q16, the Tenda segment acquired new land plots with a potential PSV of R$276.0 million. In the first quarter, 8 land plots were acquired, representing an acquisition cost of R$24.9 million, 100% to be paid in cash, with cash disbursement to occur over the next few quarters.

 

New Model Update and Turnaround

Tenda is in keeping with expanding it launches volume under its New Business Model, which is based on three pillars: operational efficiency, risk management, and capital discipline.

Currently, the Company continues to operate in six macro regions: São Paulo, Rio de Janeiro, Belo Horizonte, Porto Alegre, Salvador and Recife. Tenda has a total of 60 projects/phases and a launched PSV of R$2,244.7 million since 2013. Below is a brief description of the average performance of these projects, per region.

Notably, the Tenda segment has delivered 22 projects/phases, totaling 6,147 units and R$845.1 million in PSV, all of them attaining the performance and profitability drivers established for 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

293

774

-

-

-

2,445

% Sold

100%

98%

99%

-

-

-

99%

SoS Avg (Month)

11%

6%

5%

-

-

-

9%

Transfers

1,378

267

761

-

-

-

2,406

% Transferred (Sales)

100%

89%

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

720

1,418

1,193

427

428

-

4,186

% Sold

100%

94%

98%

99%

99%

-

97%

SoS Avg (Month)

13%

6%

7%

7%

4%

-

7%

Transfers

700

1,185

1,134

406

373

-

3,798

% Transferred (Sales)

98%

80%

95%

94%

86%

-

88%

Work Progress

100%

95%

97%

100%

76%

-

95%

 

 

 

 

40


 
 

EARNINGS

RELEASE

1Q16

 

 

 

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

1,720

780

905

551

290

691

4,937

% Sold

79%

45%

57%

58%

78%

79%

64%

SoS Avg (Month)

15%

6%

8%

6%

12%

13%

10%

Transfers

1,505

546

747

431

181

497

3,907

% Transferred (Sales)

72%

32%

51%

46%

48%

56%

51%

Work Progress

56%

32%

44%

46%

40%

41%

44%

 

 

SP

RJ

BA

PE

MG

RS

2016

Number of Projects

1

-

2

1

3

2

9

Units launched

180

-

440

304

520

280

1,724

Total PSV (R$ 000)

27.7

-

56.0

38.2

66.5

40.2

229

Units Sold

44

-

57

34

10

8

153

% Sold

24%

-

13%

11%

2%

3%

9%

SoS Avg (Month)

12%

-

13%

4%

13%

1%

9%

Transfers

17

-

32

9

-

-

58

% Transferred (Sales)

9%

-

7%

3%

-

-

3%

Work Progress

1%

-

4%

0%

-

7%

2%

 

 

41


 
 

EARNINGS

RELEASE

1Q16

Financial Result

Revenues

 

Tenda’s 1Q16 net revenues totaled R$234.6 million, an increase of 30.7% compared with 1Q15, reflecting an increased volume of net sales as a result of lower levels of dissolutions compared to previous years. As shown in the table below, revenues from new projects accounted for 90.1% of Tenda’s revenues in 1Q16, while revenues from legacy projects accounted for the remaining 9.9%.

 

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

 

 

1Q16

 

 

1Q15

Launches

Pre-Sales

% Sales

Revenue

% Revenue

Pre- Sales

% Sales

Revenues

% Revenues

2016

21,930

8%

4,130

2%

-

0%

-

0%

2015

205,603

77%

175,411

75%

45,280

19%

7,864

5%

2014

17,637

7%

32,146

14%

167,696

69%

91,592

51%

2013

(662)

0%

(293)

0%

7,033

3%

29,471

16%

≤ 2012

21,989

8%

23,159

10%

23,528

10%

50,516

28%

Total

266,497

100%

234,552

100%

243,537

100%

179,443

100%

New Model

244,508

92%

211,393

90%

220,009

90%

128,927

72%

Legacy

21,989

8%

23,159

10%

23,528

10%

50,516

28%

                     

 

Gross Profit and Margin

1Q16 gross profit totaled R$68.7 million, up significantly from R$51.1 million in 1Q15, and R$58.7 million in the 4Q15. Gross margin for the quarter reached 29.3%, compared to 28.5% in 1Q15 and 28.4% in 4Q15.

The maintenance of higher gross margins is due to the increased contribution of more profitable projects launched under the new model in Tenda’s revenue generation, as has been observed over the last few quarters.

Tenda’s adjusted gross margin ended 1Q16 at 31.7%, above the 30.0% recorded in the previous year period, and 29.9% when compared with 4Q15.

The table below shows Tenda’s gross margin breakdown in 1Q16.

 

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

 

1Q16

4Q15

Q/Q (%)

1Q15

Y/Y (%)

Net Revenue

234,552

206,822

13%

179,443

31%

Gross Profit

68,745

58,660

17%

51,053

35%

Gross Margin

29.3%

28.4%

90 bps

28.5%

80 bps

(-) Financial Costs

5,515

3,267

69%

2,747

101%

Adjusted Gross Profit

74,260

61,927

20%

53,800

38%

Adjusted Gross Margin

31.7%

29.9%

180 bps

30.0%

170 bps

 

 

42


 
 

EARNINGS

RELEASE

1Q16

 

Selling, General and Administrative Expenses (SG&A)

During 1Q16, selling, general and administrative expenses totaled R$37.3 million, a 4.6% decrease compared to 4Q15, and an increase of 34.1% compared to R$27.8 million in 1Q15.

Selling expenses totaled R$18.3 million in 1Q16, in line with the last quarter, and a 40.3% increase y-o-y, due to the ongoing expansion in launch volumes and increased gross sales in the Tenda segment in the last quarters.

In 1Q16, general and administrative expenses presented a decrease of 8.2% compared to 4Q15 and an increase of 28.7% in the annual comparision, explicado pela the reversal of expenses related to provision for bonus recorded in 1Q15.

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

 

 

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

 

1Q16

4Q15

Q/Q(%)

1Q15

Y/Y (%)

Selling Expenses

(18,272)

(18,348)

0%

(13,021)

40%

General & Admin Expenses

(19,020)

(20,723)

-8%

(14,783)

29%

Total SG&A Expenses

(37,292)

(39,071)

-5%

(27,804)

34%

Launches

228,544

302,635

-24%

238,354

-4%

Net Pre-Sales

266,497

237,452

12%

243,537

9%

Net Revenue

234,552

206,822

13%

179,443

31%

 

The Other Operating Revenues/Expenses totaled an expense of R$15.2 million, a decrease of 25.3% vs. 4Q15, due to the absence 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)

 

1Q16

4Q15

Q/Q(%)

1Q15

Y/Y (%)

Litigation Expenses

(7.084)

(8.356)

-15%

(6.105)

16%

Other

(8.133)

(12.003)

-32%

1.071

-859%

Total

(15.217)

(20.359)

-25%

(5.034)

202%

 

Over the past two years, the strong volume of deliveries related to delayed projects resulted in increased contingencies in the Tenda segment. The Company expects to see a reduction in the volume of such expenses over the coming years as a result of the delivery of the final legacy projects in 3Q15 and the full contribution of New Model projects which are demonstrating strong operational performance.

 

 

 

43


 
 

EARNINGS

RELEASE

1Q16

 

Adjusted EBITDA

Adjusted EBITDA was R$22.8 million in 1Q16, compared to Adjusted EBITDA of R$1.5 million in 4Q15 and R$21.1 million in the last year.

The increased contribution of projects under the New Model in Tenda’s revenue mix and the related delivery of legacy projects since 2013, has resulted in improved gross margins in recent quarters. In addition to the improved performance, Tenda’s efficiencies in its cost structure have resulted in a significant increase in EBITDA in the Tenda segment during the period.

 

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

 

1Q16

4Q15

Q/Q(%)

1Q15

Y/Y (%)

Net (Loss) Profit

4,794

(12,991)

-

11,446

-58%

(+) Financial results

1,897

(565)

-

(1,528)

-

(+) Income taxes

6,755

5,751

17%

4,810

40%

(+) Depreciation & Amortization

3,190

3,941

-19%

3,390

-6%

(+) Capitalized interests

5,515

3,267

69%

2,747

101%

(+) Expenses with stock Option Plan

533

533

0%

527

1%

(+) Minority Shareholders

71

1,528

-95%

(278)

-

Adjusted EBITDA

22,755

1,464

1454%

21,114

8%

Net Revenue

234,552

206,822

13%

179,443

31%

Adjusted EBITDA Margin

9.7%

0.7%

900 bps

11.8%

-210 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$115.1 million in 1Q16. The consolidated margin for the quarter was 40.9%.

 

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

 

1Q16

4Q15

Q/Q(%)

1Q15

Y/Y(%)

Backlog Revenues

281,506

266,463

6%

188,447

49%

Backlog Costs (units sold)

(166,446)

(148,691)

12%

(114,973)

45%

Backlog Results

115,060

117,772

-2%

73,474

57%

Backlog Margin

40.9%

44.2%

-330 bps

39.0%

190 bps

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

 

 

44


 
 

EARNINGS

RELEASE

1Q16

 

 

Balance Sheet and Consolidated Financial Results

Cash and Cash Equivalents

 

On March 31, 2016, cash and cash equivalents and securities totaled R$792.1 million, up 11.2% from December 31, 2015.

 

Accounts Receivable

At the end of 1Q16, total consolidated accounts receivable decreased 15.1% y-o-y to R$2.4 billion, and decreased by 6.4% compared to 4Q15.

The Gafisa and Tenda segments have approximately R$553.0 million in accounts receivable from finished units.

Table 35. Total Receivables (R$ 000)

 

1Q16

4Q15

Q/Q(%)

1Q15

Y/Y(%)

Receivables from developments
(off balance sheet)

725,499

792,968

-9%

965,855

-25%

Receivables from PoC- ST
(on balance sheet)

1,328,042

1,395,273

-5%

1,476,007

-10%

Receivables from PoC- LT
(on balance sheet)

374,614

407,091

-8%

417,746

-10%

Total

2,428,155

2,595,332

-6%

2,859,608

-15%

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$94.3 million in 1Q16. The Gafisa segment contributed cash generation of R$41.0 million. This increase came as a result of the volume of delivered residential projects in the last quarter of the year. The volume of transferred/received units sold to financing agents reached R$110.0 million during the period. The Tenda segment generated R$53.3 million in cash, with R$235.1 million transferred in 1Q16.

While consolidated operating cash generation reached R$94.3 million, the Company ended 1Q16 with net operating cash generation of R$28.3 million.

 

Table 36. Cash Generation (R$ 000)

 

4Q15*

1Q16

Availabilities

712,311

792,076

Change in Availabilities(1)

 

79,766

Total Debt + Investor Obligations

2,155,688

2,207,114

Change in Total Debt + Investor Obligations (2)

 

51,425

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

 

28,340

Cash Generation Final

 

28,340

* 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.

 

 

 

45


 
 

EARNINGS

RELEASE

1Q16

 

Liquidity

At the end of March 2016, the Company’s Net Debt/Equity ratio reached 46.5%, in line with 46.6% in the previous quarter. Excluding project finance, the Net Debt/Equity ratio was negative 14.6%.

The Company's consolidated gross debt reached R$2.2 billion at the end of 1Q16, in line with the last quarter, a decrease of 16.8% y-o-y. In the 1Q16, the Company amortized R$175.9 million in debt, of which R$146.5 million was project finance and R$29.4 million was corporate debt. A total of R$139.8 million, however, was disbursed, allowing for a net amortization of R$36.1 million.

 

Table 37. Debt and Investor Obligations

 

1Q16

4Q15

Q/Q (%)

1Q15

Y/Y (%)

Debentures - FGTS (A)

672,793

654,445

3%

914,209

-26%

Debentures – Working Capital (B)

186,295

203,513

-8%

356,359

-48%

Project Financing SFH – (C)

1,187,049

1,161,707

2%

1,103,283

8%

Working Capital (D)

154,495

131,128

18%

264,102

-42%

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

2,200,632

2,150,793

2%

2,637,953

-17%

Investor Obligations (F)

6,482

4,895

32%

13,430

-52%

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

2,207,114

2,155,688

2%

2,651,383

-17%

Cash and Availabilities (H)

792,076

712,311

11%

1,116,168

-29%

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

1,415,038

1,443,377

-2%

1,535,215

-8%

Equity + Minority Shareholders (J)

3,046,284

3,097,236

-2%

3,070,891

-1%

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

46.5%

46.6%

-10 bps

50.0%

-350 bps

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

-14.6%

-12.0%

-260 bps

-15.7%

110 bps

 

The Company ended 1Q16 with R$1.0 billion in total debt due maturing in the short term. It should be noted, however, that 86.5% of this volume relates to debt linked to the Company's projects. Currently, the average cost of consolidated debt is 14.12% p.y., or 99.94% of the CDI.

 

Table 38. Debt Maturity

(R$ 000l)

Average Cost (p.y.)

Total

Until Mar/17

Until Mar/18

Until Mar/19

Until Mar/20

After Mar/20

Debentures - FGTS (A)

TR + 9.02% - 10.19%

672,793

373,126

299,667

-

-

-

Debentures – Working Capital (B)

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

186,295

26,618

60,866

78,154

20,657

-

Project Financing SFH (C)

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

1,187,049

521,926

448,949

172,313

29,160

14.701

Working Capital (D)

CDI + 3.95% / 117.9% CDI / INCC

154,495

107,582

44,248

2,116

549

-

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

 

2,200,632

1,029,252

853,730

252,583

50,366

14.701

Investor Obligations (F)

CDI + 0.59%

6,482

5,342

1,140

-

-

-

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

 

2,207,114

1,034,594

854,870

252,583

50,366

14.701

% of Total Maturity per period

 

46.9%

38.7%

11.4%

2.3%

0.7%

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

 

 

86.5%

87.6%

68.2%

57.9%

100.0%

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

 

13.5%

12.4%

31.8%

42.1%

0.0%

Ratio Corporate Debt / Mortgage

15.7%/
84.3%

 

 

 

 

 

 

 

46


 
 

EARNINGS

RELEASE

1Q16

      

Financial Result

Revenues

On a consolidated basis, net revenue in 1Q16 totaled R$405.5 million, down 27.5% compared to 4Q15 and down 21.9% from 1Q15. In the quarter, the Gafisa segment represented 42.2% of consolidated revenues, while Tenda accounted for the remaining 57.8%.

 

Gross Profit & Margin

Gross profit in 1Q16 was R$72.2 million, compared to R$142.9 million in 4Q15, and R$149.2 million in the prior year period. Such reduction is due to the lower level of revenues in the period. Gross margin for the quarter reached 17.8% compared to 25.5% in the 4Q15 and 28.7% in 1Q15.

Adjusted gross profit totaled R$110.2 million, with a margin of 27.2%, compared to 33.9% in the 4Q15 and 34.5% in the previous year.

 

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

 

1Q16

4Q15

Q/Q(%)

1Q15

Y/Y (%)

Net Revenue

405,534

559,246

-27%

519,501

-22%

Gross Profit

72,201

142,851

-49%

149,200

-52%

Gross Margin

17.8%

25.5%

-770 bps

28.7%

-1090 bps

( - ) Financial Costs

38,038

46,468

-18%

30,102

26%

Adjusted Gross Profit

110,239

189,319

-42%

179,302

-39%

Adjusted Gross Margin

27.2%

33.9%

-670 bps

34.5%

-730 bps

 

Selling, General and Administrative Expenses (SG&A)

SG&A expenses totaled R$81.0 million in 1Q16, up of 14.5% compared to 1Q15 and a decrease of 14.2%  q.o.q.

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

 

1Q16

4Q15

Q/Q %)

1Q15

Y/Y(%)

Selling Expenses

(35,018)

(56,686)

-38%

(27,113)

29%

G&A Expenses

(46,022)

(37,727)

22%

(43,668)

5%

Total SG&A Expenses

(81,040)

(94,413)

-14%

(70,781)

14%

Launches

308,648

682,905

-55%

313,581

-2%

Net Pre- Sales

333,339

482,648

-31%

423,344

-21%

Net Revenue

405,534

559,246

-27%

519,501

-22%

 

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

The Other Operating Revenues/Expenses line totaled an expense of R$29,8 million, a decrease of 37.3% vs. 4Q15 and of 11.2% vs 1Q15.

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

 

47


 
 

EARNINGS

RELEASE

1Q16

 

 

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

 

1Q16

4Q15

Q/Q %)

1Q15

Y/Y(%)

Litigation expenses

(22,888)

(31,443)

-27%

(26,070)

-12%

Other

(6,905)

(16,045)

-57%

(7,485)

-8%

Total

(29,793)

(47,488)

-37%

(33,555)

-11%

 

Consolidated Adjusted EBITDA

Consolidated adjusted EBITDA, including Alphaville equity income, totaled R$15.5 million in 1Q16, down from R$96.4 million in the prior-year period e from the R$78.0 million in 4Q15. 1Q16 Consolidated adjusted EBITDA was especially impacted by the lower gross result of the Gafisa segment, as a result of the major difficulties in the upper-middle income market in face of the current economic and political environment. Consolidated adjusted EBITDA margin using the same criteria was 3.8%, compared with 18.5% margin reported in the last year and 14.0% in 1Q15.

 

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

 

1Q16

4Q15

Q/Q %)

1Q15

Y/Y(%)

Net Profit (Loss)

(53,227)

827

-

31,651

-

(+) Financial results

1,941

12,907

-85%

8,216

-76%

(+) Income taxes

12,745

3,924

225%

12,160

5%

(+) Depreciation & Amortization

12,698

11,746

8%

11,669

9%

(+) Capitalized interests

38,038

46,468

-18%

30,102

26%

(+) Expenses with stock Option Plan

2,424

2,499

-3%

2,618

-7%

(+) Minority Shareholders

876

(345)

-

(50)

-

Adjusted EBITDA

15,495

78,026

-80%

96,366

-84%

Net Revenue

405,534

559,246

-27%

519,501

-22%

Adjusted EBITDA Margin

3.8%

14.0%

-1,020 bps

18.5%

-1,470 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 the 1Q16 reached R$12.7 million, up 8.1% compared to 4Q15 and 8.8% compared to the R$11.7 million recorded in 1Q15. D&A is now in line with Company’s current level of operations.

 

Financial Results

1Q16 Net financial result was negative R$1.9 million, better than the negative result of R$8.2 million in 1Q15 and R$12.9 million in 4Q15. Financial revenues were down 22.0% y-o-y, totaling R$25.4 million, due to the lower balance of funds available in the period. Financial expenses reached R$27.4 million, compared to R$40.8 million in 1Q15, due to the lower amount of total debt, higher share of project-related debt compared to corporate debt, resulting in lower cost of funding, as well as the positive result of mark-to-market of swaps.

 

 

48


 
 

EARNINGS

RELEASE

1Q16

 

Taxes

Income taxes, social contribution and deferred taxes for 1Q16 amounted to an expense of R$12.7 million, due to temporary differences in the period.

 

Net Income

The Company ended the 1Q16 with a net loss of R$53.2 million. Excluding the equity income from AUSA, the Company recorded a net loss of R$64.1 million, compared to a net loss of R$25.9 million in 4Q15 and net income of R$14.7 million in the same period last year.

 

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

 

1Q16

4Q15

Q/Q %)

1Q15

Y/Y(%)

Net Revenue

405,534

559,246

-27%

519,501

-22%

Gross Profit

72,201

142,851

-49%

149,200

-52%

Gross Margin

17.8%

25.5%

-770 bps

28.7%

-1,090 bps

Adjusted Gross Profit1

110,239

189,319

-42%

179,302

-39%

Adjusted Gross Margin1

27.2%

33.9%

-670 bps

34.5%

-730 bps

Adjusted EBITDA2

15,495

78,026

-80%

96,366

-84%

Adjusted EBITDA Margin

3.8%

14.0%

-1,020 bps

18.5%

-1,480 bps

Net Income (ex-AUSA equity income)

(53,227)

827

-

31,651

-

( - ) Alphaville Equity Income

10,880

26,704

-59%

16,960

-36%

Net income ( ex-AUSA equity income)

(64,107)

(25,877)

148%

14,691

-536%

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$275.0 million in the 1Q16. The consolidated margin for the quarter was 38.8%.

 

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

 

1Q16

4Q15

Q/Q %)

1Q15

Y/Y(%)

Backlog Revenues

708,871

764,024

-7%

930,601

-24%

Backlog Costs( units sold)

(433,841)

(453,897)

-4%

(563,034)

-23%

Backlog Results

275,030

310,127

-11%

367,567

-25%

Backlog Margin

38.8%

40.6%

-180 bps

39.5%

-70 bps

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

 

 

49


 
 

EARNINGS

RELEASE

1Q16

 

 

Net Profit reaches R$36.0 million in 1Q16

São Paulo, May 5, 2016 – Alphaville Urbanismo SA releases its results for the 1st quarter of 2016.

 

Financial Results

In the first quarter of 2016, net revenues were R$234 million, 2.8% below the same period of 2015. Net income was R$36 million, 2.9% above 1Q15.

 

 

1Q16

1Q15

Net Revenue

234

240

-2,8%

Net Income

36

35

2,9%

Margin

16%

15%

 

 

 

 

 

 

 

 

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

 

 

 

50


 
 

EARNINGS

RELEASE

1Q16

 

Financial Statements Gafisa Segment

 

1Q16

4Q15

Q/Q %)

1Q15

Y/Y(%)

Net Revenue

170,982

352,424

-51%

340,058

-50%

Operating Costs

(167,526)

(268,233)

-38%

(241,911)

-31%

Gross Profit

3,456

84,191

-96%

98,147

-96%

Gross Margin

2.0%

23.9%

-2,190 bps

28.9%

-2,690 bps

Operating Expenses

(54,638)

(60,601)

-10%

(60,620)

-10%

Selling Expenses

(16,746)

(38,338)

-56%

(14,092)

19%

General and Administrative Expenses

(27,002)

(17,004)

59%

(28,885)

-7%

Other Operating Revenue/Expenses

(14,576)

(27,129)

-46%

(28,521)

-49%

Depreciation and Amortization

(9,508)

(7,805)

22%

(8,279)

15%

Equity Income

13,194

29,675

-56%

19,157

-31%

Operational Result

(51,182)

23,590

-

37,527

-

Financial Income

16,622

17,076

-3%

19,277

-14%

Financial Expenses

(16,666)

(30,548)

-45%

(29,021)

-43%

Net Income Before taxes on Income

(51,226)

10,118

-

27,783

-

Deferred Taxes

964

8,011

-88%

(2,012)

-

Income Tax and Social Contribution

(6,954)

(6,184)

12%

(5,338)

30%

Net Income After Taxes on Income

(57,216)

11,945

-

20,433

-

Minority Shareholders

805

(1,873)

-

228

253%

Net Income

(58,021)

13,818

-

20,205

-

 

 

51


 
 

EARNINGS

RELEASE

1Q16

 

Financial Statements Tenda Segment

 

1Q16

4Q15

Q/Q %)

1Q15

Y/Y(%)

Net Revenue

234,552

206,822

13%

179,443

31%

Operating Costs

(165,807)

(148,162)

12%

(128,390)

29%

Gross Profit

68,745

58,660

17%

51,053

35%

Gross Margin

29.3%

28.4%

90 bps

28.5%

80 bps

Operating Expenses

(55,228)

(64,937)

-15%

(36,603)

51%

Selling Expenses

(18,272)

(18,348)

0%

(13,021)

40%

General and Administrative Expenses

(19,020)

(20,723)

-8%

(14,783)

29%

Other Operating Revenue/Expenses

(15,217)

(20,359)

-25%

(5,034)

202%

Depreciation and Amortization

(3,190)

(3,941)

-19%

(3,390)

-6%

Equity Income

471

(1,566)

-

(375)

-

Operational Result

13,517

(6,277)

-

14,450

-6%

Financial Income

8,809

7,051

25%

13,335

-34%

Financial Expenses

(10,706)

(6,486)

65%

(11,807)

-9%

Net Income Before taxes on Income

11,620

(5,712)

-

15,978

-27%

Deferred Taxes

(3,496)

(2,321)

51%

(3,288)

6%

Income Tax and Social Contribution

(3,259)

(3,430)

-5%

(1,522)

114%

Net Income After Taxes on Income

4,865

(11,463)

-

11,168

-56%

Minority Shareholders

71

1,528

-95%

(278)

-

Net Income

4,794

(12,991)

-

11,446

-58%

 

 

 

52


 
 

EARNINGS

RELEASE

1Q16

 

Consolidated Financial Statements

 

1Q16

4Q15

Q/Q %)

1Q15

Y/Y(%)

Net Revenue

405,534

559,246

-27%

519,501

-22%

Operating Costs

(333,333)

(416,395)

-20%

(370,301)

-10%

Gross Profit

72,201

142,851

-49%

149,200

-52%

Gross Margin

17.8%

25.5%

-770 bps

28.7%

-1,090 bps

Operating Expenses

(109,866)

(125,538)

-12%

(97,223)

13%

Selling Expenses

(35,018)

(56,686)

-38%

(27,113)

29%

General and Administrative Expenses

(46,022)

(37,727)

22%

(43,668)

5%

Other Operating Revenue/Expenses

(29,793)

(47,488)

-37%

(33,555)

-11%

Depreciation and Amortization

(12,698)

(11,746)

8%

(11,669)

9%

Equity Income

13,665

28,109

-51%

18,782

-27%

Operational Result

(37,665)

17,313

-

51,977

-

Financial Income

25,431

24,127

5%

32,612

-22%

Financial Expenses

(27,372)

(37,034)

-26%

(40,828)

-33%

Net Income Before taxes on Income

(39,606)

4,406

-

43,761

-

Deferred Taxes

(2,532)

5,690

-

(5,300)

-52%

Income Tax and Social Contribution

(10,213)

(9,614)

6%

(6,860)

49%

Net Income After Taxes on Income

(52,351)

482

-

31,601

-

Minority Shareholders

876

(345)

-

(50)

-

Net Income

(53,227)

827

-

31,651

-

 

 

 

53


 
 

EARNINGS

RELEASE

1Q16

 

Balance Sheet Gafisa Segment

 

1Q16

4Q15

Q/Q %)

1Q15

Y/Y(%)

Current Assets

 

 

 

 

 

Cash and cash equivalents

457,154

478,037

-4%

680,412

-33%

Receivables from clients

899,525

957,047

-6%

1,074,721

-16%

Properties for sale

1,444,672

1,389,893

4%

1,225,675

18%

Other accounts receivable

135,939

140,610

-3%

199,545

-32%

Deferred selling expenses

1,656

2,088

-21%

8,584

-81%

Land for sale

6,631

4,367

52%

6,074

9%

 

2,945,577

2,972,042

-1%

3,195,011

-8%

Long-term Assets

 

 

 

 

 

Receivables from clients

328,097

365,902

-10%

384,928

-15%

Properties for sale

494,122

506,719

-2%

572,410

-14%

Other

175,099

161,683

8%

163,184

7%

 

997,318

1,034,304

-4%

1,120,522

-11%

Intangible, Property and Equipment

53,671

57,926

-7%

59,949

-10%

Investments

1,979,277

1,962,153

1%

1,947,616

2%

Total Assets

5,975,843

6,026,425

-1%

6,323,098

-5%

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

Loans and financing

621,921

663,466

-6%

537,032

16%

Debentures

192,684

187,744

3%

329,876

-42%

Obligations for Purchase of Land and

advances from customers

251,101

223,197

13%

274,886

-9%

Material and service suppliers

50,439

43,666

16%

81,459

-38%

Taxes and Contribution

59,331

61,716

-4%

65,117

-9%

Investor Obligations

5,342

5,016

6%

8,717

-39%

Other

397,516

385,623

3%

395,180

1%

 

1,578,334

1,570,428

1%

1,692,267

-7%

Long-term liabilities

 

 

 

 

 

Loans and financings

633,699

582,916

9%

796,607

-20%

Debentures

459,344

468,337

-2%

541,712

-15%

Obligations for Purchase of Land and

advances from customers

93,572

146,102

-36%

61,234

53%

Deferred taxes

10,085

11,444

-12%

27,560

-63%

Provision for contigencies

81,542

81,542

0%

75,190

8%

Investor Obligations

1,140

1,322

-14%

4,713

-76%

Other

70,186

65,501

7%

53,912

30%

 

1,349,568

1,357,164

-1%

1,560,928

-14%

Shareholders’ Equity

 

 

 

 

 

Shareholders’ Equity

3,043,669

3,095,490

-2%

3,066,949

-1%

Minority Shareholders

4,272

3,343

28%

2,954

45%

 

3,047,941

3,098,833

-2%

3,069,903

-1%

Total Liabilities and Shareholders’ Equity

5,975,843

6,026,425

-1%

6,323,098

-5%

 

 

 

 

54


 
 

EARNINGS

RELEASE

1Q16

 

Balance Sheet Tenda Segment

 

1Q16

4Q15

Q/Q %)

1Q15

Y/Y(%)

Current Assets

 

 

 

 

 

Cash and cash equivalents

334,922

234,274

43%

435,756

-23%

Receivables from clients

428,517

438,226

-2%

401,285

7%

Properties for sale

513,414

490,484

5%

563,291

-9%

Other accounts receivable

103,485

104,656

-1%

117,337

-12%

Land for sale

93,898

101,490

-7%

107,415

-13%

 

1,474,236

1,369,130

8%

1,625,084

-9%

Long-term Assets

 

 

 

 

 

Receivables from clients

46,517

41,189

13%

32,818

42%

Properties for sale

212,843

243,520

-13%

196,378

8%

Other

47,423

45,356

5%

72,751

-35%

 

306,783

330,065

-7%

301,947

2%

Intangible, Property and Equipment

41,503

43,116

-4%

33,935

22%

Investments

163,820

163,349

0%

188,315

-13%

Total Assets

1,986,342

1,905,660

4%

2,149,281

-8%

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

Loans and financing

7,586

8,899

-15%

9,084

-16%

Debentures

207,060

201,877

3%

198,979

4%

Obligations for Purchase of Land and

Advances from customers

136,238

138,223

-1%

223,977

-39%

Material and service suppliers

29,806

13,669

118%

20,932

42%

Taxes and Contributions

73,531

72,606

1%

71,763

2%

Other

72,434

67,675

7%

168,783

-57%

 

526,655

502,949

5%

693,518

-24%

Long-term liabilities

 

 

 

 

 

Loans and financings

78,337

37,554

109%

24,663

218%

Debentures

-

-

0%

200,000

-100%

Obligations for Purchase of Land and

Advances from customers

102,869

102,412

0%

14,824

594%

Deferred taxes

10,090

5,045

100%

11,603

-13%

Provision for contigencies

56,237

55,716

1%

68,154

-17%

Other

79,942

75,170

6%

29,935

167%

 

327,475

275,897

19%

349,179

-6%

Shareholders’ Equity

 

 

 

 

 

Shareholders’ Equity

1,096,263

1,090,936

0%

1,070,450

2%

Minority Shareholders

35,949

35,878

0%

36,134

-1%

 

1,132,212

1,126,814

0%

1,106,584

2%

Total liabilities and Shareholders’ Equity

1,986,342

1,905,660

4%

2,149,281

-8%

 

 

55


 
 

EARNINGS

RELEASE

1Q16

 

Consolidated Balance Sheets

 

1Q16

4Q15

Q/Q %)

1Q15

Y/Y(%)

Current Assets

 

 

 

 

 

Cash and cash Equivalents

792,076

712,311

11%

1,116,168

-29%

Receivables from clients

1,328,042

1,395,273

-5%

1,476,007

-10%

Proprieties for Sale

1,958,087

1,880,377

4%

1,788,967

9%

Other accounts receivable

205,249

215,775

-5%

295,846

-31%

Prepaid expenses and others

6,474

7,171

-10%

15,322

-58%

Land for Sale

100,529

105,857

-5%

113,489

-11%

 

4,390,457

4,316,764

2%

4,805,799

-9%

Long-term Assets

 

 

 

 

 

Receivable from clients

374,614

407,091

-8%

417,746

-10%

Properties for sale

706,965

750,240

-6%

768,789

-8%

Other

207,555

192,073

8%

220,969

-6%

 

1,289,134

1,349,404

-4%

1,407,504

-8%

Intangible anda Property and Equipment

120,650

126,518

-5%

119,360

1%

Investments

979,712

967,646

1%

1,001,235

-2%

Total Assets

6,779,953

6,760,332

0%

7,333,898

-8%

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

Loans and Financing

629,508

672,365

-6%

546,115

15%

Debentures

399,744

389,621

3%

528,856

-24%

Obligations for purchase of land and

Advances from customers

387,339

361,420

7%

498,857

-22%

Materials and service suppliers

80,245

57,335

40%

102,391

-22%

Taxes and contributions

97,074

102,057

-5%

110,933

-12%

Other

481,718

466,171

3%

584,332

-18%

 

2,075,628

2,048,969

1%

2,371,484

-12%

Long-term Liabilities

 

 

 

 

 

Loans and Financing

712,036

620,470

15%

821,270

-13%

Debentures

459,344

468,337

-2%

741,712

-38%

Obligations for purchase of land and

Advances from customers

196,441

248,514

-21%

76,059

158%

Deferred taxes

20,175

16,489

22%

39,164

-48%

Provision for contigencies

145,214

142,670

2%

143,990

1%

Other

124,831

117,647

6%

69,328

80%

 

1,658,041

1,614,127

3%

1,891,523

-12%

Shareholders’ Equity

 

 

 

 

 

Shareholders’ Equity

3,043,671

3,095,491

-2%

3,066,952

-1%

Minority Shareholders

2,613

1,745

50%

3,939

-34%

 

3,046,284

3,097,236

-2%

3,070,891

-1%

Total liabilities and Shareholders’ Equity

6,779,953

6,760,332

0%

7,333,898

-8%

 

 

 

56


 
 

EARNINGS

RELEASE

1Q16

 

Cash Flow

 

1Q16

1Q15

Net Income (Loss) Before Taxes on Income

(39,606)

43,761

Expenses/income not affecting working capital

59,868

44,533

Depreciation and amortization

12,698

11,669

Expense with stock option plan

2,424

2,618

Penalty fee over delayed projects

(513)

(2,079)

Unrealized interest and charges,net

26,507

16,414

Equity income

(13,665)

(18,782)

Disposal of fixed asset

1,637

216

Warranty provision

(5,621)

6,925

Provision for contingencies

22,888

26,070

Profit Sharing provision

8,342

2,914

Allowance (reversal) for doubtful accounts

15,357

317

Writeoff of Investments

-

(4,505)

Profit / Loss from financial instruments

(10,186)

2,756

Clients

79,213

(65,295)

Properties for sale

(29,313)

(57,683)

Other receivables

(7,864)

10,231

Deferred selling expenses and pre-paid expenses

697

120

Obligations on land purchase

(26,154)

(16,820)

Taxes and contribution

(4,983)

(3,491)

Accounts payable

22,910

7,259

Salaries, payroll charges and bonus provision

3,350

4,289

Other accounts payable

(12,797)

(7,385)

Current account operations

9,376

1,514

Paid taxes

(12,745)

(12,160)

Cash used in Operating Activities

41,952

(51,127)

Investments Activities

 

 

Purchase of property and equipment

(8,467)

(5,651)

Redemption of securities, restricted securities and loans

(807,799)

1,180,350

Investments in marketable securities, restricted securities

789,111

(1,024,416)

Investments increase

(1,451)

(175)

Dividends receivables

(1,000)

-

Cash used in investing activities

(29,606)

150,108

Financing activities

 

 

Contributions from related partners

1,587

2,400

Increase in loans and financing

200,289

200,321

Amortization of loans and financing

(176,957)

(165,306)

Stock buyback

-

(22,135)

Assignment of credit receivables, net

27,974

-

Mutual Operations

(4,162)

587

Net cash provided by financing activities

48,731

15,867

Net increase (decrease) in cash and cash equivalents

61,077

114,848

At the beginning of the period

82,640

109,895

At the end of the period

143,717

224,743

Net increase (decrease) in cash and cash equivalents

61,077

114,848

 

 

 

57


 
 

EARNINGS

RELEASE

1Q16

About Gafisa

Gafisa is one Brazil’s leading residential and commercial properties development and construction companies. Founded over 60 years ago, the Company is dedicated to growth and innovation oriented to enhancing the  well-being, comfort and safety of an increasing number of households. More than 15 million square meters have been built, and approximately 1,100 projects  delivered under the Gafisa brand - more than any other company in Brazil. Recognized as one of the foremost professionally managed homebuilders, Gafisa’s brand is also one of the most respected, signifying both quality and consistency. In addition to serving the upper-middle and upper class segments through the Gafisa brand, the Company also focuses on low income developments through its Tenda brand. And, it participates through its 30% interest in Alphaville, a leading urban developer, in the national development and  sale of residential lots.  Gafisa S.A. is a Corporation traded on the Novo Mercado of the BM&FBOVESPA (BOVESPA:GFSA3) and is the only Brazilian homebuilder listed on the New York Stock Exchange (NYSE:GFA) with an ADR Level III, which ensures best practices in terms of transparency and corporate governance.

 

This release contains forward-looking statements about the business prospects, estimates for operating and financial results and Gafisa’s growth prospects. These are merely projections and, as such, are based exclusively on the expectations of management concerning the future of the business and its continued access to capital to fund the Company’s business plan. Such forward-looking statements depend, substantially, on changes in market conditions, government regulations, competitive pressures, the performance of the Brazilian economy and the industry, among other factors; therefore, they are subject to change without prior notice.

 

58


 
 

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

 

Gafisa S.A.

 

Notes to the financial statements

March 31, 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 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


 
 

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

 

Gafisa S.A.

 

Notes to the financial statements

March 31, 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 March 5, 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 have been prepared and are 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 are not considered in compliance with the International Financial Reporting Standards (IFRS), once they consider 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 unit sales.

 

 

 

 

 

60


 
 

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

 

Gafisa S.A.

 

Notes to the financial statements

March 31, 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 the 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, changes to standards or interpretation issued and not yet adopted that could, on the Management’s opinion, have significant impact arising from their 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


 
 

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

 

Gafisa S.A.

 

Notes to the financial statements

March 31, 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

 

03/31/2016

12/31/2015

03/31/2016

12/31/2015

 

  

 

 

 

Cash and banks

14,501

31,823

56,067

69,560

Securities purchased under resale agreements (a)

12,100

12,221

50,499

13,080

Funds deposited with third parties (b)

-

-

37,151

-

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

26,601

44,044

143,717

82,640

 

 

 

(a)     As of March 31, 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) (from 75% 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 April 1, 2016, the 15th interest installment and the 9th 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

 

03/31/2016

12/31/2015

03/31/2016

12/31/2015

 

 

 

 

 

Fixed-income funds

169,381

192,409

261,412

279,486

Government bonds (LFT)

9,420

10,081

19,203

18,631

Corporate securities (LF/DPGE)

45,942

51,835

93,657

95,801

Securities purchased under resale agreements

9,607

11,890

19,974

25,548

Bank certificates of deposit (a)

49,806

54,491

131,987

101,733

Restricted cash in guarantee to loans

40,954

20,515

41,113

31,633

Restricted credits

9,523

9,122

81,013

76,839

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

334,633

350,343

648,359

629,671

         

 

 

(a)   As of March 31, 2016, Bank Certificates of Deposit (CDBs) include interest earned through the balance sheet date, varying from 85% 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


 
 

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

 

Gafisa S.A.

 

Notes to the financial statements

March 31, 2016

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

 

 

 

 

5.         Trade accounts receivable from real estate development and services

 

 

Company

Consolidated

 

03/31/2016

12/31/2015

03/31/2016

12/31/2015

 

 

 

 

 

Real estate development and sales

940,009

1,001,351

1,792,847

1,895,795

( - ) Allowance for doubtful accounts and cancelled contracts

(18,429)

(12,365)

(115,379)

(100,530)

( - ) Present value adjustments

(19,472)

(21,527)

(30,973)

(31,052)

Services and construction and other receivables

22,407

18,583

56,161

38,151

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

924,515

986,042

1,702,656

1,802,364

 

 

 

 

 

Current

678,656

723,950

1,328,042

1,395,273

Non-current

245,859

262,092

374,614

407,091

 

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

 

 

Company

Consolidated

Maturity

03/31/2016

12/31/2015

03/31/2016

12/31/2015

 

 

 

 

 

Overdue

171,100

205,524

452,335

492,721

2016

455,027

543,781

734,846

948,998

2017

185,897

148,568

433,668

324,513

2018

82,659

62,256

120,715

80,850

2019

26,061

20,254

48,696

33,335

2020 onwards

41,672

39,551

58,748

53,529

 

 962,416

1,019,934

1,849,008

1,933,946

( - ) Adjustment to present value

(19,472)

(21,527)

(30,973)

(31,052)

( - ) Allowance for doubtful account and cancelled contracts

(18,429)

(12,365)

(115,379)

(100,530)

 

924,515

986,042

1,702,656

1,802,364

 

During the periods ended March 31, 2016, the changes in the allowance for doubtful accounts and cancelled contracts are summarized as follows:

 

 

Company

 

03/31/2016

 

 

Balance at December 31, 2015

(12,365)

Shares (Note 22)

(6,064)

Balance at March 31, 2016

(18,429)

 

 

Consolidated

 

Receivables

Properties for

sale (Note 6)

Net

 

 

 

 

Balance at December 31, 2015

(100,530)

21,764

(78,766)

Additions and Write-offs (Notes 22 and 23)

(14,849)

(3,412)

(18,261)

Balance at March 31, 2016

(115,379)

18,352

(97,027)

       

 

On March  4, 2016, 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 portfolio
accounting

Portfolio discounted to present value

Transaction balance at March 31, 2016 (Note 14)

Company

Consolidated

 

 

 

 

 

03/04/2016

27,954

27,334

24,176

27,974

         

 

 

63


 
 

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

 

Gafisa S.A.

 

Notes to the financial statements

March 31, 2016

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

 

 

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

 

In the transaction 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 significante changes in relation to the disclosures in Note 5 to the financial statements as of December 31, 2015.

 

 

6.    Properties for sale

 

 

Company

Consolidated

 

03/31/2016

12/31/2015

03/31/2016

12/31/2015

 

 

 

 

   

Land

790,801

775,814

1,465,637

1,443,460

( - ) Adjustment to present value

(8,397)

(9,639)

(20,817)

(16,771)

Property under construction

496,281

545,701

836,096

857,619

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

-

-

18,352

21,764

Completed units

273,931

216,073

374,275

333,036

( - ) Provision for realization of properties for sale

(5,437)

(5,437)

(8,491)

(8,491)

Total properties for sale

1,547,179

1,522,512

2,665,052

2,630,617

 

 

 

 

 

Current portion

1,172,707

1,135,137

1,958,087

1,880,377

Non-current portion

374,472

387,375

706,965

750,240

 

In the period ended  March 31, 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

 

03/31/2016

12/31/2015

03/31/2016

12/31/2015

 

 

 

 

 

Advances to suppliers

1,421

1,578

5,390

7,102

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

18,762

20,712

61,777

66,289

Judicial deposit (Note 16)

114,103

105,275

136,094

125,358

Other

3

4

4,631

4,788

 

 

 

 

 

Total other accounts receivable and others

134,289

127,569

207,892

203,537

 

 

 

 

 

Current portion

48,544

46,621

118,196

120,657

Non-current portion

85,745

80,948

89,696

82,880

 

 

 

 

64


 
 

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

 

Gafisa S.A.

 

Notes to the financial statements

March 31, 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

3,601

-

3,601

Transfer from (to) properties for sale, net

 

-

-

(6,696)

-

(6,696)

Reversal/Write-offs

-

-

-

(2,233)

-

(2,233)

Balance at March 31, 2016

21,721

(15,090)

6,631

142,345

(41,816)

100,529

 

 

 

 

 

 

Gafisa segment

 

 

 

21,721

(15,090)

6,631

Tenda segment

 

 

 

120,624

(26,726)

93,898

 

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


 
 

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

 

Gafisa S.A.

 

Notes to the financial statements

March 31, 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

 

03/31/2016

12/31/2015

03/31/2016

03/31/2016

03/31/2016

12/31/2015

 

03/31/2016

03/31/2015

03/31/2016

12/31/2015

03/31/2016

03/31/2015

03/31/2016

12/31/2015

03/31/2016

03/31/2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construtora Tenda S/A

-

100%

100%

1,986,343

890,079

1,096,263

1,090,935

 

4,794

11,446

1,096,263

1,090,935

4,794

11,446

-

-

-

-

Alphaville Urbanismo S.A

-

30%

30%

2,628,292

1,863,506

764,786

728,519

 

36,268

35,242

229,436

218,556

10,880

16,973

229,436

218,556

10,880

16,973

Gafisa SPE 26 Emp. Imob. Ltda.

-

100%

100%

176,647

9,479

167,168

167,361

 

(193)

327

167,168

167,361

(193)

327

-

-

-

-

Gafisa SPE- 130 Emp. Imob. Ltda

-

100%

100%

90,393

13,478

76,915

53,323

 

1,918

1,082

76,915

53,323

1,918

1,082

-

-

-

-

Gafisa SPE-111 Emp. Imob. Ltda.

-

100%

100%

119,722

49,168

70,554

79,764

 

(9,211)

3,559

70,554

79,764

(9,211)

3,559

-

-

-

-

Gafisa SPE-89 Emp. Imob. Ltda.

-

100%

100%

81,248

23,666

57,582

60,362

 

(2,780)

1,629

57,582

60,362

(2,780)

1,629

-

-

-

-

Gafisa SPE-116 Emp. Imob. Ltda.

(a)

50%

50%

166,211

56,561

109,650

103,372

 

6,278

3,068

54,825

51,686

3,139

1,534

54,825

51,686

3,139

1,534

Maraville Gafsa SPE Emp. Imob. Ltda.

-

100%

100%

68,160

17,559

50,601

48,883

 

1,718

20

50,601

48,883

1,718

20

-

-

-

-

Gafisa SPE-51 Emp. Imob. Ltda.

-

100%

100%

53,039

6,628

46,411

46,825

 

(414)

309

46,411

46,825

(414)

309

-

-

-

-

Gafisa SPE - 127 Emp. Imob. Ltda.

-

100%

100%

87,448

41,038

46,410

35,718

 

292

1,639

46,410

35,718

292

1,639

-

-

-

-

Gafisa SPE - 121 Emp. Imob. Ltda.

-

100%

100%

93,616

47,868

45,748

46,897

 

(1,149)

9,420

45,748

46,897

(1,149)

9,420

-

-

-

-

Gafisa SPE 72 Emp. Imob. Ltda.

-

100%

100%

55,523

11,257

44,266

44,275

 

(9)

(83)

44,266

44,275

(9)

(83)

-

-

-

-

Gafisa SPE-110 Emp. Imob. Ltda.

-

100%

100%

44,851

4,158

40,693

40,879

 

(186)

(1,547)

40,693

40,879

(186)

(1,547)

-

-

-

-

Gafisa SPE - 122 Emp. Imob. Ltda.

-

100%

100%

101,276

62,588

38,688

31,624

 

4,108

2,530

38,688

31,624

4,108

2,530

-

-

-

-

Gafisa SPE - 120 Emp. Imob. Ltda.

-

100%

100%

41,679

3,779

37,900

36,621

 

1,280

1,844

37,900

36,621

1,280

1,844

-

-

-

-

Manhattan Square Emp. Im. Res. 02

-

100%

100%

36,221

797

35,424

35,424

 

-

-

35,424

35,424

-

-

-

-

-

-

SPE Parque Ecoville Emp. Imob. Ltda

-

100%

100%

89,329

54,335

34,994

34,984

 

10

(1,753)

34,994

34,984

10

(1,753)

-

-

-

-

Gafisa SPE-107 Emp. Imob. Ltda.

-

100%

100%

32,532

3,002

29,530

29,442

 

88

(4)

29,530

29,442

88

(4)

-

-

-

-

Gafisa SPE-104 Emp. Imob. Ltda.

-

100%

100%

70,881

42,494

28,387

3,428

 

(429)

(20)

28,387

3,428

(429)

(20)

-

-

-

-

Gafisa SPE-41 Emp. Imob. Ltda.

-

100%

100%

28,171

1,668

26,503

26,469

 

34

63

26,503

26,469

34

63

-

-

-

-

Verdes Pracas Incorp. Imob. SPE Ltda.

-

100%

100%

26,304

74

26,230

26,225

 

5

7

26,230

26,225

5

7

-

-

-

-

Gafisa E Ivo Rizzo SPE-47 Emp. Im. Ltda

(a)

80%

80%

32,172

293

31,879

31,749

 

1

(28)

25,503

25,399

1

(22)

25,503

25,399

1

(22)

Gafisa SPE- 129 Emp. Imob. Ltda.

-

100%

100%

57,306

31,919

25,387

24,012

 

1,375

1,806

25,387

24,012

1,375

1,806

-

-

-

-

Varandas Grand Park Emp. Imob. Spe

(a)(c)

50%

50%

113,629

67,949

45,680

43,588

 

(769)

1,175

22,840

21,794

92

718

22,840

21,794

92

718

Gafisa SPE - 126 Emp. Imob. Ltda.

-

100%

100%

96,105

73,479

22,626

22,834

 

(208)

1,166

22,626

22,834

(208)

1,166

-

-

-

-

Gafisa SPE-112 Emp. Imob. Ltda.

-

100%

100%

29,671

7,935

21,736

21,736

 

-

(3)

21,736

21,736

-

(3)

-

-

-

-

Sitio Jatiuca Emp. Imob. SPE Ltda.

(a)

50%

50%

46,213

4,123

42,090

41,470

 

621

554

21,045

20,735

311

277

21,045

20,735

311

277

Gafisa SPE-134 Emp. Imob. Ltda.

-

100%

100%

34,427

15,674

18,753

2,083

 

(672)

-

18,753

2,083

(672)

-

-

-

-

-

Manhattan Square Emp. Im. Com. 02

-

100%

100%

18,019

61

17,958

17,955

 

-

-

17,958

17,955

-

-

-

-

-

-

Gafisa SPE 46 Emp. Imob. Ltda.

-

100%

100%

30,785

13,014

17,771

17,740

 

31

109

17,771

17,740

31

109

-

-

-

-

Edsp 88 Participações S.A.

-

100%

100%

32,242

14,816

17,426

17,454

 

(28)

(46)

17,426

17,454

(28)

(46)

-

-

-

-

Fit 13 Spe Empr. Imob. Ltda.

(b)

50%

50%

43,376

8,758

34,618

34,487

 

130

(984)

17,309

17,244

65

(492)

-

-

-

-

Parque Arvores Empr. Imob. Ltda.

(a)(c)

50%

50%

39,131

6,081

33,050

33,378

 

(340)

271

16,525

16,689

(164)

1,000

16,525

16,689

(164)

1,000

Gafisa SPE 30 Emp. Imob. Ltda.

-

100%

100%

63,774

47,545

16,229

16,196

 

33

40

16,229

16,196

33

40

-

-

-

-

Gafisa SPE-106 Emp. Imob. Ltda.

-

100%

100%

16,665

1,053

15,612

15,623

 

(11)

(4)

15,612

15,623

(11)

(4)

-

-

-

-

Gafisa SPE-92 Emp. Imob. Ltda.

-

100%

100%

16,682

1,091

15,591

15,474

 

117

78

15,591

15,474

117

78

-

-

-

-

Diodon Participações Ltda

-

100%

100%

17,923

2,912

15,011

14,962

 

49

295

15,011

14,962

49

295

-

-

-

-

Gafisa SPE 71 Emp. Imob. Ltda.

-

100%

100%

16,438

2,318

14,120

14,060

 

61

(177)

14,120

14,060

61

(177)

-

-

-

-

Gafisa SPE - 123 Emp. Imob. Ltda.

-

100%

100%

96,477

82,450

14,027

15,683

 

(1,655)

(1,053)

14,027

15,683

(1,655)

(1,053)

-

-

-

-

Gafisa SPE 33 Emp. Imob. Ltda.

-

100%

100%

14,166

1,198

12,968

13,385

 

(417)

66

12,968

13,385

(417)

66

-

-

-

-

Gafisa SPE 65 Emp. Imob. Ltda.

-

100%

100%

19,936

8,299

11,637

11,602

 

36

83

11,637

11,602

36

83

-

-

-

-

Alto Da Barra De Sao Miguel Em. Im.

(a)

50%

50%

24,386

1,296

23,090

23,504

 

(414)

505

11,545

11,752

(207)

252

11,545

11,752

(207)

252

Blue I SPE - Plan., Prom., Inc. E Venda

-

100%

100%

11,607

554

11,053

11,051

 

2

(16)

11,053

11,051

2

(16)

-

-

-

-

Città Ville SPE Emp. Imob. Ltda.

(b)

50%

50%

23,144

1,054

22,090

22,195

 

(106)

(2)

11,045

11,098

(53)

(1)

-

-

-

-

Gafisa SPE- 132 Emp. Imob. Ltda.

-

100%

100%

51,621

40,882

10,739

-

 

(65)

(1)

10,739

-

(65)

-

-

-

-

-

 

 

 

66


 
 

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

 

Gafisa S.A.

 

Notes to the financial statements

March 31, 2016

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

 

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

 

(i)      Ownership interests--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

 

03/31/2016

12/31/2015

03/31/2016

03/31/2016

03/31/2016

12/31/2015

 

03/31/2016

03/31/2015

03/31/2016

12/31/2015

03/31/2016

03/31/2015

03/31/2016

12/31/2015

03/31/2016

03/31/2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gafisa SPE-81 Emp. Imob. Ltda.

-

100%

100%

85,698

76,784

8,914

8,978

 

(64)

1,980

8,914

8,978

(64)

1,980

-

-

-

-

Gafisa SPE 36 Emp. Imob. Ltda.

-

100%

100%

26,076

17,190

8,886

8,857

 

29

29

8,886

8,857

29

29

-

-

-

-

Atins Emp. Imob.s Ltda.

(a)

50%

50%

29,663

13,487

16,176

15,777

 

(174)

2

8,088

7,888

(87)

1

8,088

7,888

(87)

1

Gafisa SPE-38 Emp. Imob. Ltda.

-

100%

100%

8,020

54

7,966

7,967

 

(1)

(1)

7,966

7,967

(1)

(1)

-

-

-

-

Gafisa SPE-77 Emp. Imob. Ltda.

-

65%

65%

25,346

13,141

12,205

9,552

 

3,063

189

7,933

6,209

2,082

1,562

-

-

-

-

Parque Aguas Empr. Imob. Ltda.

(a)(c)

50%

50%

16,758

1,402

15,356

15,264

 

482

(98)

7,678

7,632

47

(133)

7,678

7,632

47

(133)

Gafisa SPE-109 Emp. Imob. Ltda.

-

100%

100%

8,968

1,780

7,188

7,189

 

(1)

(7)

7,188

7,189

(1)

(7)

-

-

-

-

Gafisa SPE-37 Emp. Imob. Ltda.

-

100%

100%

7,635

885

6,750

6,727

 

23

16

6,750

6,727

23

16

-

-

-

-

Gafisa SPE-90 Emp. Imob. Ltda.

-

100%

100%

11,577

5,101

6,476

6,477

 

-

(32)

6,476

6,477

-

(32)

-

-

-

-

Dubai Residencial Empr. Imob. Ltda.

(a)(c)

50%

50%

11,843

545

11,298

10,562

 

508

(46)

5,649

5,281

367

2

5,649

5,281

367

2

Costa Maggiore Empr. Imob. Ltda.

(a)(c)

50%

50%

13,934

2,934

11,000

10,149

 

889

163

5,500

5,724

210

262

5,500

5,724

210

262

Gafisa SPE-87 Emp. Imob. Ltda.

-

100%

100%

23,602

18,229

5,373

5,393

 

(20)

1,862

5,373

5,393

(20)

1,862

-

-

-

-

OCPC01 adjustments – capitalized interests

(d)

 

 

-

-

-

-

 

-

-

31,247

31,675

(428)

5,363

-

-

-

-

Other (*)

-

 

 

318,186

226,428

91,759

97,269

 

(4,609)

(6,730)

71,029

76,854

(3,365)

(1,974)

29,178

33,110

(2,001)

(274)

Subtotal

 

 

 

7,611,087

4,015,896

3,595,191

3,463,712

 

40,318

69,939

2,877,661

2,779,093

11,380

61,981

437,812

426,246

12,588

20,590

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Saí Amarela S.A.

(a)

50%

50%

2,410

126

2,284

2,314

 

32

(102)

-

-

-

-

1,142

1,126

16

(51)

Gafisa SPE-51 Emp. Imob. Ltda.

(a)

60%

60%

2,547

1,020

1,528

1,662

 

(134)

768

-

-

-

-

917

997

(81)

461

Other (*)

 

 

 

446

114

331

466

 

2

113

-

-

-

-

166

73

(2)

87

Indirect jointly-controlled investees - Gafisa

 

 

 

5,403

1,260

4,143

4,442

 

(100)

779

-

-

-

-

2,225

2,196

(67)

497

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acedio SPE Emp. Imob. Ltda.

-

55%

55%

4,596

3,918

678

676

 

2

-

-

-

-

-

-

372

1

-

Maria Inês SPE Emp. Imob. Ltda.

-

60%

60%

21,342

168

21,174

21,050

 

124

34

-

-

-

-

12,705

12,630

74

20

Fit 02 SPE Emp. Imob. Ltda.

-

60%

60%

10,013

71

9,942

9,882

 

60

47

-

-

-

-

5,965

5,929

36

28

Fit Jardim Botânico SPE Emp. Imob. Ltda.

-

55%

55%

9,980

140

9,840

9,999

 

(259)

58

-

-

-

-

5,412

5,554

(142)

32

Fit 11 SPE Emp. Imob. Ltda.

-

70%

70%

36,677

3,683

32,994

32,062

 

931

(47)

-

-

-

-

23,095

22,443

652

(33)

Fit 31 SPE Emp. Imob. Ltda.

-

70%

70%

16,417

1,199

15,218

16,455

 

(1,236)

(678)

-

-

-

-

10,652

11,518

(865)

(475)

Fit 34 SPE Emp. Imob. Ltda.

-

70%

70%

34,795

1,075

33,720

33,634

 

86

438

-

-

-

-

23,604

23,544

60

306

Fit 03 SPE Emp. Imob. Ltda.

-

80%

80%

11,701

547

11,154

11,404

 

(250)

98

-

-

-

-

8,924

9,123

(200)

79

Imbuí I SPE Emp. Imob. Ltda.

-

50%

50%

8,900

206

8,694

8,723

 

(29)

(112)

-

-

-

-

-

4,362

(15)

(56)

Città Ipitanga SPE Emp. Imob. Ltda.

-

50%

50%

12,434

652

11,782

11,761

 

22

(104)

-

-

-

-

5,891

5,880

11

(52)

Grand Park - Pq. dos Pássaros Emp. Im.

-

50%

50%

26,183

2,947

23,236

22,466

 

771

1,644

-

-

-

-

11,618

11,233

385

822

Citta Itapua Emp. Imob. SPE Ltda.

-

50%

50%

19,242

1,189

18,053

18,015

 

38

8

-

-

-

-

9,027

9,007

19

4

SPE Franere Gafisa 08 Emp. Imob. LTDA.

-

50%

50%

55,268

6,795

48,473

47,831

 

641

(145)

-

-

-

-

24,236

23,916

321

(72)

Fit 13 SPE Emp. Imob. Ltda.

(b)

50%

50%

37,095

2,478

34,617

34,487

 

130

(984)

-

-

-

-

17,970

17,840

130

(979)

Other (*)

-

 

 

92,234

4,492

87,742

69,986

 

17,754

-

-

-

-

-

4,723

-

-

-

Indirect jointly-controlled investees Tenda

-

 

 

396,877

29,560

367,317

348,431

 

18,785

257

-

-

-

-

163,822

163,351

467

(376)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subtotal

 

 

 

8,013,367

4,046,716

3,966,651

3,816,585

 

59,003

70,975

2,877,661

2,779,093

11,380

61,981

603,859

591,793

12,988

20,711

 

 

67


 
 

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

 

Gafisa S.A.

 

Notes to the financial statements

March 31, 2016

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

 

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

 

(i)      Ownership interests--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

 

03/31/2016

12/31/2015

03/31/2016

03/31/2016

03/31/2016

12/31/2015

 

03/31/2016

03/31/2015

03/31/2016

12/31/2015

03/31/2016

03/31/2015

03/31/2016

12/31/2015

03/31/2016

03/31/2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill on acquisition of subsidiaries

(e)

 

 

 

 

 

 

 

 

 

25,476

25,476

-

-

-

-

-

-

Goodwill based on inventory surplus

-

 

 

 

 

 

 

 

 

 

62,343

62,343

-

-

-

-

-

-

Addition to remeasurement of investment in associate

(f)

 

 

 

 

 

 

 

 

 

375,853

375,853

-

-

375,853

375,853

-

-

Total investments

 

 

 

 

 

 

 

 

 

 

3,341,333

3,242,765

11,380

61,981

979,712

967,646

12,988

20,711

(*)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

Provision for net capital deficiency

Income from equity method investments

Provision for capital deficiency

Income from equity method investments

Direct investees

03/31/2016

12/31/2015

03/31/2016

03/31/2016

03/31/2016

12/31/2015

 

03/31/2016

03/31/2015

03/31/2016

12/31/2015

03/31/2016

03/31/2015

03/31/2016

12/31/2015

03/31/2016

03/31/2015

Provision for net capital deficiency (g):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Manhattan Residencial 01 Spe Ltda

50%

50%

30,847

120,166

(89,319)

(89,319)

 

60

(2,097)

(43,386)

(44,627)

30

(2,205)

(43,386)

(44,627)

30

(2,205)

Gafisa Vendas Interm. Imobiliaria Ltda

100%

100%

23,280

30,292

(7,011)

(8,239)

 

(2,372)

(1,320)

(7,011)

(8,239)

(2,372)

(1,320)

-

-

-

-

Manhattan Comercial 01 Spe Ltda

50%

50%

12,765

20,651

(7,887)

(7,887)

 

115

(564)

(4,372)

(4,350)

57

(209)

(4,372)

(4,350)

57

(196)

Other (*)

 

 

27,848

28,837

(989)

(2,557)

 

(151)

(2,083)

(945)

(2,511)

982

(2,071)

(5,424)

(5,424)

590

472

Total provision for net capital deficiency

 

 

94,740

199,946

(105,206)

(108,002)

 

(2,348)

(6,064)

(55,714)

(59,727)

(1,303)

(5,805)

(53,182)

(54,401)

677

(1,929)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Income from equity method investments

 

 

 

 

 

 

 

 

 

 

 

10,077

56,176

 

 

13,665

18,782

 

(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 March 31, 2016 related to the recognition, by joint ventures, of adjustments in prior years, 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

 

11,380

12,988

Capital contribution (decrease)

 

92,789

1,725

Dividends receivable

 

(5,575)

(2,650)

Other investments

 

(26)

3

Balance at March 31, 2016

 

3,341,333

979,712

 

 

68


 
 

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

 

Gafisa S.A.

 

Notes to the financial statements

March 31, 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

03/31/2016

12/31/2015

Addition

Write-off

100% depreciated items

03/31/2016

Cost

 

 

 

 

 

 

 

 

 

 

Hardware

14,018

577

-

(1,191)

13,404

28,143

2,041

(455)

(1,269)

28,460

Leasehold improvements and installations

9,367

1

-

(3,432)

5,936

17,449

514

-

(3,432)

14,531

Furniture and fixtures

675

-

-

-

675

5,503

-

-

-

5,503

Machinery and equipment

2,640

-

-

-

2,640

4,039

-

-

-

4,039

Molds

-

-

-

-

-

13,067

1,005

-

-

14,072

Sales stands

12,041

1,237

(99)

(795)

12,384

15,724

1,238

(1,182)

(1,356)

14,424

 

38,741

1,815

(99)

(5,418)

35,039

83,925

4,798

(1,637)

(6,057)

81,029

 

 

 

 

 

 

 

 

 

 

Accumulated depreciation

 

 

 

 

 

 

 

 

 

 

Hardware

(7,191)

(673)

-

1,191

(6,673)

(13,474)

(1,360)

-

1,269

(13,565)

Leasehold improvements and installations

(4,838)

(524)

-

3,432

(1,930)

(7,918)

(836)

-

3,432

(5,322)

Furniture and fixtures

(282)

(17)

-

-

(299)

(3,664)

(137)

-

-

(3,801)

Machinery and equipment

(1,344)

(66)

-

-

(1,410)

(1,898)

(102)

-

-

(2,000)

Molds

-

-

-

-

-

(3,379)

(684)

-

-

(4,063)

Sales stands

(2,267)

(2,114)

99

795

(3,487)

(4,416)

(3,571)

1,182

1,356

(5,449)

 

(15,922)

(3,394)

99

5,418

(13,799)

(34,749)

(6,690)

1,182

6,057

(34,200)

 

 

 

 

 

 

 

 

 

 

 

Total property and equipment

22,819

(1,579)

-

-

21,240

49,176

(1,892)

(455)

-

46,829

 

 

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

 

 

 

03/31/2016

 

Balance

Addition

Write-down / amortization

100% amortized items

Balance

 

 

 

 

 

 

Software – Cost

75,409

1,745

-

(15,457)

61,697

Software – Depreciation

(47,187)

-

(3,592)

15,457

(35,322)

Other

5,089

1,518

(1,086)

-

5,521

Total intangible assets

33,311

3,263

(4,678)

-

31,896

 

 

 

 

 

 

Consolidated

 

12/31/2015

 

 

 

03/31/2016

 

Balance

Addition

Write-down / amortization

100% amortized items

Balance

Goodwill

 

 

 

 

 

AUSA

25,476

-

-

-

25,476

 

 

 

 

 

 

Software – Cost

110,559

3,308

(1,655)

(15,457)

96,755

Software – Depreciation

(65,408)

-

(5,341)

15,457

(55,292)

Other

6,715

1,604

(1,437)

-

6,882

 

51,866

4,912

(8,433)

-

48,345

 

 

 

 

 

Total intangible assets

77,342

4,912

(8,433)

-

73,821

 

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 March 31, 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 financial statements

March 31, 2016

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

 

 

12.      Loans and financing

 

 

 

 

Company

Consolidated

Type

Maturity

Annual interest rate

03/31/2016

12/31/2015

03/31/2016

12/31/2015

 

 

 

 

 

 

 

National Housing System - SFH /SFI

June 2016 to

August 2020

8.30% to 14.00% + TR

120% to 129% of CDI

999,294

1,014,092

1,187,049

1,161,707

Certificate of Bank Credit - CCB

 

May 2016 to

June 2019

 

 

117.90% of CDI

3.95% + CDI

13.20% Fixed

 

129,331

124,568

154,495

131,128

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

1,128,625

1,138,660

1,341,544

1,292,835

 

 

 

 

 

 

Current portion

 

 

556,307

595,817

629,508

672,365

Non-current portion

 

 

572,318

542,843

712,036

620,470

 

 

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

 

 

Company

 

Consolidated

Maturity

03/31/2016

12/31/2015

 

03/31/2016

12/31/2015

 

 

 

 

 

 

2016

349,405

595,817

 

398,645

672,365

2017

555,382

385,555

 

628,719

440,418

2018

219,037

153,288

 

257,588

166,996

2019

4,801

4,000

 

38,151

12,049

2020 onwards

-

-

 

18,441

1,007

 

1,128,625

1,138,660

 

1,341,544

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  March 31, 2016 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

 

03/31/2016

03/31/2015

03/31/2016

03/31/2015

 

 

 

 

 

Total financial charges for the period

59,851

61,678

80,786

70,237

Capitalized financial charges

(49,129)

(42,621)

(63,019)

(46,405)

 

 

 

 

 

Financial expenses (Note 24)

10,722

19,057

17,767

23,832

 

 

 

 

 

Financial charges included in “Properties for sale”:

 

 

 

 

 

 

 

 

 

Opening balance

287,806

220,959

354,551

276,613

Capitalized financial charges

49,129

42,621

63,019

46,405

Charges recognized in profit or loss (Note 23)

(26,048)

(24,962)

(38,038)

(30,102)

 

 

 

 

 

Closing balance

310,887

238,618

379,532

292,916

 

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 financial statements

March 31, 2016

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

 

13.      Debentures

 

 

 

 

 

Company

Consolidated

Program/placement

Principal - R$

Annual interest

Final maturity

03/31/2016

12/31/2015

03/31/2016

12/31/2015

 

 

 

 

 

 

 

 

Seventh placement

450,000

TR + 10.1992%

December 2017

465,733

452,568

465,733

452,568

Eighth placement / second series

5,787

IPCA + 7.96%

October 2016

8,808

8,395

8,808

8,395

Ninth placement (i)

116,061

CDI + 1.90%

July 2018

114,587

130,394

114,587

130,394

Tenth placement (ii)

55,000

IPCA + 8.22

January 2020

62,900

64,724

62,900

64,724

First placement (Tenda) (iii)

200,000

TR + 9.02%

October 2016

-

-

207,060

201,877

 

 

 

 

 

 

 

 

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

652,028

656,081

859,088

857,958

 

 

 

 

 

 

 

 

Current portion

 

 

 

192,684

187,744

399,744

389,621

Non-Current portion

 

 

 

459,344

468,337

459,344

468,337

               

 

 

(i)   In the period ended March 31, 2016, the Company made the payment in the total amount of R$20,464, of which R$15,965 related to amortization of the Face Value of the Placement and R$4,499 related to the interest payable.

 

(ii)  In the period ended March 31, 2016, the Company made the payment in the total amount of R$4,775 related to the interest payable.

 

(iii) On March 31, 2016, at the Board of Directors of the Company it was approved the partial deferral of the 9th amortization installment payable on April 01, 2016, in the amount of R$70,000, to July 01, 2016, becoming the 10th amortization installment.

 

 

 

 

Current and non-current portions have the following maturities:

 

 

 

Company

Consolidated

Maturity

03/31/2016

12/31/2015

03/31/2016

12/31/2015

 

 

 

 

 

2016

191,744

187,744

398,804

389,621

2017

340,821

344,690

340,821

344,690

2018

78,154

83,485

78,154

83,485

2019

20,652

20,078

20,652

20,078

2020

20,657

20,084

20,657

20,084

  

652,028

656,081

859,088

857,958

 

 

 

71


 
 

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

 

Gafisa S.A.

 

Notes to the financial statements

March 31, 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 March 31, 2016 and December 31, 2015 are as follows:

 

 

03/31/2016

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)

-11.53 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

-14.81%

-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

2.33 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

-6.22 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

-14.81%

-12.19%

 

 

 

Ninth placement

 

 

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

3.70 times

3.71 times

Net debt cannot exceed 100% of equity plus noncontrolling interests

46.24%

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)

-11.53 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

-14.81%

-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.

-4.75 times

-6.79 times

Net debt less debt with secured guarantee (3) required to be in excess of 50% of equity.

-30.55%

-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

3.14 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 financial statements

March 31, 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

 

03/31/2016

12/31/2015

03/31/2016

12/31/2015

 

 

 

 

 

Assignment of receivables:

 

 

 

 

Obligation CCI Jun/11

2,801

3,164

4,325

4,775

Obligation CCI Dec/11

1,982

2,071

2,118

2,236

Obligation CCI Jul/12

279

368

279

368

Obligation CCI Nov/12

-

-

4,007

4,351

Obligation CCI Dec/12

5,690

7,541

5,690

7,541

Obligation CCI Nov/13

2,441

2,858

5,649

6,362

Obligation CCI Nov/14

4,241

4,646

6,276

6,696

Obligation CCI Dec/15

12,770

13,053

23,781

24,558

Obligation CCI Mar/16 (Note 5)

24,176

-

27,974

-

FIDC obligation

940

1,146

2,030

2,406

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

55,320

34,847

82,129

59,293

 

 

 

 

 

Current portion

19,598

12,631

31,352

23,482

Non-current potion

35,722

22,216

50,777

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

 

03/31/2016

12/31/2015

03/31/2016

12/31/2015

 

 

 

 

 

Provision for penalties for delay in construction works

1,399

1,404

2,700

3,213

Cancelled contract payable

13,095

11,014

29,331

24,053

Warranty provision

37,856

41,958

54,026

59,647

Deferred sales taxes (PIS and COFINS)

6,519

8,368

11,799

13,129

Provision for net capital deficiency (Note 9)

55,714

59,727

53,182

54,401

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

2,796

5,652

5,790

7,508

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

4,713

4,713

6,482

4,895

Share-based payment - Phantom Shares (Note 18.3)

1,373

889

1,373

889

Other liabilities

5,858

8,426

29,439

28,918

 

 

 

 

 

Total other payables

129,323

142,151

194,122

196,653

 

 

 

 

 

Current portion

117,789

127,123

163,494

163,437

Non-current portion

11,534

15,028

30,628

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 financial statements

March 31, 2016

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

 

16.  Provisions for legal claims and commitments

 

 

In the period ended March 31, 2016, the changes in the provision are summarized as follows:

 

 

Company

Civil lawsuits(i)

Tax proceedings(ii)

Labor claims

Total

Balance at December 31, 2015

119,420

220

63,235

182,875

Additional provision (Note 23)

11,073

-

4,096

15,169

Payment and reversal of provision not used

(7,051)

-

(3,891)

(10,942)

Balance at March 31, 2016

123,442

220

63,440

187,102

 

 

 

 

 

Current portion

87,289

220

15,566

103,075

Non-current portion

36,153

-

47,874

84,027

 

Consolidated

Civil lawsuits(i)

Tax proceedings(ii)

Labor claims

Total

Balance at December 31, 2015

149,621

400

92,961

242,982

Additional provision (Note 23)

14,876

10

8,002

22,888

Payment and reversal of provision not used

(10,674)

(12)

(6,895)

(17,581)

Balance at March 31, 2016

153,823

398

94,068

248,289

 

 

 

 

 

Current portion

87,289

220

15,566

103,075

Non-current portion

66,534

178

78,502

145,214

 

(a)     Civil lawsuits, tax proceedings and labor claims

 

As of March 31, 2016, the Company and its subsidiaries have deposited in court the amount of R$114,103 (R$105,275 in 2015) in the Company’s statement, and R$136,094 (R$125,358 in 2015) in the consolidated statement (Note 7).

 

 

   

Company

Consolidated

 

 

03/31/2016

12/31/2015

03/31/2016

12/31/2015

 

 

 

 

 

 

Civil lawsuits

 

75,402

71,327

88,184

81,919

Tax proceedings

 

17,612

13,744

20,804

14,222

Labor claims

 

21,088

20,204

27,106

29,217

Total

 

114,103

105,275

136,094

125,358

 

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

 

As of March 31, 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$860,313 (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 losses. The change in the period was caused by the higher volume of lawsuits with smaller amounts and review of the involved amounts and tax proceedings.

 

   

Company

Consolidated

 

 

03/31/2016

12/31/2015

03/31/2016

12/31/2015

 

 

 

 

 

 

Civil lawsuits

 

240,685

235,975

510,342

469,841

Tax proceedings

 

32,887

32,543

264,276

263,540

Labor claims

 

41,602

38,967

85,695

76,782

 

315,174

307,485

860,313

810,163

 

 

 

 

74


 
 

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

 

Gafisa S.A.

 

Notes to the financial statements

March 31, 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$1,114 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-months 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

03/31/2016

12/31/2015

03/31/2016

12/31/2015

 

 

 

 

 

 

Payables for purchase of properties

April 2016 to July 2020

129,380

139,320

364,364

362,800

Adjustment to present value

 

(8,483)

(9,723)

(21,315)

(17,039)

Advances from customers

 

 

 

 

 

Development and sales (Note 5)

 

17,012

19,337

34,397

39,743

Barter transaction - Land

 

127,450

143,271

206,334

224,430

 

 

 

 

 

 

Total payables for purchase of properties and advances from customers

 

265,359

292,205

583,780

609,934

 

 

 

 

 

 

Current portion

 

173,102

148,989

387,339

361,420

Non-current portion

 

92,257

143,216

196,441

248,514

 

18.  Equity

 

18.1.  Capital

 

As of March 31, 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 10,584,756 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.

 

As of 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. During the period ended March 31, 2016, there was no change in the treasury shares.

 

 

75


 
 

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

 

Gafisa S.A.

 

Notes to the financial statements

March 31, 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

03/31/2016

12/31/2015

03/31/2016

12/31/2015

11/20/2001

599,486

2,8875

0.16%

1,613

1,457

1,731

1,731

Changes in 2013:

 

 

 

 

 

 

 

Acquisition

18,500,000

3,8561

5.03%

49,765

44,955

71,339

71,339

Changes in 2014:

 

 

 

 

 

 

 

Acquisition

43,738,234

2,6353

11.90%

117,656

106,284

115,265

115,265

Transfer

(5,463,395)

3,2183

-1.49%

(14,697)

(13,276)

(17,583)

(17,583)

Cancellations

(27,493,039)

3,3351

-7.48%

(73,956)

(66,808)

(91,693)

(91,693)

Changes in 2015:

 

 

 

 

 

 

 

Acquisition

11,925,330

2,0257

3.25%

32,079

28,979

24,157

24,157

Transfer

(1,221,860)

2,4733

-0.33%

(3,287)

(2,970)

(3,022)

(3,022)

Cancellations

(30,000,000)

2,4738

-8.16%

(80,700)

(72,900)

(74,214)

(74,214)

 

10,584,756

2,4545

2.88%

28,473

25,721

25,980

25,980

(*)                                   Market value calculated based on the closing share price at March 31, 2016 at R$2.69 (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

Shares held by the management members of the Company

(2,350)

Outstanding shares as of March 31, 2016

365,131

 

 

Weighted average shares outstanding

366,681

 

 

18.2.  Stock option plan

 

Expenses for granting stocks recorded under the account “General and administrative expenses” (Note 23) in the periods ended March 31, 2016 and 2015, are as follows:

 

 

03/31/2016

03/31/2015

 

 

 

Gafisa

1,891

2,091

Tenda

533

527

 

2,424

2,618

 

(i)    Gafisa

 

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

 

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.

 

76


 
 

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

 

Gafisa S.A.

 

Notes to the financial statements

March 31, 2016

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

 

 

18.      Equity --Continued

 

18.2.  Stock option plan -- Continued

 

(i)    Gafisa-- Continued

 

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

 

In the period ended March 31, 2016, there was no change in the options outstanding.

 

As of March 31, 2016, stock options outstanding and exercisable 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

 

 

 

 

 

11,743,379

4.07

1.83

1,757,598

2.59

 

During the period ended March 31, 2016, the Company did not grant options in connection with its stock option plan comprising common shares (3,567,201 options granted in the year ended December 31, 2015).

 

 (ii)   Tenda

 

Tenda has a stock option plan for common shares, created in 2014, by which a total of 42,259,687 stock options were granted to employees and management members of the subsidiary, with exercise dates between March 31, 2017 and March 31, 2020.

 

In the period ended March 31, 2016,  the subsidiary Tenda did not grant options in connection with its stock option plan for common shares.

 

18.3.  Share-based payment – Phantom Shares

 

As of March 31, 2016, the amount of R$1,373 (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.

 

 

 

77


 
 

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

 

Gafisa S.A.

 

Notes to the financial statements

March 31, 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 March 31, 2016 and 2015 is as follows:

 

 

Company

Consolidated

 

03/31/2016

03/31/2015

03/31/2016

03/31/2015

 

 

 

 

 

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

(50,999)

35,107

(39,606)

43,761

Income tax calculated at the applicable rate - 34 %

17,340

(11,936)

13,448

(14,878)

Net effect of subsidiaries taxed by presumed profit

-

-

(2,630)

(3,343)

Tax losses (tax loss carryforwards used)

(971)

(1,484)

(1,015)

(1,744)

Income from equity method investments

3,426

18,904

4,646

6,191

Stock option plan

(478)

(711)

(659)

(890)

Other permanent differences

(6,036)

(2,711)

(10,033)

(5,119)

Charges on payables to venture partners

(279)

277

(111)

355

Tax benefits recognized (not recognized)

(15,230)

(5,795)

(16,391)

7,268

 

(2,228)

(3,456)

(12,745)

(12,160)

 

 

 

 

 

Tax expenses - current

(2,228)

(3,456)

(10,213)

(6,860)

Tax income - deferred

-

-

(2,532)

(5,300)

 

 (ii)   Deferred income tax and social contribution

 

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

 

 

Company

Consolidated

 

03/31/2016

12/31/2015

03/31/2016

12/31/2015

Assets

 

 

 

 

Provisions for legal claims

63,615

62,178

82,735

82,614

Temporary differences – PIS and COFINS deferred

8,299

10,636

14,103

16,404

Provisions for realization of non-financial assets

1,849

1,849

11,776

11,776

Temporary differences – CPC adjustment

32,357

40,089

36,915

44,748

Other provisions

71,181

60,745

100,544

85,912

Income tax and social contribution loss carryforwards

74,593

75,768

312,140

317,282

Tax benefits of subsidiaries

28,165

28,165

28,165

28,165

Tax credits not recognized

(15,230)

-

(289,388)

(272,997)

 

264,829

279,430

296,990

313,904

 

 

 

 

 

Liabilities

 

 

 

 

Negative goodwill

(92,385)

(92,385)

(92,384)

(92,385)

Temporary differences –CPC adjustment

(130,674)

(131,096)

(131,306)

(130,929)

Differences between income taxed on cash basis and recorded on an accrual basis

(51,855)

(66,034)

(93,475)

(107,079)

 

(274,914)

(289,515)

(317,165)

(330,393)

 

 

 

 

 

Total net

(10,085)

(10,085)

(20,175)

(16,489)

 

 

The balances of income tax and social contribution loss carryforwards for offset are as follows:

 

 Company

 

03/31/2016

 

12/31/2015

 

Income tax

Social contribution

Total

 

Income tax

Social contribution

Total

Balance of income tax and social contribution loss carryforwards

219,393

219,393

 

 

222,849

222,849

 

Deferred tax asset (25%/9%)

54,848

19,745

74,593

 

55,712

20,056

75,768

Recognized deferred tax asset

54,848

19,745

74,593

 

55,712

20,056

75,768

Unrecognized deferred tax asset

-

-

-

 

-

-

-

 

 

78


 
 

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

 

Gafisa S.A.

 

Notes to the financial statements

March 31, 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

 

03/31/2016

 

12/31/2015

 

Income tax

Social contribution

Total

 

Income tax

Social contribution

Total

Balance of income tax and social contribution loss carryforwards

918,061

918,061

 

 

933,182

933,182

 

Deferred tax asset (25%/9%)

229,515

82,626

312,140

 

233,296

83,986

317,282

Recognized deferred tax asset

54,848

19,745

74,593

 

55,712

20,056

75,768

Unrecognized deferred tax asset

174,667

62,881

237,547

 

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

13,027

 

4,429

2017

8,282

 

2,816

2018

3,056

 

1,039

2019

27,174

 

9,239

2020 to 2026

167,854

 

57,070

 

 219,393

 

 74,593

 

 

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.

 

 

79


 
 

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

 

Gafisa S.A.

 

Notes to the financial statements

March 31, 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 March 31, 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

03/31/2016

12/31/2015

 

 

 

 

 

 

 

 

 

Gafisa S/A

Banco Votorantim S.A.

55,000

Fixed 14.2672%

CDI + 1.6344%

12/21/2015

06/20/2016

(417)

(637)

Gafisa S/A

Banco Votorantim S.A.

27,500

Fixed 11.1136%

CDI + 0.2801%

06/20/2016

12/20/2016

(359)

(641)

Gafisa S/A

Banco Votorantim S.A.

27,500

Fixed 15.1177%

CDI + 1.6344%

12/20/2016

06/20/2017

(35)

(399)

Gafisa S/A

Banco Votorantim S.A.

130,000

CDI + 1.90%

118% CDI

07/22/2014

07/26/2018

(992)

(2,216)

Gafisa S/A

Banco HSBC

194,000

Fixed 12.8727%

120% CDI

09/29/2014

10/08/2018

(7,327)

(15,907)

Gafisa S/A

Banco Votorantim S.A.

55,000

IPCA + 8.22%

120% CDI

03/17/2015

01/20/2020

3,925

(1,874)

             

(5,205)

(21,674)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current

(9,936)

(14,056)

 

 

 

 

 

Non-current

4,731

(7,618)

 

 

During the period ended March 31, 2016, the amount of R$10,184 (R$(2,756) in 2015) in the Company’s and consolidated statements, which refers to net result of the interest swap transaction, 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.

 

 

80


 
 

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

 

Gafisa S.A.

 

Notes to the financial statements

March 31, 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 March 31, 2016

Less than 1 year

1 to 3 years

4 to 5 years

More than 5 years

Total

Loans and financing (Note 12)

556,724

571,901

-

-

1,128,625

Debentures (Note 13)

192,684

459,344

-

-

652,028

Payables to venture partners (Note 15)

3,573

1,140

-

-

4,713

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

40,176

2,796

-

-

42,972

 

793,157

1,035,181

-

-

1,828,338

 

 

Consolidated

Period ended March 31, 2016

Less than 1 year

1 to 3 years

4 to 5 years

More than 5 years

Total

Loans and financing (Note 12)

627,962

698,427

15,155

-

1,341,544

Debentures (Note 13)

399,744

459,344

-

-

859,088

Payables to venture partners (Note 15)

5,342

1,140

-

-

6,482

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

80,245

5,790

-

-

86,035

 

1,113,293

1,164,701

15,155

-

2,293,149

 

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 March 31, 2016 and December 31, 2015 is as follows:

 

 

Company

Consolidated

 

Fair value classification

As of March 31, 2016

Level 1

Level 2

Level 3

Level 1

Level 2

Level 3

 

 

 

 

 

 

 

Financial assets

 

 

 

 

 

 

Short-term investments (Note 4.2)

-

334,633

-

-

648,359

-

 

 

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

-

 

 

81


 
 

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

 

Gafisa S.A.

 

Notes to the financial statements

March 31, 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 March 31, 2016

Level 1

Level 2

Level 3

Level 1

Level 2

Level 3

 

 

 

 

 

 

 

Financial liabilities

 

 

 

 

 

 

Payables to venture partners (Note 20.i.b)

-

5,205

-

-

5,205

-

 

 

Company

Consolidated

 

Fair value classification

As of December 31, 2015

Level 1

Level 2

Level 3

Level 1

Level 2

Level 3

 

 

 

 

 

 

 

Financial liabilities

 

 

 

 

 

 

Payables to venture partners (Note 20.i.b)

-

21,674

-

-

21,674

-

 

In the period ended March 31, 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 March 31, 2016 and December 31, 2015, classified into Level 2 of the fair value classification, are as follows:

 

 

Company

 

03/31/2016

12/31/2015

 

Carrying value

Fair value

Carrying value

Fair value

 

 

 

 

Financial assets

 

 

 

 

Cash and cash equivalents (Note 4.1)

26,601

26,601

44,044

44,044

Short-term investments (Note 4.2)

334,633

334,633

350,343

350,343

Trade accounts receivable (Note 5)

924,515

924,515

986,042

986,042

 

 

 

 

 

Financial liabilities

 

 

 

 

Loans and financing (Note 12)

1,128,625

1,235,365

1,138,660

1,095,844

Debentures (Note 13)

652,028

660,546

656,081

633,238

Payables to venture partners (Note 15)

4,713

5,733

4,713

5,472

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

5,205

5,205

21,674

21,674

Suppliers (Note 20(i)(d))

42,972

42,972

32,115

32,115

 

 

 

82


 
 

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

 

Gafisa S.A.

 

Notes to the financial statements

March 31, 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

 

03/31/2016

12/31/2015

 

Carrying value

Fair value

Carrying value

Fair value

    

 

 

   

Financial assets

 

  

  

 

Cash and cash equivalents (Note 4.1)

143,717

143,717

82,640

82,640

Short-term investments (Note 4.2)

648,359

648,359

629,671

629,671

Trade accounts receivable (Note 5)

1,702,656

1,702,656

1,802,364

1,802,364

 

  

 

 

 

Financial liabilities

 

 

 

 

Loans and financing (Note 12)

1,341,544

1,311,596

1,292,835

1,237,222

Debentures (Note 13)

859,088

863,357

857,958

828,387

Payables to venture partners (Note 15)

6,482

5,733

4,895

5,472

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

5,205

5,205

21,674

21,674

Suppliers (Note 20(i)(d))

86,035

86,035

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 risks of debt acceleration disclosed in Note 20(ii)(c) to the financial statements as of December 31, 2015. 

 

 (iii)  Capital stock management

 

The other explanations related to this note were not subject to significant changes in relation to the disclosures in Note 20(iii) to the individual and consolidated 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

 

03/31/2016

12/31/2015

03/31/2016

12/31/2015

 

 

 

 

 

Loans and financing (Note 12)

1,128,625

1,138,660

1,341,544

1,292,835

Debentures (Note 13)

652,028

656,081

859,088

857,958

Obligations assumed on assignment of receivables (Note 14)

55,320

34,847

82,129

59,293

Payables to venture partners (Note 15)

4,713

4,713

6,482

4,895

( - ) Cash and cash equivalents and short-term investments (Note 4.1 and 4.2)

(361,234)

(394,387)

(792,076)

(712,311)

Net debt

1,479,452

1,439,914

1,497,167

1,502,670

Equity

3,043,671

3,095,491

3,046,284

3,097,236

Equity and net debt

4,523,123

4,535,405

4,543,451

4,599,906

 

 

83


 
 

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

 

Gafisa S.A.

 

Notes to the financial statements

March 31, 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 March 31, 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 and debentures linked to the Referential Rate (TR) and CDI, and debentures indexed to the CDI, IPCA and TR;

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

 

For the sensitivity analysis in the period ended March 31, 2016, the Company considered the interest rates of investments, loans and accounts receivables, the CDI rate at 14.13%, TR rate at 1.97%, INCC rate at 7.18%, and the National Consumer Price Index – Extended (IPCA) at 9.39% . 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 March 31, 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

7,688

19,222

38,443

(38,443)

(19,222)

(7,688)

Loans and financing

Increase/Decrease of CDI

(5,567)

(13,917)

(27,834)

27,834

13,917

5,567

Debentures

Increase/Decrease of CDI

(1,419)

(3,547)

(7,093)

7,093

3,547

1,419

Derivative financial instruments

Increase/Decrease of CDI

(6,455)

(15,821)

(30,826)

34,151

16,576

6,493

 

 

 

 

 

 

 

 

Net effect of CDI variation

 

(5,753)

(14,063)

(27,310)

30,635

14,818

5,791

 

 

 

 

 

 

 

Loans and financing

Increase/Decrease of TR

(1,715)

(4,287)

(8,573)

8,573

4,287

1,715

Debentures

Increase/Decrease of TR

(1,432)

(3,581)

(7,163)

7,163

3,581

1,432

 

 

 

 

 

 

 

Net effect of TR variation

 

(3,147)

(7,868)

(15,736)

15,736

7,868

3,147

 

 

 

 

 

 

 

Debentures

Increase/Decrease of IPCA

(616)

(1,539)

(3,078)

3,078

1,539

616

 

 

 

 

 

 

 

Net effect of IPCA variation

 

(616)

(1,539)

(3,078)

3,078

1,539

616

 

 

 

 

 

 

 

Accounts receivable

Increase/Decrease of INCC

11,411

28,527

57,052

(57,052)

(28,527)

(11,411)

 

 

 

 

 

 

 

Net effect of INCC variation

 

11,411

28,527

57,052

(57,052)

(28,527)

(11,411)

 

 

 

 

 

 

 

 

 

 

84


 
 

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

 

Gafisa S.A.

 

Notes to the financial statements

March 31, 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

03/31/2016

12/31/2015

03/31/2016

12/31/2015

 

 

 

 

 

Assets

 

 

 

 

Current account:

 

 

 

 

Total SPEs

56,204

55,023

78,798

86,010

Condominium and consortia and thirty party’s works

8,254

9,108

8,255

9,108

Loan receivable

82,628

78,818

113,128

109,193

Dividends receivable

16,204

14,279

-

-

 

163,290

157,228

200,181

204,311

 

 

 

 

 

Current portion

80,662

78,410

87,053

95,118

Non-current

82,628

78,818

113,128

109,193

 

 

 

 

 

Liabilities

 

  

  

 

Current account:

 

 

 

 

Total SPEs and Tenda

(915,460)

(790,895)

(76,556)

(76,620)

Loan payable

(7,830)

(10,480)

(51,256)

(51,482)

 

(923,290)

(801,375)

(127,812)

(128,102)

 

 

 

 

 

Current portion

(923,290)

(801,375)

(84,386)

(87,100)

Non-current

-

-

(43,426)

(41,002)

 

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

         

 

Company

 

 

 

03/31/2016

12/31/2015

Nature

Interest rate

 

 

 

 

 

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

11,044

11,044

Construction

12% p.a. + IGPM

Acquarelle Civilcorp Incorporações Ltda.

232

287

Construction

12% p.a. + IGPM

Manhattan Residencial I

55,402

53,862

Construction

10% p.a. + TR

Target Offices & Mall

5,430

3,105

Construction

12% p.a. + IGPM

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

10,520

10,520

Construction

12% p.a. + IGPM

Total receivable - Company

82,628

78,818

   

 

 

 

 

 

Gafisa Spe-113 Empr Imob

776

3,788

Construction

100% of CDI

Dubai Residencial

2,943

2,650

Construction

6% p.a.

Parque Arvores

2,270

2,270

Construction

6% p.a.

Parque Aguas

1,841

1,772

Construction

6% p.a.

Total payable - Company

7,830

10,480

Construction

6% p.a.

 

 

Consolidated

 

 

 

03/31/2016

12/31/2015

Nature

Interest rate

 

 

 

 

 

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

11,044

11,044

Construction

12% p.a. + IGPM

Acquarelle Civilcorp Incorporações Ltda.

232

287

Construction

12% p.a. + IGPM

Manhattan Residencial I

55,402

53,862

Construction

10% p.a. + TR

Target Offices & Mall

5,430

3,105

Construction

12% p.a. + IGPM

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

10,520

10,520

Construction

12% p.a. + IGPM

Fit Campolim SPE Emp. Imob. Ltda.

14,171

14,097

Construction

113.5% of 126.5% of CDI

Acedio SPE Emp. Imob. Ltda.

3,312

3,260

Construction

113.5% of 126.5% of CDI

Atua Construtora e Incorporadora S.A.

12,168

12,168

Construction

113.50% to 112% of CDI

Other

849

850

Construction

Several

Total receivable - Consolidated

113,128

109,193

 

 

 

 

 

 

 

Fit 34 SPE Empreendimentos Imobiliários Ltda.

22,343

21,925

Construction

6% p.a.

Fit 03 SPE Empreendimentos Imobiliários Ltda.

8,061

7,912

Construction

6% p.a.

Fit 11 SPE Empreendimentos Imobiliários Ltda.

6,022

5,910

Construction

6% p.a.

Gafisa Spe-113 Empr Imob

776

3,788

Construction

100% of CDI

Parque dos Pássaros

3,874

2,725

Construction

6% p.a.

Dubai Residencial

2,943

2,650

Construction

6% p.a.

Parque Arvores

2,270

2,270

Construction

6% p.a.

Parque Aguas

1,841

1,772

Construction

6% p.a.

Fit 31 SPE Empreendimentos Imobiliários Ltda.

1,323

1,298

Construction

6% p.a.

Araçagy

1,803

1,232

Construction

6% p.a.

Total payable - Consolidated

51,256

51,482

 

 

 

In the period ended March 31, 2016 the recognized financial income from interest on loans amounted to R$1,596 (R$2,133 in 2015) in the Company’s  statement and R$1,625 (R$2,174 in 2015) in the consolidated statement (Note 24).

 

85


 
 

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

 

Gafisa S.A.

 

Notes to the financial statements

March 31, 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$1,358,938 as of March 31, 2016 (R$1,067,950 as of December 31, 2015).

 

22.  Net operating revenue

 

 

Company

Consolidated

 

03/31/2016

03/31/2015

03/31/2016

03/31/2015

Gross operating revenue

 

 

 

 

Real estate development, sale, barter transactions and construction services

144,077

297,807

451,393

555,828

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

(6,064)

(626)

(14,849)

9,026

Taxes on sale of real estate and services

(11,040)

(26,780)

(31,010)

(45,353)

Net operating revenue

126,973

270,401

405,534

519,501

 

 

23.  Costs and expenses by nature

 

These are represented by the following:

 

 

Company

Consolidated

 

03/31/2016

03/31/2015

03/31/2016

03/31/2015

Cost of real estate development and sale:

 

 

 

 

Construction cost

(63,357)

(116,316)

(194,122)

(227,823)

Land cost

(26,012)

(35,952)

(71,946)

(62,508)

Development cost

(8,226)

(10,999)

(23,559)

(24,697)

Capitalized financial charges (Note 12)

(26,048)

(24,962)

(38,038)

(30,102)

Maintenance / warranty

(1,223)

(14,945)

(2,256)

(15,828)

Provision for cancelled contracts (Note 5)

-

-

(3,412)

(9,343)

Total cost of real estate development and sale

(124,866)

(203,174)

(333,333)

(370,301)

 

 

 

 

Commercial expenses:

 

 

 

 

Product marketing expenses

(4,325)

(5,927)

(15,556)

(13,945)

Brokerage and sale commission

(5,004)

(3,406)

(12,929)

(8,014)

Customer Relationship Management (CRM) and corporate marketing expenses

(2,997)

(1,929)

(3,698)

(4,539)

Other

(2,085)

(261)

(2,835)

(615)

Total commercial expenses

(14,411)

(11,523)

(35,018)

(27,113)

 

 

 

 

General and administrative expenses:

 

 

 

 

Salaries and payroll charges

(8,401)

(9,523)

(17,725)

(18,774)

Employee benefits

(1,046)

(1,195)

(1,947)

(1,955)

Travel and utilities

(188)

(299)

(565)

(608)

Services

(2,540)

(3,147)

(5,402)

(5,543)

Rents and condominium fees

(2,144)

(2,603)

(3,363)

(3,748)

IT

(4,442)

(4,170)

(4,260)

(7,379)

Stock option plan (Note 18.3)

(1,891)

(2,091)

(2,424)

(2,618)

Reserve for profit sharing (Note 25.iii)

(6,250)

(6,000)

(8,342)

(2,914)

Other

(100)

144

(1,994)

(129)

Total general and administrative expenses

(27,002)

(28,884)

(46,022)

(43,668)

 

 

 

 

 

Other income (expenses), net:

 

 

 

 

Expenses with lawsuits (Note 16)

(15,169)

(18,711)

(22,888)

(26,070)

Other

1,445

(8,482)

(6,905)

(7,485)

Total other income/(expenses), net

(13,724)

(27,193)

(29,793)

(33,555)

         

 

 

 

 

86


 
 

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

 

Gafisa S.A.

 

Notes to the financial statements

March 31, 2016

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

 

24.  Financial income (expenses)

 

 

Company

Consolidated

 

03/31/2016

03/31/2015

03/31/2016

03/31/2015

Financial income

 

 

 

 

Income from financial investments

10,942

15,504

19,763

28,320

Financial income on loans (Note 21)

1,596

2,133

1,596

2,174

Other financial income

1,135

519

4,072

2,118

Total financial income

13,673

18,156

25,431

32,612

 

 

 

 

 

Financial expenses

 

 

 

 

Interest on funding, net of capitalization (Note 12)

(10,722)

(19,057)

(17,767)

(23,832)

Amortization of debenture cost

(618)

(983)

(618)

(983)

Payables to venture partners

(396)

(576)

(396)

(576)

Banking expenses

(1,687)

(862)

(2,389)

(1,207)

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

10,184

(2,756)

10,184

(2,756)

Discount in securitization transaction

(10,408)

(6,729)

(16,386)

(11,474)

Total financial expenses

(13,647)

(30,963)

(27,372)

(40,828)

 

25.  Transactions with management and employees

 

(i)     Management compensation

 

The amounts recorded in the account “general and administrative expenses” for the periods ended  March 31, 2016 and 2015, related to the compensation of the Company’s key management personnel are as follows:

 

 

Management compensation

 

Period ended March 31, 2016

Board of Directors

Statutory Board

Fiscal Council

 

 

 

 

Number of members

7

5

3

Annual fixed compensation (in R$)

423

911

48

Salary / Fees

423

825

48

Direct and indirect benefits

-

86

-

Monthly compensation (in R$)

141

304

16

Total compensation

423

911

48

Profit sharing (Note 25 (iii))

-

1.138

-

Total compensation and profit sharing

423

2.049

48

 

 

Management compensation

 

Period ended March 31, 2015

Board of Directors

Statutory Board

Fiscal Council

 

 

 

 

Number of members

7

5

3

Annual fixed compensation (in R$)

423

921

50

Salary / Fees

423

825

50

Direct and indirect benefits

-

96

-

Monthly compensation (in R$)

141

307

17

Total compensation

423

921

50

Profit sharing (Note 25 (iii))

-

1.138

-

Total compensation and profit sharing

423

2.059

50

       

 

The amount related to the stock compensation of the Company’s management members was R$893 for the period ended March 31, 2016 (R$1,391 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 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$245.

 

 

87


 
 

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

 

Gafisa S.A.

 

Notes to the financial statements

March 31, 2016

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

 

25.      Transactions with management and employees --Continued

 

(ii)    Sales

 

In the period ended March 31, 2016, there were no with units sold to the Management and the total receivables is R$1,284 (R$1,610 in 2015).

 

(iii)   Profit sharing

 

In the period ended March 31, 2016, the Company recorded a provision for profit sharing amounting to R$6,250 in the Company’s  statement (R$6,000 in 2015) and R$8,342 in the consolidated statement (R$2,914 in 2015) in the account “General and Administrative Expenses" (Note 23).

 

 

Company

Consolidated

 

03/31/2016

03/31/2015

03/31/2016

03/31/2015

 

 

 

 

 

Executive officers

1,138

1,138

2,951

2,607

Other employees

5,112

4,862

7,422

7,607

Reclassification in subsidiary Tenda

-

-

-

(1,636)

Reversal in subsidiary Tenda

-

-

(2,031)

(5,664)

 

6,250

6,000

8,342

2,914

 

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 March 31, 2015, 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 profit and loss per share. In view of the loss for the period ended March 31, 2016, shares with dilutive potential are not considered, because the impact would be antidilutive.

 

 

 

 

 

03/31/2016

03/31/2015

Basic numerator

 

 

Proposed dividends and interest on equity

-

-

Undistributed profit (loss)

(53,227)

31,651

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

(53,227)

31,651

 

 

 

Basic denominator (in thousands of shares)

 

 

Weighted average number of shares

366,681

367,259

 

 

 

Basic earning (loss) per share in Reais

(0.1452)

0.0862

 

Diluted numerator

 

 

Proposed dividends and interest on equity

-

-

Undistributed earning (loss)

(53,227)

31,651

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

(53,227)

31,651

 

 

 

Diluted denominator (in thousands of shares)

 

 

Weighted average number of shares

366,681

367,259

Stock options

2,966

2,491

Anti-dilutive effect

(2,966)

-

Diluted weighted average number of shares

366,681

369,750

 

 

 

Diluted earning (loss) per share in Reais

(0.1452)

0.0856

 

 

 

 

88


 
 

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

 

Gafisa S.A.

 

Notes to the financial statements

March 31, 2016

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

 

27.  Earning (loss) per share --Continued

 

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.

 

28.  Segment information

 

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

 

 

   

Consolidated

 

Gafisa

Tenda

03/31/2016

Net operating revenue

170,982

234,552

405,534

Operating costs

(167,526)

(165,807)

(333,333)

 

 

 

Gross profit

3,456

68,745

72,201

 

 

 

Selling expenses

(16,746)

(18,272)

(35,018)

General and administrative expenses

(27,002)

(19,020)

(46,022)

Other income / (expenses), net

(14,576)

(15,217)

(29,793)

Depreciation and amortization

(9,508)

(3,190)

(12,698)

Financial expenses

(16,666)

(10,706)

(27,372)

Financial income

16,622

8,809

25,431

Tax expenses

(5,990)

(6,755)

(12,745)

 

 

 

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

(58,021)

4,794

(53,227)

 

 

 

Customers (short and long term)

1,227,622

475,034

1,702,656

Inventories (short and long term)

1,938,795

726,257

2,665,052

Other assets

1,627,194

785,051

2,412,245

 

 

 

Total assets

4,793,611

1,986,342

6,779,953

 

 

 

 

Total liabilities

2,879,539

854,130

3,733,669

 

 

   

Consolidated

 

Gafisa

Tenda

03/31/2015

Net operating revenue

340,058

179,443

519,501

Operating costs

(241,911)

(128,390)

(370,301)

 

 

 

Gross profit

98,147

51,053

149,200

 

 

 

Selling expenses

(14,092)

(13,021)

(27,113)

General and administrative expenses

(28,885)

(14,783)

(43,668)

Other income / (expenses), net

(28,051)

(5,504)

(33,555)

Depreciation and amortization

(8,279)

(3,390)

(11,669)

Financial expenses

(29,021)

(11,807)

(40,828)

Financial income

19,277

13,335

32,612

Tax expenses

(7,350)

(4,810)

(12,160)

 

 

 

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

20,205

11,446

31,651

 

 

 

Customers (short and long term)

1,459,650

434,103

1,893,753

Inventories (short and long term)

1,798,087

759,669

2,557,756

Other assets

1,926,880

955,509

2,882,389

 

 

 

Total assets

5,184,617

2,149,281

7,333,898

 

 

 

 

Total liabilities

3,220,310

1,042,697

4,263,007

 

The other explanation related to this note was not subject to significant changes in relation to those reported in Note 28 to the financial statements as of December 31, 2015.

 

 

 

 

89


 
 

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

 

Gafisa S.A.

 

Notes to the financial statements

March 31, 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 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 March 31, 2016 and December 31, 2015:

 

 

Consolidated

 

 

03/31/2016

12/31/2015

 

 

 

 

Unappropriated sales revenue of units sold

 

720,393

777,679

Unappropriated estimated cost of units sold

 

(423,427)

(445,265)

Unappropriated estimated cost of units in inventory

 

(715,115)

(795,995)

 

 

 

 

(i) Unappropriated sales revenue of units sold

 

 

 

Ventures under construction:

 

 

 

Contracted sales revenue

 

2,665,483

2,761,219

Appropriated sales revenue

 

(1,945,090)

(1,983,540)

Unappropriated sales revenue (a)

 

720,393

777,679

 

(ii) Unappropriated estimated cost of units sold

 

 

 

Ventures under construction:

 

 

 

Estimated cost of units

 

(1,574,355)

(1,626,339)

Incurred cost of units

 

1,150,928

1,181,074

Unappropriated estimated cost (b)

 

(423,427)

(445,265)

 

(iii) Unappropriated estimated costs of units in inventory

 

 

 

Ventures under construction:

 

 

 

Estimated cost of units

 

(1,599,379)

(1,724,372)

Incurred cost of units

 

884,264

928,377

Unappropriated estimated cost

 

(715,115)

(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, net of the levied 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 do 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, and also the warranty provision, which is appropriated to real estate units as the construction work progresses.

 

       As of March 31, 2016, the percentage of assets consolidated in the quarterly information related to ventures included in the equity segregation structure of the development stood at 31.7% (33.1% in 2015).

 

 

 

90


 
 

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

 

Gafisa S.A.

 

Notes to the financial statements

March 31, 2016

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

 

30.  Communication with regulatory bodies

 

The explanation related to this note was 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 April 1, 2016, the Company made the payment of the 15th interest installment and the 9th amortization installment related to the first debenture placement of the subsidiary Tenda, in the total amount of R$37,151, of which R$30,000 of principal and R$7,151 of interests.

 

(ii)  Annual Shareholders’ Meeting

 

On April 25, 2016, the Annual Shareholders’ Meeting of the Company was held, and main resolutions were as follows: (i) approval of the financial statements for the year ended December 31, 2015; (ii) approval of the allocation of profit for the year ended December 31, 2015, and dividend distribution; (iii) setting of the number of members of the Board of Directors of the Company; (iv) election of members to the Board of Directors of the Company; (v) setting of the maximum aggregate compensation to be distributed to the Company’s management for the year 2016; (vi) setting of the number of members of the Fiscal Council of the Company; (vii) election of the members to the Fiscal Council of the Company; and (viii) setting of the maximum aggregate compensation to be distributed to the members of the Fiscal Council of the Company for the year 2016.

 

***

 

 

91


 
 

(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

 

 

3/31/2016

 

Common shares

Shareholder

Shares

%

Treasury shares

10,584,757

2.80%

FUNCEF – Fundação dos Economiários Federais

23,835,800

6.30%

Polo

69,108,486

18.28%

Pátria Investimentos

21,171,100

5.60%

Outstanding shares

253,366,019

67.02%

     

Total shares

378,066,162

100.00%

     

3/31/2015

 

Common shares

Shareholder

Shares

%

Treasury shares

10,806,616

2.86%

FUNCEF – Fundação dos Economiários Federais

23,835,800

6.30%

Polo

52,547,486

13.90%

Outstanding shares

290,876,260

76.94%

     

Total shares

378,066,162

100.00%

 

 

 

92


 
 

(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

 

 

3/31/2016

Common shares

Shares

%

Shareholders holding effective control of the Company

114,115,386

30.18%

Board of Directors

592,609

0.16%

Executive directors

1,757,120

0.46%

Fiscal council

0

0.00%

Executive control, board members, officers and fiscal council

116,465,115

30.81%

Treasury shares

10,584,757

2.80%

Outstanding shares in the market (*)

251,016,290

66.39%

Total shares

378,066,162

100.00%

3/31/2015

Common shares

Shares

%

Shareholders holding effective control of the Company

76,383,286

20.20%

Board of Directors

592,609

0.16%

Executive directors

1,534,445

0.41%

Fiscal council

-

-

Executive control, board members, officers and fiscal council

78,510,340

20.77%

Treasury shares

10,806,616

2.86%

Outstanding shares in the market (*)

288,749,206

74.38%

Total shares

378,066,162

100.00%

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

 

 

 

93


 
 

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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.

 

 

 

94


 
 

(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 March 31, 2016, which comprises the balance sheet as of March 31, 2016 and the respective statement of operations, statement of comprehensive income (loss), statement of changes in equity and statement of cash flows for the quarter 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.

 

 

 

95


 
 

(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 quarter ended March 31, 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, May 5, 2016

 

KPMG Auditores Independentes

CRC 2SP014428/O-6

 

Giuseppe Masi

Accountant CRC 1SP176273/O-7

 

 

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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 March 31, 2016; and

 

ii)   Management has reviewed and agreed with the interim information for the period ended March 31, 2016.

 

Sao Paulo, May 5, 2016

 

GAFISA S.A.

 

Management

 

 

97


 
 

(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 March 31, 2016; and

 

ii)   Management has reviewed and agreed with the interim information for the period ended March 31, 2016.

 

Sao Paulo, May 5, 2016

 

GAFISA S.A.

 

Management

 

 

 

SIGNATURE

 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: May 20, 2016
 
Gafisa S.A.
 
By:
/s/ Sandro Gamba

 
Name:   Sandro Gamba
Title:     Chief Executive Officer
 

 

98