gfapr2q11_6k.htm - Generated by SEC Publisher for SEC Filing
 
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM 6-K
 
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934
 
For the month of August, 2011

(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 Reports Results for Second Quarter 2011
 
  --- Pre-sales reached R$ 1.1 billion on strong sales velocity of 42% over the R$ 1.4
  billion launched in the quarter ---
 
  --- Revised full year 2011 EBITDA margin guidance of 16%-20% incorporates more
  conservative approach on costs of projects being completed ---
 
  --- Cash position of R$ 1.2 billion, comfortably within debt covenants ---
 
  FOR IMMEDIATE RELEASE - São Paulo, August 11th , 2011 – Gafisa S.A. (Bovespa: GFSA3;
 

NYSE: GFA), Brazil’s leading diversified national homebuilder, today reported financial results for the second quarter ended June 30, 2011.

Commenting on the results, Duilio Calciolari, Chief Executive Officer said, “Our second quarter performance demonstrates the strength of our well-diversified portfolio of products, the persistent demand in the market and the success of our sales force. Pre-sales of R$1.14 billion was supported by favorable sales velocity over launches of R$1.38 billion.”

“While we are pleased with the quarterly improvement in reported EBITDA margin based on AlphaVille, our residential community developer with strong margins, we continue to be affected by some set-backs related to Tenda legacy units and also discounts over unsold finished units. As a result we are lowering our full year EBITDA margin guidance range by 200 bps, to 16-20%, to more accurately reflect our current and expected momentum of improvement through 2011. Our cash position of R$ 1.2 billion was reinforced by securitized receivables and higher cash inflow, benefiting from a deceleration of cash burn. Cash inflows for 2Q11 totaled R$ 847 million, a 36% sequential increase, and 53% higher than the second quarter of 2010”.

Calciolari continued, “In the short to medium term, I will prioritize execution in markets where we have strong track records and see the highest profitability potential. I am currently focusing on execution, margins improvement, generating cash flow and reducing leverage. We will be guided by a strict adherence to optimizing capital allocation and human resources when evaluating new launches.”

IR Contact
Luiz Mauricio Garcia
 
Rodrigo Pereira
 
Email: ri@gafisa.com.br
 
IR Website:
 
www.gafisa.com.br/ir
 
2Q11 Earnings Results
Conference Call
Friday, August 12th , 2011
 
> In English (simultaneous
 
translation from Portuguese)
01:00 PM US EST
02:00 PM Brasilia Time
Phones:
+1 (888) 700-0802 (US only)
+1 (786) 924-6977 (Others)  
+55 (11) 4688-6361 (Brazil) 2Q11 - Operating & Financial Highlights
Code: Gafisa  
> In Portuguese
  • Consolidated launches totaled R$ 1.38 billion in the quarter and R$ 1.89 billion in 1H11, a 37% and 11% increase when compared to 2Q10 and 1H10, respectively, representing 36% of the mid-range launch guidance.
  • Pre-sales reached R$ 1.14 billion in the quarter, a 29% increase as compared to 2Q10 mainly due to better sales of launches in the 2Q11, which reached 42%. Consolidated VSO was 25.2%.
  • Net revenues, recognized by the Percentage of Completion (“PoC”) method, reached R$ 1.04 billion, a 12% increase from 2Q10, mainly due to higher recognition coming from recent launches.
  • Adjusted Gross Profit (w/o capitalized interest) was R$ 227 million, 9% lower than the same period of 2010, with a 26.6% Adjusted Gross Margin.
  • Adjusted EBITDA reached R$ 150.8 million with a 14.5% margin, an 18% decrease when compared to R$ 184 million in the 2Q10, which can be attributed to the delivery of lower margin products by Tenda and Gafisa.
  • Net Income was R$ 25.1 million for 2Q11 (3.8% Adj.Net Margin), a decrease of 74% from 2Q10.
  • Net Debt/Equity reached 75.1% at the end of the quarter, 300 bps higher than 1Q11, also supported by a securitization of part of Gafisa’s receivables, totaling R$ 170 million.
  • The Backlog of Revenues to be recognized reached R$ 4.28 billion, a 5% increase over last quarter. The Margin to be recognized reduced to 36.5%, mainly due to the two-month gap taken to reflect the INCC over receivables, compared to the one-month gap taken over costs. Without this effect, backlog margin would almost be stable, since we have a high INCC of 2.94% in May to be reflected in July.
01:00 PM US EST
02:00 PM Brasilia Time
Phone: +55 (11) 4688-6361

Code: Gafisa
Shares
 
GFSA3– Bovespa
GFA – NYSE
Total Outstanding Shares:
432,137,3741
 
 
Average daily trading volume
(90 days2 ): R$ 127.2 million
 
1) Including 599,486 treasury shares
 
2) Up to August 11th , 2011
 

 

2



Index  
 
CEO Comments and Corporate Highlights for 2Q11 04
Recent Developments 05
Launches 07
Pre-Sales 08
Sales Velocity 09
Operations 09
Land Bank 10
Gross Profit 11
SG&A 12
EBITDA 12
Net Income 13
Backlog of Revenues and Results 13
Liquidity 15
Outlook 16
Detailed Information to Support Gafisa Expected Improvement 17
Covenant Ratios 18

 

3


CEO Comments and Corporate Highlights for 2Q11
I am very pleased to have been named CEO of Gafisa earlier last month and along with Rodrigo Osmo as CFO, who has done a very good job at expanding AlphaVille, we are fully committed to improving the profitability of our business and achieving an optimal capital structure that ensures the long-term growth and sustainability of all of our business segments. My number one priority as CEO is to right Gafisa, particularly when it comes to improving margins, delivering cash flow and lowering leverage. Over the last months my executive team and I have traveled the country to better understand the underlying opportunities we have as a company in all of our regional offices and amongst all of our segments. The Gafisa brand has been synonymous with delivering developments on time and within budget and I intend to recapture that mantle in the near term.

In the short to medium term, I will prioritize execution in markets where we have strong track records and see the highest profitability potential. During this period, we will curb our geographic expansion throughout the country, and will be guided by a strict adherence to optimizing capital allocation and human resources when evaluating new launches. Specifically, we intend to target areas that we know are proven performers and where we have a sound supply chain in place.

2Q11 figures on both launch and contracted sales are higher than 2Q10, which is demonstrative of the demand that continues to outstrip supply. In 2Q11, Gafisa launched 23 projects spread across 16 cities. We have already reached 36% of the mid-range of our launch estimates for 2011. Our contracted sales of launches which are at much higher margins are also tracking at an appropriate level to support the expected margin improvement for 2H11.

It is a fact these cost pressures, primarily related to projects launched in 2007 and 2008, had a negative effect on the Company’s margins, and also on the industry’s profitability as a whole. In addition to the margin pressure that Gafisa has already experienced, we anticipate that there may be further items which will impact Tenda, relating to costs for the outsourced construction projects currently being completed, which may impact our forecasted margin for full year. We remain confident in our ability to manage and mitigate these risks, and still expect operating margins to increase over the rest of the year.

We continue to focus on standardized execution, cost reduction and cash generation initiatives. For example, the gross margin on average for Tenda’s developments from 2008 is currently running at 13% while the gross margin from a 2010 project is over 30% as a result of standardization and the introduction of aluminum molds which reduce the labor component of construction costs and optimize execution.

Our cash position continue at a comfortable level and we have no need to refinance and also have an additional R$ 100 million in receivables available for securitization should we wish to use them. Additionally, accelerating the number of Tenda units to be transferred to Caixa is among my highest priorities for the Company, thus contributing to cash inflow.

We believe it would be prudent to be cautious over full year targets, but assuming demand to continue at similar levels, we will secure margins in the expected range and positive cash flow in the second half. Our main focus is long-term profitability with managed growth.

The fundamentals of Brazil’s economy are generally good, however we are following close the current scenario. Consumer confidence rose in June from earlier in the year. And, unemployment, at its lowest this year, fell to 6.2% in June. The job market continues to grow even at nearly full employment.

Our history as a homebuilder, number of deliveries, land bank, strong management team and knowledge of the sector is what sets we apart and what should support us to reach the goals. We are focusing on execution, improving margins, generating cash flow and reducing leverage. At the same time, we are committed to transparency and high governance standards.
Duilio Calciolari, CEO -- Gafisa S.A.

4


Recent Developments and Highlights


Duilio Calciolari appointed CEO; Rodrigo Osmo named CFO
On July 4, 2011, the Board of Gafisa appointed Duilio Calciolari to the position of CEO. Rodrigo Osmo was named CFO. Mr. Calciolari has worked with Gafisa for the last 11 years as its CFO and the last six as its IRO as well. Mr. Calciolari, who will also retain the role of IRO during Mr. Osmo’s transition, has played a major role in developing the strategic direction of Gafisa, while executing three successful capital markets transactions, several joint ventures and the acquisitions of AlphaVille and Tenda. Mr. Osmo will maintain his position of CEO of AlphaVille, which he has held since December 2009, through the end of the year to continue to lead the purchase of the remaining 20% of AlphaVille still owned by Alphapar.

Improving performance at Tenda
In 2009, Tenda introduced the use of aluminum molds in its building process and set about standardizing its building practices with the aim of reducing the overall cost of construction and decreasing the development cycle, thus increasing the feasibility on each project. While we continue to increase the share of developments with this lower cost/faster delivery formula, today this still only represents approximately 20% of projects under construction. However, 60% to 70% of the projects being launched in 2011 are utilizing aluminum molds. At this rate, we expect to see a rapid increase in the share of units using this construction method, as we accelerate the delivery of older Tenda units throughout the 2H11. The improvement in Tenda’s gross margins have been significant with the 2008 gross margin running at 13%, 2009 at 29% and over 30% for 2010. This progress on the cost side coupled with the increase in wages limit available to benefit from the MCMV program is resulting in more profitable developments.

True securitization of part of Gafisa’s portfolio of delivered and soon to be delivered receivables
In June, Gafisa sold part of its portfolio of receivables, for the sum of R$ 170 million, considered a definitive sale. The portfolio contains both receivables that are due (40%) and receivables that will come due within the next six months (which are considered equivalent to due receivables, since there is no longer any execution risk). The effective rates were yielding a combined weighted average of 10.22%.

Alphaville: A major growth engine
Given the success and brand awareness created by AlphaVille over the last 38 years, the unit created a brand extension, Terras Alpha, targeting the growing middle class demand for a similar kind of lifestyle traditionally offered by AlphaVille community developments. During the quarter two successful developments were launched under this brand, Terras Alpha Marica and Terras Alha Rezende, both located in the state of Rio de Janeiro. With highly successful launches, Terras Alpha Marica for example practically sold out its first phase, selling 393 of 399 lots released. Additionally, we are also focusing on urban centers, which are developed as neighborhoods, as well as AlphaVille’s first development, in the city of Barueri, Sao Paulo. Two good examples of these kinds projects currently under development are: AlphaVille Brasília, with 22 million sqm and AlphaVille Pernambuco, with 5 million sqm.

Strong sales velocity supported by internal sales force and growing online presence
Consolidated sales velocity for 2Q11 was 25.2% while sales of launches during the quarter were 42%. Supporting these results during the first half of the year was the Company’s internal sales force, which was responsible for some 52% of sales in the regions where they are present. Additionally, online sales contributed to some 14% of sales in the Rio and São Paulo. In the case of Tenda, sales originated online have reached approximately 20%.


5



Operating and Financial Highlights
(R$000, unless otherwise specified)		 2Q11 2Q10 2Q11 vs.
2Q10 (%)		 1Q11 2Q11 vs.
1Q11 (%)		 1H11 1H10 1H11 vs.
1H10 (%)
Launches (%Gafisa) 1,380,270 1,008,528 36.9% 512,606 169.3% 1,892,875 1,711,738 10.6%
Launches (100%) 1,482,487 1,461,510 1.4% 594,214 149.5% 2,076,701 2,311,384 -10.2%
Launches, units (%Gafisa) 6,083 4,398 38.3% 2,254 169.9% 8,337 8,281 0.7%
Launches, units (100%) 6,909 6,213 11.2% 2,736 152.5% 9,645 10,354 -6.8%
Contracted sales (%Gafisa) 1,147,002 889,761 28.9% 822,220 39.5% 1,969,222 1,747,082 12.7%
Contracted sales (100%) 1,274,977 1,151,788 10.7% 935,722 36.3% 2,210,699 2,176,638 1.6%
Contracted sales, units (% Gafisa) 4,219 4,476 -5.7% 3,361 25.5% 7,580 9,729 -22.1%
Contracted sales, units (100%) 4,907 5,536 -11.4% 3,945 24.4% 8,852 11,491 -23.0%
Contracted sales from Launches (%Gafisa) 583,532 409,160 42.6% 296,317 96.9% 879,849 643,876 36.6%
Contracted sales from Launches (%) 42.3% 40.6% 171 bps 57.8% -1553 bps 46.5% 37.6% 887 bps
Completed Projects (%Gafisa) 681,957 631,216 8.0% 524,942 29.9% 1,206,899 957,118 26.1%
Completed Projects, units (%Gafisa) 4,467 4,782 -6.6% 3,060 46.0% 7,527 7,497 0.4%
Net revenues 1,041,344 927,442 12.3% 800,356 30.1% 1,841,700 1,835,027 0.4%
Gross profit 218,920 279,492 -21.7% 184,768 18.5% 403,688 532,148 -24.1%
Gross margin 21.0% 30.1% -911 bps 23.1% -206 bps 21.9% 29.0% -708 bps
Adjusted Gross Margin 1) 26.6% 32.8% -624 bps 27.7% -113 bps 27.1% 31.6% -452 bps
Adjusted EBITDA2) 150,809 183,970 -18.0% 106,520 41.6% 257,329 352,429 -27.0%
Adjusted EBITDA margin 2) 14.5% 19.8% -535 bps 13.3% 117 bps 14.0% 19.2% -523 bps
Adjusted Net profit 2) 39,630 107,171 -63.0% 24,127 64.3% 63,757 186,795 -65.9%
Adjusted Net margin 2) 3.8% 11.6% -775 bps 3.0% 79 bps 3.5% 10.2% -672 bps
Net profit 25,112 97,269 -74.2% 13,706 83.2% 38,818 162,087 -76.1%
EPS (R$) 0.0582 0.2265 -74.3% 0.0318 83.2% 0.0900 0.3775 -76.2%
Number of shares ('000 final) 431,538 429,348 0.5% 431,384 0.0% 431,538 429,348 0.5%
Revenues to be recognized 4,277 3,209 33.3% 4,062 5.3% 4,277 3,209 33.3%
Results to be recognized 3) 1,561 1,167 33.8% 1,585 -1.5% 1,561 1,167 33.8%
REF margin 3) 36.5% 36.4% 13 bps 39.0% -252 bps 36.5% 36.4% 13 bps
Net debt and Investor obligations 2,890,108 1,622,787 78% 2,741,682 5% 2,890,108 1,622,787 78%
Cash and cash equivalent 1,163,080 1,806,384 -36% 926,977 25% 1,163,080 1,806,384 -36%
Equity 3,850,343 3,591,729 7% 3,809,175 1% 3,850,343 3,591,729 7%
Equity + Minority shareholders 3,850,342 3,591,729 7% 3,809,175 1% 3,850,342 3,591,729 7%
Total assets 10,392,194 9,168,679 13% 9,623,032 8% 10,392,194 9,168,679 13%
(Net debt + Obligations) / (Equity + Minorities) 75.1% 45.2% 2988 bps 72.0% 309 bps 75.1% 45.2% 2988 bps
 
1) Adjusted for capitalized interest
2) Adjusted for expenses on stock option plans (non-cash), minority shareholders and non-recurring expenses
3) Results to be recognized net of PIS/Cofins - 3.65%; excludes the AVP method introduced by Law nº 11,638

 

6














 Launches

In 2Q11, launches totaled R$ 1.38 billion, an increase of 37% compared to 2Q10, represented by 23 projects/phases, located in 16 cities.

78% of Gafisa launches represented a price per unit below R$ 500 thousand, while nearly 89% of Tenda’s launches had prices per unit under the MCMV program. This quarter Tenda launched one project out of MCMV, with an average price per unit of R$ 207 thousand. These project represented a PSV of R$ 39 million or 11% of Tenda’s launches in the quarter. Excluding these projects, the average price per unit of Tenda was R$ 116 thousand.

For the quarter, the Gafisa segment was responsible for 68% of total launches with 93% of them coming from the state of Sao Paulo, reflecting favorable projects approval performance, Tenda accounted for 25% and AlphaVille the remaining 7%.

The tables below detail new projects launched during 2Q11 and 1H11:

 
Table 1 - Launches per company per region          
%Gafisa - (R$000)   2Q11 2Q10 Var. (%) 1H11 1H10 Var. (%)
Gafisa São Paulo 865,309 384,072 125% 1,023,088 567,290 80%
  Rio de Janeiro 55,243 - - 125,766 49,564 154%
  Other 14,708 106,562 -86% 14,708 183,078 -92%
  Total 935,259 490,634 91% 1,163,562 799,932 45%
  Units 2,589 1,143 127% 3,344 1,886 77%
 
AlphaVille São Paulo - 58,266 -100% - 155,534 -100%
  Rio de Janeiro 95,567 - - 95,567 - -
  Other - 169,218 - 181,914 169,218 8%
  Total 95,567 227,483 -58% 277,482 324,752 -15%
  Units 621 681 -9% 1,470 1,033 42%
 
Tenda São Paulo 9,200 37,727 -76% 20,420 70,398 -71%
  Rio de Janeiro 64,743 57,073 13% 64,743 106,365 -39%
  Other 275,500 195,611 41% 366,669 410,291 -11%
  Total 349,443 290,411 20% 451,832 587,054 -23%
  Units 2,873 2,574 12% 3,523 5,362 -34%
 
Consolidated Total - R$000 1,380,270 1,008,528 37% 1,892,875 1,711,738 11%
  Total - Units 6,083 4,398 38% 8,337 8,281 1%
 
Table 2 - Launches per company per unit price          
%Gafisa - (R$000)   2Q11 2Q10 Var. (%) 1H11 1H10 Var. (%)
Gafisa <= R$500K 729,837 222,272 228% 845,196 365,088 132%
  > R$500K 205,422 268,362 -23% 318,365 434,843 -27%
  Total 935,259 490,634 91% 1,163,562 799,932 105%
 
AlphaVille ~ R$100K; <= R$500K 95,567 227,483 -58% 277,482 324,752 -15%
  Total 95,567 227,483 -58% 277,482 324,752 -15%
 
Tenda ≤ MCMV 310,505 216,666 43% 332,767 436,515 -24%
  > MCMV 38,938 73,745 -47% 119,065 150,539 -21%
  Total 349,443 290,411 20% 451,832 587,054 -23%
 
Consolidated   1,380,270 1,008,528 37% 1,892,875 1,711,738 11%

 

7



 
Pre-Sales            
 

Pre-sales for the quarter reached R$ 1.15 billion, an increase of 29%, compared to 2Q10, mainly due to the volume of strong launches in the quarter. In the case of Tenda, the 27% decrease is a consequence of a 23% decrease in launches during 1H11, when compared to 1H10; as well as the concentration of products launched in the last month of the quarter, reducing the availability of products under the Tenda brand during this period.

The Gafisa segment was responsible for 68% of total pre-sales, while Tenda and AlphaVille accounted for approximately 20% and 13%, respectively. Among Gafisa’s pre-sales, 72% corresponded to units priced below R$ 500 thousand, while 81% of Tenda’s pre-sales came from units priced under the MCMV program. The tables below illustrate a detailed breakdown of our pre-sales for 2Q11 and 1H11:
 

Table 3 - Sales per company per region
%Gafisa - (R$000) 2Q11 2Q10 Var. (%) 1H11 1H10 Var. (%)
Gafisa São Paulo 602,992 319,435 89% 931,512 521,219 79%
  Rio de Janeiro 103,748 35,693 191% 162,692 88,434 84%
  Other 71,560 101,131 -29% 107,609 222,484 -52%
  Total 778,300 456,258 71% 1,201,812 832,138 44%
  Units 1,946 1,088 79% 2,856 2,038 40%
 
AlphaVille São Paulo 6,130 39,818 -85% 9,965 105,981 -91%
  Rio de Janeiro 74,361 9,234 705% 77,425 17,770 336%
  Other 64,522 79,740 -19% 228,542 121,685 88%
  Total 145,013 128,792 13% 315,932 245,435 29%
  Units 752 424 77% 1,648 997 65%
 
Tenda São Paulo 42,682 53,390 -20% 65,819 149,483 -56%
  Rio de Janeiro 26,802 66,035 -59% 22,883 150,988 -85%
  Other 154,205 185,286 -17% 362,776 369,039 -2%
  Total 223,689 304,711 -27% 451,478 669,510 -33%
  Units 1,521 2,964 -49% 3,076 6,694 -54%
 
Consolidated Total - R$000 1,147,002 889,761 28.9% 1,969,222 1,747,082 13%
  Total - Units 4,219 4,476 -6% 7,580 9,729 -22%
 
Table 4 - Sales per company per unit price - PSV          
%Gafisa - (R$000) 2Q11 2Q10 Var. (%) 1H11 1H10 Var. (%)
Gafisa <= R$500K 561,175 196,795 185% 748,600 519,492 44%
  > R$500K 217,125 259,463 -16% 453,212 312,645 45%
  Total 778,300 456,258 71% 1,201,812 832,138 44%
 
AlphaVille > R$100K; <= R$500K 145,013 128,792 13% 315,932 245,435 29%
  Total 145,013 128,792 13% 315,932 245,435 29%
 
Tenda ≤ MCMV 180,508 225,846 -20% 253,804 488,319 -48%
  > MCMV 43,181 78,865 -45% 197,674 181,191 9%
  Total 223,689 304,711 -27% 451,478 669,510 -33%
 
Consolidated Total 1,147,002 889,761 28.9% 1,969,222 1,747,082 13%
 
Table 5 - Sales per company per unit price - Units          
%Gafisa - Units   2Q11 2Q10 Var. (%) 1H11 1H10 Var. (%)
Gafisa <= R$500K 1,700 669 154% 2,308 1,505 53%
  > R$500K 246 419 -41% 548 533 3%
  Total 1,946 1,088 79% 2,856 2,038 40%
 
AlphaVille > R$100K; <= R$500K 752 424 77% 1,648 997 65%
  Total 752 424 77% 1,648 997 65%
 
Tenda ≤ MCMV 1,311 2,499 -48% 1,929 5,592 -65%
  > MCMV 210 465 -55% 1,147 1,102 4%
  Total 1,521 2,964 -49% 3,076 6,694 -54%
 
Consolidated Total 4,219 4,476 -6% 7,580 9,729 -22%

 

8


Sales Velocity



















On a consolidated basis, the Company attained a sales velocity of 25.2% in 2Q11, compared to 24.6% in 2Q10. Sales velocity increased over the previous period, mainly due to a higher volume of launches in the period. Sales velocity per launch date reached 42% for 2Q11 launches, reflecting a strong and continuing demand for the sector.
Table 6 - Sales velocity per company          
   
R$ million  Beginning of period
Inventories		 Launches Sales  Price Increase +
Other		  End of period
Inventories		 Sales velocity
       
Gafisa 1,724.2 935.3 778.3 59.7 1,940.9 28.6%
AlphaVille 436.7 95.6 145.0 26.8 414.0 25.9%
Tenda 856.2 349.4 223.7 61.8 1,043.8 17.6%
Total 3,017.0 1,380.3 1,147.0 148.3 3,398.6 25.2%
 
Table 7 - Sales velocity per launch date          
2Q11      
  End of period
Inventories		  Sales  Sales velocity      
2011 launches 940,204 686,518 42.2%      
2010 launches 1,146,599 306,434 21.1%      
2009 launches 298,655 54,321 15.4%      
≤ 2008 launches 1,013,135 99,729 9.0%      
Total 3,398,593 1,147,002 25.2%      
 
Operations

By the end of 2Q11, the Company was present in 22 different states plus the Federal District, with 197 projects under development at the end of the second quarter. Around 437 engineers and architects were in the field, in addition to 587 intern engineers in training.

Since June we saw an acceleration of the number of units contracted by the CEF likely due to the internal improvements as a result of the start-up of a new area dedicated to working with the major homebuilders. In 2Q11 Tenda contracted 6,858 units with CEF, with 73% of them contracted in June alone. This improvement resulted in a 274% volume increase over the 1,835 units in 1Q11, totaling 8,693 units in 1H11, representing more than 40% of the expected volume for the full year.

Transferred units totaled 3,066 units in 2Q11 (4,958 in 1H11). However, in August alone we expect to transfer more units than in 2Q11, allowing us to maintain the target of close to 18,000 units to be transferred for the full year.

 
Delivered Projects

During the second quarter, Gafisa delivered 23 projects with 4,467 units with an approximate PSV of R$ 682 million. The Gafisa segment delivered 8 projects, Tenda and AlphaVille delivered the remaining 13 and 2 projects/phases, respectively. The delivery date is based on the “delivery meeting” that takes place with customers, and not upon the physical completion which is prior to the delivery meeting.

For the 2H11 we expect to deliver an additional 17,000 units for a total of 25,000, almost double the amount delivered during the full year of 2010, mainly due to the delivery of older Tenda units along with some of Gafisa’s leveraged 2007/2008 launches. Regarding construction completion (Habite-se) we already completed 9,367 units through 1H11 and expect to complete an additional 18,000 units in the 2H11.

The tables below list the products delivered in 2Q11 and first half 2011:

 

9



Table 8 - Delivered projects
           
Company Project Delivery Launch Local % Gafisa Units
(%Gafisa)		 PSV
(%Gafisa)
           
Gafisa 1Q11           1,379 387,330
 
Gafisa Grand Park - Árvores Fase I Apr-11 Dec-07 São Luis - MA 50% 200 29,978
Gafisa Privilege Residencial Apr-11 Sep-07 Niterói - RJ 100% 194 44,469
Gafisa Horizonte May-11 May-07 Belem - PA 100% 29 21,173
Gafisa Terraças Tatuapé May-11 Jun-08 São Paulo - SP 100% 108 48,660
Gafisa Costa Maggiore Resdidencial Resort May-11 Jan-08 Cabo Frio - RJ 50% 30 24,052
Gafisa Magnific May-11 Mar-08 Goiânia - GO 100% 31 30,458
Gafisa Bella Vista May-11 Dec-07 Resende - RJ 100% 116 46,046
Gafisa Supremo Jun-11 Aug-07 São Paulo - SP 100% 192 143,634
Gafisa 2Q11           900 388,469
 
AlphaVille 1Q11           543 46,414
 
Alphaville Nova Esplanada (SP) May-11 Dec-08 Votorantim-SP 31% 196 39,749
Alphaville Mossoró (RN) Jun-11 Dec-08 Mossoró-RN 70% 405 22,804
AlphaVille 2Q11           602 62,553
 
Tenda 1Q11           1,138 91,198
 
Tenda Residencial San Pietro Life Apr-11 Sep-09 Barbacena - MG 100% 172 15,188
Tenda Residencial Vivendas Do Sol Ii F2 Apr-11 May-08 Porto Alegre - RS 100% 200 11,608
Tenda Residencial Bologna Life May-11 May-08 Belo Horizonte - MG 100% 306 23,256
Tenda Residencial Clube Garden May-11 Oct-09 São Paulo - SP 100% 192 16,800
Tenda Residencial Nicolau Kuhn May-11 Dec-07 Sapucaia do Sul - RS 100% 460 36,340
Tenda Fit Maria Ines Jun-11 May-09 Goiânia - GO 60% 270 25,330
Tenda Residencial Aricanduva Life Jun-11 Jun-07 São Paulo - SP 100% 180 18,380
Tenda Fit Taboao Jun-11 Dec-07 Taboão da Serra - SP 100% 374 22,115
Tenda Vale Verde Cotia 4 Jun-11 Dec-07 Cotia - SP 100% 368 32,156
Tenda Residencial Terra Nova I Garden Jun-11 Mar-08 Goiânia - GO 100% 240 16,320
Tenda Residencial Sao Francisco Life Jun-11 Jul-08 Belo Horizonte - MG 100% 80 6,800
Tenda Residencial Vale Do Sol Jun-11 Jul-08 Guarulhos - SP 100% 69 3,726
Tenda Residencial Vitoria Regia Jun-11 Jul-08 Guarulhos - SP 100% 54 2,916
Tenda 2Q11           2,965 230,935
 
Total 1Q11           3,060 524,942
 
Total 2Q11           4,467 681,957
 
Total 1H11           7,527 1,206,899

 


Land Bank

The Company’s land bank, of approximately R$ 18.4 billion, is composed of 182 different projects in 19 states, equivalent to approximately 90 thousand units. In line with our strategy, 38.8% of our land bank was acquired through swaps – which require no cash obligations.

During 2Q11 we recorded a gross increase of R$ 1.73 billion in land bank, reflecting acquisitions that offset the R$1.38 billion launches in the quarter.

The table below shows a detailed breakdown of our current land bank:

 
 
Table 9 - Landbank per company per unit price
    PSV - R$ million %Swap %Swap %Swap Potential units
    (%Gafisa) Total Units Financial (%Gafisa)
Gafisa < R$500K 4,318 40.4% 36.6% 3.7% 14,155
  > R$500K 3,829 42.0% 38.3% 3.7% 4,837
  Total 8,147 41.3% 37.6% 3.7% 18,991
 
AlphaVille < R$100K; 657 100.0% 0.0% 100.0% 7,894
  > R$100K; < R$500K 4,876 97.2% 0.0% 97.2% 20,189
  > R$500K 230 99.8% 0.0% 99.8% 26
  Total 5,763 97.4% 0.0% 97.4% 28,109
 
Tenda ≤ MCMV 3,511 25.8% 17.8% 8.0% 35,761
  > MCMV 991 45.9% 45.9% 0.0% 5,556
  Total 4,502 32.2% 26.7% 5.5% 41,317
 
Consolidated   18,412 38.8% 34.4% 4.4% 88,418

 

10



Number of projects/phases      
Gafisa  56      
AlphaVille  46      
Tenda  80      
Total  182      
Table 10 - Landbank Changes (based on PSV)      
 
Land Bank (R$ million) Gafisa Alphaville Tenda Total
 
Land Bank - BoP 8,433 5,083 4,547 18,063
2Q11 - Net Acquisitions 649.1 775.4 304.8 1,729
2Q11 - Launches (935.3) (95.6) (349.4) (1,380)
Land Bank - EoP (2Q11) 8,147 5,763 4,502 18,412
 
 
2Q11 - Revenues

Due to the solid sales performance in 2Q11 of newly launched projects and units from inventory, as well as an accelerated pace of construction, the Company was able to recognize substantial net operating revenues for 2Q11, which rose by 12.3% to R$ 1.04 billion from R$ 927.4 million in 2Q10, with Tenda contributing 32% of consolidated revenues.

This quarter, 47% of Tenda revenue came from projects from and prior to 2008, compared to 54% in 1Q11. We should see this been consistently reducing in the coming quarters due to the delivery of Tenda legacy units. The negative sales from 2008 units were due to Tenda’s effort to cancel sales from customers with low credit scores, which in 2Q11 happened by the end of the quarter and should be re-sold in 3Q11.

The table below presents detailed information about pre-sales and recognized revenues by launch year:

 

Table 11 - Sales vs. Recognized revenues
    2Q11 2Q10
R$ 000   Sales % Sales Revenues % Revenues Sales % Sales Revenues %Revenues
Gafisa 2011 launches 549,002 59% 78,121 11% - - - -
  2010 launches 185,110 20% 205,628 29% 387,449 66% 97,841 16%
  2009 launches 54,730 6% 159,520 23% 90,820 16% 103,841 17%
  ≤ 2008 launches 134,471 15% 262,775 37% 106,781 18% 425,788 68%
  Total Gafisa 923,313 100% 706,044 100% 585,050 100% 627,470 100%
 
Tenda 2011 launches 137,516 61% 11,550 3% - - - -
  2010 launches 125,223 56% 102,102 30% 183,657 60% - -
  2009 launches (409) 0% 64,311 19% 37,458 12% - -
  ≤ 2008 launches (38,641) -17% 157,336 47% 83,596 27% - -
  Total Tenda 223,689 100% 335,299 100% 304,711 100% 299,972 100%
 
Total   1,147,002   1,041,343   889,761   927,442  

 


2Q11 - Gross Profits      

On a consolidated basis, gross profit for 2Q11 totaled R$ 218.9 million, a decrease of 21.7% over 2Q10. The gross margin for the quarter reached 21.0% (26.6% w/o capitalized interest).

Moving forward, we see important improvements in margins due to the delivery of old lower-margin units – Please see a more detailed explanation of Gross Margin on page 18.

 
Table 12 - Capitalized interest      
(R$000)   2Q11 2Q10 1Q11
Consolidated Opening balance 150,817 94,101 146,544
  Capitalized interest 62,264 32,900 41,454
  Interest transfered to COGS (58,117) (25,104) (37,181)
  Closing balance 154,964 101,897 150,817

 

11


2Q11 - Selling, General, and Administrative Expenses (SG&A)


In the second quarter 2011, SG&A expenses totaled R$ 122.4 million. SG&A increased 13%, from R$ 107.8 million compared to 1Q11. This was mainly due to higher selling expenses related to the strong launches and sales volume in the quarter. Regarding the R$ 4.0 million G&A increase, R$ 2.5 million was due to annual wages adjustments and R$ 1.5 million to SOP (stock option plan) expenses, which was offset by higher revenue recognition.

When compared to 2Q10, all expense ratios improved as compared to net revenues, resulting in a ratio of SG&A/Net Revenues of 11.8 %, compared to 12.5% in 2Q10.

Going forward, we continue to see stable SG&A/net revenue ratios, mainly due to growing volumes of launches expected for 2H11 that should offset greater revenue recognition.


Table 13 - Sales and G&A Expenses          
(R$'000)   2Q11 2Q10 1Q11 2Q11 x 2Q10 2Q11 x 1Q11
Consolidated Selling expenses 61,970 61,140 51,505 1% 20%
  G&A expenses 60,389 55,125 56,307 10% 7%
  SG&A 122,359 116,265 107,812 5% 13%
  Selling expenses / Launches 4.5% 6.1% 2.7% -157 bps 177 bps
  G&A expenses / Launches 4.4% 5.5% 3.0% -109 bps 140 bps
  SG&A / Launches 8.9% 11.5% 5.7% -266 bps 317 bps
  Selling expenses / Sales 5.4% 6.9% 6.3% -147 bps -86 bps
  G&A expenses / Sales 5.3% 6.2% 6.8% -93 bps -158 bps
  SG&A / Sales 10.7% 13.1% 13.1% -240 bps -244 bps
  Selling expenses / Net revenue 6.0% 6.6% 6.4% -64 bps -48 bps
  G&A expenses / Net revenue 5.8% 5.9% 7.0% -14 bps -124 bps
  SG&A / Net revenue 11.8% 12.5% 13.5% -79 bps -172 bps

 

 
2Q11 - Other Operating Results
In 2Q11, our results reflected a negative impact of R$8.6 million, compared to R$ 6.9 million in 2Q10, primarily due to a higher level of contingency provisions in the quarter. These included an R$ 11.5 million contingency mainly at Tenda, related to delayed delivery of units from legacy Tenda projects and labor contingency mainly related to outsourced tasks, where we continued taking a conservative stance by making this provision.
 




 2Q11 - Adjusted EBITDA

Adjusted EBITDA for 2Q11 totaled R$ 150.8 million, 18% lower than the R$ 184 million for 2Q10, with a consolidated adjusted margin of 14.5%, compared to 19.8% in 2Q10.

In 1H11, EBITDA margin reached 14.0%, or 100 bps below the mid-range of the previously stated guidance of 13%-17% for the period. For more detailed information about EBITDA margin guidance, please refer to “Outlook” section, on page 16.

We adjusted our EBITDA for expenses associated with stock option plans, as it is non-cash expense.

 
 
Table 14 - Adjusted EBITDA          
(R$'000)   2Q11 2Q10 1Q11 2Q11 x 2Q10 2Q11 x 1Q11 







 Consolidated Net Profit 25,112 97,269 13,706 -74% 83%
 

(+) Financial result

 28,866 20,853 30,999 38% -7%
 

(+) Income taxes

 1,443 22,060 1,847 -93% -22%
 

(+) Depreciation and Amortization

 22,753 8,781 12,366 159% 84%
 

(+) Capitalized Interest Expenses

 58,117 25,106 37,181 131% 56%
 

(+) Minority shareholders and non

          
 

recurring expenses

 9,737 7,318 7,058 33% 38%
 

(+) Stock option plan expenses

 4,781 2,584 3,363 85% 42%
 

Adjusted EBITDA

 150,809 183,970 106,520 -18% 42%
  Net Revenue 1,041,344 927,442 800,356 12.3% 30.1%
  Adjusted EBITDA margin 14.5% 19.8% 13.3% -535 bps 117 bps

 

12



2Q11 - Depreciation and Amortization
Depreciation and amortization in 2Q11 was R$ 22.8 million, an increase of R$ 14 million when compared to the R$ 8.8 million recorded in 2Q10, mainly due to higher showroom depreciation.
 
2Q11 – Financial Results
Net financial expenses totaled R$ 28.9 million in 2Q11, compared to net financial expenses of R$ 20.9 million in 2Q10. Since we did our equity offering at the end of March 2010, the company’s leverage was reduced in 2Q10, and as a consequence, decreased the net financial expenses for that period. Additionally, this quarter we capitalized R$ 66 million, compared to R$ 32.9 million in 2Q10, mainly due to higher project finance debt, reflecting leveraging activity, and capitalization of some short term land investments. When compared to the R$ 31.0 million from 1Q11, the difference is mainly due to higher capitalized interest.
 
2Q11 - Taxes
Income taxes, social contribution and deferred taxes for 2Q11 amounted to R$ 1.4 million, compared to R$ 22.1 million in 2Q10. This result is mainly due to lower income before taxes reached this quarter and the optimization of tax planning annouced at the end of 2010. In the future, and assuming normalized margins, we continue to expect income tax to represent approximately 2% of net revenue. When compared to R$ 1.8 million from 1Q11, the results were in line, mainly due to lower profitability in both quarters.
 
2Q11 - Adjusted Net Income
Net income in 2Q11 was R$ 25.1 million compared to R$ 97.3 million in the 2Q10. However, net income on an adjusted basis (before deduction of expenses related to minority shareholders and stock options), reached R$ 39.6 million, with an adjusted net margin of 3.8%, representing a decrease of 63.0% when compared to R$ 107.2 million in 2Q10, mostly due to the above mentioned facts. When compared to 1Q11 of R$ 24.1 million, the R$ 15.5 million increase was mainly due to higher operational results.
2Q11 - Earnings per Share
Earnings per share was R$ 0.06/share in the 2Q11 compared to R$ 0.23/share in 2Q10, a 74.3% decrease, and R$0.03 in 1Q11. Shares outstanding at the end of the period were 431.5 million (ex. Treasury shares) and 429.3 million in the 2Q10.
 
Backlog of Revenues and Results

The backlog of results to be recognized under the PoC method reached R$ 1.56 billion in 2Q11, in line with 2Q10. The consolidated margin for the quarter was 36.5%, 10 bps higher than in 2Q10 and 250 bps lower than 1Q11, mainly due to the two month gap that we take to reflect the INCC index over receivables, compared to the one month gap taken to recognize inflation costs. This INCC effect was boosted this quarter since we have a high INCC level of 2.94% in May (related to annual labor adjustments), to be recognized in July (3Q11). Without this effect, backlog margin would almost be stable.

The table below shows our revenues, costs and results to be recognized, as well as the expected margin:

 

13


Table 15 - Results to be recognized (REF)
(R$ million)   2Q11 2Q10 1Q11 2Q11 x 2Q10 2Q11 x 1Q11
Consolidated Revenues to be recognized 4,277 3,209 4,062 33.3% 5.3%
  Costs to be recognized -2,716 -2,042 -2,477 33.0% 9.6%
  Results to be recognized (REF) 1,561 1,167 1,585 33.8% -1.5%
  REF margin 36.5% 36.4% 39.0% 13 bps -252 bps
Note: Revenues to be recognized are net of PIS/Cofins (3.65%); excludes the AVP method introduced by Law nº 11,638  

 

Balance Sheet
Cash and Cash Equivalents

On June 30, 2011, cash and cash equivalents reached R$ 1.2 billion, 25.5% higher than 1Q11, mainly due to improved operating cash inflow and also due to the true securitization in the sum of R$170 million. We see our cash position as sufficient to execute our development plans, and we see no need to increase this current level. Assuming this scenario, the expected positive cash flow generation in 2H11 should contribute to reduce gross debt.

Accounts Receivable

At the end of 2Q11, total accounts receivable increased by 6% to R$ 10.3 billion, compared to R$ 9.7 billion in 1Q11, a 30% increase compared to the R$ 7.9 billion balance in 2Q10, reflecting increased sales activity.

Table 16 - Total receivables          
(R$ million)   2Q11 2Q10 1Q11 2Q11 x 2Q10 2Q11 x 1Q11
Consolidated Receivables from developments - ST 2,738.4 1,466.0 2,554.2 87% 7%
  Receivables from developments - LT 1,700.3 1,864.6 1,661.6 -9% 2%
  Receivables from PoC - ST 3,653.7 2,470.9 3,357.4 48% 9%
  Receivables from PoC - LT 2,171.3 2,075.2 2,106.8 5% 3%
  Total 10,263.7 7,876.7 9,679.9 30% 6%
Notes:            

ST = short term; LT = long term

          

Receivables from developments: accounts receivable not yet recognized according to PoC and BRGAAP
Receivables from PoC: accounts receivable already recognized according do PoC and BRGAP

 

Inventory (Properties for Sale)
 

Inventory at market value totaled R$ 3.4 billion in 2Q11, an increase of 24.7% when compared to the R$ 3.0 billion registered in the 1Q11. On a consolidated basis, our inventory is at a level of 9.6 months of sales based on LTM sales figures.

Finished units of inventory at market value represented 12% by the end of the quarter, or 200 bps lower than this ratio at 1Q11, mainly due to Gafisa’s finished units sold in the quarter which more than compensated the completion of unsold units. We continue to focus on finished inventory reduction, concentrated under Gafisa brand, with 69% of the total.

At the end of 2Q11, 51.3% of the total inventory reflected units where construction is up to 30% complete.

Table 17 - Inventories            
(R$000)   2Q11 2Q10 1Q11 2Q11 x 2Q10 2Q11 x 1Q11
Consolidated Land 1,044,269 701,790 1,014,630 48.8% 2.9%
  Units under construction 997,409 947,023 879,333 5.3% 13.4%
  Completed units 293,073 205,739 333,168 42.4% -12.0%
  Total 2,334,751 1,854,552 2,227,131 25.9% 4.8%
 
Table 18 - Inventories at market value          
PSV - (R$000)   2Q11 2Q10 1Q11 2Q11 x 2Q10 2Q11 x 1Q11
Consolidated 2011 launches 940,204 - 216,654  - 334%
  2010 launches 1,146,599 880,214 1,398,314 30% -18%
  2009 launches 298,655 492,448 345,271 -39% -14%
  2008 and earlier launches 1,013,135 1,352,937 1,056,771 -25% -4%
Consolidated Total 3,398,593 2,725,599 3,017,010 24.7% 12.6%

 

14



 

Table 19 - Inventories per completion status
Company Not started Up to 30%
constructed		 30%to 70%
constructed		 More than 70%
constructed		 Finished units Total 2Q11
       
Gafisa 564,122 571,459 485,280 368,610 365,358 2,354,828
Tenda 168,043 438,931 189,760 201,701 45,329 1,043,765
Total 732,165 1,010,390 675,039 570,312 410,687 3,398,593

 

Liquidity
On June 30, 2011, Gafisa had a cash position of R$ 1.2 billion. On the same date, Gafisa’s debt and obligations to investors totaled R$ 4.05 billion, resulting in a net debt and obligations of R$ 2.9 billion. The net debt and investor obligations to equity and minorities ratio was 75.1% compared to 72.0% in 1Q11, due to the R$ 148.4 million cash burn in the second quarter. When excluding Project Finance, this net debt/equity ratio reached 24.5%, a comfortable leverage level with a competitive cost that is equivalent to the Selic rate.

Our 2Q11 cash burn was mainly explained by the R$ 768 million in expenditures in construction and development payments and R$ 132 million in land acquisition payments, partially offset by increasing cash inflow (expected to continue increasing in 2H11) and also due to the true securitization that we did by the end of the quarter, containing both receivables that are due and receivables that will come due within the next six months (which are considered by the investor to be equivalent to performed receivables, since there is no longer execution risk, resulting in a definitive sale).

During 2H11 we expect cash burn to continue to diminish, following expected positive cash flow generation, and is expected to close the year with a Net Debt/Equity below 60%, following the previously stated guidance. With the expected positive cash flow for 2H11, we should be able to deleverage the Company, which together with a greater use of the blue print mortgage–which requires almost no working capital - for Tenda’s MCMV units, should contribute to our ability to reduce current leverage and keep it at a comfortable level going forward. On page 18, we also highlighted our current debt covenants ratio, showing a comfortable position by the end of the quarter.

Project finance now represents 46% of total debt. Currently we have access to a total of R$ 4.3 billion in construction finance lines of credit provided by all of the major banks in Brazil. At this time we have R$ 2.3 billion in signed contracts and R$ 1.0 billion of contracts in process, giving us additional availability of R$ 1.0 billion.

We also have additional receivables (from units already delivered) of over R$ 100 million available for securitization. The following tables provide information on our debt position.

 15



Table 20 - Indebtedness and Investor obligations          
Type of obligation (R$000) 2Q11 2Q10 1Q11 2Q11 x 2Q10 2Q11 x 1Q11
Debentures - FGTS (project finance) 1,212,557 1,208,939 1,239,816 0.3% -2.2%
Debentures - Working Capital 677,257 662,669 688,800 2.2% -1.7%
Project financing (SFH) 735,358 499,186 755,652 47.3% -2.7%
Working capital 968,016 678,377 604,391 42.7% 60.2%
Total consolidated debt 3,593,188 3,049,171 3,288,659 18% 9%
 
Consolidated cash and availabilities 1,163,080 1,806,384 926,977 -36% 25%
Investor Obligations 460,000 380,000 380,000 - -
Net debt and investor obligations 2,890,108 1,622,787 2,741,682 78% 5%
Equity + Minority shareholders 3,850,342 3,591,729 3,809,175 7% 1%
(Net debt + Obligations) / (Equity + Minorities) 75.1% 45.2% 72.0% 2988 bps 309 bps
(Net debt + Ob.) / (Eq + Min.) - Exc.          
Project Finance (SFH + FGTS Deb.) 24.5% -2% 19.6% 2685 bps 488 bps

 

Table 21 - Debt maturity              
(R$ million) Average Cost (p.a.) Total Until
Jun/2012		 Until
Jun/2013

Until
Jun/2014

 Until
Jun/2015		 After
Jun/2015
     
Debentures - FGTS (project finance) TR + 9.20% 599.7 3.1 148.9 298.9 148.9 -
Debentures - Working Capital CDI + 1.43% 677.3 137.8 124.3 117.2 143.2 154.7
Project financing (SFH) TR + 10.44% 1,280.5 466.4 498.2 312.6 3.1 0.2
Working capital CDI + 1.80% 1,035.8 235.9 184.2 229.1 259.3 127.4
sub-total consolidated debt 12.5% 3,593.2 843.2 955.5 957.8 554.4 282.3
Investor Obligations CDI 460 143 145 145 14 13
Total consolidated debt   4,053.2 986.2 1,100.5 1,102.8 568.4 295.3
% Total     24% 27% 27% 14% 7%

 

Outlook 2011 vs. Actual
In 1H11 Gafisa achieved 36% of the mid-range of launch guidance provides for the full year of between R$ 5.0 billion and R$ 5.6 billion.

With regard to profitability, the 14.0% EBITDA margin reached in 1H11 came in 100 bps lower than the mid-range of our expectations for the first half guidance range of between 13% and 17%, mainly due to higher than expected costs coming from the outsourced projects recently completed under the Tenda brand and expected to be completed in the short term and also some discounts over Gafisa finished inventory units. Due to this fact, and also assuming a more conservative approach (focusing on long term profitability) we decided to reduce the full year EBITDA margin guidance range by 200 bps, from 18%-22% to 16%-20%. Reflecting the same adjustment in 2H11 guidance, the range for the period is being decreased from 20%-24% to 18%-22%.

These changes do not impact our expectations for positive operating cash flow in 2H11 that should bring the Net Debt/Equity ratio down to below 60% at the end of the year.

Considering the above-mentioned plan, current guidance figures for 2011 are as follows:

Launches
(R$ million)		   Guidance
2011		 1H11 %  
Gafisa Min. 5,000   38%  
(consolidated) Average 5,300 1,893 36%  
  Max. 5,600   34%  
 
EBITDA Margin (%)   Guidance
1H11		 1H11 % Guidance
2011
Gafisa Min. 13.0%   100 bps 16.0%
(consolidated) Average 15.0% 14.0% -100 bps 18.0%
  Max. 17.0%   -300 bps 20.0%
 
Net Debt/Equity (%) - EoP   Guidance
2011		  1H11 %  
Gafisa Max. < 60.0% 75.1% 1510 bps  

 

16


Detailed Information to Support Gafisa Expected Improvement

The following information is being provided this quarter to support our expectations for achieving the operational and financial performance guided.

Positive Cash Flow:

Since 3Q10, when the cash burn rate reached its peak of R$ 453 million for the quarter, it has declined sequentially to the R$ 148 million reported in 2Q11. We are considering the securitization in this calculation, as the traded receivables were sold without joint liability for both those that were due and those scheduled to be delivered within 6 months (thus eliminating execution risk).

Additionally, we are seeing a healthy improvement in cash inflow that should continue to improve. In 2Q11 cash inflow reached R$ 846.9 million or 53% higher than 2Q10 and 36% higher than 1Q11, as a consequence of higher number of units being delivered, that should accelerate further in 2H11.



Short Term Obligations versus Expected Inflow
R$ million - June/2011
Consolidated TOTAL
Suppliers 226
Land and advances from clients 527
Taxes + Other Liabilities¹ 595
Dividends 103
Construction Expenses 2,340
Total Obligations 3,790
Short-Term Debt repayment² 1,104
Short-Term Receivables³ 6,392
Surplus (Deficit) - Scenario 1 1,498
 
Surplus (Deficit) - Scenario 2 -
Assumptions:  
¹ Tax: PIS/COFINS + Income Tax  
² Including Interest expenses  
³ Short-Term including on and off balance receivables Scenario 1 = 100% of ST receivables, Scenario 2 = 77% of ST receivables

Assuming short-term receivables net of ST obligations, we see close to R$ 1.5 billion net cash inflow (Scenario 1), even assuming no debt refinancing and not considering the cash position. To offset the expected positive inflow in the short-term, it is necessary to assume a discount of 23% over short-term receivables, plus no debt refinancing. We see this as a strong fundamental for the expected deleverage to occur in the coming quarters. If necessary, we can also manage the land acquisition, considering that we have a comfortable Land bank of over R$ 18 billion, however, we don’t expect this to be necessary.

 

17



Based on all information above, we continue to expect a net debt/equity of 60% by the end of this year, reflecting the positive impact from the upcoming delivery of units expected for the 2H11.

Margin Expansion:

This year, for the first time we have split guidance for the first and second half of 2011, mainly due to several negative effects impacting the profitability of the 1H11 (as previously explained). Going forward, assuming the revised EBITDA margin guidance, we see the projects from and prior to 2008 having a lower impact on the recognition of results, while recent projects (from 4Q10 and 2011) which are starting to be built, are positively contributing to the expected margin improvement in 2H11:

Consolidated
(R$ million)		 1H11
Net Revenue % COGS w/o
capitalized
interest		 Gross Profit Gross margin (%)
         
         
2011 launches 109.9 6% -65.1 44.9 40.8%
2010 launches 530.4 29% -326.3 204.3 38.5%
2009 launches 396.9 22% -254.1 143.0 36.0%
≤ 2008 launches 804.6 44% -697.2 107.8 13.4%
Total 1,841.7 100% -1,342.7 500.0 27.1%

 

In 1H11, 44% of the Net Revenues came from projects from and prior to 2008. In the case of Tenda this number was 50% for 1H11, 54% in 1Q11, and 47% in 2Q11. Crucial to our expectation of important improvement in terms of margin expansion going forward is the fact that the recognition from projects < 2008 should quickly diminish and be replaced by increasing recognition of projects from 2H10 and 2011, with average gross margin in the range of 38%-41%, compared to 13% from 2008.

Covenants ratios
 
Table 22 - Debenture Covenants - 5th issuance      
Debenture covenants - 5th issuance     1Q11 2Q11
(Total debt - SFH debt - Cash) / Equity ≤ 75%     42.2% 44.0%
(Total Receivables + Finished Units) / (Total Debt - Cash) ≥ 2.2x 4.2x 4.3x
Maturity (in R$ million) 5th issuance      
2012 125      
2013 125      
Total 250      
Table 23 - Debenture Covenants - 7th issuance / 8th issuance    
Debenture covenants - 7th / 8th issuance     1Q11 2Q11
(Total Receivables + Finished Units) / (Total Debt - Cash - Project Debt) > 2     27.3x 21.9x
(Total Debt - SFH Debt - Project Debt - Cash) / Equity ≤ 75%   9.6% 12.5%
EBIT / (Net Financial Result) > 1,3     6.58 4.94
Maturity (in R$ million) 7th issuance 8th issuance     
2013 300 -    
2014 300 144    
After 2015 - 156    
Total 600 300    

 

Table 24 - Selected Financials for Covenant Calculation    
Financial statements (R$ million) 1Q11 2Q11
Total debt 3,289 3,593
Project debt 1,240 1,213
SFH debt 756 735
Cash and availabilities 927 1,163
Total receivables 9,680 10,264
Receivables - PoC 5,464 5,825
Receivables - results to be recognized 4,216 4,439
Finished units 333 293
 
Equity 3,809 3,850

 

18



Glossary
Affordable Entry Level

Residential units targeted to the mid-low and low income segments with prices below R$200 thousand
per unit.

Backlog of Results

As a result of the Percentage of Completion Method of recognizing revenues, we recognize revenues
and expenses over a multi-year period for each residential unit we sell. Our backlog of results
represents revenues minus costs that will be incurred in future periods from past sales.

Backlog of Revenues

As a result of the Percentage of Completion Method of recognizing revenues, we recognize revenues
over a multi-year period for each residential unit we sell. Our backlog represents revenues that will be
incurred in future periods from past sales.

Backlog Margin

Equals to “Backlog of Results” divided “Backlog of Revenues” to be recognized in future periods.

Land Bank

Land that Gafisa holds for future development paid either in Cash or through swap agreements. Each
decision to acquire land is analyzed by our investment committee and approved by our Board of
Directors.

LOT (Urbanized Lots)

Land subdivisions, or lots, with prices ranging from R$ 150 to R$ 600 per square meter

PoC Method

Under Brazilian GAAP, real estate development revenues, costs and related expenses are recognized
using the percentage-of-completion (“PoC”) method of accounting by measuring progress towards
completion in terms of actual costs incurred versus total budgeted expenditures for each stage of a
development.

Pre-sales

Contracted pre-sales are the aggregate amount of sales resulting from all agreements for the sale of
units entered into during a certain period, including new units and units in inventory. Contracted pre-
sales will be recorded as revenue as construction progresses (PoC method). There is no definition of
"contracted pre-sales'' under Brazilian GAAP.

PSV

Potential Sales Value.

SFH Funds

Funds from SFH are originated from the Governance Severance Indemnity Fund for Employees
(FGTS) and from savings accounts deposits. Banks are required to invest 65% of the total savings
accounts balance in the housing sector, either to final customers or developers, at lower interest rates
than the private market.

Swap Agreements

A system in which we grant the land-owner a certain number of units to be built on the land or a
percentage of the proceeds from the sale of units in such development in exchange for the land. By
acquiring land through this system, we intend to reduce our cash requirements and increase our
returns.

19


About Gafisa
Gafisa is a leading diversified national homebuilder serving all demographic segments of the Brazilian market. Established over 57 years ago, we have completed and sold more than 1,000 developments and built more than 12 million square meters of housing only under Gafisa’s brand, more than any other residential development company in Brazil. Recognized as one of the foremost professionally managed homebuilders, "Gafisa" is also one of the most respected and best-known brands in the real estate market, recognized among potential homebuyers, brokers, lenders, landowners, competitors, and investors for its quality, consistency, and professionalism. Our pre-eminent brands include Tenda, serving the affordable/entry level housing segment, and Gafisa and AlphaVille, which offer a variety of residential options to the mid to higher-income segments. Gafisa S.A. is traded on the Novo Mercado of the BM&FBOVESPA (BOVESPA:GFSA3) and on the New York Stock Exchange (NYSE:GFA).
 
Investor Relations Media Relations (Brazil)
Luiz Mauricio de Garcia Paula Débora Mari
Rodrigo Pereira Máquina da Notícia Comunicação Integrada
Phone: +55 11 3025-9297 / Phone: +55 11 3147-7412
9242 / 9305 Fax: +55 11 3147-7900
Email: ri@gafisa.com.br E-mail: debora.mari@maquina.inf.br
Website: www.gafisa.com.br/ir  
 
This release contains forward-looking statements relating to the prospects of the business, estimates for operating and financial results, and those related to growth prospects of Gafisa. 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.

 

The second quarter financial statements were prepared and are being presented in accordance with the accounting practices adopted in Brazil (“Brazilian GAAP”), required for the years ended December 31, 2009. Therefore, they do not consider the early adoption of the technical pronouncements issued by CPC in 2009, approved by the Federal Accounting Council (“CFC”), required beginning on January 1, 2010. On November 10, 2009 the CVM, issued the deliberation nº 603 changed by deliberation nº 626, which provides the option for listed Companies to present 2010 quarterly information based on accounting practices in force at December 31, 2009.

20



The following table displays projects launched during 2Q11:

Table 22 - Projects launched              
         
Company Project Launch Date Local % Gafisa Units
(%Gafisa)		 PSV
(%Gafisa)		 % sales
30/jun/11		 Sales
30/jun/11
Gafisa 1Q11         755 228,302 47% 108,360
 
Gafisa Smart Vila Mascote - Lacedemonia May São Paulo - SP 100% 156 66,596 64% 42,826
Gafisa Alegria - Fase 5 May Guarulhos - SP 100% 139 47,674 40% 19,062
Gafisa Prime F2 May São Luis - MA 50% 74 14,708 23% 3,318
Gafisa Compra de Participação - IGLOO June São Paulo - SP 30% 27 10,382 90% 9,392
Gafisa Smart Maracá June São Paulo - SP 100% 156 60,919 82% 49,835
Gafisa Royal - Vila Nova São José QC1 June São José dos Campos - SP 100% 68 41,789 11% 4,703
Gafisa Vision Anália Franco June São Paulo - SP 100% 200 84,904 12% 10,191
Gafisa Station Parada Inglesa (André Campale) June São Paulo - SP 100% 173 77,662 59% 45,733
Gafisa Target - Comercial Capenha June Rio de Janeiro - RJ 60% 549 55,243 38% 20,772
Gafisa Network Business Tower F1 e F2 (Cerami June São Caetano - SP 100% 855 311,749 53% 164,230
Gafisa MUNDI - RESIDENCIAL CERAMICA - FASE I June São Caetano - SP 100% 192 163,633 22% 35,922
Gafisa 2Q11         2,589 935,259 43% 405,984
 
Alphaville 1Q11         849 181,914 63% 114,108
 
Alphaville Terras Alpha Resende - F1 June Resende - RJ 77% 325 49,204 59% 28,830
Alphaville Terras Alpha Maricá Sta Rita - F1 June Maricá - RJ 48% 296 46,363 57% 26,503
Alphaville 2Q11         621 95,567 58% 55,332
 
Tenda 1Q11         650 102,389 72% 73,849
 
Tenda Lopes Trovão April Canoas - RS 100% 188 38,938 33% 12,898
Tenda Montes Claros May Belo Horizonte - MG 100% 300 30,602 42% 12,828
Tenda Cheverny F2 May Goiânia - GO 100% 96 13,638 46% 6,241
Tenda Cheverny F3 May Goiânia - GO 100% 96 13,638 30% 4,158
Tenda Vale Verde Cotia - Fase 7 May Cotia - SP 100% 80 9,200 75% 6,943
Tenda Porto Fino June Santa Luzia - MG 100% 224 25,228 38% 9,633
Tenda Vila das Flores June Salvador-BA 100% 460 50,273 1% 696
Tenda RESIDENCIAL ATENAS June Rio de Janeiro-RJ 100% 260 30,288 27% 8,258
Tenda Reserva dos Pássaros June Vespasiano-MG 100% 817 103,183 56% 57,558
Tenda Bosque dos Palmares June Nova Iguaçu -RJ 100% 352 34,454 9% 3,003
Tenda 2Q11         2,873 349,443 35% 122,216
 
Total 1Q11         2,254 512,606 42% 296,317
 
Total 2Q11         6,083 1,380,270 42% 583,532
 
Total 1H11         8,337 1,892,875 46% 879,849

 

21



The following table illustrates the financial completion of the construction in progress and the related revenue recognized (R$000) during the second quarter ended on June 30, 2011.

 
 
Company Project Construction status % Sold Revenues recognized (R$ '000)
    2Q11 1Q11 2Q11 1Q11 2Q11 1Q11
Gafisa Ceramica Comercial 14% 0% 53% 0% 20,324 -
Gafisa Vision Brooklin 68% 58% 100% 98% 14,330 11,674
Gafisa Pq Barueri Cond - Fase 1 100% 100% 86% 79% 14,008 16,616
Gafisa Nova Petropolis Sbc - 1ª Fase 100% 100% 93% 82% 13,822 10,328
Gafisa Mont Blanc 98% 91% 64% 56% 12,785 12,074
Gafisa Smart Maracá 26% 0% 83% 0% 12,593 -
Gafisa Alegria Fase 1 92% 81% 94% 89% 11,888 11,188
Gafisa Vistta Santana 85% 79% 97% 95% 11,814 6,400
Gafisa Reserva Ibiapaba F2 63% 48% 100% 97% 11,542 11,742
Gafisa Smart Vila Mascote 29% 0% 66% 0% 11,062 -
Gafisa Gafisa Corporate - Jardim Paulista 89% 83% 100% 97% 10,741 6,673
Gafisa Station Parada Inglesa 23% 0% 60% 0% 10,181 -
Gafisa Mansão Imperial - Fase 2B 84% 73% 75% 66% 10,146 6,029
Gafisa Colours 18% 2% 81% 74% 9,516 321
Gafisa Condessa 31% 29% 82% 67% 9,071 30,771
Gafisa Central Life F2 27% 20% 98% 89% 8,985 5,588
Gafisa Laguna Di Mare - Fase 2 100% 93% 89% 85% 8,492 9,533
Gafisa Mansão Imperial - F1 86% 75% 85% 83% 7,867 6,987
Gafisa Reserva Ecoville 72% 53% 72% 67% 7,704 8,767
Gafisa Manhattan Residencial 68% 58% 51% 46% 7,501 1,680
Gafisa Manhattan Comercial 63% 59% 70% 62% 6,974 2,529
Gafisa The Place 43% 30% 92% 81% 6,884 3,629
Gafisa Reserva Sta Cecilia 100% 100% 41% 33% 6,597 4,619
Gafisa Reserva Do Bosque - Fase 2 93% 82% 93% 89% 6,570 6,007
Gafisa Magic 100% 100% 99% 95% 6,371 3,899
Gafisa Mosaico 67% 56% 100% 96% 6,281 3,333
Gafisa London Green 100% 100% 97% 96% 6,249 5,120
Gafisa Pateo Mondrian (Mota Paes) 50% 45% 83% 81% 5,997 4,827
Gafisa Alegria - Fase2B 54% 43% 88% 76% 5,937 5,255
Gafisa Avant Garde 6% 0% 95% 0% 5,891 21
Gafisa Supremo Ipiranga 75% 66% 100% 100% 5,803 5,782
Gafisa Stellato 22% 18% 65% 58% 5,792 2,697
Gafisa Global Offices 44% 31% 95% 86% 5,782 2,385
Gafisa Acqua Residencial 100% 100% 82% 78% 5,741 3,558
Gafisa Riservato 65% 54% 92% 78% 5,645 1,902
Gafisa Office Life 54% 54% 80% 75% 5,637 6,306
Gafisa Igloo Alphaville 68% 59% 98% 99% 5,621 -
Gafisa Carpe Diem - Belem 96% 88% 84% 78% 5,495 3,278
Gafisa Secret Garden 100% 98% 92% 86% 5,438 3,685
Gafisa Details 100% 95% 100% 96% 5,400 4,273
Gafisa Others         204,764 177,810
  Total Gafisa         549,239 407,286
 
Alphaville Rio Das Ostras Fase Iii 88% 78% 92% 70% 17,052 5,654
Alphaville Teresina 46% 31% 99% 98% 14,723 10,806
Alphaville Porto Alegre 52% 38% 87% 87% 14,671 8,189
Alphaville Ribeirão Preto 67% 51% 93% 93% 14,257 8,643
Alphaville Granja Viana 81% 52% 99% 99% 10,379 4,332
Alphaville Ta Petrolina 41% 18% 96% 96% 9,092 4,357
Alphaville Belem 26% 13% 94% 85% 7,785 2,583
Alphaville Brasília 62% 48% 87% 87% 7,577 5,857
Alphaville Duas Unas 20% 15% 77% 56% 7,337 7,955
Alphaville Others         53,931 55,247
  Total AUSA         156,805 113,624
 
  Total Tenda         335,299 279,446
 
  Consolidated Total         1,041,343 800,356

 

22



Consolidated Income Statement

The Income Statement reflects the impact of IFRS adoption, also for 2010.

 
R$ 000 2Q11 2Q10 1Q11 2Q11 x 2Q10 2Q11 x 1Q11
Net Operating Revenue 1,041,344 927,442 800,356 12.3% 30.1%
Operating Costs (822,424) (647,950) (615,588) 26.9% 33.6%
Gross profit 218,920 279,492 184,768 -21.7% 18.5%
Operating Expenses          
Selling Expenses (61,970) (61,140) (51,505) 1.4% 20.3%
General and Administrative Expenses (60,389) (55,125) (56,307) 9.5% 7.2%
Other Operating Revenues / Expenses (8,649) (6,947) (10,981) 24.5% -21.2%
Depreciation and Amortization (22,754) (8,781) (12,365) 159.1% 84.0%
Non-recurring expenses - (259) - - -
Operating results 65,158 147,240 53,610 -55.7% 21.5%
Financial Income 21,697 40,929 24,664 -47.0% -12.0%
Financial Expenses (50,563) (61,782) (55,662) -18.2% -9.2%
Income Before Taxes on Incom e 36,292 126,387 22,612 -71.3% 60.5%
Deferred Taxes 10,147 (12,083) 6,303 -184.0% 61.0%
Income Tax and Social Contribution (11,590) (9,977) (8,150) 16.2% 42.2%
Income After Taxes on Incom e 34,849 104,327 20,765 -66.6% 67.8%
    .      
Minority Shareholders (9,737) (7,058) (7,059) 38.0% 37.9%
Net Incom e 25,112 97,269 13,706 -74.2% 83.2%
 
Net Incom e Per Share (R$) 0.05819 0.22655 0.03177 -74.3% 83.2%

 

23



Consolidated Balance Sheet

 
 
  2Q11 2Q10 1Q11 2Q11 x 2Q10 2Q11 x 1Q11
ASSETS          
Current Assets          
Cash and cash equivalents 330,183 306,330 228,700 7.8% 44.4%
Market Securities 832,897 1,500,054 698,277 -44.5% 19.3%
Receivables from clients 3,653,708 2,470,944 3,357,360 47.9% 8.8%
Properties for sale 1,988,093 1,446,760 1,765,570 37.4% 12.6%
Other accounts receivable 201,492 141,740 210,993 42.2% -4.5%
Deferred selling expenses 20,588 20,592 10,375 0.0% 98.4%
Prepaid expenses 9,533 15,283 11,916 -37.6% -20.0%
  7,036,494 5,901,703 6,283,191 19.2% 12.0%
Long-term Assets          
Receivables from clients 2,171,302 2,075,161 2,106,770 4.6% 3.1%
Properties for sale 346,658 407,792 461,561 -15.0% -24.9%
Deferred taxes 353,445 311,693 330,739 13.4% 6.9%
Other 187,536 201,520 148,059 -6.9% 26.7%
  3,058,941 2,996,166 3,047,129 2.1% 0.4%
Permanent Assets          
Property, plant and equipment 81,135 59,659 79,822 36.0% 1.6%
Intangible assets 215,624 211,151 212,890 2.1% 1.3%
  296,759 270,810 292,712 9.6% 1.4%
 
Total Assets 10,392,194 9,168,679 9,623,032 13.3% 8.0%
 
LIABILITIES AND SHAREHOLDERS' EQUITY          
Current Liabilities          
Loans and financing 689,412 825,382 838,334 -16.5% -17.8%
Debentures 153,788 123,608 71,562 24.4% 114.9%
Obligations for purchase of land and advances from          
clients 526,560 466,078 438,462 13.0% 20.1%
Materials and service suppliers 225,692 244,545 178,443 -7.7% 26.5%
Taxes and contributions 294,716 154,983 259,690 90.2% 13.5%
Taxes, payroll charges and profit sharing 66,772 73,057 84,897 -8.6% -21.3%
Provision for contingencies 21,598 6,312 16,540 242.2% 30.6%
Dividends 102,767 52,287 102,897 96.5% -0.1%
Other 233,339 217,569 206,914 7.2% 12.8%
  2,314,644 2,163,821 2,197,739 7.0% 5.3%
Long-term Liabilities          
Loans and financings 1,013,961 352,181 521,708 187.9% 94.4%
Debentures 1,736,027 1,748,000 1,857,055 -0.7% -6.5%
Obligations for purchase of land 183,619 176,084 187,920 4.3% -2.3%
Deferred taxes 395,440 484,453 391,687 -18.4% 1.0%
Provision for contingencies 126,811 123,155 126,841 3.0% 0.0%
Obligation for investors 460,000 380,000 380,000 21.1% 21.1%
Other 311,349 149,256 150,907 108.6% 106.3%
  4,227,207 3,413,129 3,616,118 23.9% 16.9%
 
Shareholders' Equity          
Capital 2,730,789 2,712,899 2,730,787 0.7% 0.0%
Treasury shares -1,731 -1,731 -1,731 0.0% 0.0%
Capital reserves 262,970 290,507 256,645 -9.5% 2.5%
Revenue reserves 741,212 381,651 741,211 94.2% 0.0%
Retained earnings/accumulated losses 38,818 162,087 13,706 0.0% 183.2%
Minority Shareholders 78,285 46,316 68,557 69.0% 14.2%
  3,850,343 3,591,729 3,809,175 7.2% 1.1%
Liabilities and Shareholders' Equity 10,392,194 9,168,679 9,623,032 13.3% 8.0%

 

24



Consolidated Cash Flows      
 
  2Q11 2Q10
Income Before Taxes on Income 36,292 126,387
     
Expenses (income) not affecting working capital    

Depreciation and amortization

22,754 8,781

Expense on stock option plan

4,781 2,584

Unrealized interest and charges, net

11,584 27,529

Disposal of fixed asset

- (331)

Warranty provision

12,361 3,615

Provision for contingencies

11,552 2,819

Profit sharing provision

2,350 10,886
     
Decrease (increase) in assets    

Clients

(360,879) (429,973)

Properties for sale

(111,379) (98,037)

Other receivables

(36,793) (143,442)

Deferred selling expenses and prepaid expenses

(1,013) (1,673)
     
Decrease (increase) in liabilities    

Obligations on land purchases and advances from customer

86,673 12,686

Taxes and contributions

38,785 7,265

Trade accounts payable

47,249 9,897

Salaries, payroll charges

(20,479) (4,371)

Other accounts payable

26,679 138,256
     
Cash used in operating activities (229,483) (327,122)
     
Investing activities    
     
Purchase of property and equipment and deferred charges (26,802) (10,649)
 (Aplicação) resgate de títulos e valores mobiliários, cauções e c 44 (134,620) 275,926
Cash used in investing activities (161,422) 265,277
 
Financing activities    
 
Capital increase 2 21,681
Follow on expenses - (9,439)
Capital reserve increase - 18,759
Increase in loans and financing 483,533 136,286
Repayment of loans and financing (181,281) (148,245)
Assignment of credit receivables, net 1,553 32,772
 Proceeds from subscription of redeemable equity interest in sec 60 (3,744) (4,314)
Mortgage Assignment - CCI 203,915 -
Impostos pagos (11,590) (7,058)
Net cash provided by financing activities 492,388 40,442
     
Net increase (decrease) in cash and cash equivalents 101,483 (21,403)
Cash and cash equivalents    
     
At the beggining of the period 228,700 374,411
At the end of the period 330,183 353,008
     
Net increase (decrease) in cash and cash equivalents 101,483 (21,403)

 

25

 

SIGNATURE

 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: August 12, 2011
 
Gafisa S.A.
 
By:
/s/ Alceu Duílio Calciolari
 
Name:   Alceu Duílio Calciolari
Title:     Chief Executive Officer and Investor Relations Officer