GFA

[BigSully1]

Homebuilding is hot in Brazil. added this to my Latin American Port. Looks close to break out now on strong volume!

http://stockcharts.com/h-sc/ui?s=GFA&p=D&b=5&g=0&id=-p12205570146
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Gafisa S.A.
Avnaes Unidas No 4777
9th Floor
Sao Paulo, SP 05477-000
Brazil - Map
Phone: 55 11 3025 9305
Fax: 55 11 3025 9217
Web Site: http://www.gafisa.com.br

DETAILS  
Index Membership: N/A
Sector: Industrial Goods
Industry: Residential Construction
Full Time Employees: 530


BUSINESS SUMMARY  
Gafisa S.A. operates as a homebuilder in Brazil. The company also engages in the development of land subdivisions, commercial buildings, and entry-level housing. In addition, it provides construction services to third parties. Gafisa primarily develops residential buildings targeted at middle- and upper-income customers. As of October 26, 2007, it sold approximately 900 developments and constructed 37 million square meters. The company was founded in 1954 and is headquartered in Sao Paulo, Brazil.

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Gafisa Reports Strong Third Quarter
Wednesday November 7, 6:34 pm ET  
- 3Q07 Launches Increase 119% to R$426 million and Pre-sales Increase 56% to R$367 million
- Land Bank Grows 44% from Previous Quarter to R$8.9 billion
- Company Updates 2007 Expectations for Launches and Provides 2008 Outlook


SAO PAULO, Brazil, Nov. 7 /PRNewswire-FirstCall/ -- Gafisa S.A. (Bovespa: GFSA3; NYSE: GFA), one of Brazil's leading diversified national homebuilders, today reported its financial results for the third quarter (3Q07) and nine months ended September 30, 2007 (9M07). The following financial and operating information, unless otherwise indicated, was prepared and presented in accordance with Brazilian GAAP (BR GAAP) and in Brazilian Reais (R$). Additionally, financial statements and operating information consolidate the numbers for Gafisa and its subsidiaries, and refer to Gafisa's stake (or participation) in its developments. To view a more detailed review of third quarter results filed with the Brazilian Comissao de Valores Mobiliarios ("CVM"), please visit Gafisa's website www.gafisa.com.br/ir.
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Net operating revenue for the third quarter, recognized by the Percentage of Completion ("PoC") method, increased 91% to R$309 million from R$162 million in the prior year period. Backlog of Results to be recognized under the PoC method at the end of the third quarter reached R$465 million (Backlog margin of 38.5%), an increase of 60% from the previous year's quarter.

Project launches during the quarter totaled R$426 million, an increase of 119% over the same period in 2006. Pre-sales reached R$366.9 million, an increase of 56% over the 3Q06 pre-sales of R$235.3 million.

The Company's land bank is currently R$8.9 billion of future sales, close to 3 times our 2008 potential launch value, and 44% higher than at the end of 2Q07. The increase is largely due to the addition of the Bairro Novo land bank of R$468 million and R$1.1 billion, corresponding to the 70% share of the land bank acquired through the Cipesa transaction. This acquisition gives Gafisa a strong foothold in the Northeast region of the country.

Selling, general and administrative (SG&A) expenses were R$47.1 million in 3Q07 versus R$27.8 million in the prior year. The increase in SG&A is primarily due to the Company's rapid expansion and management expenses associated with the new divisions targeting Brazil's lower income segments, Fit and Bairro Novo. Additionally, 3Q07 amounts include the consolidation of Alphaville and the implementation of quarterly accruals for bonuses during 2007.

EBITDA for the third quarter increased 61% to R$47.8 million from R$29.8 million in the prior year period. Net Income for the third quarter increased 12% to R$30.9 million, or R$0.24 per share from R$27.7 million in the third quarter of 2006. Net Income taxes for the quarter were R$8.7 million versus R$0.7 million in 3Q06. The lower tax figures in 2006 were mainly due to utilized tax credits.

Nine month EBITDA reached R$122 million (15.3% EBITDA margin) in 2007 versus R$69 million (16.3% EBITDA margin) in 2006 and adjusted net income was R$81 million (10.1% adjusted net margin) in 9M07 compared to R$60.4 million (14.2% adjusted net margin) in 9M06.

Commenting on results, Wilson Amaral, chief executive officer of Gafisa S.A., said, "We continue to see robust growth in the Brazilian housing industry and strong prospects for accelerated growth in the future driven by increased access to financing, especially in the lower income population segments. Through Fit Residencial and Bairro Novo, we are now creating the conditions to lead the housing industry in serving the lower income segments of the population which we believe will fuel long term growth in the industry. And, while implementing these programs, we have continued to drive profitable growth across the organization."

Amaral continued, "I am very pleased with our third quarter and year to date operating and financial results. We are on track to meet our profitability targets and expect to exceed our earlier outlook for launches by year end 2007. We also expect significant growth in launches during 2008. In fact, we now expect the first launch of a Bairro Novo development targeting the lower income segment with large scale housing developments, to take place by the end of 4Q07 rather than in the first half of 2008. Bairro Novo's high quality land bank with certain existing permits allowed us to accelerate the launch of this project.

"Pre-sales, a strong indicator of Gafisa's ability to meet market demand, remain strong with year to date growth of 56%, reaching R$964 million, while EBITDA increased 77% during the same period. We have also continued to launch new projects in diverse geographies at an unprecedented rate. During the first nine months of the year Gafisa's new developments reached nearly R$1.2 billion."

Commenting on the Company's strategy, Amaral said, "To date, we have created the infrastructure and teams to serve all segments of the market. Our long-established products, complemented by the acquisition of Alphaville earlier in the year, solidify our leadership position in serving the high and mid-high end of the population with a differentiated product offering. Fit Residencial and Bairro Novo will serve the lower income markets with increased access to financing through programs established by the Caixa Economica Federal (CEF) and commercial banks. We have already launched 3 projects in diverse geographies under the Fit brand and are announcing today the expected launch of our first Bairro Novo project by the end of this year.

"Our strategy not only addresses segment diversification, but also geographic diversification. Gafisa's R$8.9 billion land bank is distributed over 118 separate land parcels, 61% of which is located outside of Sao Paulo and Rio. The Gafisa brand, reputation and diverse products have helped attract excellent partners that complement Gafisa with local market knowledge and access to high quality land. Our recent acquisition of Cipesa, a leader in the Northeastern state of Alagoas was the result of a successful partnership.

"Our investment in human capital will assure our on-going ability to aggressively execute and deliver the most appropriate products on the market. We have dedicated teams developing, executing and selling the products that serve unique market segments. And, through our trainee program, we are guaranteeing that we will have a steady flow of expertise into the future. Our trainee program is among the top three largest and most competitive across all industries in Brazil.

"Finally, the underlying macroeconomic conditions are very favorable and we expect conditions to continue to improve for long term housing expansion. Overall savings deposits, an important source of mortgage financing, increased 9.6% in the first nine months of 2007 as compared to the same period in 2006. This translated into an 81% increase in the amount of mortgages provided utilizing this source of funding over the same period. Commercial banks are offering longer repayment periods and lower interest rates. Additionally, we are working closely with banks to streamline access to financing for our clients and intend to continue to play an important role in this process," concluded Amaral.

Outlook

At the end of 3Q07, Gafisa reached 72% of the guidance provided for full year 2007 launches. Therefore, we are increasing 2007 full year launch guidance to R$1.9 billion (from R$1.65 billion) given our accelerated schedule for the fourth quarter. The Company now expects an increase of 90% in consolidated project launches over 2006. Approximately R$1.5 billion of the year's launches are expected to come from Gafisa's core business, R$200 million from Fit Residencial, R$200 million from AlphaVille.

For 2008, Gafisa expects to launch R$3 billion for the consolidated company.

The Company continues to expect a full year 2007 EBITDA margin of between 15% and 16%.

Conference Call

The management of Gafisa will host a conference call in English on November 8, 2007, at 9:00 a.m. EST/12:00 p.m. Brasilia. To access the call, dial +1 (480) 293-1744 and enter the code # 3797967. A replay of the conference call will be available until November 08, 2007. To access the replay, dial +1 (303) 590-3030 and enter the code # 3797967. A live webcast of the conference call will be available on the internet at www.gafisa.com.br/ir.

About Gafisa

We are one of Brazil's leading diversified national homebuilders. Over the last 50 years, we have been recognized as one of the foremost professionally- managed homebuilders, having completed and sold more than 900 developments and constructed over 37 million square meters of housing, which we believe is more than any other residential development company in Brazil. We believe "Gafisa" is one of the best-known brands in the real estate development market, enjoying a reputation among potential homebuyers, brokers, lenders, landowners, and competitors for quality, consistency, and professionalism.

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


   Investor Relations:
   Bruno Teixeira
   Phone: +55 11 3025-9297
   Email: [email protected]
   Website: www.gafisa.com.br/ir

   Media Relations (US - Europe)
   Eileen Boyce
   Reputation Partners
   Phone: +1 312 222 9126
   Fax: +1 312 222 9755
   E-mail: [email protected]

   Media Relations (Brazil)
   Joana Santos
   Maquina da Noticia
   Phone: +55 11 3147-7900
   Fax: +55 11 3147-7900
   Email: [email protected]



   Consolidated Statements of Income


   R$ 000          3Q07        3Q06          2Q07    3Q07 x 3Q06  3Q07 x 2Q07

   Gross
    Operating
    Revenue      320,787      168,690      280,121       90.2%       14.5%
   Real State
    development
    and sales    309,373      163,304      264,319       89.4%       17.0%
   Construction
    and services
    rendered      11,414        5,386       15,802      111.9%      -27.8%

   Deductions   (12,232)      (7,148)     (13,573)       71.1%       -9.9%

   Net Operating
    Revenue      308,555      161,542      266,548       91.0%       15.8%

   Operating
    Costs      (215,822)    (104,896)    (186,467)      105.7%       15.7%

   Gross profit   92,733       56,646       80,081       63.7%       15.8%

   Operating
    Expenses    (44,884)     (26,839)     (41,665)       67.2%        7.7%
   Selling
    expenses    (18,941)     (15,874)     (17,330)       19.3%        9.3%
   General and
    administrative
    expenses    (28,173)     (11,900)     (22,207)      136.7%       26.9%
   Equity Income      33          962         (37)      -96.6%     -189.2%
   Other Operating
    Revenues       2,197         (27)      (2,091)          na     -205.1%

   EBITDA         47,849       29,807       38,416       60.5%       24.6%

   Depreciation
    and
    Amortization (1,986)        (918)      (5,517)      116.3%      -64.0%
   Extraordinary
    expenses          --           --            0          na          na

   EBIT           45,863       28,889       32,899       58.8%       39.4%

   Financial
    Income        11,543       13,399       15,395      -13.9%      -25.0%
   Financial
    Expenses    (14,959)     (13,909)     (18,340)        7.5%      -18.4%

   Income before
    taxes on
    income        42,447       28,379       29,954       49.6%       41.7%

   Deffered
    Taxes        (1,987)      (1,061)        5,703       87.3%     -134.8%
   Income tax and
    social
    contribution (6,744)          349      (1,774)    -2032.4%      280.2%

   Income after
    taxes on
    income        33,716       27,667       33,883       21.9%       -0.5%

   Minority
    Shareholders (2,777)           --      (1,743)          na       59.3%

   Net income     30,939       27,667       32,140       11.8%       -3.7%
   Adjusted net
    income per
    thousand
    shares
    outstanding     0.24         0.27         0.25          na          na



   Consolidated Statements of Income


   R$ 000                           9M07            9M06       9M07 x 9M06
   Gross Operating Revenue         836,248         444,923         88.0%
   Real State development
    and sales                      815,893         425,887         91.6%
   Construction and
    services rendered               20,355          19,036          6.9%

   Deductions                     (36,829)        (19,363)         90.2%

   Net Operating Revenue           799,419         425,560         87.9%

   Operating Costs               (558,645)       (294,865)         89.5%

   Gross profit                    240,774         130,695         84.2%

   Operating Expenses            (118,301)        (61,454)         92.5%
   Selling expenses               (48,277)        (35,586)         35.7%
   General and
    administrative expenses       (74,453)        (28,522)        159.7%
   Equity Income                     (263)           3,315       -107.9%
   Other Operating Revenues          4,692           (661)            na

   EBITDA                          122,473          69,241         76.9%

   Depreciation and Amortization  (12,564)         (2,651)        373.9%
   Extraordinary expenses         (30,174)        (29,176)            na

   EBIT                             79,735          37,414        113.1%

   Financial Income                 35,260          40,722        -13.4%
   Financial Expenses             (50,307)        (44,154)         13.9%

   Income before taxes on income    64,688          33,982         90.4%

   Deffered Taxes                  (5,352)         (3,031)         76.6%
   Income tax and social
    contribution                   (2,592)             309       -938.8%

   Income after taxes on income     56,744          31,260         81.5%

   Minority Shareholders           (6,221)              --            na

   Net income                       50,523          31,260         61.6%

   Adjusted net income
    per thousand shares outstanding   0.65            0.61            na


   Consolidated Balance Sheet

   R$ 000         3Q07         3Q06         2Q07     3Q07 x 3Q06  3Q07 x 2Q07
   ASSETS
   Current assets
   Cash and
    banks         30,454       11,766       21,328      158.8%       42.8%
   Financial
    investments  341,638      318,440      474,688        7.3%      -28.0%
   Receivables
    from clients 485,989      356,370      435,887       36.4%       11.5%
   Properties
    for sale     709,115      383,136      594,013       85.1%       19.4%
   Other accounts
    receivable   119,062      103,560      119,417       15.0%       -0.3%
   Deferred
    selling
    expenses      29,136       15,505       25,259       87.9%       15.3%
   Prepaid
    expenses       7,921        2,051       13,238      286.2%      -40.2%

               1,723,315    1,190,828    1,683,830       44.7%        2.3%

   Long-term
    assets
   Receivables
    from clients 384,934       72,852      316,057      428.4%       21.8%
   Deferred taxes 77,316       30,614       73,913      152.6%        4.6%
   Other          42,738       42,802       38,704       -0.1%       10.4%

                 504,988      146,268      428,674      245.2%       17.8%

   Permanent
    assets
   Investments   167,574        2,838      167,709     5804.7%       -0.1%
   Properties
    and equipment 21,396        8,177       15,169      161.6%       41.1%
                 188,970       11,015      182,878     1615.5%        3.3%

   Total
    assets     2,417,273    1,348,111    2,295,382       79.3%        5.3%

   LIABILITIES AND
    SHAREHOLDERS'
    EQUITY
   Current liabilities
   Loans and
    financings    31,731       41,828       51,710      -24.1%      -38.6%
   Debentures      2,043      183,126       10,481      -98.9%      -80.5%
   Real estate
    development
    obligations    4,168       14,529        5,710      -71.3%      -27.0%
   Obligations for
    purchase of
    land         166,286       69,407      108,913      139.6%       52.7%
   Materials and
    service
    suppliers     78,655       36,717       75,638      114.2%        4.0%
   Taxes and
    contributions 67,860       45,170       60,349       50.2%       12.4%
   Taxes, payroll
    charges and
    profit
    sharing       29,929        7,944       21,141      276.8%       41.6%
   Advances from
    clients -
    real state
    and services  29,504       34,980       50,181      -15.7%      -41.2%
   Dividends          --           --        2,823          --     -100.0%
   Other          17,036       16,203       15,359        5.1%       10.9%
                 427,212      449,904      402,305       -5.0%        6.2%

   Long-term
    liabilities
   Loans and
    financings   102,773       26,527       68,566      287.4%       49.9%
   Debentures    240,000          --      240,000          --        0.0%
   Obligations
    for purchase
    of land       28,600        8,373       13,501      241.6%      111.8%
   Deferred
    taxes         62,407       20,979       52,260      197.5%       19.4%
   Unearned income
    from property
    sales            637        3,320        1,053      -80.8%      -39.5%
   Other          48,129       29,206       51,365       64.8%       -6.3%
                 482,546       88,405      426,745      445.8%       13.1%
   Deferred
    income
   Deferred income
    on acquisition
    of subsidiary     --           --          345          --          --

   Minority
    Shareholders  14,154           --        3,616          --      291.4%

   Shareholders'
    equity
   Capital     1,220,542      591,315    1,220,490      106.4%        0.0%
   Treasury
    shares      (18,050)     (47,026)     (18,050)      -61.6%        0.0%
   Capital
    reserves     167,276      167,276      167,276        0.0%        0.0%
   Revenue
    reserves     123,593       51,211       92,655      141.3%       33.4%
               1,493,361      809,802    1,462,371       84.4%        2.1%

   Total
    liabilities
    and
    shareholders'
    equity     2,417,273    1,348,111    2,295,382       79.3%        5.3%

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[BigSully1]

chart

[BigSully1]

volume very strong today