Gafisa Reports Unaudited Full Year 2011 Preliminary Results

Gafisa S.A. (Bovespa: GFSA3; NYSE: GFA), Brazil’s leading diversified national homebuilder, announced today preliminary unaudited financial results for the full year ended December 31, 2011. The preliminary financial statements were prepared and presented in accordance with Brazilian GAAP (BR GAAP) and in Brazilian Reais (R$). Additionally, preliminary financial statements and operating information consolidate the numbers for Gafisa and its subsidiaries, and refer to Gafisa’s stake (or participation) in its developments.

Duilio Calciolari, Chief Executive Officer, stated, “Gafisa has made significant structural and managerial changes that position the Company for long-term growth and improved financial performance. Our full-year preliminary results reflect required corrective actions, including the scaling back of our Tenda business, the dissolution of contracts with potential homeowners who no longer qualify for bank mortgages and a reduced geographic focus. Cost overruns related to the Tenda and Gafisa segments have been remedied by focusing on geographic regions where the Company has strong supply chains and completed a stringent vetting of external construction partnerships. While the impact of the adjustment is material, there is no current cash flow impact and our liquidity remains sufficient to meet our obligations and execute our new strategic plan. We look forward to successfully executing our strategy to enhance shareholder value.”


Project launches in 2011 totaled R$3.5 billion reflecting the strategic slowdown of launches at Tenda. The Gafisa segment represented 61%, AlphaVille comprised 28% and Tenda, 11% of total launches.

Net revenue for the full year 2011, recognized by the Percentage of Completion (“PoC”) method, was R$2.8 billion, 25.1% below the previous year’s net revenues as a result of R$1.2 billion in revenue reversals related to the adjustments, R$1.0 billion coming from Tenda and the remaining attributed to the Gafisa segment.

The Company’s full year gross profit was R$111.3 million, reflecting the net impact of revenue reversals and associated costs of R$706.4 million related to the adjustments registered in the fourth quarter.

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