- EBITDA Increase of 69% to R$108.3 million on Revenue Increase of 59% to R$542 million SAO PAULO, May 14 /PRNewswire-FirstCall/ -- Gafisa S.A. (Bovespa: GFSA3; NYSE: GFA), one of Brazil's leading diversified national homebuilders, today reported financial results for the first quarter ended March 31, 2009 (1Q09). The following financial and operating information, unless otherwise indicated, was prepared and presented in accordance to Brazilian GAAP (BR GAAP) and in Brazilian Reais (R$). The first quarter of 2008 has been adjusted in accordance with Law 11638, new Brazilian GAAP, for comparison purposes to the first quarter of 2009. Further details of the Company's first quarter results may be found on the Gafisa website: http://www.gafisa.com.br/ir. Commenting on first quarter performance, Wilson Amaral, chief executive officer of Gafisa, S.A. said, "I am pleased that our operating results remained strong for the first quarter of 2009. With the environment still in flux throughout much of the period, we took a conservative approach to launches and kept our development schedule in-line with market demand and internally generated cash flow. On the other hand we were able to successfully ramp-up our sales efforts to generate over R$558 million in sales resulting in a significant reduction of inventory." Amaral added: "With the announcement at the end of March of the government housing package, and the landmark R$600 million debenture signed with the Caixa Economica Federal, our subsidiary Tenda is now in an excellent position to aggressively execute its expanded business plan for development of projects in the affordable/entry-level income sector. We have a strong management team in place now and, as a group, we have the expertise and execution capacity to meet what we believe will be significantly accelerated demand in the near future. At Gafisa and Alphaville, we will continue to dedicate resources to selected launches and marketing and sales efforts." First Quarter Results Net operating revenue for the first quarter, recognized by the Percentage of Completion ("PoC") method, increased 59% to R$541.9 million from R$340.9 million in the prior year period. Backlog of Results to be recognized under the PoC method at the end of the first quarter reached R$1.0 billion (Backlog margin of 33.3%), an increase of 67% from the previous year's quarter. Selling expenses were R$46.6 million in 1Q08 versus R$21.4 million in the prior year. The increase in these expenses is primarily due to the consolidation of Tenda which has a large retail presence in highly trafficked areas and a dedicated sales force, as well as Gafisa's expanded marketing efforts during the quarter aimed at boosting sales. EBITDA for the first quarter increased 69% to R$108.3 million from R$64.1 million in the prior year period. EBITDA margin for the quarter was 20.0% as compared to 18.8% in 1Q08. Net Income before deduction of minority shareholders and non-cash stock option expenses was R$57.1 million (10.5% margin) as compared to R$47.2 million (13.9% margin) in the previous year's first quarter. Net Income was R$36.7 million (6.8% margin) and EPS R$0.28, a decrease of 8%, compared with R$39.8 million (11.7% margin) and an EPS of R$0.31 for the first quarter of 2008. Project launches for the quarter declined to R$160 million from R$578 million in the same period last year. In response to expected declines in demand from continued weakness in the economic climate, the Company slowed launches during the quarter for all of its brands. Tenda did not launch any new projects as it reorganized operations under new management leadership and successfully orchestrated a financing package to support future growth. Pre-sales of new and inventoried units reached R$558 million, an 11% increase over the 1Q08 sales of R$502 million. Gafisa's land bank is currently R$17 billion of future sales consisting of 207 different sites in 21 states and equivalent to 108,223 units. With the consolidation of Tenda's R$6.3 billion in land bank, the Company's land bank increased by 53% as compared to the end of 1Q08. Overall, 76% of the Company's land bank was acquired through swaps. Reflecting Gafisa's strategy of serving all segments and geographies of the homebuyer market, 43% of the consolidated land bank was outside the states of Rio de Janeiro and Sao Paulo. Total consolidated cash at March 31, 2009 was R$501 million while net debt including obligations to investors was R$1,362 million. As of March 31, 2009, our net debt and obligation to investors to equity and minority interests ratio was 61.9% compared to 59.8% in 4Q08. A 2006 debenture established that we could not have net debt over R$1 billion, which we have passed by 6.2%. We are negotiating this covenant, which is an absolute amount that does not correspond to the current size and consolidated equity position of our company. Our other covenants were not impacted by the growth of the company, since they are based on relative measures. This breached covenant does not impact any other financial obligation of the Company. Key Recent Events During the quarter, Tenda signed a five year debenture of R$600 million with Caixa. The five year debenture, which effectively acts as a line of credit is priced at an attractive TR + 8% with an initial three year grace period. Gafisa completed a sale of receivables of completed units with net cash proceeds of R$70 million. The Company has approximately R$200 million additional receivables that may be available for sale. Gafisa's consolidated cash balance, including proceeds from this debenture, is now over R$1 billion. Operational details of the government package, "Minha Casa, Minha Vida" were announced on April 13, 2009. The Program comprises investments of over R$30 billion, which will be directed to foster the construction of one million houses for families with monthly income from one to ten times minimum wages. Tenda is well positioned to benefit from this Program with over two thirds of its current business concentrated in the targeted segment. The main measures of this Program include: longer mortgage terms; lower interest rates; higher percentage of financed loan to value; higher subsidies, provided on an inverse proportion to the income level; lower costs related to insurance and origination; and creation of a Guarantee Fund to allow for a bridge of mortgage payments in case of unemployment. The ceiling for units to be eligible for subsidized SFH loans and allowing employees to withdraw their FGTS (unemployment severance fund) was raised from R$350K to R$500K. This increase benefits a large portion of Gafisa's client base. Gafisa and Tenda agreed to transfer the Cotia project, which was originally part of the Bairro Novo joint venture with Odebrecht to Tenda at book value of R$42.5 million. The transaction is subject to due diligence expected to last 30 days. The 5-phase project comprises 2,338 units with R$191 million PSV. The first phase of 574 units has already been delivered. Tenda expects to achieve further economies of scale through the integration of this type of development into its portfolio. Outlook Gafisa's consolidated sales for the full year 2009 is expected to be between R$2.7 and R$3.2 billion. Gafisa is expected to account for between R$1.0 - R$1.2 billion, Tenda for R$1.4 - R$1.6 billion and Alphaville from R$0.3 - R$0.4 billion. Consolidated EBITDA margin is expected to be in the range of 16% - 17%, while EBITDA margin for Tenda is expected to be between 14% - 16%. Conference Call The management of Gafisa will host a conference call in English on Friday, May 15, 2009, at 11:00 a.m. US EDT/12:00 p.m. Brasilia time. To access the call, dial +1 (800) 860-2442 from the United States and +1 (412) 858-4600 from other countries and ask for the Gafisa conference. A replay of the conference call will be available for a week after that. To access the replay, dial +1 (877) 344-7529 from the United States and +1 (412) 317-0088 from other countries and enter the code #430349. A live webcast of the conference call will be available on the internet at http://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 970 developments and constructed over 10 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. The Company serves the lower income housing segments through its majority ownership stake in Construtora Tenda, S.A., a separate publicly-traded company on the Novo Mercado of the BOVESPA. Only financial data derived from the Company's accounting system were subject to review by the Company's auditors. Operating and financial information not directly linked to the accounting system (i.e., launches, pre-sales, average sales price, land bank, PSV and others) or non-BR GAAP measures were not reviewed by the auditors. 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 http://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. DATASOURCE: Gafisa S.A. CONTACT: Investors, Julia Freitas Forbes, +55-11-3025-9242, ; or Media (Brazil), Patricia Queiroz, Maquina da Noticia Comunicacao Integrada, +55-11-3147-7409, Fax: +55-11-3147-7900, Web Site: http://www.gafisa.com.br/ir

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