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

EARNINGS RELEASE 1Q16

 

On a consolidated basis, launches totaled R$308.6 million in 1Q16, a decrease of 1.6% year over year and of 54.8% quarter over quarter. The Gafisa segment accounted for 26% of 1Q16 launches, while Tenda accounted for the remaining 74%. First quarter 2016 net pre-sales totaled R$333.3 million, a decrease of 21.3% year over year and a 30.9% sequential reduction. In the quarter, sales from launches represented 9.0% of total sales, while the sale of inventory units represented 91.0%. The Gafisa segment accounted for 20% of net pre-sales while the Tenda segment represented 80%. 1Q16 consolidated adjusted gross profit was R$110.2 million, at a margin of 27.2%. In the current economic environment, the Company’s focus on greater stability in its cost and expense structure is paramount. Selling and administrative expenses were R$81.0 million in 1Q16, 14.2% lower compared to 4Q15, confirming the Company's efforts to respond to changes and movements in real estate market conditions, thus providing a cost structure more adequate to the current environment. As a result of all this factors, Gafisa reported a consolidated net loss of R$53.2 million in 1Q16, compared to the R$31.6 million profit recorded in the previous year period.

At the end of the year, the Net Debt/ Shareholders Equity ratio reached 46.5%, the lowest level since 3Q14. Excluding project finance, the Net Debt/Shareholder Equity ratio was negative 14.6%. One of the positive highlights in the quarter was the consolidated operating cash generation, which reached R$94.3 million, ending the quarter with net cash generation of R$28.3 million. Our positive cash flow performance and the maintenance of a low level of leverage reinforces the Company's conservative approach to capital discipline, which remains a priority during this period of macroeconomic uncertainty in Brazil. We will maintain this conservative approach throughout the year, seeking to balance the placement of new products on the market, prioritizing those projects with more liquidity in order to reach adequate sales and profitability levels. The Gafisa segment, through its consistent and balanced performance, is focused on improving the return on invested capital. The Tenda segment is ready to expand the volume of new projects, backed by the positive results achieved from the new model and the resilience of the low-income market. The Company continues to advance guided by capital discipline, its profitability goals, and value creation for shareholders.

Sandro Gamba                                                                                  Rodrigo Osmo

Chief Executive Officer – Gafisa                                                      Chief Executive Officer – Tenda  

EARNINGS RELEASE 1Q16

MAIN CONSOLIDATED FIGURES

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

1)         Adjusted by capitalized interestes.

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

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

EARNINGS RELEASE 1Q16

FINANCIAL RESULTS

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

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

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

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

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

.

OPERATING RESULTS

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

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

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

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

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

EARNINGS RELEASE 1Q16

ANALYSIS OF RESULTS

Gafisa Segment

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

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

1)         Adjusted by capitalized interestes.

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

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

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

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

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

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

EARNINGS RELEASE 1Q16

 

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

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

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

Net Income

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

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

EARNINGS RELEASE 1Q16

Tenda Segment

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

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

1)   Adjusted by capitalized interestes.

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

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

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

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

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

Net Income

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

EARNINGS RELEASE 1Q16

 

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

RECENT EVENTS

ALLOCATION OF THE 2015 FISCAL YEAR RESULTS

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

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

UPDATE SHARE BUYBACK PROGRAM

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

The Company also reaffirms its commitment to capital discipline. The execution of the program is conditioned to the maintenance of Gafisa’s Consolidated Net Debt to Equity ratio in a level equal or lower than 60%. The Company’s Executive Officers are authorized to determine the opportunities in which operations will be performed, as well as the amount of shares to be effectively traded. 

EARNINGS RELEASE 1Q16

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

Operating Results | Launches and Pre-Sales

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

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

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

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

EARNINGS RELEASE 1Q16

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

Sales over Supply (SoS)

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

Dissolutions

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

Over the last three years, the Company has been working on initiatives to strengthen the credit review component of its sale process. In doing so, the Company intends to reduce the level of dissolutions throughout the construction and delivery cycle. However, given the current uncertainties in the economic environment and its effects on the real estate market, it has not been possible to reduce the volume of dissolutions in a more effective manner.

Notably, a comprehensive approach in the credit review process at the time of sale has generated a more efficient process of transferring Gafisa customers to financial institutions, even amid a unfavorable economic environment. As an example of the efficiency achieved in this process, of all customers who asked for transfers in 1Q16, only 3.5% have been rejected in the bank’s credit analysis, i.e. out of the 318 units asking for transfers, only 11 were not accepted.

In recent quarters the Gafisa segment has been able to reduce the level of dissolutions by enabling customers facing financial pressure to swap their units for those that better match their financial position. This exchange process reflects the flexibility of Gafisa’s product portfolio.

In the quarter, 257 Gafisa units were cancelled and 116 units, representing R$61.9 million, were already resold within the period.

EARNINGS RELEASE 1Q16

Inventory

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

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

¹ The Period Adjustment reflect the updates related to the project scope, release date and pricing update in the period.

During the same period, finished units represented R$430.1million, or 21.8% of total inventory. Inventory from projects launched outside core markets, which is comprised exclusively of finished units, represented R$56.3 million, a decrease of 51.0% when compared to the R$115.0 million recorded last year and down 22.5% from 4Q15. The Company estimates that through the beginning of 2017, it will have monetized a large portion of its inventory in non-core markets, based on the sales rate observed in these markets over the past few quarters.

In regards to Gafisa’s inventory, approximately 45%, or R$890.6 million, is concentrated in projects to be delivered from 1Q17 on, not representing an immediate increase in the segment’s volume of inventory of finished units.

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

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

EARNINGS RELEASE 1Q16

 

Inventory Delivery Schedule

Landbank

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

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

¹ The swap percentage is measured compared to historical cost of land acquisition.

² Potential units are net of swaps and refer to the Gafisa’s and/or its partners’ stake in the project.

Table 10 - Gafisa Segment - Changes in the Landbank (4Q15 x 1Q16 - R$ 000)

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

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

Gafisa Sales

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

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

EARNINGS RELEASE 1Q16

 

Gafisa Segments Delivered Projects

During 1Q16, 2 projects/phases totaling 191 units were delivered, accounting for R$104.8 million in PSV. Currently, Gafisa has 24 projects under construction, all of which are on schedule according to the Company’s business plan.

Transfers

Over the past few years, the Company has been taking steps to improve the performance of its receivables/transfer process in an attempt to achieve higher rates of return on invested capital. Currently, the Company’s strategy is to transfer 90% of eligible units up to 90 days after the delivery of the project. In accordance with this policy, transfers totaled R$110.0 million in PSV in the first quarter.

Table 11 – Gafisa Segment – Delivered Projects

EARNINGS RELEASE 1Q16

Financial Results                                  Revenue

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

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

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

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

Gross Profit & Margin

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

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

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

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

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

EARNINGS RELEASE 1Q16

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

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

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

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

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

Selling, General and Administrative Expenses (SG&A)

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

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

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

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

EARNINGS RELEASE 1Q16

 

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

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

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

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

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

  The strong volume of deliveries over the past three years, due to the delivery of delayed projects in discontinued markets, led to an increase in the level of contingencies. The Gafisa segment has since concentrated its operations only in the metropolitan regions of São Paulo and Rio de Janeiro. This new strategic geographical positioning, combined with improved internal processes, is expected to result in fewer future legal claims and a subsequent decrease in the amount of expenses related to contingencies in the following years.

Adjusted EBITDA

Adjusted EBITDA for the Gafisa segment totaled a negative result of R$18.1 million in 1Q16, below when compared to the positive Adjusted EBITDA of R$49.9 million in 4Q15 and R$58.3 million compared to the same period last year. The 1Q16 Adjusted EBITDA was impacted by the following factors: (i) lower revenue in the quarter due to the volume and sales mix; and (ii) decreased gross margin in the period. Note that adjusted EBITDA for the Gafisa segment does not include equity income from Alphaville.

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

EARNINGS RELEASE 1Q16

 

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

1) EBITDA is adjusted by expenses associated with stock option plans, as this is a non-cash expense.

Backlog of Revenues and Results

The backlog of results to be recognized under the PoC method totaled R$160.0 million in 1Q16. The consolidated margin was 37.4% in the quarter, compared to 39.6% posted in last year’s first quarter.

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

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

EARNINGS RELEASE 1Q16

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

Operating Results | Launches and Sales

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

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

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

EARNINGS RELEASE 1Q16

 

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

Sales Over Supply (SoS)

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

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

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

Dissolutions

The level of dissolutions in the Tenda segment totaled R$46.2 million in 1Q16, a decrease of 17.9% compared to 1Q15 and an increase of 15.9% compared to 4Q15, in line with the higher volume of gross sales in this quarter.

Due to its transfer policy, which occurs immediately after the sale, and the reduction of the legacy portfolio, the Tenda segment continues to support a lower volume of dissolutions. The percentage of dissolutions over gross sales reached 14.8%, even with the significant participation of 55.7% of the old legacy projects in this quarter’s total volume of dissolutions.

EARNINGS RELEASE 1Q16

 

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

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

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

Tenda Segment Transfers

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

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

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

Tenda Segment Delivered Projects

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

Inventory

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

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EARNINGS RELEASE 1Q16

 

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

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

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

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

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

Tenda Segment Landbank

The Tenda segment landbank, with a PSV of approximately R$4.6 billion, is comprised of 126 different projects/phases. Out of these projects/phases 24% are located in São Paulo, 13% in Rio Grande do Sul, 22% in Rio de Janeiro, 5% in Minas Gerais, 25% in Bahia, and 10% in Pernambuco. In total these projects/phases reflect more than 33,000 units.

Table 26 – Tenda Segment - Landbank (R$ 000)

¹ Swap percentage over the historical cost of land acquisition.

² Potential Units are net of swaps and refer to Tenda’s and/or its partners’stake in the projects.

EARNINGS RELEASE 1Q16

 

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

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

New Model Update and Turnaround

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

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

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

Table 28. Tenda – New Model Monitoring 2013 - 2016

EARNINGS RELEASE 1Q16

Financial Result Revenues

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

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