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 2Q16

 

pre-sales while the Tenda segment represented the remaining 71%. Consolidated adjusted gross profit totaled R$138.3 million with a gross margin of 29.2%, which resulted from a partial recovery in the Gafisa segment’s operating profitability in the period. In 1H16, adjusted gross profit totaled R$248.5 million, with a gross margin of 28.3%. In the current economic environment, the Company’s main focus is on greater stability in its cost and expense structure. Selling, general and administrative expenses were R$82.2 million in 2Q16, stable y-o-y and down 8.3% q-o-q, reflecting the Company’s efforts in efficiently answering to the adjustments and movements of the real estate market, so that to allow a structure of costs and expenses aligned to current scenario. As a result of these factors, Gafisa reported a 2Q16 consolidated net loss of R$38.5 million, compared to a loss of R$53.2 million recorded in 1Q16 and net income of R$28.5 million in 2Q15. At the end of the first six months, the Net Debt/Shareholders’ Equity ratio reached 48.5%, a slight increase compared to 1Q16, although in line with the

Company’s business plan. Excluding project finance, the Net Debt/Shareholders’ Equity ratio was negative at 9.8%. Consolidated operating cash generation reached R$38.2 million in the quarter, ending the period with a net cash burn of R$32.5 million. In 6M16, the net cash burn totaled R$4.2 million. It is worth noting that in 1H16, the Company’s cash generation was impacted by the decreased volume of deliveries in the Gafisa segment, which we expect to improve on in the second semester of the year. We will maintain this conservative approach in this second half of 2016, seeking to balance the placement of new products on the market, prioritizing those with higher liquidity, in order to reach adequate sales and profitability levels. The Gafisa segment, through its balanced performance, seeks to manage the effects of this period of economic weakness. The Tenda segment is ready to expand the volume of new projects, backed by the resilience of the low-income market, sustained demand, and the positive results from new model projects. 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 2Q16

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 Adjustment) method according to Law 11.638.

4)    Cash and cash equivalents,  and titles and securities.

5)    Backlog results include ventures that are subject to restriction due to a suspensive clause.

EARNINGS RELEASE 2Q16

FINANCIAL RESULTS

§  2Q16 net revenue recognized by the “PoC” method was R$212.6 million in the Gafisa segment and
R$260.7 million in the Tenda segment. This resulted in 2Q16 consolidated revenue of R$473.3 million, a decrease of 20.0% year-on-year and an increase of 16.7% from the previous quarter. In 6M16, consolidated net revenue was R$878.9 million, a reduction of 20.9% compared with 6M15.

§  Adjusted gross profit for 2Q16 was R$138.3 million, higher than R$110.2 million in 1Q16 and lower than R$200.4 million recorded in the past year. Adjusted gross margin reached 29.2%, compared to 27.2% in 1Q16 and 33.9% in the 2Q15. The Gafisa segment accounted for an adjusted gross profit of R$65.3 million, with an adjusted gross margin of 30.7%, while the Tenda segment accounted for an adjusted gross profit of R$73.0 million, with a margin of 28.0%. In the first half of the year, adjusted gross profit was R$248.5 million with adjusted gross margin of 28.3%, compared to R$379.7 million in 1H15.

§  Consolidated Adjusted EBITDA was R$22.4 million in 2Q16, with an adjusted EBITDA margin of 4.7%. The Gafisa segment reported adjusted EBITDA of R$12.5 million, while the Tenda segment’s adjusted EBITDA was R$21.8 million. In 1H16, consolidated Adjusted EBITDA was R$37.9 million, 78% lower than R$169.2 million in 1H15. 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 a 2Q16 net loss of R$38.5 million compared to a net loss of R$53.2 million in 1Q16, and net profit of R$28.5 million in 2Q15. The Gafisa segment reported a net loss of R$47.1 million, while the Tenda segment reported a net profit of R$8.6 million. In the 1H16, the Company reported a consolidated net loss of R$91.7 million.

§  Operating cash generation totaled R$38.2 million in 2Q16, finishing the quarter with cash generation of R$134.9 million. Cash burn in the quarter was R$32.5 million, with an accumulated cash burn of R$4.2 million in 6M16.

.

OPERATING RESULTS

§  Total Company launches were R$545.0 million in 2Q16, comprised of 14 projects in the states of São Paulo, Rio de Janeiro, Minas Gerais, Bahia and Rio Grande do Sul, up from R$482.0 million launched in 2Q15. The Gafisa segment accounted for 24% of the quarter’s launches, while the Tenda segment accounted for the remaining 76%. First half 2016 launches totaled R$853.7 million.

§  Net pre-sales totaled R$454.5 million in 2Q16, an increase of 36.4% from the R$333.3 million recorded in 1Q16 and 14.6% lower y-o-y. The Gafisa segment accounted for R$129.5 million and the Tenda segment for R$325.0 million in 1Q16. Consolidated sales from launches in the quarter represented 18.6% of the total, while sales from inventory comprised the remaining 81.4%. The Company reached R$787.9 million in net pre-sales in the first six months of the year.

§  Consolidated sales over supply (SoS) reached 13.9% in 2Q16 compared to 10.6% in 1Q16 and 15.9% in 2Q15. On a trailing 12-month basis, Gafisa’s SoS was 26.5%, while Tenda’s SoS was 54.2%.

§  Consolidated inventory at market value remained stable in 2Q16, at R$2.8 billion. Gafisa’s inventory ended the quarter at R$1.9 billion, while Tenda’s inventory totaled R$906.3 million.

§  Throughout the second quarter, the Company delivered 14 projects/phases, totaling 3,136 units, accounting for R$687.7 million in PSV. In regards tp the first six months, the company delivered 19 projects/phases and 3,791 units, accounting for R$854.2 million in PSV.

EARNINGS RELEASE 2Q16

ANALYSIS OF RESULTS

Gafisa Segment

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

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

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 Adjustment) method according to Law 11.638.

4)      Backlog results include ventures that are subject to restriction due to a suspensive clause.

The uncertainty in Brazil’s economic and political environment negatively impacted demand in the mid-high income segment and continued to hurt the Gafisa segment’s operational performance. Despite a greater share of projects launched before 2015 in the 2Q16 gross sales mix (68.7% of gross sales), the high volume of dissolutions related to these projects (95.2% of dissolutions in the quarter) ended up concentrating part of the net volume of sales from inventory of more recent projects. Thus, revenues in the quarter were impacted again for the following items: (i) lower volume of net sales in the period; and (ii) higher concentration of net sales in projects with slower evolution of work progress.

The Gafisa segment ended 2Q16 with a gross margin of 12.3% compared to 25.9% in 2Q16 and 2.0% in the past quarter, reflecting a modest rebound from 1Q16. 2Q16 was still impacted by dissolutions related to commercial projects (R$28.4 million – 21.4% of total PSV dissolutions) and due to the effects of pricing pressure related to the resale of cancelled units. Adjusted Gross Margin reached 30.7% in the quarter and 26.4% in the first half of the year.

In 2Q16 the Gafisa segment maintained a level of SG&A expenses more in line with the current level of the business cycle and market demand, posting a y-o-y reduction of 21.2% and ending 1H16 down 10.6% from 1H15.

EARNINGS RELEASE 2Q16

Net Income

Net loss for the period was R$47.1 million compared to a loss of R$58.0 million in 1Q16 and a profit of R$8.5 million in 2Q15. Excluding the net loss from Alphaville equity income, which totaled R$12.0 million in the quarter, the Gafisa segment reported a 2Q16 net loss of R$35.1 million, compared to a net loss of R$68.9 million in 1Q16 and net profit of R$3.3 million in 2Q15. In 1H16, the Gafisa segment posted a net loss of R$104.0 million.

 As previously stated, this was due to the following items: (i) volume and mix of net sales in the period, and (ii) the effect of the negative contribution of AUSA equity income, due to the lower operating volume (launches and sales), reflecting on the quarter's revenue level and also to AUSA’s net financial result, impacted by the higher cost of debt, compared to the previous year.In 1H16, net loss including Alphaville reached R$105.1 million.

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

EARNINGS RELEASE 2Q16

Tenda Segment

Operating and Financial Profitability Supported
by Increased Scale and the Improved Performance of the New Model

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

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 Adjustment) method according to Law 11.638.

4) Backlog results include ventures that are subject to restriction due to a suspensive clause.

During 2Q16, the Tenda segment continued to scale its operations, supported by positive demand levels, which stimulated sales and launches.

Adjusted gross margin went down to 28.0% in the second quarter, compared to 31.7% in the 1Q16 and 30.1% in the previous year, as a result of the completion of the receivables portfolio revision, started in 4Q15, which resulted in additional provisioning of R$14.6 million in 2Q16. In April, as a result of major credit constraints, Tenda chose to be more flexible in its discount policy as an initiative to recover sales volume. This initiative was a one-off situation that normalized in subsequent months.

                Selling, general and administrative expenses ended the 1H16 at R$79.7 million, 18.9% higher than 1H15, but in line with the expansion of Tenda’s operations; launch volume increased by 37.5% in 6M16, compared to the same period last year.

Adjusted EBITDA totaled R$21.9 million, with adjusted EBITDA margin of 8.4% in 2Q16. Adjusted EBITDA increased from R$15.2 million in 2Q15 and decreased from R$22.8 million in 1Q16.

EARNINGS RELEASE 2Q16

Net Income

The Tenda segment’s 2Q16 net income was R$8.6 million, up from net income of R$4.8 million recorded in 1Q16 and down from net income of R$20.0 million in 2Q15. In 6M16, net income was R$13.4 million.

The 2Q16 results are attributable to: (i) higher volume of revenues, mitigating the effect of the lower gross margin; and (ii) a lower impact from Other Operating Revenues/Expenses.

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

EARNINGS RELEASE 2Q16

RECENT EVENTS

UPDATE SHARE BUYBACK PROGRAM

Referring to the current share buyback program, through July 11, 2016, the Company has acquired 4.5 million shares or 55% of the total amount authorized, with a maximum amount of 8,198,565 shares. It is worth mentioning that the Company reaffirms its commitment to capital discipline. The execution of the program is conditional on the maintenance of Gafisa’s Consolidated Net Debt to Equity ratio at 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 traded. 

UPDATE ON THE SEPARATION PROCESS OF THE GAFISA AND TENDA UNITS

In 2016, the Company has continued working on the potential separation of the Gafisa and Tenda business units. Since studies began in February 2014, several activities have been undertaken to enable these two business units to become more independent, both from an operational viewpoint and in terms of capital structure. As previously informed via Material Fact, such procedures are still in progress, but are taking more time to complete than initially planned.

                The Company will keep its shareholders and the market informed about the process and any developments pertaining to the issues mentioned above.

EARNINGS RELEASE 2Q16

 

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

Operating Results | Launches and Pre-Sales

Second quarter launches totaled R$130.4 million and consisted of 2 projects/phases in São Paulo. The sales speed of these launches reached 21.0%. In 6M16, the Gafisa segment reached R$210.5 million in launches or 23.9% of consolidated launches.

Second quarter gross pre-sales in the Gafisa segment totaled R$262.0 million. Dissolutions in 2Q16 were R$132.5 million, yielding total net pre-sales of R$129.5 million, up 93.8% q-o-q and down 46.5% y-o-y. Out of total dissolutions in the quarter, 21.5% were related to corporate projects, while residential dissolutions corresponded to the remaining 78.5%. In 1H16, net pre-sales totaled R$196.4 million.

Despite headwinds in Brazil’s political and economic scenario, the segment was capable of achieving an improved performance in 2Q16 relative to the previous quarter. Gross sales totaled R$262.0 million, 10.5% higher than the previous quarter. The slight improvement in sales performance from 1Q16 signals a marginal improvement in the consumer environment and a potentially improving scenario in 2H16. Another positive trend in 2Q16 was the lower volume of dissolutions compared to 1Q16, which returned to average levels posted in 2015.

As a main operational guideline for the year, the Company continues to focus its efforts on the sale of remaining units. As a result, 77.6% of net sales for the period were related to projects with launches before 2016. The dissolutions, in turn, were concentrated in the units launched prior to 2014, impacting the level of revenue in the period.

EARNINGS RELEASE 2Q16

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

Sales over Supply (SoS)

The Gafisa segment’s SoS for the last twelve months reached 26.5% compared to 27.7% in the same period last year. In the 2Q16, SoS was 6.3% compared to 3.3% in 1Q16 and 10.5% in 2Q15.

Dissolutions

The weak economic conditions observed in 2016 and the strong recession have directly impacted consumer confidence and, accordingly, the level of gross sales and dissolutions. Due to the challenging operating environment, the level of dissolutions in the Gafisa segment reached R$132.5 million in 2Q16, down sequentially compared to R$170.3 million in 1Q16 and up from R$115.6 million in 2Q15. In 1H16, the total volume of dissolutions was R$302.8 million.

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. Given the current economic uncertainties and corresponding effects on the real estate market, the reduction in dissolutions has been slower than expected.

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 an unfavorable economic environment. As an example of the efficiency achieved in this process, only 9.2% of those who asked for transfers in 1H16 have been rejected by the bank’s credit analysis. (i.e. out of the 656 units asking for transfers, only 60 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 1H16, R$56.2 million of new sales were made to clients who opted for swaps.

In the quarter, 243 Gafisa units were cancelled and 143 units, representing R$73.4 million, were already resold within the period. In 1H16, 500 units were cancelled, with the resale of 259 units in the same period, or R$135.3 million.

EARNINGS RELEASE 2Q16

Inventory

Gafisa is maintaining its focus on inventory reduction initiatives. Projects launched prior to 2016 represented 72.3% of net sales in the period. The market value of the Gafisa segment’s inventory decreased by 3.1% q-o-q, and 7.8% y.o.y, totaling R$1.9 billion. The reduction reflects current market conditions, the effect of sales income in the period, as well as pricing adjustments on some inventory projects. Finished units outside of core markets accounted for R$51.2 million, or 2.7% 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$451.2 million, or 23.6% of total inventory. Inventory from projects launched outside core markets, which is comprised exclusively of finished units, represented R$51.2 million, a decrease of 51.5% when compared to R$105.4 million in 2Q15 and down 9.2% from 1Q16. 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 46% or R$869.7 million, is concentrated in projects to be delivered after 2Q17 and will not significantly increase the segment’s inventory of finished units in the short term.

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

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

Inventory Delivery Schedule

EARNINGS RELEASE 2Q16

Landbank

The Gafisa segment landbank, with a PSV of R$5.6 billion, is comprised of 34 land parcels, representing 45 potential projects/phases, and corresponding to nearly 11.1 units. 69% of potential projects/phases are located in São Paulo and 31% are located in Rio de Janeiro. The largest portion of land acquired through swap agreements is located in Rio de Janeiro, impacting the total percentage of land acquired through swaps, to a total of 57.3%.

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 (1Q16 x 2Q16 - R$ 000)

In 2Q16, the Company acquired a new parcel with PSV potential of R$66.7 million and an acquisition cost of R$15.7 million. It was financed by 100% cash and an initial disbursement of R$5.0 million. The disbursement schedule is subject to the launch.

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

Gafisa Sales

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

Gafisa Vendas currently has a team of 579 highly trained, dedicated consultants, in addition to an online sales force.

Gafisa Segment Delivered Projects

During 2Q16, 4 projects/phases totaling 1,241 units were delivered, accounting for R$412.3 million in PSV. In 6M16, 6 projects/phases totaling 1,432 units were delivered, accounting for R$517.1 million in PSV. Currently, Gafisa has 25 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 in a 90-day period after the delivery of the project. In accordance with this policy, transfers totaled R$142.7 million in PSV in the second quarter.

EARNINGS RELEASE 2Q16

Table 11 – Gafisa Segment – Delivered Projects

1) PSV refers to potential sales value of the units transferred to financial institutions.

2) PSV = Potential sales value of delivered units.

EARNINGS RELEASE 2Q16

2Q16 net revenues for the Gafisa segment totaled R$212.6 million, up 24.4% q-o-q and down 39.0% y-o-y, as a result of higher sales volume compared to 1Q16 and the sales mix, with a higher concentration of projects launched from 2015. In 1H16, net revenue reached R$383.6 million.

In the quarter, 100% of Gafisa segment revenues were derived from projects located in Rio de Janeiro and São Paulo. The table below provides additional details.

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

Gross Profit & Margin

2Q16 gross profit for the Gafisa segment was R$26.1 million, up from R$3.5 million in 1Q16, and down from R$90.3 million in the prior year period, due to a lower top line result. Gross margin in the quarter reached 12.3%, higher q-o-q, but still negatively impacted by the higher volume of dissolutions, mainly those related to corporate projects (R$28.4 million – 21.4% of total PSV cancelled) and the effect of pricing differences. Excluding financial impacts, adjusted gross margin reached 30.7% in 2Q16 compared to 21.0% in 1Q16 and 36.5% in 2Q15.

The table below contains more details on the breakdown of 2Q16 Gafisa’s gross margin.

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

EARNINGS RELEASE 2Q16

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

Selling, General and Administrative Expenses (SG&A)

SG&A expenses totaled R$39.8 million in the 2Q16, down 21.2% y-o-y and 9.1% q-o-q. In the 6M16, these expenses totaled R$83.5 million, 10.6% down from the R$93.4 million in the past year.

While selling expenses decreased 11.9% compared to 2Q15, they increased 20.9% from 1Q16, due to an increased level of launch volumes and higher required sales and marketing investments to stimulate demand. Year-to-date, the sales expenses remained stable compared to 6M15.

The segment’s general and administrative expenses reached R$19.5 million in 2Q16, a decrease of 28.9% compared to the previous year and 27.7% compared to 1Q16. In the quarter, and as an effect of the current market moment, the Company has not provisioned any amount related to profit sharing. In the 6M16, G&A expenses reached R$46.5 million compared to R$56.4 million in 6M15, a decrease of 17.4%.

The improved balance in the Gafisa segment’s SG&A levels reflects the Company's commitment to improving operational efficiency and achieving a level of costs and expenses that is more in line with the current economic outlook.

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

Other Operating Revenues/Expenses reached R$19.0 million in 2Q16, a decrease of 11.3% compared to 2Q15, and an increase of 30.1% compared to 1Q16.

The Company continues to be proactive in mitigating risks associated with potential contingencies.

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

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

EARNINGS RELEASE 2Q16

A higher volume of deliveries over the past three years, due to the delivery of delayed projects in legacy regions, led to an increase in the level of contingencies. The Gafisa segment has since concentrated its operations on the metropolitan regions of São Paulo and Rio de Janeiro. This 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 was R$12.5 million in 2Q16, an improvement from the negative R$18.1 million in 1Q16 and lower than the R$52.4 million recorded in 2Q15. Year-to-date adjusted EBITDA was negative R$5.6 million compared to the positive result of R$110.7 million in 6M15. 2Q16 Adjusted EBITDA was impacted year-over-year by the following factors: (i) lower revenue in the quarter due to the volume and sales mix; and (ii) decreased gross margin level in 2Q16. As a reminder, adjusted EBITDA for the Gafisa segment does not include equity income from Alphaville.

The adjusted EBITDA margin reached 5.9% in 2Q16, compared to 15.0% in 2Q15, and a negative margin of 10.6% in 1Q16. The adjusted EBITDA margin for the 6M16 was negative 1.5%.

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$134.0 million in 2Q16. The consolidated margin was 36.6% in the quarter, compared to 39.9% posted in last year’s second 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 Adjustment) method according to Law 11.638

² Backlog results include ventures that are subject to restriction due to a suspensive clause.

EARNINGS RELEASE 2Q16

 

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

Operating Results | Launches and Sales

Second quarter launches totaled R$414.7 million and included 12 projects/phases in the states of São Paulo, Rio de Janeiro, Minas Gerais, Bahia and Rio Grande do Sul. The Tenda segment accounted for 76.1% of launches in the quarter. In the first half of the year, the launch volume reached R$643.2 million.

During 2Q16, gross sales reached R$382.9 million and dissolutions were R$57.9 million, resulting in total net pre-sales of R$325.0 million, 21.9% higher than the last quarter and 12.1% higher y-o-y. 

In the 6M16, the volume of dissolutions was R$104.2 million and net pre-sales totaled R$591.5 million. In 6M16, 74.4% of total net sales were related to remaining units.

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

EARNINGS RELEASE 2Q16

Sales Over Supply (SoS)

In 2Q16, sales velocity (sales over supply) was 26.4%, and on a trailing 12-month basis, Tenda’s SoS was 54.2%.

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

Dissolutions

The level of dissolutions in the Tenda segment totaled R$57.9 million in 2Q16, an increase of 7.8% compared to 2Q15 and 25.3% compared to 1Q16, in line with the increasing 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 15.1%, despite the 58.5% of the legacy projects in this quarter’s total volume of dissolutions.

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

EARNINGS RELEASE 2Q16

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

During the quarter, 392 units were cancelled and returned to inventory, of which 238 units were resold to qualified customers during the same period. The sale and transfer process plays an important role in Tenda’s business model. It is expected that within a 90-day period, the effective sale and transfer process will be completed.

Tenda Segment Transfers

In the 2Q16, 2,051 units were transferred to financial institutions, representing R$261.6 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 2Q16, Tenda delivered 10 projects/phases and 1,895 units, accounting for a PSV of R$275.4 million. In 6M16, 13 projects/phases and 2,359 units were delivered, accounting for R$337.1 million in PSV.

Inventory

The market value of Tenda’s inventory was R$906.3 million at the end of the 2Q16, up 6.7% compared to R$849.1 million at the end of 1Q16. Inventory related to the legacy units totaled R$160.6 million or 17.7% of the total Tenda inventory, down 12.6% versus 1Q16 and 58.9% compared to 2Q15. During the quarter, inventory units within the Minha Casa Minha Vida program totaled R$882.3 million, or 97.3% of total inventory, while units outside the program totaled R$24.0 million, a decrease of 28.8% q-o-q and of 83.0% y-o-y.

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.

EARNINGS RELEASE 2Q16

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

1) Inventory at market value includes projects in partnership. This index 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 inventory projects, the Tenda segment is still awaiting legal approval for a suspended project with a total PSV of R$59.8 million to move forward with construction.

Tenda Segment Landbank

The Tenda segment landbank, with a PSV of approximately R$4.4 billion, is comprised of 130 different projects/phases. Out of these projects/phases, 26% are located in Bahia, 23% in São Paulo, 21% in Rio de Janeiro, 15% in Rio Grande do Sul, 10% in Pernambuco and 5% in Minas Gerais.  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.

Table 27 –Tenda Segment – Changes in the Landbank (1Q16 x 2Q16 - R$ 000)