Gafisa Reports Results for 2007 Full Year and Fourth Quarter

- Full Year Adjusted Net income Rose 89% on 77% Gain in Net Revenues - Full Year Launches Increase 122% to R$2.2 Billion; Pre-sales Increase 63% to R$1.6 billion

- Company Posts 15.7% Adjusted EBITDA Margin for 2007 and Provides 2008 EBITDA Margin Guidance

- Land Bank Reaches R$10.2 Billion

SAO PAULO, Brazil, March 4 /PRNewswire-FirstCall/ -- Gafisa S.A. (Bovespa: GFSA3; NYSE: GFA), Brazil's leading diversified national homebuilder, today reported financial results for full year and fourth quarter ended December 31, 2007. The financial statements were 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 fourth quarter results filed with the Brazilian Comissao de Valores Mobiliarios ("CVM"), please visit Gafisa's website www.gafisa.com.br/ir

Full Year Results

Net operating revenue for the full year 2007, recognized by the Percentage of Completion ("PoC") method, rose 77% to R$1,172 million from R$664 million in 2006. Pre-sales for the year remained strong, growing by 63% to R$1.6 billion from R$995 million.

Project launches in 2007 totaled R$2.2 billion, an increase of 122% from R$1.0 billion in 2006. Approximately 46% of the launches for the year took place in the fourth quarter. Fit Residencial and Bairro Novo also launched their first developments during 2007 and accounted for 13% of the total launches.

The Company's land bank totaled R$10.2 billion at the end of the year and consists of 136 different sites totaling approximately 19.2 million meters. Reflecting the Company's strategy of servicing all segments and geographies of the homebuyer market, 42% of the consolidated land bank was outside the states of Rio de Janeiro and Sao Paulo.

EBITDA, adjusted for public offering expenses, increased 87% to R$183.8 million in 2007 and adjusted EBITDA margin improved to 15.7%. Net Income was R$113.6 million, an increase of 146.7% while Net Income adjusted for public offering expenses totaled R$143.8 million, up 89% from R$76.0 million in 2006.

Gafisa adopts one of the most conservative accounting standards in the industry. Starting in the fourth quarter, the Company began to capitalize the interest cost from corporate debt and recognize it on a percentage of completion basis. As a result, Gafisa now accounts for interest expense on the COGS line of its income statement which impacts gross margin.

Selling, general and administrative (SG&A) expenses were R$192.4 in 2007 versus R$103.8 in 2006. G&A represented R$113.1 million in 2007 of the total amount, up from R$52.1 million in 2006. This increase in G&A primarily reflects the Company's consolidation of AlphaVille and the ramp-up of operations at Fit and Bairro Novo.

Fourth Quarter Results

Net operating revenue for the quarter, recognized by the PoC method, was R$372.8 million, an increase of 56% from R$238.3 million during the fourth quarter of 2006. Backlog of Results to be recognized under the PoC method at the end of the fourth quarter totaled R$583 million, up 96% from R$298 million in the previous year. Backlog margin to be recognized reached 38.2%.

Project launches for the fourth quarter were up 176% from R$374.8 million in the same period last year to R$1.0 billion.

Fourth quarter EBITDA rose 101% to 61.3 million from R$30.5 in the previous year's quarter. EBITDA margin improved to 16.5%. Net Income was R$63.1 million in 4Q07, versus R$14.8 million in the fourth quarter of 2006.

Commenting on results, Wilson Amaral, chief executive officer of Gafisa S.A., said, "Through our disciplined and professional approach, Gafisa delivered strong results in 2007, expanded its reach both geographically and across socioeconomic segments, as well as built a strategic platform to support future growth initiatives. Gafisa, AlphaVille, Fit Residencial and Bairro Novo are all substantially established with dedicated teams specializing in meeting the needs of the specific socioeconomic segments they serve within 40 cities across Brazil. "

"As one of the most geographically diversified homebuilder, offering products for every socioeconomic segment, we are well-positioned to remain an innovator and leader in the marketplace. Our land bank has reached R$10.2 billion encompassing 136 different sites. Pre-sales, a strong indicator of Gafisa's ability to deliver the appropriate product to consumers, grew 63%, reaching R$1.6 billion in 2007, while launches increased to R$2.2 billion, representing growth of 122% compared to the prior year. Based on our current market outlook, we now expect to execute R$3 billion in launches for 2008, a 34% increase over 2007. Our EBITDA margin for the year reached 15.7%, which we now anticipate will grow to between 16% and 17% by the end of 2008."

Commenting on the outlook for growth in the industry, Amaral said, "Looking ahead, the outlook for continued growth in the Brazilian residential housing industry remains strong for years to come. With a current housing deficit of almost 8 million homes and the need for around two million new units per year, the demand for housing is as robust as ever. And, while over R$25.3(1) billion in housing credit was granted during 2007, the demand for housing continues to far exceed the growth in available credit. We made important strides throughout the year in partnering with the public and private banking industry to innovate and accelerate access to credit for all socioeconomic groups while also creating a model that improved our own working capital structure. Going forward we will continue to make it a priority to work hand in hand with the banking sector to increase access to mortgages and address the vast demand for financing particularly in the lower income sectors of the market.

"Responding to the demand for housing in the lower income segments, I was pleased that we could announce the launch of our first Bairro Novo development in December, months ahead of its planned schedule. Additionally, Fit Residencial has launched ten developments since its establishment at the end of March, and we are seeing strong consumer acceptance. Fit has already developed the five prototypes for future projects and has substantially completed building out its corporate infrastructure.

"Finally, the strong demand for our shares this past year has resulted in Gafisa's inclusion on the Bovespa Index (Ibovespa) and the IBrX-50, as well as the MSCI Emerging Markets Index. We also strengthened our commitment to transparency and excellence in corporate governance, and we have a majority of independent directors on the board. Gafisa is well-positioned to address the rapidly expanding Brazilian housing market. The initiatives we established in 2007 will enable us to deliver strong business results long into the future while increasing returns to our shareholders."

Outlook

For 2008, Gafisa reiterates its launch guidance of R$3 billion by the end of 2008 for its share of consolidated launches. Approximately R$2 billion is expected to come from Gafisa, R$300 million from AlphaVille and R$700 million from Bairro Novo and Fit Residencial.

Based on the current market outlook, the Company expects the EBITDA margin to be between 16% and 17% for the full year 2008.

Conference Call

The management of Gafisa will host a conference call in English on Wednesday, March 5, 2008, at 10:00 a.m. US EST/12:00 p.m. Brasilia time. To access the call, dial +1 (973) 935-8893 and enter the code # 34871359. A replay of the conference call will be available until March 12, 2008. To access the replay, dial above mentioned numbers. 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 almost 40 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.

(1) Source: ABECIP, Central Bank of Brazil, CEF and FGV.

Investor Relations:
Duilio Calciolari
CFO and IR Officer
Phone: +55 11 3025-9297
Email: ir@gafisa.com.br
Website: www.gafisa.com.br/ir

Media Relations (US - Europe)
Eileen Boyce
Reputation Partners
Phone: +011 312 222 9126
Fax: +011 312 222 9755
E-mail: eileen@reputationpartners.com

Media Relations (Brazil)
Joana Santos
Maquina da Noticia
Phone: +55 11 3147-7900
Fax: +55 11 3147-7900
Email: joana.santos@maquina.inf.br

Consolidated Statements of Income

4Q07 x 4Q07 x
R$ 000 4Q07 4Q06 3Q07 4Q06 3Q07
Gross Operating Revenue
Real State development and
sales 366,678 250,112 309,373 46.6% 18.5%
Construction and services
rendered 14,766 2,444 11,414 504.1% 29.4%

Deductions (8,689) (14,269) (12,232) -39.1% -29.0%

Net Operating Revenue 372,755 238,287 308,555 56.4% 20.8%

Operating Costs (238,269) (170,931) (215,822) 39.4% 10.4%

Gross profit 134,486 67,356 92,733 99.7% 45.0%

Operating Expenses
Selling expenses (31,101) (16,085) (18,941) 93.4% 64.2%
General and administrative
expenses (38,753) (22,533) (28,173) 72.0% 37.6%
Equity Income -- -- -- -- -- Other Operating Revenues (3,304) 1,783 2,230 -285.4% -248.2%

EBITDA 61,328 30,521 47,849 100.9% 28.2%

Depreciation and
Amortization (2,259) (1,651) (1,986) 36.9% 13.7%

EBIT 59,069 28,870 45,863 104.6% 28.8%

Financial Income 20,186 12,267 11,543 64.6% 74.9%
Financial Expenses 9,016 (23,036) (14,959) -139.1% -160.3%

Income before taxes on
income 88,271 18,100 42,447 387.7% 108.0%

Deffered Taxes (16,137) (1,703) (1,987) 847.7% 712.1%
Income tax and social
contribution (6,865) (1,600) (6,744) 329.0% 1.8%

Income after taxes on
income 65,269 14,797 33,716 341.1% 93.6%

Minority Shareholders (2,189) -- (2,777) -- -21.8%

Net income 63,080 14,797 30,939 326.3% 103.9%
Adjusted net income per
thousand shares
outstanding 0.49 0.14 0.24 240.8% 103.3%

R$ 000 2007 2006 2007 x 2006
Gross Operating Revenue
Real State development and sales 1,182,571 675,999 74.9%
Construction and services rendered 35,121 21,480 63.5%

Deductions (45,518) (33,632) 35.3%

Net Operating Revenue 1,172,174 663,847 76.6%

Operating Costs (796,914) (465,795) 71.1%

Gross profit 375,260 198,052 89.5%

Operating Expenses
Selling expenses (79,378) (51,670) 53.6%
General and administrative expenses (113,054) (52,121) 116.9%
Equity Income -- -- -- Other Operating Revenues 973 3,958 -75.4%

EBITDA 183,801 98,219 87.1%

Depreciation and Amortization (14,823) (4,302) 244.6%
Extraordinary expenses (30,174) (29,894) 0.9%

EBIT 138,804 64,023 116.8%

Financial Income 49,446 52,989 -6.7%
Financial Expenses (35,291) (64,932) -45.6%

Income before taxes on income 152,959 52,080 193.7%

Deffered Taxes (18,729) (1,393) 1244.5%
Income tax and social contribution (12,217) (4,631) 163.8%

Income after taxes on income 122,013 46,056 164.9%

Minority Shareholders (8,410) -- --
Net income 113,603 46,056 146.7%
Adjusted net income per thousand
shares outstanding 1.15 0.76 51.1%

4Q07 x 4Q07 x
R$ 000 4Q07 4Q06 3Q07 4Q06 3Q07
ASSETS
Current assets
Cash and banks 79,590 45,231 30,454 76.0% 161.3%
Financial investments 434,857 220,928 341,638 96.8% 27.3%
Receivables from clients 524,818 365,741 485,989 43.5% 8.0%
Properties for sale 774,908 377,576 666,150 105.2% 16.3%
Other accounts
receivable 101,920 111,600 119,062 -8.7% -14.4%
Deferred selling
expenses 37,023 17,032 29,136 117.4% 27.1%
Prepaid expenses 8,824 5,446 7,921 62.0% 11.4%
1,961,940 1,143,554 1,680,350 71.6% 16.8%
Long-term assets
Receivables from clients 497,933 194,097 384,934 156.5% 29.4%
Properties for sale 149,403 63,413 42,965 135.6% 247.7%
Deferred taxes 61,322 53,134 77,316 15.4% -20.7%
Other 42,797 29,329 42,738 45.9% 0.1%
751,455 339,973 574,953 121.0% 37.1%
Permanent assets
Investments 209,689 2,544 167,574 8142.5% 25.1%
Properties and equipment 27,409 8,146 21,396 236.5% 28.1%
237,098 10,690 188,970 2117.9% 25.5%

Total assets 2,950,493 1,494,217 2,417,273 97.5% 22.1%

LIABILITIES AND
SHAREHOLDERS' EQUITY
Current liabilities
Loans and financings 59,526 17,305 31,731 244.0% 87.6%
Debentures 9,190 11,038 2,043 -16.7% 349.8%
Real estate development
obligations -- 6,733 4,168 -- -- Obligations for purchase
of land 163,034 120,239 166,286 35.6% -2.0%
Materials and service
suppliers 86,709 26,683 78,655 225.0% 10.2%
Taxes and contributions 70,293 41,574 67,860 69.1% 3.6%
Taxes, payroll charges
and profit sharing 38,512 18,089 29,929 112.9% 28.7%
Advances from clients - real state and services 47,662 76,146 29,504 -37.4% 61.5%
Dividends 26,981 11,025 -- 144.7% -- Other 75,489 11,912 17,036 533.7% 343.1%
577,396 340,744 427,212 69.5% 35.2%
Long-term liabilities
Loans and financings 380,640 27,100 102,773 1304.6% 270.4%
Debentures 240,000 240,000 240,000
Obligations for purchase
of land 73,207 6,184 28,600 1083.8% 156.0%
Deferred taxes 63,268 32,259 62,407 96.1% 1.4%
Unearned income from
property sales -- 2,439 637 -- -30.1%
Other 35,733 29,107 48,129 22.9% -26.6%
792,888 337,089 482,546 135.2% 64.3%
Deferred income
Deferred income on
acquisition of
subsidiary 32,223 2,297 -- 1,308.8%

Minority Shareholders 17,223 -- 14,154 -- 21.7%

Shareholders' equity
Capital 1,221,846 591,742 1,220,542 106.5% 0.1%
Treasury shares (18,050) (47,026) (18,050) -61.6%
Capital reserves 167,276 167,276 167,276
Revenue reserves 159,691 102,095 123,593 56.4% 29.2%
1,530,763 814,087 1,493,361 88.0% 2.5%
Total liabilities and
shareholders' equity 2,950,493 1,494,217 2,417,273 97.5% 22.1%

First Call Analyst:
FCMN Contact:

Source: Gafisa S.A.

CONTACT: Investors, Duilio Calciolari, CFO and IR Officer,
+011-5511-3025-9297, ir@gafisa.com.br; or media (US - Europe), Eileen Boyce,
Reputation Partners, +011-312-222-9126, fax, +011-312-222-9755,
eileen@reputationpartners.com for Gafisa; or media (Brazil), Joana Santos,
Maquina da Noticia, +5511-3147-7900, or fax, +011-5511-3147-7900,
joana.santos@maquina.inf.br, for Gafisa

Web site: http://www.gafisa.com.br/

2008-03-04 19:58:00 0304744 PRNEWSWIRE