FORM 6-K

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
Report of Foreign Issuer

Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934

For the month of May, 2008

Commission File Number: 001-33356

Gafisa S.A.
(Translation of registrant’s name into English)

Av. Nações Unidas No. 4777, 9th floor
São Paulo, SP, 05477-000
Federative Republic of Brazil
(Address of principal executive office)
 
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
 
Form 20-F
x
 
Form 40-F
o
 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
 
Yes
o
 
No
x
 

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
o
 
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
o
 
No
x
 

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): N/A

Gafisa Reports Results for First Quarter 2008
--- Net income Rose 103% on 63% Increase in Gross Profits ---
--- Launches Increase 91% to R$578 Million; Pre-sales Increase 97% to R$502 million ---
--- Land Bank Tops R$11 Billion ---

São Paulo, May 5, 2008 - Gafisa S.A. (Bovespa: GFSA3; NYSE: GFA), Brazil’s leading diversified national homebuilder, today reported financial results for the first quarter ended March 31, 2008. 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.

Chief Executive Officer Wilson Amaral said, “As you can imagine, we are all pleased with last week’s upgrade by S & P of Brazil’s sovereign credit to investment grade.  This will have important positive implications on the overall health of the Brazilian economy and liquidity within our debt and equity markets as more investors will now be able to participate in the strong growth potential of Brazil.

As a company, we are off to a strong start in 2008 and remain optimistic about the prospects for our sector. During what is traditionally a slower quarter for the industry, we were pleased by both the launches achieved during the first quarter, as well as the velocity of pre-sales. Gafisa has now launched and developed products in each of our newly targeted demographic segments through AlphaVille, addressing the high and mid-high income markets and Fit Residencial and Bairro Novo, targeting the lower income segments of the population. And, while we continue to expand our geographic reach and diversify our product offering to consumers, our higher-end traditional Gafisa product remains highly competitive. Indicative of the continuing demand for the Gafisa branded product, a development launched in Salvador, Bahia, in January was nearly 100% pre-sold by the end of the quarter. “

Amaral continued, “With a strong balance sheet and over R$722 million in cash, one of the best teams in the industry, and a track-record of success in on-time and within budget execution of developments, we remain well-positioned to continue our strong pace of growth throughout the year. Our land bank has reached R$11 billion and represents over 58 thousand units. Pre-sales, a strong indicator of Gafisa’s ability to meet consumer demand, grew 97% for the quarter, launches increased 91% compared to the prior year and EBITDA margin for the quarter increased to 15.9% as compared to 15.1% in the previous year’s quarter.”

Operating & Financial Highlights
IR Contact
Julia Freitas Forbes
Email: ir@gafisa.com.br
IR Website:
www.gafisa.com.br/ir

1Q08 Earnings Results
Conference Call
Tuesday, May 6, 2008
> In English
11AM EST
12AM Brasilia Time
Phone: +1 (973) 935-8893
Code: 43201887
> In Portuguese
9AM EST
10AM Brasilia Time
Phone: +55 (11) 2188-4848
Code: Gafisa

  
· Consolidated launches totaled R$577.9 million for the quarter, an increase of 91% as compared to the first quarter of 2007.
 
· Pre-sales from current launches and inventory reached R$502.3 million for the quarter, a 97% increase over 1Q07. The share of pre-sales from current launches rose 171% to R$203.6 million from R$75.1 million sequentially.
 
· Net operating revenues, recognized by the Percentage of Completion (“PoC”) method, rose 42% to R$319.5 million from R$224.3 million in 1Q07.
 
· 1Q08 EBITDA reached R$50.8 million (15.9% EBITDA margin), a 51% increase compared to adjusted EBITDA of R$33.8 million (15.1% EBITDA margin) reached in 1Q07.
 
· Net Income was R$41.6 million for the quarter (13.0% net margin) an increase of 103% compared with adjusted R$20.5 million in 1Q07. EPS in 1Q08 was R$.32, an increase of 88% compared to adjusted 1Q07.
 
· The Backlog of Results to be recognized under the PoC method reached R$665.2 million, a 79% increase over 1Q07. The Backlog Margin to be recognized reached 38.5%.
 
· Gafisa’s land bank totaled R$11.1 billion at 1Q08, representing a 94% increase over 1Q07 and 9% increase over the previous quarter.
 
· In January, Gafisa enhanced its presence in the high-end North East market through the launch of Horto Fase 2- Villagio Panamby, selling 98% of the units in the quarter.
 
· Upgrade on Fitch corporate rating to A bra (stable outlook) from A- (A minus) bra.
 
 
Page 2 of 16

CEO Commentary and Corporate Highlights for 1Q 2008
 
I am pleased to report that demand for housing continues to be very healthy. During the seasonally slower first quarter, Gafisa experienced a robust rate of pre-sales reaching R$502.3 million, almost double that of the previous year’s quarter for developments launched during the quarter as well as for existing inventory. The velocity of pre-sales remains strong and is not only indicative of the still unmet demand for housing, but also of Gafisa’s ability to develop products that consumers want. There is a huge gap in the supply available to meet the demand for affordable entry level and lower priced housing, and thus we launched Fit Residencial and Bairro Novo. Fit sales are growing quickly; in this quarter alone they reached R$80 million and were 70% higher than in the year 2007. However, there is also significant unmet demand in the higher income segments for primary housing in many areas throughout Brazil. The near sell-out -- in record time -- of our high-end development in Salvador, Bahia launched in January, clearly demonstrates this point.
 
Looking ahead, we believe that the outlook for continued growth in the Brazilian residential housing industry remains strong. Mortgages with resources from savings accounts increased by 88% in this quarter compared to the first quarter of 2007. We remain confident that the banking system will continue to accelerate the rate of access to mortgages, thus continuing to fuel our industry. There are several reasons to support this perspective: savings account balances are expected to continue to grow and regulation requires that 65% of those balances be used toward financing mortgages; even with potential increases in rates, the improved terms and tenors of loans will continue to make monthly payments affordable; and, the Selic rate does not necessarily have a direct correlation to the consumer’s mortgage rate. Finally, the Brazilian Central Bank’s decision to control inflation, resulting from stronger-than-anticipated economic activity, and the overall health of the economy will have a long-term positive impact on all consumers and their ability to continue to afford new housing.
 
Gafisa is going into 2008 with both a strong cash position and a healthy balance sheet with significant room for additional leverage, should we choose to pursue it. Based on our current outlook and performance, we are reaffirming our full-year launch guidance of R$3 Billion. We also continue to expect to achieve an EBITDA margin of between 16% and 17% for the full year. We established a powerful platform for future growth in 2007 and will work hard throughout 2008 to successfully execute this plan.
 
Wilson Amaral
CEO - Gafisa S.A.

Recent Developments
 
Fit sales reached R$80 million: In 2007 Fit sales were R$47 million, in the first quarter alone sales totaled R$80 million, reflecting the success of launches in the fourth quarter of 2007. In the São Paulo state, sales increased over four times compared to 2007. Fit now has 11 developments in 6 metropolitan areas.
 
 
The North East: With the successful launch of a high-end development, Horto Fase 2-Villagio Panamby, located in Salvador, Bahia, the Company now serves most socioeconomic segments in that region with Gafisa, AlphaVille and Fit products. While each company operates independently, they have been able to leverage the strong local relationships created by Gafisa to identify the best locations, develop highly desirable offerings and launch and execute in an efficient manner.
 
 
Gafisa Vendas expands to the North East: Gafisa established Gafisa Vendas to shore up the performance of third party sales teams and ensure sales speed and excellence. The wholly-owned Gafisa Vendas sales teams were first established in São Paulo and Rio de Janeiro, and already account for 43% and 34% of sales in these markets, respectively. Based on a rapid track record of success, this model is now expanding to the North East.
 
Bairro Novo starts construction: Bairro Novo Cotia, phases 1 and 2, launched in December 2007, started construction this quarter. It is on track for planned delivery and by the end of March had completed 11% of the development.
 
Page 3 of 16
 
Conservative Accounting Practices: During the fourth quarter of 2007, the Company began capitalizing interest cost from corporate debt and to recognize it on a percentage of completion basis. Interest expense is now included on the COGS line of the income statement. This, as well as Gafisa’s practice of deferring only the selling expenses that are associated with the showrooms, while recognizing revenues on a Percentage of Completion (PoC) basis, is now fully reflected in the Company’s quarterly earnings statements and represents one of the most conservative stances in accounting practices in the industry.
 
Potential Financing Program: Recently, the Company submitted an initial filing with the CVM for a potential R$1 billion debenture program. We are in the process of registering the first tranche, of R$200 million.
 
Operating and Financial Highlights (R$000)
  
1Q08
  
1Q07 1
  
Change
      
4Q07 2
  
Project Launches (% Gafisa)
    
577,888
   
303,146
   
91
%
        
1,036,382
 
Project Launches (100%)
    
796,896
    
345,275
    
131
%
        
1,279,371
  
Project Launches (Units) (100%)
    
2,105
    
1,817
    
16
%
        
6,757
  
Project Launches (Units) (% Gafisa)
    
1,493
    
1,562
    
(4
%)
        
4,975
 
Pre-Sales (% Gafisa)
    
502,260
   
254,503
   
97
%
        
662,412
 
Sales from current project launches (% Gafisa)
    
203,621
    
75,161
   
171
%
        
569,080
 
Sales from inventory (% Gafisa)
    
298,639
    
179,342
   
67
%
        
93,332
 
Pre-Sales (100%)
    
716,111
    
306,513
    
134
%
        
804,835
  
Pre-Sales (Units) (100%)
    
2,789
    
1,186
    
135
%
        
3,726
  
Pre-Sales (Units) (% Gafisa)
    
2,040
    
959
    
113
%
        
2,092
  
Average Sales Price (R$/sq.m) (excluding lots)
    
2,923
    
2,854
    
2
%
        
2,765
 
                                 
Net Operating Revenues
    
319,482
   
224,316
   
42
%
        
372,755
 
Gross Profits
    
106,996
   
65,527
    
63
%
        
131,266
 
Gross Margin
    
33.5
%
  
29.2
%
  
430
   
bps
    
35.2
%
EBITDA
    
50,770
    
33,778
    
51
%
        
58,108
  
EBITDA Margin
    
15.9
%
  
15.1
%
  
8
   
bps
    
15.6
%
Extraordinary Expenses
   
-
    
(30,174
)
  
-
   
 
    
-
  
Net Income
    
41,646
    
20,547
    
103
%
        
66,952
  
Net Margin
    
13.0
%
  
9.2
%
  
380
    
bps
    
18.0
%
Earnings per Share (R$)
    
0.32
    
0.17
    
88
%
        
0.52
  
Average number of shares, basic
   
129,455,361
    
124,396,957
    
4
%
        
129,281,029
 
 
                        
Backlog of Revenues (R$million)
    
1,726
    
986
   
75
%
        
1,527
 
Backlog of Results (R$ million)
    
665
    
372
   
79
%
        
583
 
Backlog Margin
    
38.5
%
  
37.7
%
  
80
    
bps
    
38.2
%
 
                        
Net Debt (Cash)
    
368,582
    
(265,403
)
  
-
          
174,909
 
Cash
    
722,385
    
621,252
    
16
%
        
514,447
 
Shareholders’ Equity
    
1,572,534
    
1,424,322
    
10
%
        
1,530,763
 
Total Assets
    
3,611,764
    
2,241,757
    
61
%
        
2,950,493
 

Notes:    1 1Q07 adjusted for follow-on offering and capitalized interest.
2 4Q07 adjusted for PIS/COFINS + Eldorado and capitalized interest.
 
Page 4 of 16
Launches
 
Gafisa’s project launches increased 91%, from R$303 million in first quarter 2007 to R$578 million in first quarter 2008. Following our strategy of diversification into high-potential, less explored markets, in the first quarter of 2008 new markets share of the total increased to 38% - during 2007 33% of our launches came from new markets. Launches in new markets increased 266% compared to the first quarter of 2007. We maintain our goal of growth in the affordable entry level segment, and are developing a strong pipeline for FIT and Bairro Novo.

The tables below detail new projects launched in the first quarters of 2007 and 2008:

Table 1 - Launches per Company (Gafisa %)
1Q08
1Q07
1Q08 x 1Q07
Gafisa
PSV (R$ 000)
490,782
251,154
95%
 
Units
956
1,052
(9%)
 
R$/m²
3,334
2,519
32%
 
Area
147,188
99,705
48%
AlphaVille
PSV (R$ 000)
58,521
35,018
67%
 
Units
388
326
19%
 
R$/m²
320
233
37%
 
Area
182,748
150,029
22%
Fit Residencial
PSV (R$ 000)
28,585
16,974
68%
 
Units
149
184
(19%)
 
R$/m²
2,575
1,852
39%
 
Area
11,099
9,164
21%
Total
PSV (R$ 000)
577,888
303,146
91%
 
Units
1,493
1,562
(4%)
 
Area
341,035
258,898
32%
       
R$ 000
      
Table 2 - Launches per Region (Gafisa %)
1Q08
1Q07
1Q08 x 1Q07
Gafisa
São Paulo
251,653
75,683
233%
 
Rio de Janeiro
108,231
150,904
 (28%)
 
New Markets
130,898
24,567
433%
 
Total Gafisa
490,782
251,154
95%
AlphaVille
New Markets
58,521
35,018
67%
Fit Residencial
São Paulo
-
16,974
-
 
New Markets
28,585
-
 -
 
Total Fit Residencial
28,585
16,974
68%
Total
São Paulo
251,653
92,657
172%
 
Rio de Janeiro
108,231
150,904
(28%)
 
New Markets
218,004
59,585
266%
Total
 
577,888
303,146
91%
 
 
Pre-Sales and Sales Velocity
 
In this quarter, pre-sales almost doubled to R$502 million from R$255 million in the first quarter of 2007, reflecting the strength of our launches in the last quarter of 2007. Pre-sales reached 87% of new launches. Our diversification strategy is showing strong results, pre-sales in new markets accounted for 46% of pre-sales in the current quarter, compared to 33% of total sales in 2007. Additionally, São Paulo continues to show impressive pre-sales speeds, with a 51% total increase in this quarter over the same period in 2007.

The real estate market continues to benefit from rising consumer confidence, favorable loan terms and the strong inflow of commercial bank mortgages. This scenario is positively impacting our ability to sell our products.

The tables below set forth a detailed breakdown of our pre-sales for the first quarters of 2007 and 2008:
 
Page 5 of 16
Table 3 - Pre-Sales per Company (Gafisa %)
1Q08
1Q07
1Q08 x 1Q07
Gafisa
PSV (R$ 000)
362,372
230,198
57%
 
Units
802
785
2%
 
R$/m²
3,453
2,854
21%
 
Area (m²)
106,109
84,816
25%
AlphaVille
PSV (R$ 000)
56,951
24,305
134%
 
Units
310
174
78%
 
R$/m²
345
281
23%
 
Area (m²)
165,165
86,473
91%
Fit Residencial 2
 
PSV (R$ 000)
80,097
 -
 -
 
Units
889
 -
 -
 
R$/m²
1,756
 -
 -
 
Area (m²)
45,603
 -
 -
Bairro Novo 1 2
 
PSV (R$ 000)
2,840
 -
 -
 
Units
39
 -
 -
 
R$/m²
1,543
 -
 -
 
Area (m²)
1,841
 -
 -
Total
PSV (R$ 000)
502,260
254,503
97%
 
Units
2,040
959
113%
 
Area (m²)
318,718
171,289
86%
         
R$ 000
        
Table 4 - Pre -Sales per Region (Gafisa %)
1Q08
1Q07
1Q08 x 1Q07
  
Gafisa
São Paulo
138,232
128,365
8%
 
Rio de Janeiro
75,106
73,441
2%
 
New Markets
149,034
28,392
425%
 
Total Gafisa
362,372
230,198
57%
AlphaVille
São Paulo
2,097
236
789%
 
Rio de Janeiro
2,421
-
-
 
New Markets
52,433
24,069
118%
 
Total AlphaVille
56,951
24,305
134%
Fit Residencial 2
São Paulo
51,473
-
-
 
New Markets
28,624
-
-
 
Total Fit Residencial
80,097
-
-
Bairro Novo 1 2
São Paulo
2,840
-
-
Total
São Paulo
194,642
128,601
51%
 
Rio de Janeiro
77,527
73,441
6%
 
New Markets
230,091
52,461
339%
Total
 
502,260
254,503
97%
Note: 1 Bairro Novo figures presented in this report correspond to Gafisa’ stake of 50% in the company.
 
2 Fit Residencial and Bairro Novo recognize sales after client receives final approval from bank or CEF.
 
 
Operations
 
Gafisa now has 127 projects under development in 17 different states. With a strong track record of managing multiple construction sites spread over a wide geographic area, Gafisa is uniquely positioned to execute its aggressive launch strategy.

Fit Residencial will deliver its first project in the first semester of 2008 within the expected delivery schedule, and Bairro Novo started construction of Bairro Novo Cotia.

Land Reserves
 
Consistent with our established land bank policies, the Company owns approximately R$11.1 billion in its land bank composed of 144 different sites. The land bank totals 16.1 million square meters, equivalent to 58,791 units.
 
In accordance with our land bank diversification strategy, at the end of the quarter 42% of the consolidated land bank was outside of the Rio de Janeiro and São Paulo states. Our land bank reflects our strategy of servicing all segments of the homebuyer market. One of our goals going forward is to continue increasing Fit Residencial and Bairro Novo’s land banks aimed at the Affordable Entry Level segment and the Low Affordable Entry Level segment, respectively.
 
The table below show a detailed breakdown of our current land bank:

Page 6 of 16
Table 5 - Land Bank per Region
Future Sales
R$000 (%Gafisa)
% of Swap(1)
Usable Area
(sqm x1000)
(% Gafisa)
Potential Units
(% Gafisa)
Potential Units
(100%)
Gafisa
São Paulo
2,669
28%
1,096
7,319
8,058
 
Rio de Janeiro
1,236
21%
534
3,680
4,227
 
New Markets
2,217
74%
1,300
8,164
14,181
 
Total Gafisa
6,122
45%
2,930
19,163
26,466
AlphaVille
São Paulo
1,105
99%
3,751
6,207
14,394
 
Rio de Janeiro
131
100%
449
630
1,120
 
New Markets
1,762
98%
7,726
9,505
19,098
 
Total AlphaVille
2,998
98%
11,926
16,342
34,612
Fit Residencial
São Paulo
972
9%
526
9,859
11,887
 
Rio de Janeiro
79
0%
46
854
1,019
 
New Markets
350
6%
174
2,669
4,297
 
Total Fit
1,401
7%
746
13,382
17,203
Bairro Novo
São Paulo
48
0%
30
690
1,380
 
Rio de Janeiro
230
81%
197
3,746
7,492
 
New Markets
337
89%
266
5,468
10,935
 
Total Bairro Novo
615
78%
493
9,904
19,807
Total
 
11,136
81%
16,095
58,791
98,088

(1)  
% Swap refers to the swap portion over total land costs.
 
2008 and 2007 Capitalized Interest
 
Targeting best accounting practices, in 4Q07 we began to capitalize interest cost from corporate debt (mostly raised in 2007) and to recognize it on a percentage of completion basis. Accordingly, since 4Q07 we account for interest expenses on the COGS line of our income statement, thus impacting our gross margin.

In our 4Q07 earnings statements, we adjusted capitalized interest for the whole year 2007 in the fourth quarter. In the table below, we show how 2007 capitalized interest allocated among the four quarters of 2007 would have affected each quarter’s income statements, to help make 1Q08 more comparable to 1Q07 and 4Q07:

Table 6 - Capitalized Interest Effect (R$000)
 
1Q08
1Q07
2Q07
3Q07
4Q07
2007
COGS
(2,749)
(2,433)
(2,600)
(3,283)
(3,220)
(11,535)
Financial Expenses
16,626
6,865
7,339
9,264
9,087
32,554
Income Taxes
(4,718)
(1,507)
(1,611)
(2,034)
(1,995)
(7,146)
             
Net Income
9,159
2,925
3,128
3,947
3,872
13,873
Earnings per share (R$)
0.07
0.02
0.02
0.03
0.03
0.11
             
Properties for Sale (Current Assets)
34,914
        
21,037
 
1Q08 - Revenues
 
Net operating revenues for 1Q08 rose 42% to R$319.5 million from R$224.3 million in 1Q07.
 
Revenues for the industry are recognized based on actual cost versus total budgeted costs of land and construction (Percentage of Completion method or PoC method) and the pre-sales portfolio is recognized in future periods even if the company has already completely pre-sold developments.
 
The table below presents detailed information of pre-sales and recognized revenues by launch year:

Table 7 - Pre-sales x Recognized revenues (R$ 000)
    
 
1Q08
  
1Q07
 
Pre-Sales
% of Total
Revenues
% of Revenues
Revenues
  
Pre-Sales
% of Total
Revenues
% of Revenues
Launched in 2008
203,621
40.5%
30,759
9.6%
  
-
-
-
-
Launched in 2007
236,750
47.1%
88,386
27.7%
  
75,161
29.5%
-
-
Launched in 2006
32,575
6.5%
119,562
37.4%
  
130,276
51.2%
63,666
28.4%
Launched in 2005
25,769
5.1%
70,129
22.0%
  
34,375
13.5%
109,353
48.7%
Launched up to 2004
3,545
0.7%
10,646
3.3%
  
14,691
5.8%
51,297
22.9%
TOTAL
502,260
100.0%
319,482
100.0%
  
254,503
100.0%
224,316
100.0%
 

 
1Q08 - Gross Profits
 
Gross profits for 1Q08 totaled R$107.0 million (adjusted R$65.5 million for 1Q07), an increase of 63%, partially reflecting continuing robust demand in sales, specially in the higher end of the market this quarter. Gross margin for 1Q08 was 33.5%, 430 basis points higher than 1Q07.
 
Page 7 of 16
1Q08 - Selling, General, and Administrative Expenses (SG&A)
 
Our growth strategy and investment in infrastructure for future growth lead to higher G&A expenses. In 1Q08, due to the ramp up of Fit Residencial and Bairro Novo and the consolidation of AlphaVille, G&A reached R$32.1 million compared to R$19.5 million in 1Q07. G&A will be diluted as we grow revenues in the future.

Table 8 - SG&A expenses
1Q08
1Q07
Selling Expenses (R$ 000)
24,047
12,006
G&A Expenses (R$ 000)
32,150
19,484
SG&A Expenses (R $000)
56,197
31,490
Selling Expenses / Launches
4.2%
4.0%
G&A Expenses / Launches
5.6%
6.4%
SG&A / Launches
9.7%
10.4%
Selling Expenses / Sales
4.8%
4.7%
G&A Expenses / Sales
6.4%
7.7%
SG&A / Sales
11.2%
12.4%
Selling Expenses / Revenues
7.5%
5.4%
G&A Expenses / Revenues
10.1%
8.7%
SG&A / Revenues
17.6%
14.0%

Gafisa has adopted conservative accounting standards, especially with regards to the recognition of selling expenses. The only selling expenses that we defer are those associated with the showrooms, and this, as previously noted, negatively impacts our EBITDA margin. As can be seen on the table below, our deferred selling expenses are low and will be amortized on a PoC basis:

Table 9 - Deferred selling expenses1
 
1Q08
1Q07
4Q07
Deferred Selling Expenses (R$ 000)
44,633
18,972
37,023
Deferred Selling Expenses / LTM Launches
1.8%
1.7%
1.7%
Deferred Selling Expenses / LTM Sales
2.4%
1.7%
2.3%
Deferred Selling Expenses / LTM Revenues
3.5%
2.5%
3.2%
¹ Current assets account
 
 
1Q08 - EBITDA
 
EBITDA for the first quarter totaled R$50.8 million, 51% higher than the R$33.8 million for adjusted 1Q07. As a percentage of net revenues, EBITDA increased from 15.1% in 1Q07 to 15.9% in 1Q08.
 
1Q08 - Depreciation and Amortization
 
Depreciation and amortization in 1Q08 amounted to R$1.8 million, compared to the R$5.1 million in 1Q07. Amortization of the acquisition of AlphaVille - R$1.5 million in 1Q08 and R$3.8 million in 1Q07 - explains most of this difference.

With regards to the amortization of the goodwill generated from the AlphaVille acquisition, we used a linear calculation for the 1Q07 and 2Q07 results, and for 3Q07 and 4Q07 this figure was equal to zero. As explained in the 2007 Earnings Release, from 1Q08 on we will amortize this goodwill through a progressive exponential calculation following the EBIT, in the percentages described below:

Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
4.49%
6.28%
7.22%
10.11%
11.52%
14.02%
11.78%
11.67%
11.45%
11.46%
Page 8 of 16

1Q08 - Financial Results
 
Net financial results totaled R$6.2 million in 1Q08 compared to a negative of R$8.7 million in 1Q07, mainly due to the capitalization of interest.
 
1Q08 - Income Taxes
 
Net income taxes and social contribution for 1Q08 amounted to R$9.8 million versus R$3.1 million in 1Q07. The higher figure in 2008 reflects an increase in the income taxes and social contribution that is proportional to the growth of the Company’s net income.

1Q08 - Net Income and Earnings per Share
 
Net income in 1Q08 was R$41.6 million (13.0% of net revenues), compared to adjusted R$20.5 million in 1Q07.
Earnings per share were R$0.32 in 1Q08 compared to adjusted R$0.17 in 1Q07.

Shares outstanding were 129.4 million in 1Q08 compared to 125.5 million in 1Q07.

Backlog of Revenues and Results
 
The backlog of results to be recognized under the PoC method reached R$665.2 million in 1Q08, from R$371.9 million in 1Q07 and R$583.4 million in 4Q07.

The table below shows our revenues, costs and results to be recognized, as well as the amount of the corresponding costs and the expected margin:

Table 10 - Revenues and results to be recognized (R$ million)
 
1Q08
1Q07
4Q07
1Q08 x 1Q07
1Q08 x 4Q07
Sales to be recognized—end of period
1,725.9
985.7
1,526.6
75.1%
13.1%
Cost of units sold to be recognized - end of period
(1,060.7)
(613.8)
(943.2)
72.8%
12.5%
Backlog of Results to be recognized
665.2
371.9
583.4
78.9%
14.0%
Backlog Margin - yet to be recognized
38.5%
37.7%
38.2%
80 bps
30 bps
 
Balance Sheet
 
Cash and Cash Equivalents
On March 31, 2008, cash and cash equivalents were equal to R$722 million, 41% higher than R$514 million on December 31, 2007, and 16% higher than 1Q07’s R$621 million.
At the end of the quarter, Gafisa’s debt totaled R$1,091 million, bringing a net debt position of R$369 million. The detail of the debt breakdown is located on table 16. Net debt to equity ratio is 23.4%.

Accounts Receivable
Accounts receivable increased 12% to R$2.7 billion in March 2008, compared to R$2.4 billion in 4Q07, and 71% compared to R$1.6 billion in March 2007.

Table 11 - Revenues and results to be recognized (R$000)
Real estate development receivables:
 
1Q08
1Q07
4Q07
1Q08 x 1Q07
1Q08 x 4Q07
Current
607,668
392,634
524,818
54.8%
15.8%
Long-term
578,475
236,576
497,933
144.5%
16.2%
Total
1,186,143
629,210
1,022,751
88.5%
16.0%
Receivables to be recognized on our balance sheet according to PoC method and Brazilian GAAP:
 
1Q08
1Q07
4Q07
1Q08 x 1Q07
1Q08 x 4Q07
Current
445,790
220,894
486,794
101.8%
(8.4%)
Long-term
1,054,173
720,555
881,352
46.3%
19.6%
Total
1,499,963
941,449
1,368,146
59.3%
9.6%
           
2,686,106
1,570,659
2,390,896
71.0%
12.3%

Table 12 - Aging of Account Receivables Portfolio
Total
2008
2009
2010
2011
2012 and later
2,686,106
1,062,987
532,710
581,587
261,218
247,604

Page 9 of 16
Inventory (Properties for Sale)
Our inventory includes land paid in cash, construction in progress, and finished units. Our inventory reached R$1.2 billion in 1Q08, an increase of 106.7% as compared to R$559 million registered in 1Q07 due to land acquisitions in cash (more details in the “Land Reserves” section of this report) and developments under construction.

Table 13 - Inventory (R$ 000)
 
1Q08
1Q07
4Q07
1Q08 x 1Q07
1Q08 x 4Q07
Land
566,697
202,342
379,068
180.1%
49.5%
Properties under construction
514,747
307,597
503,417
67.3%
2.3%
Units completed
74,808
49,520
41,826
51.1%
78.9%
Total
1,156,252
559,459
924,311
106.7%
25.1%
Current
1,015,020
481,874
774,908
110.6%
31.0%
Long-term
141,232
77,585
149,403
82.0%
(5.5%)
Total
1,156,252
559,459
924,311
106.7%
25.1%

Table 14 - Inventory at Market Value per year (Gafisa %)
 
1Q08
1Q07
4Q07
1Q08 x 1Q07
1Q08 x 4Q07
Launches from 2008
346,424
-
-
-
-
Launches from 2007
883,605
226,942
1,127,498
289%
(22%)
Launches from 2006
173,788
331,795
200,326
(48%)
(13%)
Prior to 2005
224,984
326,452
250,987
(31%)
(10%)
PSV
1,628,801
885,189
1,578,811
84%
3%
Launches from 2008
944
-
-
-
-
Launches from 2007
4,400
1,196
5,883
268%
(25%)
Launches from 2006
619
1,133
714
(45%)
(13%)
Prior to 2005
995
1,651
1,078
(40%)
(8%)
Units
6,958
3,980
7,675
75%
(9%)

Table 15 - Inventory at Market Value per Company
 
1Q08
1Q07
4Q07
1Q08 x 1Q07
1Q08 x 4Q07
Gafisa
1,236,748
699,026
1,141,701
77%
8%
AlphaVille
205,317
169,189
196,309
21%
5%
Fit Residencial
164,704
16,974
216,214
870%
(24%)
Bairro Novo
22,032
-
24,587
-
(10%)
Total
1,628,801
885,189
1,578,8111
84%
3%

Liquidity

The following table sets forth information on our indebtedness as of March 31, 2008. In addition to our net cash position we have over R$200 million in receivables of completed units, which are available for securitization anytime. We had an upgrade on our corporate rating by Fitch to A bra (stable outlook) from A- (A minus) bra.

Table 16 - Debt breakdown (R$ 000)
Type of transaction
Rates
1Q08
4Q07
1Q07
Debentures
1.3%p.a. + CDI
242,312
249,190
242,663
Construction Financing (SFH)
6.2-11.4%p.a. + TR
194,017
98,700
34,248
Downstream Merger obligation
10-12%p.a. + TR
12,020
13,311
16,925
Funding for developments
6.2%p.a. + TR
2,501
2,702
23,147
Working Capital
104-105% of CDI
217,414
204,463
34,952
UniGafisa
0.235% p.a. + CDI
300,000
-
-
Other (AlphaVille)
0.66-3.29% p.a. + CDI
122,703
121,390
3,912
Total Debt
 
1,090,967
689,356
355,847
         
Total Cash
  
722,385
514,447
621,252
         
Net Debt (Cash)
  
368,582
174,909
(265,405)
 
Page 10 of 16
Debt payment schedule as of March 31, 2008:

Table 17 - Debt Maturity (R$ 000)
 
Total
2008
2009
2010
2011
2012 and later
Debentures
242,312
2,312
48,000
96,000
96,000
-
Construction Financing (SFH)
194,017
49,095
99,525
40,121
5,276
-
Downstream Merger obligation
12,020
4,020
5,534
2,466
-
-
Funding for developments
2,501
797
857
847
-
-
Working Capital
217,414
-
217,414
-
-
-
UniGafisa
300,000
-
-
-
-
300,000
Other (AlphaVille)
122,703
10,150
2,394
28,455
27,922
53,782
Total
1,090,967
66,374
373,724
167,889
129,198
353,782

As of March 31, 2008, our net debt to equity ratio was 23.4% compared to 11.4% in 4Q07.

Outlook
 
For 2008 Gafisa reiterates its launch guidance of R$3 billion 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 current market outlook, the Company expects the EBITDA margin to be between 16% and 17% for the full year 2008.
 
Glossary

Backlog of Results - As a result of the Percentage of Completion Method of recognizing revenues, we recognize revenues and expenses over a multi-year period for each residential unit we sell. Our backlog of results represents revenues minus costs that will be incurred in future periods from past sales.

Backlog of Revenues - As a result of the Percentage of Completion Method of recognizing revenues, we recognize revenues over a multi-year period for each residential unit we sell. Our backlog represents revenues that will be incurred in future periods from past sales.

Backlog Margin - Equals to “Backlog of results” divided “Backlog of Revenues” to be recognized in future periods.

Land Bank - Land that Gafisa holds for future development paid either in Cash or through swap agreements. Each decision to acquire land is analyzed by our investment committee and approved by our board of directors.

PoC Method - Under Brazilian GAAP, real estate development revenues, costs and related expenses are recognized using percentage-of-completion (“PoC”) method of accounting by measuring progress towards completion in terms of actual costs incurred versus total budgeted expenditures for each stage of a development.

Pre-sales - Contracted pre-sales are the aggregate amount of sales resulting from all agreements for the sale of units entered into during a certain period, including new units and units in inventory. Contracted pre-sales will be recorded as revenue as construction progresses (PoC method). There is no definition of "contracted pre-sales'' under Brazilian GAAP.

HIG (High Income) - segment with residential units sold at minimum price of R$3,600 per square meter.

MHI (Mid-High) - segment with residential units sold at prices ranging from R$2,800 to 3,600 per square meter.

MID (Middle Income) - segment with residential units sold at prices ranging from R$2,300 to 2,800 per square meter.

MID (Mid-Low) - segment with residential units sold at prices ranging from R$1,800 to 2,300 per square meter.

AEL (Affordable Entry Level) - residential units targeted to the mid-low and low income segments with prices below R$1,800 per square meter.

Page 11 of 16
LOT (Urbanized Lots) - land subdivisions, or lots, with prices ranging from R$150 to R$600 per square meter

COM (Commercial buildings) - Commercial and corporate units developed only for sale with prices ranging from R$3,000 to R$7,000 per square meter.

SFH Funds - Funds from SFH are originated from the Governance Severance Indemnity Fund for Employees (FGTS) and from savings accounts deposits. Banks are required to invest 65% of the total savings accounts balance in the housing sector, either to final customers or developers, at lower interest rates than the private market.

Swap Agreements - A system in which we grant the land-owner a certain number of units to be built on the land or a percentage of the proceeds from the sale of units in such development in exchange for the land. By acquiring land through this system, we intend to reduce our cash requirements and increase our returns.

PSV - Potential Sales Value.


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.


Investor Relations
Julia Freitas Forbes
Phone: +55 11 3025-9297
Email: ir@gafisa.com.br
Website: www.gafisa.com.br/ir

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

Media Relations (Brazil)
Patrícia Queiroz
Máquina da Notícia Comunicação Integrada
Phone: +55 11 3147-7409 
Fax: +55 11 3147-7900
E-mail: patricia.queiroz@maquina.inf.br

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.

Page 12 of 16
 
The following table sets forth projects launched during the first quarter of 2008:

 
Project
Launch Month
Segment R$/m²
Location
Usable Area
m² (% Gafisa)
Gafisa Units
Gafisa's Stake
PSV
(% Gafisa)
R$ 000
% Sold up
to 03/31/08
Gafisa
Costa Maggiore
January
HIG
Cabo Frio - RJ
4,693
30
50%
24,052
84%
Gafisa
Horto Phase 2
January
HIG
Salvador - BA
2,298
92
50%
87,807
98%
Gafisa
Pablo Picasso
January
HIG
João Pessoa - PB
4,188
12
50%
12,632
26%
AUSA
AlphaVille Londrina Phase 2
January
LOT
Londrina - PR
67,060
173
63%
17,230
20%
Gafisa
Nova Petrópolis
March
MHI
São Bernardo - SP
36,879
268
100%
108,479
23%
Gafisa
Terraças - Alto da Lapa
March
MHI
São Paulo - SP
23,248
182
100%
72,701
19%
Gafisa
Raízes Granja Viana
March
MHI
Cotia - SP
8,641
35
50%
25,994
10%
Gafisa
VerdeMar
March
MHI
Guarujá - SP
13,084
80
100%
44,479
23%
Gafisa
London Green Phase 2
March
HIG
Niterói - RJ
15,009
140
100%
54,719
18%
Gafisa
Carpe Diem
March
MHI
Rio de Janeiro - RJ
10,012
91
80%
29,461
25%
Gafisa
Magnific
March
HIG
Goiânia - GO
9,225
27
100%
30,458
34%
AUSA
AlphaVille Jacuhy Phase 2
March
LOT
Serra - ES
115,688
215
65%
41,291
28%
FIT1
Citta Vila Allegro
March
AEL
Salvador - BA
11,099
149
50%
28,585
1%
 
Total 1Q08
      
321,124
1,494
73%
577,888
35%
 
¹ Fit Residencial recognizes sales only after the client has received the final approval by the bank.

 
The following table sets forth the financial completion of the construction in progress and the related revenue recognized during the quarter ended on March, 31 2008.

Development
Date Launched
Total Area
sq m
Final Completion
% Sold
Accumulated
Revenue Recognized
R$ 000
Gafisa
Stake
     
1Q08
1Q07
1Q08
1Q07
1Q08
1Q07
  
Gafisa
            
249,969
199,993
  
VP - Horto Fase 2
jan-08
22,298
30%
0%
97%
0%
28,491
-
50%
Península Fit
mar-06
24,080
77%
22%
69%
29%
10,975
8,094
100%
Sunspecial Resid. Service
mar-05
21,189
99%
62%
98%
70%
8,925
10,614
100%
The Gold
dec-05
10,465
97%
59%
100%
31%
7,850
3,258
100%
Villagio Panamby - Agrias
nov-06
21,390
51%
28%
89%
19%
7,476
4,849
100%
Espaço Jardins
may-06
28,926
58%
17%
100%
66%
7,085
3,312
100%
Villagio Panamby- Mirabilis
mar-06
23,355
77%
45%
94%
39%
6,687
2,351
80%
Supremo
aug-07
34,864
41%
0%
69%
0%
6,506
-
80%
Enseada das Orquídeas
oct-07
42,071
22%
0%
51%
0%
5,912
-
80%
Beach Park - Living
oct-07
11,931
60%
4%
77%
25%
5,911
547
100%
Isla
mar-07
31,423
26%
0%
82%
16%
5,578
-
100%
Espacio Laguna
aug-06
13,091
59%
19%
72%
22%
5,432
1,734
100%
Solaris de Vila Maria
dec-07
13,376
16%
0%
93%
0%
5,327
-
100%
Sunplaza Personal Office
mar-06
6,328
100%
42%
100%
36%
5,509
6,173
50%
Olimpic - Chácara Sto Antonio
aug-06
24,988
48%
21%
98%
50%
5,100
3,252
45%
Olimpic Resort
oct-05
21,851
99%
54%
100%
82%
4,945
8,438
100%
Blue Vision - Sky e Infinity
jun-06
9,257
85%
46%
82%
37%
4,390
6,087
100%
Paço das Águas
may-06
10,836
73%
39%
93%
33%
4,388
1,344
100%
Blue II e Concept
dec-05
14,148
95%
73%
72%
32%
4,597
12,174
100%
Arena
dec-05
29,256
92%
44%
100%
86%
4,049
8,629
100%
Vistta Ibirapuera
may-06
9,963
85%
43%
100%
90%
4,031
2,737
100%
Ville Du Soleil
oct-06
8,920
79%
17%
50%
11%
3,757
871
100%
London Green
jun-07
28,998
35%
0%
44%
0%
3,648
-
100%
CSF - Santtorino
aug-06
14,979
42%
9%
100%
54%
3,471
247
60%
Villagio Panamby - Parides
nov-06
13,093
70%
48%
100%
50%
3,469
7,078
100%
Town Home
nov-05
8,319
80%
31%
95%
33%
3,451
1,413
50%
Beach Park Acqua
nov-05
8,793
100%
33%
95%
55%
3,068
5,515
100%
CSF - Paradiso
nov-06
16,286
33%
5%
79%
30%
2,982
547
100%
Blue Land
aug-03
9,169
90%
44%
75%
28%
5,009
2,734
100%
Parc Paradiso
aug-07
41,773
11%
0%
89%
0%
3,121
-
100%
CSF - Saint Etienne
may-05
11,261
100%
46%
97%
48%
3,574
3,957
100%
Villagio Panamby - Jazz Duet
sep-05
13,400
99%
67%
98%
28%
2,891
5,221
100%
Mirante do Rio
oct-06
4,875
44%
2%
98%
63%
2,540
80
100%
Quinta Imperial
jul-06
8,422
49%
6%
76%
38%
2,434
378
50%
Grand Valley
mar-07
16,908
27%
0%
61%
19%
2,388
-
100%
VP - Horto
oct-07
22,281
35%
0%
100%
0%
4,777
-
80%
Olimpic Bosque
oct-07
19,150
27%
0%
73%
0%
2,133
-
50%
Palm D'Or
sep-05
8,493
95%
49%
100%
40%
1,916
4,334
50%
CSF - Acácia
jun-07
23,461
11%
0%
89%
0%
1,847
-
100%
Icaraí Corporate
dec-06
5,683
45%
19%
90%
40%
1,787
5,209
100%
Fit Niterói
aug-06
8,523
49%
27%
83%
40%
1,626
1,861
100%
Blue Land
nov-05
9,083
91%
45%
75%
28%
5,009
1,318
50%
Felicitá - Evangelina 2
dec-06
11,323
35%
0%
80%
18%
1,699
(0)
100%
Collori
nov-06
19,731
45%
24%
86%
28%
1,578
2,811
100%
Acqua Residence Fase 1
apr-07
-
21%
0%
45%
10%
-
-
100%
Privilege Residencial
sep-07
12,938
15%
0%
65%
0%
1,577
-
100%
Villagio Panamby - Domaine Du Soleil
sep-05
8,225
100%
69%
100%
45%
1,469
5,039
100%
Cuiabá
dec-05
5,887
93%
30%
39%
11%
1,364
399
50%
Parc Paradiso Fase 2
sep-07
-
12%
0%
84%
0%
-
-
100%
CSF - Prímula
jun-07
13,897
16%
0%
77%
0%
1,223
-
100%
Grand Valley Niterói
oct-07
17,905
18%
0%
83%
0%
1,150
-
100%
Weber Art
jun-05
5,812
100%
54%
98%
50%
1,391
3,060
100%
Riviera Ponta Negra - Cannes e Marseille
jan-04
11,166
100%
97%
85%
55%
1,144
3,588
50%
Del Lago
may-05
62,022
93%
46%
99%
57%
1,126
5,275
80%
Riviera Nice
dec-06
3,380
31%
0%
47%
15%
1,021
-
50%
Vivance Res. Service
nov-06
14,717
21%
13%
76%
35%
988
1,417
100%
CSF - Dália
jun-07
9,000
13%
0%
76%
0%
849
-
100%
Città Imbuí
sep-07
22,442
15%
0%
86%
0%
-
-
50%
Belle Vue - Porto Alegre
aug-04
9,559
79%
58%
70%
46%
863
1,755
100%
CSF - Benne Sonanz
sep-03
4,718
100%
100%
100%
53%
786
9
100%
Celebrare
mar-07
14,679
19%
0%
74%
6%
591
-
100%
Secret Garden
may-07
15,344
18%
0%
61%
0%
567
-
100%
Blue One
sep-03
10,649
100%
99%
84%
43%
740
907
100%
Montenegro Boulevard
jun-05
174,862
100%
81%
100%
76%
690
3,754
100%
Costa Paradiso
apr-05
63,041
100%
100%
57%
24%
399
815
100%
Lumiar
feb-05
7,193
96%
77%
91%
37%
496
4,650
100%
Side Park - Ed. Style
jul-04
10,911
99%
82%
98%
72%
350
2,930
100%
Villagio Panamby - Double View
oct-03
5,388
100%
100%
100%
97%
387
2,910
100%
La Place
may-04
8,416
100%
96%
97%
60%
301
1,461
100%
Others
            
13,158
34,857
  
                   

Page 13 of 16
Development
Date Launched
Total Area
sq m
Final Completion
% Sold
Accumulated
Revenue Recognized
R$ 000
Gafisa
Stake
     
1Q08
1Q07
1Q08
1Q07
1Q08
1Q07
  
AlphaVille
            
58,599
32,021
  
AlphaVille Salvador II
feb-06
853,344
82%
26%
94%
84%
8,929
4,033
55%
AlphaVille Recife
aug-06
704,051
72%
18%
94%
91%
8,287
1,013
65%
AlphaVille Jacuhy
dec-07
2,274,585
7%
0%
92%
0%
6,348
-
65%
AlphaVille Burle Marx
mar-05
1,305,022
95%
49%
34%
16%
4,932
844
50%
AlphaVille Gravataí
jun-06
1,309,397
75%
20%
47%
30%
4,362
973
64%
AlphaVille Campo Grande
mar-07
517,869
61%
0%
57%
39%
4,072
-
67%
AlphaVille Eusébio
sep-05
534,314
90%
40%
76%
44%
3,375
1,324
65%
AlphaVille Natal
feb-05
1,028,722
100%
73%
100%
100%
2,217
11,450
63%
AlphaVille Araçagy
aug-07
195,829
45%
0%
84%
0%
2,101
-
50%
AlphaVille Rio Costa do Sol
sep-07
1,521,753
10%
0%
83%
0%
2,021
-
58%
AlphaVille Manaus
aug-05
464,688
100%
36%
100%
100%
1,781
2,072
63%
AlphaVille Litoral Norte
mar-04
798,893
100%
100%
84%
83%
764
-
63%
AlphaVille Londrina 2
jan-08
377,650
8%
0%
28%
0%
377
-
63%
AlphaVille Londrina 2
dec-07
377,650
8%
0%
28%
0%
377
-
63%
Others
            
8,656
10,312
  
                   
Fit Residencial
            
18,073
-
  
Fit Jaçanã
mar-07
16,586
61%
0%
97%
0%
4,125
-
98%
Fit Vila Augusta
oct-07
23,036
25%
0%
59%
0%
3,752
-
100%
Fit Coqueiro I
sep-07
44,584
15%
0%
72%
0%
2,059
-
60%
Fit Jardim Botânico
dec-07
31,055
23%
0%
70%
0%
1,802
-
50%
Fit Jaraguá
oct-07
14,345
24%
0%
53%
0%
1,764
-
100%
Fit Taboão
dec-07
20,319
13%
0%
53%
0%
1,591
-
100%
Fit Mirante do Sol
dec-07
26,936
10%
0%
34%
0%
1,088
-
100%
Fit Maria Inês
dec-07
19,541
18%
0%
46%
0%
1,048
-
60%
Others
            
844
-
  
                   
Bairro Novo
            
4,047
-
50%
Bairro Novo Cotia (Fases 1 e 2)
dec-07
23,617
11%
  
42%
  
4,047
-
50%
Total
            
330,688
232,014
  

Page 14 of 16

Consolidated Statement of Income

R$ 000
  
1Q08
  
1Q07
  
4Q07
  
1Q08 x 1Q07
  
1Q08 x 4Q07
  
Gross Operating Revenue
                      
Real State development and sales
    
330,688
    
232,014
    
366,678
    
42.5
%
  
(9.8
%)
Construction and services rendered
    
368
    
3,326
    
14,766
    
(88.9
%)
  
(97.5
%)
                                 
Deductions
    
(11,574
)
  
(11,024
)
  
(8,689
)
  
(4.9
%)
  
33.2
%
                                 
Net Operating Revenue
    
319,482
    
224,316
    
372,755
    
42.4
%
  
(14.3
%)
                                 
Operating Costs
    
(212,486
)
  
(156,356
)
  
(238,269
)
  
35.9
%
  
(10.8
%)
                                 
Gross profit
    
106,996
    
67,960
    
134,486
    
57.4
%
  
(20.4
%)
                                 
Operating Expenses
                                
Selling expenses
    
(24,047
)
  
(12,006
)
  
(31,101
)
  
100.3
%
  
(22.7
%)
General and administrative expenses
    
(32,150
)
  
(19,484
)
  
(38,753
)
  
65.0
%
  
(17.0
%)
Equity Income
                                
Other Operating Revenues
    
(29
)
  
(259
)
  
(3,304
)
  
88.8
%
  
(99.1
%)
                                 
EBITDA
    
50,770
    
36,211
    
61,328
    
40.2
%
  
(17.2
%)
                                 
Depreciation and Amortization
    
(1,750
)
  
(5,061
)
  
(2,259
)
  
(65.4
%)
  
(22.5
%)
Extraordinary expenses
    
-
    
(30,174
)
  
-
    
(100.0
%)
  
-
  
                                 
EBIT
    
49,020
    
976
    
59,069
    
4,922.5
%
  
(17.0
%)
                                 
Financial Income
    
14,343
    
8,080
    
20,186
    
77.5
%
  
(28.9
%)
Financial Expenses
    
(8,105
)
  
(16,765
)
  
9,016
    
(51.7
%)
  
(189.9
%)
                                 
Income before taxes on income
    
55,258
    
(7,709
)
  
88,271
    
(816.8
%)
  
(37.4
%)
                                 
Deffered Taxes
    
(6,076
)
  
(1,551
)
  
(16,137
)
  
291.7
%
  
(62.3
%)
Income tax and social contribution
    
(3,755
)
  
(1,591
)
  
(6,865
)
  
136.0
%
  
(45.3
%)
                                 
Income after taxes on income
    
45,427
    
(10,851
)
  
65,269
    
(518.6
)%
  
(30.4
%)
                                 
Minority Shareholders
    
(3,781
)
  
(1,701
)
  
(2,189
)
  
122.3
%
  
72.7
%
                                 
Net income
    
41,646
    
(12,552
)
  
63,080
    
(431.8
%)
  
(34.0
%)
                                 
                                 
Net income per share
    
0.32
    
(0.10
)
  
0.49
              


Page 15 of 16
 
Consolidated Balance Sheet

R$ 000
  
1Q08
  
1Q07
  
4Q07
  
1Q08 x 1Q07
  
1Q08 x 4Q07
  
ASSETS
                      
Current assets
                      
Cash and banks
    
47,614
    
34,049
    
79,590
    
39.8
%
  
(40.2
%)
Financial investments
    
674,771
    
587,203
    
434,857
    
14.9
%
  
55.2
%
Receivables from clients
    
607,668
    
392,634
    
524,818
    
54.8
%
  
15.8
%
Properties for sale
    
1,015,020
    
481,874
    
774,908
    
110.6
%
  
31.0
%
Other accounts receivable
    
133,205
    
117,856
    
101,920
    
13.0
%
  
30.7
%
Deferred selling expenses
    
44,633
    
18,972
    
37,023
    
135.3
%
  
20.6
%
Prepaid expenses
    
11,021
    
7,691
    
8,824
    
43.3
%
  
24.9
%
     
2,533,932
    
1,640,279
    
1,961,940
    
54.5
%
  
29.2
%
Long-term assets
                                
Receivables from clients
    
578,475
    
236,576
    
497,933
    
144.6
%
  
16.2
%
Properties for sale
    
141,232
    
77,585
   
149,403
    
82.0
%
  
(5.5
%)
Deferred taxes
    
69,938
    
59,921
    
61,322
    
16.7
%
  
14.1
%
Other
    
49,770
    
44,287
    
42,797
    
12.4
%
  
16.3
%
     
839,415
    
418,369
    
751,455
    
100.6
%
  
11.7
%
Permanent assets
                                
Investments
    
209,450
    
171,602
    
209,689
    
22.1
%
  
(0.1
%)
Properties and equipment
    
28,967
    
11,507
    
27,409
    
151.7
%
  
5.7
%
     
238,417
    
183,109
    
237,098
    
30.2
%
  
0.6
%
                                 
Total assets
    
3,611,764
    
2,241,757
    
2,950,493
    
61.1
%
  
22.4
%
                                 
                                 
LIABILITIES AND SHAREHOLDERS' EQUITY
                  
Current liabilities
                                
Loans and financings
    
82,964
    
53,716
    
59,526
    
54.4
%
  
39.4
%
Debentures
    
2,312
    
2,663
    
9,190
    
(13.2
%)
  
(74.8
%)
Real estate development obligations
    
-
    
5,088
    
-
    
(100.0
%)
  
-
  
Obligations for purchase of land
    
200,497
    
127,846
    
163,034
    
56.8
%
  
23.0
%
Materials and service suppliers
    
115,794
    
62,144
    
86,709
    
86.3
%
  
33.5
%
Taxes and contributions
    
77,850
    
49,045
    
70,293
    
58.7
%
  
10.8
%
Taxes, payroll charges and profit sharing
    
36,292
    
19,587
    
38,512
    
85.3
%
  
-5.8
%
Advances from clients - real state and services
    
58,412
    
62,833
    
47,662
    
(7.0
%)
  
22.6
%
Dividends
    
26,981
    
11,163
    
26,981
    
141.7
%
      
Other
    
114,995
    
22,558
    
75,489
    
409.8
%
  
52.3
%
     
716,097
    
416,643
    
577,396
    
71.9
%
  
24.0
%
Long-term liabilities
                                
Loans and financings
    
765,691
    
59,469
    
380,640
    
1187.5
%
  
101.2
%
Debentures
    
240,000
    
240,000
    
240,000
              
Obligations for purchase of land
    
156,393
    
14,055
    
73,207
    
1012.7
%
  
113.6
%
Deferred taxes
    
77,956
    
43,848
    
63,268
    
77.8
%
  
23.2
%
Unearned income from property sales
    
-
    
95
    
-
    
(100.0
%)
      
Other
    
32,597
    
51,533
    
35,773
    
(36.7
%)
  
(8.9
%)
     
1,272,637
    
409,000
    
792,888
    
211.2
%
  
60.5
%
Deferred income
                                
Deferred income on acquisition of subsidiary
    
29,406
    
1,281
    
32,223
    
2195.6
%
  
(8.7
%)
                                 
Minority Shareholders
    
21,090
    
(9,489
)
  
17,223
    
(322.3
%)
  
22.5
%
                                 
Shareholders' equity
                                
Capital
    
1,221,971
    
1,214,580
    
1,221,846
    
0.6
%
  
0.0
%
Treasury shares
    
(18,050
)
  
(18,050
)
  
(18,050
)
            
Capital reserves
    
167,276
    
167,276
    
167,276
              
Revenue reserves
    
201,337
    
60,516
    
159,691
    
232.7
%
  
26.1
%
     
1,572,534
    
1,424,322
    
1,530,763
    
10.4
%
  
2.7
%
Total liabilities and shareholders' equity
    
3,611,764
    
2,241,757
    
2,950,493
    
61.1
%
  
22.4
%
 
Page 16 of 16