Gafisa S.A.

Sandro Gamba - Chief Executive Officer Andre Bergstein - CFO and Investors Relations Director Rodrigo Osmo - Chief Executive Officer, Tenda Felipe Cohen - CFO and Investor Relations Director, Tenda

Enrico Trotta - Itaú BBA Sami Karlik - Votorantim Fred Mendes - HSBC Bank Gustavo Cambauva - BTG Pactual Alain Nicolau - Bradesco BBI Guilherme Capparelli - Citibank Marcelo Motta - JP Morgan

Good morning and thank you for being with us today. This first semester of 2015 represented one more step for Gafisa in the evolution of profitability.

We began the first half of the year with net profit, consolidated net profit of R$60.1 million, offsetting the loss of R$40.6 million registered in the same period of last year. Continuing with the performance of the previous quarter, we had positive result of R$20 million and in this semester R$31.4 million.

And this is due to the consolidation and growing importance of the current model. Gafisa registered a net profit of R$8.5 million in the quarter and R$28.7 million in this semester, as a result of the efforts to sell the inventory and reduction of the cost and administrative expenses.

With this, the consolidated net profit was R$28.5 million. Results reached in this first semester aligned with the strategy of the company to improve its operational performance and increase its level of profitability, even considering the current situation in the market.

In this conference, I would like to stress the good performance that Gafisa and Tenda’s projects had during the quarter. The Gafisa segment continues with a stable profitability level in its projects.

And Tenda continues with the consolidation of the new business model, which contributed for an adjusted gross margin, consolidated adjusted gross margin of 33.9% in the Gafisa segment. We continued with the strategy of being conservative, due to the greater risk of the market.

And this was – and we’re responsible for two projects. We would like to stress that the work done to reduce the level of inventory responsible for 72% of the sales was done reaching R$242.2 million.

Now, those delivered in Gafisa, we had a strong volume of deliveries, reaching approximately 1,500 units and R$777 million in PSV. In this semester, we delivered 3,345 units and R$1.3 billion in PSV.

Concerning inventory in Gafisa, it totaled R$2.1 billion at the end of the quarter, with only R$105.4 million in the strategic cities – in the non-strategic cities. The speed of sales in the semester benefited from the sales performance selling the inventory and reached 10.5% compared to last year’s sales.

Concerning the gross margin, Gafisa reached an adjusted gross margin of 36.5%, in line with the average presented in the previous quarters and a little lower than the annual comparison as a result of the mix of projects. This level of profitability ratifies and confirms really the equilibrium and stability of the gross margin in Gafisa.

As we have seen since the beginning of 2013 Q2, the performance of projects and continuous improvement in the business cycle. The net result of Gafisa was R$8.5 million, reaching year to date R$28.7 million.

With the maintenance of the current economic scenario, our expectation for the second half of the year is to maintain this conservative posture, plus really launching new products in the market, giving priority to those with better liquidity in order to reach sales and profitability levels that are adequate. I’d like to pass the floor to Felipe Cohen, who will comment the highlights of Tenda.

Thank you, Andre. Good morning.

Concerning the economic segment in this quarter, Tenda maintained a sequence of good results and presented a net profit for the second consecutive quarter. This has to do with the scale of the new model and also the results of the efficiency of the management at Tenda, continuing with the expansion of its volume of operations, Tenda was responsible for launching six projects in phases in the second quarter of 2015, totaling R$229.4 million in the states of Sao Paulo, Rio de Janeiro, Rio Grande do Sul, Bahia and Pernambuco.

630 Once again, the solid speed of sales reached in this quarter of 28.2% was one of the main highlights, operational highlights in this segment, due to the greater availability of products after three consecutive quarters with many launches, also, the good boom in this segment and also due to the reduction of cancellations in the period. Contracted sales had a strong expansion to R$289.9 million, the highest level since the fourth quarter of 2010.

Concerning deliveries, in this quarter, the segment of Tenda delivered five projects, representing 1,240 units and R$177.2 million in PSV, of which R$137 million had to do with a new model, coming from the new model. In the quarter, Tenda delivered R$239.5 million with 61% of this being in new model, thus reaching the drivers of profitability for the business, which are an adjusted gross margin consistently superior to 28%, average monthly DSO 7% and an expectation of cancelations, that’s 15% of total sales, total gross sales.

[indiscernible] second quarter brought a strong expansion of adjusted gross profit, reaching R$73.3 million, cumulating R$127.1 million in the year to date. Adjusted gross margin maintained itself within the level of 28% to 30%, as seen since the second quarter of 2014 and as a result of the operational consolidation of the projects in the new model, better performance, better profitability and also for the smaller participation of old projects.

In the second quarter of 2015, Tenda reached net result of R$20 million, substantially higher than the net profit of R$11.4 million in the first quarter of 2015 and the net profit of R$18 million in the second quarter of 2014. In year to date, the net profit was R$31.4 million in comparison with a net loss of R$55.4 million of the previous year, with a better performance.

Tenda continues to make efforts to have more scale, intensifying launches and applying strategies to have a solid speed of sales. The evolution of the results obtained in the last quarter really confirms our trust in the New Model.

Now, I would like to pass the floor back to Andre.

Thank you, Felipe. Now, talking consolidated terms, Gafisa and Tenda launched R$482 million in the second quarter and R$795 million in the first semester, with net contracted sales of R$532 million and R$955 million, respectively.

The adjusted gross profit was R$200.4 million and margin of 33.9%. In this moment, the company continues to really strive for greater stability in the cost structure and expenses.

During the second quarter, expenses with general, sales and administrative expenses were R$89.7 million. In year to date, these expenses represented R$160.5 million, a 11% lower than in the first semester of 2014, thus confirming our search for greater efficiency in the management of cost and expenses.

As a result of these initiatives, the net consolidated result in the quarter was positive R$28.5 million and in this semester R$60.1 million. At the end of the first half of the year, the relationship between net debt and equity reached 50.4%, stable in relation to the previous quarter.

The consolidated operational cash generation reached R$13.1 million in the second quarter, in line with the previous quarter. The company closed the second quarter with consumption of net cash of R$28.1 million, totaling R$97.8 million in this semester.

This has to do with greater disbursements related to the purchase of land [indiscernible] recover the Landbank. And also, consuming [indiscernible] we continue to work aiming at reaching conditions that will be sufficient for its implementations.

Since the beginning of 2014, many steps were taken. It is in progress, we’re defining the capital structure for each one of the business units.

Finally, we would like to stress our satisfaction due to the development of the business cycle of Gafisa and Tenda in this first semester of 2015. During the last year, the two companies were able to strengthen and improve the operational cycles and financial cycles, thus guaranteeing a robust and comfortable position for the challenges of 2015.

In the second semester, the company will maintain its focus on operational performance, with capital discipline and searching for better level of profitability and value generation for shareholders and other stakeholders. Thank you for your attention.

Now, we’re available for questions.

Two questions. The first, one thing called my attention, in the Gafisa segment, I’d like to understand better the impact [indiscernible] or such low taxes, so I’d like to understand better the main reason that led to this effect in Gafisa.

And also within this issue, also the gains in deferred taxes in the quarter, if you can comment. The second is for Felipe, we continue seeing the consumption of cash, we know that plots of land have been acquired for the Landbank, for the future, but I’d like to understand these plots of land that are being bought for Tenda, are you buying land or the [indiscernible] project or are you buying these plots of land for phase 2, I’d like to understand from Felipe concerning the purchase of land plots for Tenda.

Talking about tax, what happened in the second quarter, always in the second quarter, we had the payment of the bonus that was accrued during the last year. So this had an impact and benefited tax.

We also had contingencies and adding up to two things. This decreased the tax burden in this quarter.

So nothing very different, basically it’s this. In the first quarter, we had higher taxes and thus we have this result in the second.

Now, Felipe?

Talking about deferred taxes at Tenda, this was a consequence of the better result of the company and also profitability. We went back to profitability.

We made a good tax planning in the first quarter. In fact, we had a higher tax rate than we expected, 7%.

So this study, this new planning allowed us to generate deferred tax credits, R$6 million and has really brought us to the level we expected. Of course, once we don’t expect to have fluctuations.

I’d like to remind you that the window for [probability] is open until September 30, so we’re still making studies at Tenda to see if we can have some – if we can include some tax credits. In the third quarter, we might have a non-recurring effect too.

Talking about the issue of usage of cash, I’d like to stress that we have been announcing that we intend to have a cash burn in Tenda. This is due to the building of Landbank in order to guarantee the sustainability of the business, having more than R$1 billion a year in order to have a minimum return we expect for shareholders.

In fact, even with cash generating model, we have been growing 100% in the last two years and we had a very fragile Landbank, so this will require burning cash for buying plots of land. Concerning phase 1 FGTS, it’s very early to talk about this segment, because the government hasn’t made official the basis for this new segment of housing.

So all the purchases are anchored 100% on phase 2 of [indiscernible] government housing program. We want to wait for the announcements of the government to understand the dynamics and to see if we identify potential to explore this segment.

I’d like – while the issue of taxes was clarified, please comment about July, the first phase of August in terms of Gafisa sales, in terms of the quality of sales?

Concerning the sales of July, it was below our perspective because we have holidays, so sales were lower. August and September, we know that the second semester is always stronger than the first semester.

So we have expectations to launch – to have launchings at least similar to the previous quarter.

Two questions. The first I’d like to understand better this demand for [indiscernible] do you have any analysis to help us?

For example, what will be the impact on this demand, do you have studies for range too, so we can understand what might happen? And the second question in terms of accounting, other expenses, Tenda went up a lot, so are these due to accrual, do you have any perspective how is this number for the rest of the year, it had a negative impact on results, how will it be from now on?

I’ll answer your questions, but I’d like to also supplement the answer to the previous question. Concerning sales in Tenda, the third quarter is different from Gafisa is weaker than the second quarter.

Second quarter is our strongest quarter due to the efforts made by the governments savings bank, cash savings, bank’s efforts to sell these. So in three quarters, we have made launches, we imagine to continue the launches in this next semester now.

Yes, we have made studies concerning the economy for Range II projects, government Range II. We had some conflicting factors.

On the one side, we have felt less competition in this segment, Range II phase 2, our demand – the number of visits to the stores has been constant and even growing a little. So this has to do with Federal Savings Bank.

The visits dropped this year, we sold 80% more than last year, because the competition is not that strong. Where we have felt the macro effects, especially in credit approval, the banks now are placing restrictions and are approving less and this – we see this every month.

Month after month, the level of approval of the credit lines has dropped for our clients, maybe due to a worsening of the quality of credit with clients that are unemployed with less disposable income, but are also banks really preparing themselves for portfolio with less quality in the future. So we have seen this, banks being more restricted.

We have been able to react with more investments in marketing, which is small disbursement for the result obtained, and through operational improvements, thus reducing costs. We have brought more people to the stores and converted less visits to sales.

The result is still positive, where we have to see how the economy will behave in the future. In terms of other operational expenses, yes, it is above the amount we expect for the year as a result of the legacy project in this quarter.

I’d like to say that we wrote off R$6 million of assets and deposits for lawsuits in the quarter. So for the year, we see that other expenses will consume part of the profitability of the business.

Naturally, increasing the scale and more projects in the New Model, we will be able to pay for these expenses.

I have two questions. The first based on the previous question for Tenda, competition is okay for Tenda, less competition, demand is strong, the products you have – the last projects that you delivered had a good margin.

So apparently the operations well controlled. Why not increase the number of launches now?

You’ve been here with three quarters with R$250 million in launches, like you said, and it should continue this way. The backlog is small, you don’t have much from the legacy projects or the new ones.

So you transformed it into revenue quickly. So this makes a difference for profitability.

So my question, why don’t you increase the number of launches, new products, I believe this scenario is good for new products. The second, could you comment on the results of Alphaville, apparently there was a great drop in margin and revenue, but the profit dropped a lot.

Could you comment did something specific happen in the results of Alphaville hurting the consolidated numbers for Gafisa?

Why not increase the volume of launches in Tenda. The great bottleneck is launches and the new launches we would like structure to launch more projects, we have market to launch more projects.

So what is lacking is Landbank, Landbank and our launch process. Reminding you that we have to make these launches for contracted sales and this includes many activities after registry.

So it’s common to have projects and we haven’t been able to do everything that is necessary to contract the financing of the bank. Our process, we don’t have a robust Landbank we would like to have and even if we had the process to transform Landbank into launches in the New Model, takes a long time, its complex.

So most of the energy of the company is aimed at increasing launches.

Rodrigo, just a quick follow-up question, you have almost R$4 billion in Landbank in Tenda, how much of this is for the short term that you could launch in the next 12 months of these R$4 billion in the Landbank, are these approved, will they be approved soon?

I would be able, in reality, we have two categories of Landbank. Those in the second phase of an existing project and the bottleneck is not approved, but consumption of the first launch or first phase projects.

The first phase projects are all in the approval phase, we understand that we are interested in launching them as fast as possible, I don’t have this information for you. If I were to guess, I would say that we can launch R$1.5 billion to R$2 billion until next year, so the end of next year.

But it’s my feeling, I wouldn’t have the analysis to back this, but I can obtain this.

Concerning Alphaville, nothing very different, basically what I can say the difference in relation to the net profit first semester, Alphaville had good sales, but we had launches and not inventory – good launches and Q2 the characteristics, they are not cash sales, so they are not cash sales. We take other properties in exchange.

So some projects were a little below the plan in comparison with the first quarter, so those projects that were in progress also impact revenue, apart from this financial issues, higher interest rates have an impact on finance and also anticipations for compliance. So sometimes we have discounts there, this affects revenue.

So some impact and thus in the second quarter Alphaville has results a little lower than in the first quarter, but we continue focusing on good launches, good speed of sales in the second quarter and good expectations for the second semester.

I have two questions too. The first is on Tenda, could you comment how you are considering the risk over change in the FGTS when you purchase plots of land?

And also give us an update on what is happening in this area? Also, here we have the issue of the loss in this quarter that had an impact on equity income, could you give us more details about the reasons behind this lower performance, lower results and the trends for the next quarters?

Concerning law 1358, the changes, the compensation, first, how this law is progress in Congress. We don’t believe that the original will survive to the approval steps, because it is very catastrophic for FGTS and for [indiscernible] government housing project, but government has already said that they will veto the law if it continues this way and there are many leaders in the senate that have said in public that if the Congress approves, the senate would make important changes in the law.

We understand that this discussion is more political than technical today, in terms of Congress and the government. And unfortunately this topic has not been well dealt with.

We don’t have a B plan if it is approved the way it is, the law. What we do have, one of the mechanisms to mitigate risk at Tenda is that although we buy a lot of plots of land in cash, most of them have their value disbursed after the approval.

So there is a mechanism in case we have substantial changes in this. Once again, we don’t believe this will happen.

We understand that there are ways for the project to be altered substantially once politics gets better and we may go back to normal times. Now, equity income, in the case of this quarter, in fact we had partnerships related to old projects, legacy projects.

And they had been posted by historical costs, with monetary correction. When we recognize these values, we have to recognize financial expenses, which is consolidated in relation to being in the controlled income company Tenda.

So in terms of net profit, it was zero. We had also an impact on EBITDA, that’s why our EBITDA was worse in this quarter in comparison with the previous one, due to this adjustment.

Looking forward, we don’t see great fluctuations in this line, for changes in this line. So we expect to reflect the performance of sales and the ones we’re consolidating.

We don’t believe to have anything strong or anything different in this line.

Just a follow-up question. In terms of the FGTS changes, we believe that some changes are being discussed in the law.

So again – we include – for example could this result in slower sales, changes in EBITDA, profitability with new law FGTS?

Nicole, what we believe will happen, the change in the interest rates for the FGTS program, we believe that we could have a profit distribution, if this is the alternative chosen and we believe this will be in the new law. The impact will be very small, so we have two impacts that this could bring.

One, the cost of funding would go to [indiscernible] the interest paid on the FGTS accounts will be higher, and also some subsidies for Range II. If you define, the profit you saw in these two problems, because the reference rates continues to be that TR plus 3% interest rates, inflation plus 3%, and the fund continues to generate profit and would be available for subsidies, it’s very similar to what we have today.

Of course, we must analyze the final text of the law. But if it is as we expect, the impact on Range II of the government housing program will be small.

Now, if the original project win, the impact will be very strong. Then, we would have to evaluate, it would be substantial.

These would not be small amounts.

I have one question. In Gafisa, we have a robust pipeline, deliveries, I’d like to understand the strategy, are you working to reduce the inventory, we don’t see aggressive actions like discounts, so please comment on this.

We have work and we have seen that there is a greater liquidity in the projects that are being delivered. So we’re working and looking at the results as you evolve with this terms of the inventory, monitor the liquidity.

If there is a need to increase liquidity, we can make adjustments. But case by case, in terms of price, we’re seeing that we have had a good effect, we’re selling the inventory and we’re increasing also the liquidity of the projects.

My question is about level of D&A for the next quarter, and Tenda in relation to the first quarter, it was flat in Gafisa, can we expect something stronger in the future?

Talking about Tenda, to remind you that in the first quarter we had a D&A close to R$15 million as a result of eliminating accruals, writing off accruals, and that’s a benefit when you compare the first quarter with the second. In the second, we stabilized excluding this effect, we would be on the same level, R$21 million.

Now, looking to the future, second semester, we have salary increases made in July, so this has an impact on D&A looking forward. We want to close the year as we said with growth below inflation in relation to the previous year as a result of the simplification of our operations in Tenda, and the elimination of the legacy.

So this has reduced D&A as of 2012 to the levels we have today. Now, I’ll pass the floor to Andre.

In the second quarter, we had a reduction in relation to the first 5% comparing quarter with quarter, 12%. These are administrative expenses, not sales.

So we have been reducing, we have adjusted our structure. We took some measures in the second quarter, we reduced number of employees, although initially you can’t see that very well.

So this has an impact in the next quarters. Hence, we will have salary increase in the third quarter.

so we have been making adjustments based on the volume of the operation. It’s difficult to say the correct level, but we have make – taken measures, not only in terms of general and administrative expenses, but also costs.

Costs related to the number of projects we have. As we decrease the projects in progress, when we shutdown job sites, we have less costs and thus we make the adjustments.

So we took some measures. This had an impact.

We should have some more. So this is what we believe.

We will always be adjusting, but you won’t see great changes that – as we have done, we’re reducing.

Going back to the Gafisa’s inventory, I’d like to understand what you were – I think in terms of ready inventory that is ready discounts, so could this put pressure on gross margin in the second semester and also sale expenses? It’s not only discount, but also a more intense marketing campaign, so what have you been doing to accelerate sales?

The inventory has liquidity, we’re monitoring some projects where we see the need for adjustments in prices, we will adjust prices. I don’t believe this should be done for all the inventory.

The inventory is being sold, only in some specific products we just delivered some commercial projects for offices, liquidity for office projects is lower. But residential buildings have been better.

So the decisions are being made, we’re monitoring liquidity for the inventory. We have to make adjustments, discounts, it will be in some cases only, because we have this attention, we’re adapting ourselves to the market.

[indiscernible].

Could you please ask the question in Portuguese?

[Foreign Language]

Thank you for the question. Concerning the separation, we continue working on the potential separation, we’ve been doing this since 2014.

Today, the two companies are already separated in terms of administration management, some areas are together, they can only be separated when we actually do the spin-off. We’re separating the part on information technology and the rest will be separated when we can do this.

What is missing, some points, related to the capital structure, to be decided. We have a picture what we believe is the best for both companies in terms of their capital needs in their segments and we’re working on this, we have to talk to third parties for this.

This is in progress and sometimes it takes a little longer. So no great changes in relation to what we published in our last announcement.

We’re working on this. We hope that this will continue until 2016.

If we have any announcements, we will make them. In terms of what you said, we wanted to make them two independent companies and both of them on the stock market.

Gafisa is already on the stock market and Tenda, as soon as we have the separation, Tenda will be an independent company listed on the stock exchange. Concerning the second point, nothing new, we mentioned in the release the status, everything is the same as we had no evolution in relation to this, no change.

In terms of what to expect during the year, we don’t give this kind of guidance. If I understood well your question, concerning the shares, we continue working with the same prospects, the two companies have a satisfactory performance.

So right now, it’s difficult to give you any guidance in this respect.

I’d like to thank you all, thank you for the questions. So we will continue once again the objective is to have a better and better performance, working to improve profitability, and also working on the points that have affected our results.

Thank you for your presence and wish you a good day.