Gafisa S.A.

Andre Bergstein - Chief Financial Officer and Investor Relations Officer Felipe Cohen - Chief Financial Officer and Investor Relations Officer, Construtora Tenda S.A.

Daniel Malheiros - Votorantim Nicole Hirakawa - Credit Suisse

Good morning and thank you for being with us today. The first half of 2016 continued having a turbulent economic and political situation.

This combination of political crisis and a turn down in the economy have impacted the market. Gafisa, with the diversification of its operations both in high income and lower income projects, has a different reality that has allowed us to mitigate partially the negative effects of this period.

The Gafisa segment, which is the hardest hit by the deterioration of the macroeconomic environment, continues its strategy to improve the level of operations and business management, maintaining a more conservative posture concerning the development of new projects. Whereas the Tenda segment, anchored on the resilience of the low-income market, continues to have more consistency in the expansion of its business model even with the current macroeconomic environment.

In the second quarter, the Gafisa segment launched two projects in São Paulo, totaling BRL 130.4 million, totaling BRL 210 million in launches in the first semester of 2016. In spite of the continued turbulence in the markets, this segment was able to reach in Q2 a performance superior to the previous quarter.

Apart from the better result of sales, with gross sales reaching BRL 262 million, an increase of 10.5% in relation to Q1, another important point in Q2 was the reduction in the volume of cancellations, going back to the average level of the previous year. With this, the net sales reached BRL 129 million in Q2, representing 66% of net sales of the first semester 2016.

The deal flow of the Gafisa segment, still hard hit by the market difficulties, had a small recovery and reached 6.3% in this quarter in comparison to 3.3% in the previous quarter and 10.5% in Q2 2015. The volume of cancellations in the quarter, in spite of an improvement, continued as a consequence of the current situation where many volumes – a great volume of projects delivered at the end of 2015.

In Q2, we delivered four projects BRL 412 million, closing the semester at quite a good BRL 17 million in projects delivered. As seen since 2015, and one of our main operational guidelines, the company continues concentrating its efforts in selling the remaining units.

As a result, the inventory represented 73% of net sales in the quarter and 77% of the first semester. Nevertheless, with a higher volume of cancellations in old projects, net sales of first semester were concentrated in more recent projects, with an impact in the revenue of Gafisa in the first half of the year.

Gafisa segment closed Q2 2016 with 25 projects in execution, all of them within schedule. The volume of the contracts that we pass to the banks represent BRL 142 million in the quarter, BRL 252 million in year-to-date, resulting from the operational efficiency.

And in spite of the current credit restrictions, we continue passing these contracts to the bank. Although there was an expectation of an improvement in the economic political scenario, the company sees lack of visibility in relation to a recovery, and therefore, we are being very cautious.

With these facts, we will continue a conservative posture, trying to balance the launching of new products in the market, giving priority to those with more liquidity in order to reach a good level of sales and a good level of profitability. Now, I’d like to pass the floor to Felipe Cohen.

He will talk about the highlights of Tenda.

Thank you, Andre. Good morning.

Concerning Tenda, the scenario – economic scenario is more comfortable. With relevant launches and also lower level of cancellations, we’re passing the contracts immediately to the banks after the sale.

In this environment, the Tenda segment continues concentrating its efforts in this new business model. The consolidation of the model anchored on four pillars, allowing Tenda to have a good operational and financial performance even in the current political economic scenario.

Continuing with the expansion of the operation in Q2 2016, Tenda, with another step, continued to improve its operational level with launches reaching BRL 414 million, the highest volume since Q4 2010. 12 projects in the states of São Paulo, Rio de Janeiro, Rio Grande do Sul, Minas Gerais and Bahia.

Year-to-date, the Tenda segment reached BRL 643 million in new projects. In Q2, gross sales reached BRL 382.5 million and cancellations continued at a controlled level of 15.1% of gross sales, totaling net sales of BRL 325 million.

This resulted in 21.9% higher than the previous segment and 12.1% higher year-to-date. In the year-to-date, net sales totaled BRL 591.5 million.

As a result of this good operational moments, the deal flow of the quarter reached a solid 26.4%, higher than the deal flow of 23.9% in the Q1 2016. Since 2013, when we began the operations in the new model, Tenda launched 72 projects with a total of BRL 2.7 billion.

Of this total, Tenda already delivered BRL 1.1 billion or 32 projects in phases. All the projects of the first harvest in the new model, launched in 2014, were concluded and delivered with the schedule.

And concerning the harvest of 2014, we must deliver in the next months only one project of the 14 launched in that year. In Q2 2016, the Tenda segment delivered ten project phases and 1,895 units, representing BRL 275 million.

Year-to-date, we delivered 13 project phases, 2,359 units and BRL 337.1 million. For second half of the year, the Tenda segment continues to obtain gains in scale and it’s intensifying the volume of launches, always based on the behavior of the market and with a minimum profitability.

The consistency of the results with this new model consolidates our trust in this business model for the rest of the year. Now, I’d like to pass the floor back to Andre.

Thank you, Felipe. In consolidated terms, Gafisa and Tenda launched BRL 545 million in Q2 2016, closing the semester with BRL 553.7 million in new projects.

The Gafisa segment was responsible for 24% of the launches in the quarter and Tenda for the remaining 76%. In the second quarter, net sales totaled BRL 454 million, with an expansion of 46.4% in comparison with Q1 2016.

The Gafisa segment was responsible for 29% of net sales, while Tenda was responsible for the 71% remaining. The adjusted gross profit – consolidated gross profit in the quarter was BRL 138.3 million and a margin of 29.2%.

First semester of 2016, the gross adjusted result, BRL 248 million, 28.3% margin. The company is still trying to have more stability in the structure of cost and expenses.

During Q2 2016, the general expenses, administrative expenses reached BRL 82.3 million, remaining stable in comparison to the previous quarter and BRL 8.3 million lower than Q2 2015. Thus the company is working to improve this, allowing a cost structure and expenses adequate to the current situation.

As a result of all these factors, in Q2, Gafisa reported a consolidated net loss of BRL 38.5 million in comparison with a loss of BRL 53.2 million in the previous quarter and a profit of BRL 28.5 million in Q2 2015. At the end of the semester, the relationship between net debt and assets reached 48.5%, a small expansion in relation to Q1 2016, but in line with the company’s [indiscernible].

Excluding the financial projects, the relation represented a negative region of 9.8%. The generation of consolidated operational cash reached BRL 38.2 million in the quarter.

Closing the period, we had a net cash consumption of BRL 32.5 million. In year-to-date, the consumption of net cash totaled BRL 4.2 million.

In this semester, the cash generation was impacted due to reduced volume of deliveries in Gafisa. We will have great concentration in the second half of the year.

We will continue with a conservative posture in the second half of 2016, trying to balance the launching of new products, giving priority to those with greater liquidity, to preserve sales levels and adequate profitability. The Gafisa segment, with its consistent and balanced operation, tries to manage the effects of a recession.

And Tenda, with the resilience of its economic segment, is ready to improve the volume of new launches anchored on the good results, verified in the project launched during the year and this month. The company continues to have discipline in capital, having among its guidelines, goals of profitability and value generation for shareholders.

Thank you. Now, we are available for questions.

Good morning. Thank you.

I’d like to know, concerning Alphaville, I saw pretty negative results. Could you give us more disclosure, what happened in the period?

Do you have a better visibility in the future? Concerning Gafisa, in the second semester, how are the deliveries, especially residential?

Do you have an expectation for better cash generation?

Hello, Daniel. Andre.

Well, first answering about Alphaville, Alphaville had a semester – in fact, we had a lower sales volume in comparison with last year. We sold the inventory, less launches.

So we had a lower volume, much lower from launches. Remember, last year, considering the market that we had, which was not as bad as the current semester, Alphaville had a very good performance last year.

Now, in this semester, it felt the recession, it was a semester with very few launches – and few launches and also less sales of inventory, thus revenue was much lower in comparison with last year and previous years. The result was hard it.

The number of projects in progress, also deliveries, were down, having a small effect on revenue. Apart from this, we have the financial aspects.

We had an effect related to old options, which had an BRL 18 million impact on finance, and the issue of the cost of debt which went up in comparison with last year. Interest rates are higher.

Spread is higher. And this had an impact on financial expenses.

And we arrived, therefore, to this loss in BRL 39 million in the semester. Well, as the market improves in the second semester, we have expectations of a better performance.

Now, concerning cash generation in the first semester, we had a much lower volume of deliveries. We delivered, in the semester, 1,500 units.

Of these 1,500 units, 500 were commercial buildings in Rio de Janeiro and all of these were direct sales or units that were paid in advance, which was expected. It was not much different from what we anticipated in terms of operational cash flow and the consumption of cash in the semester.

We see more deliveries, more concentrated in residential in the second semester. So this should have – show an improvement.

Now, in terms of expenses, it’s in line with what we imagined. Q2 was a little more difficult.

We had to pay for some plots of land for older projects and new acquisition of a plot of land, we disbursed BRL 5 million. Let’s see if we will have more deliveries.

Sales also are not helping because when we have more sales, especially in sales of inventory, this helps a lot in operational cash flow. Thank you.

One more question concerning Tenda. For example, the receivables that had an impact on the margin.

Is this problem over? Do you think it will continue?

Hi, Daniel. Thank you for the question.

In practice, with adjustments with the final part of what we began at the end of last year, reviewing, the contracts that we pass to the banks are the legacy and some that represented bad debts. So, here, we did – we made an accrual last year, beginning of this year too, and this was the end.

We don’t expect any more adjustments, anymore – certainly accruals are all there in the legacy. It has nothing to do with the new model.

Thank you.

Good morning. I have two questions.

The first, about the PDG and Tenda, you mentioned in the release that Tenda is more resilient, what was the policy at the beginning of Q2? What changed?

How are things now? Can you give us an update how the company is working, the size of the portfolio, delinquency?

This would help a lot. Another point, cash burn.

Lower volume of deliveries in the first semester, okay, and [indiscernible]. So what caused this burning of cash, this cash burn?

Hello, Nicole. Concerning the PDG [indiscernible] and, in fact, April was a very non-typical month.

There was a deterioration, a greater credit restriction in April. And we had more difficulty to approve credit in April.

And the company made the decision to give more discounts in April to allow the delivery of volume that we expected. In May, things went back to normal as we had in Q1.

So the discount policy was canceled. We went back to our normal practice.

So it was only in April and this should not have a great impact on the margin. The drop in 3 percentage points that we see in Q2 is concentrated in this adjustment at PDG concerning the legacy portfolio.

Now, concerning the new model, we understand that we have a very conservative policy for accruals. We have a portfolio BRL 180 million and we have an accrual of BRL 56 million.

In other words, more than 30% of this portfolio is already accrued. That’s why we don’t expect great surprises in this portfolio.

Now, concerning cash flow, cash burn, talking about Tenda’s generation, we continued generating cash in Q2, but at a lower level than in Q1. And Q1 was a surprise.

We generated BRL 656 million. It was above our expectations.

But we have been saying that our expectation is to continue to generate cash in all the quarters. So in this quarter, BRL 16 million, it’s within our expectations.

We don’t expect great surprises until the end of the year.

Andre. Supplementing the issue of cash generation at Gafisa, as you said, we had a higher volume of contracts passed to the bank.

This is one of the variables to receive the total amount. The other is collections, normal installments.

We obtained – we transfer the contracts to the bank. We had an impact on revenue in terms of cash from clients.

We had a similar number, BRL 320 million per quarter. The volume of the transfer of the creditor banks is not very high in Q2 because residential deliveries were not strong.

This is what we expected. Total expenses, as we mentioned, expenses were a little higher, BRL 15 million, BRL 20 million higher.

And this generated a lower – BRL 20 million lower amount in – we had already – Gafisa had consumed cash in Q1, consumed a little more in Q2. And since Tenda generated less cash flow in Q2, therefore, we went from a consolidated generation to consolidated consumption.

And in the quarter, it was a drop, BRL 4 million in consumption.

Yes, thank you. Felipe mentioned the size of the portfolio, is it the total portfolio?

No, I’m considering pre-delivery and post-delivery total portfolio receivables excluding transfers to bank.

Thank you.

Well, we’d like to thank you all for your presence, the questions. Well, that’s the message.

As we said, let’s see how the market will behave in the second semester, the political economic scenario and the consequences on our operations. Thank you.