Reuters: Financial Services and Real Estate: UPDATE 1-Brazilian builder Gafisa posts narrower net loss

Reuters: Financial Services and Real Estate Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

UPDATE 1-Brazilian builder Gafisa posts narrower net loss May 9th 2012, 12:33 Wed May 9, 2012 8:33am EDT * Net loss $16 mln in Q1, 27 pct less than year earlier * Focus on deliveries lifts revenue; sales, launches down * Credit issues still dragging on low income segment By Brad Haynes SAO PAULO, May 9 (Reuters) - Brazilian homebuilder Gafisa posted a narrower net loss for the first quarter as it scaled back new projects to focus on deliveries after a year of delays and cost overruns. Still, credit issues in its low-income segment continued to drag on results, leading to more cancel led sales contracts. Gafisa posted a net loss of 31.5 million reais ($16.2 million), according to a Wednesday securities filing, compared with a loss of 43.3 million reais a year before. New project launches receded 10 percent from a year earlier as the builder reined in lower-income projects and tightened its credit practices. All new launches were focused in the state of Sao Paulo, to avoid the runaway costs that haunted projects in unfamiliar regions last year, contributing to a net loss of 945 million reais in 2011. Gafisa's struggles highlight the scramble by many Brazilian builders to shift away from ambitious growth plans after a sharp slowdown and surging construction costs hammered profitability last year. The focus on existing projects in the first quarter paid off with a record 6,165 units delivered, double a year earlier. But sales fell 50 percent from a year earlier, given fewer new projects coming to the market. Gafisa is getting "back to basics," Chief Executive Alceu Duilio Calciolari said in the earnings statement, reaffirming the company's goal of generating 500 million reais to 700 million reais of operating cash flow this year. The company's net debt rose 76 million reais in the quarter, down from 273 million reais a year earlier, but still pushing net debt up to 122 percent of equity. Its cash and cash equivalents ended March at 947 million reais, compared with 1.22 billion reais in debt due by next March. Revenue rose 27 percent on stronger deliveries, bringing earnings before interest, taxes, depreciation and amortization, a gauge of operating profit known as EBITDA, to 105 million reais, adjusted for stock options, up from 29 million reais a year earlier. Link this Share this Digg this Email Reprints

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