Brazil homebuilder Gafisa cuts Q2 losses but still in the red
SAO PAULO Aug 8 (Reuters) - Brazilian homebuilder Gafisa SA posted a small second-quarter loss, weighed down by the losses of its low-income Tenda division, as it made progress toward returning to profitability.
Gafisa said its net loss amounted to 851,000 reais ($372,935), a substantial improvement on its 14.1 million reais loss a year earlier, according to a securities filing late Friday. Seven analysts in a Reuters poll had forecast a 20.8 million reais profit, on average.
Gafisa has been working to rein in expenses and boost margins in recent quarters after a rapid expansion into untried regions led to cost overruns and big quarterly losses.
Gross margins improved in the quarter to 35.7 percent from 28.1 percent a year earlier.
Last month, the company said it had launched 413.8 million reais worth of new projects in the second quarter, up 66 percent from a year earlier. Total contracted sales reached 433 million reais, a 12 percent gain from the second quarter last year.
Gafisa announced plans late last year to spin off Tenda, which should be concluded in 2015. The group acquired Tenda in 2008, but a series of costly budget overruns and canceled contracts in the unit have weighed on Gafisa's bottom line.
Sales cancellations fell on a quarterly basis in the Tenda division, though that was partly offset by a rise in cancellations in the mid-range division, which also uses the Gafisa brand name.
The company said Tenda was on track to become profitable again, with net sales of 181.7 million reais for the quarter, the division's best result since the last quarter of 2011.
Gafisa saw a cash burn of 1.3 million reais, compared with an 84 million reais cash burn in the second quarter of 2013.
Adjusted earnings before interest, taxes, depreciation and amortization rose to 89.8 million reais from 26.5 million reais in the first quarter, beating analysts' estimates of 76 million reais but lower than 93.9 million reais a year earlier.