SAO PAULO Feb 14 PDG Realty SA, one
of Brazil's biggest homebuilders, said project launches should
continue to rise in 2014, with the company turning the cash burn
of recent quarters into cash generation by the second half of
Speaking to analysts on a Friday conference call to discuss
fourth-quarter results, Chief Executive Officer Carlos Piani
said the company sees growth picking up despite macroeconomic
"About the (real estate) market, yes, we are concerned ...
but I see a clear disconnect between (stock prices) and what is
happening in the street," Piani said, highlighting opportunities
to increase market share with higher quality offerings.
An index of Brazilian real estate stocks has fallen
over 30 percent in the past 12 months as investors, concerned
over the impact of higher interest rates and slowing economic
growth in Latin America's largest economy, dumped shares.
PDG, which has struggled to turn around operations after an
aggressive expansion plan led to huge losses and a hefty debt
load, saw its shares fall about 46 percent over the past year.
The stock rebounded slightly on Friday, rising about 4
percent after the company posted an unexpected quarterly profit
late Thursday following four straight quarters of losses.
The 19-million-reais profit ($7.95 million) was driven by
stronger apartment sales and the sale of an office project.
Preliminary launch and sales figures released last month
showed a rebound in demand, with cancellations down more than 50
percent from the prior three months.
Still, the company remained among the most indebted of
Brazil's major homebuilders. Total debt rose 17 million reais
from the third quarter to reach 7.0 billion reais at the end of
2013, the company said, while cost pressure still remained from
older vintage projects.
"All in all, this is not the tipping point for PDG," wrote
Luiz Mauricio Garcia, an analyst with Bradesco BBI in Sao Paulo.