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Gafisa S.A. Message Board

  • abcs.learning abcs.learning Feb 26, 2013 3:23 PM Flag

    Original Source documents for Gafisa Book Value

    For my analysis I subtracted all debt from all assets and included one year's interest payments of 9% on 4.1747 BL R$ debt in my liabilities deduction. I came up with $10.65. By the way, Gafisa received a #1 award in December, 2012 for the thoroughness of its IR financial reporting and disclosure. Instead of being whipped about by rumors, readers here would be well-served to read through this stuff.

    Go to the Gafisa website - English version - Investor area - Investor Relations - Results and Filings - Presentations and Conference Calls

    1) Apimec meeting with analysts and investors (download)
    "Gafisa Investor and Analyst Day, Sao Paulo, December 5, 2012"

    2) Presentation: Investor Breakfast Hosted by Merrill Lynch - "Gafisa Sell-Side Presentation, April 23, 2012"

    3) III BTG Pactual Real Estate Conference, October 24, 2012

    4) Bank of America Merrill Lynch CalGEMs Glbl Emerging Mkts 1-1 Conf on June 11-13, 2012

    5) Quarter Presentation and Conference Calls 4Q12

    6) Preview of Operational Results Teleconference 3Q12

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    • Good posts. You guys lost me on the TBV calculations though.

      "Instead of being whipped about by rumors, readers here would be well-served to read through this stuff."

      ABCS, I agree with this. Nothing personal, but I would say you might follow your own advice here since you independently whipped up your own rumor regarding the debt covenant issue, when it was clear from the beginning that they have the cash to cover 2013 payments. Thanks for pointing out the presentations, I had overlooked those.

      "I do not know if the ADR figure is accurate, or if it has anything to do in the way the ADR is valued via the currency conversion rate (0.51)."

      1 ADR = 2 Local shares

      "I have noticed - just my observation - that when the "good news" of a company's turnaround plan becomes obvious to professional investors - a selling stampede is engineered by interested parties to knock 6 months growth out of the share prices so that it can be bought as if the turnaround had not even happened."

      There were a number of factors that led to this fall (ranked in order of importance:

      1. Technical correction right down to the 50sma weekly for GFSA3.
      2. Macro-fundamental concerns -- Mantega and Tombini began talking about "controlling inflation" while the actual inflation figures came in higher than expected. Signs of economic slowdown in Brazil also adds to persistent concerns of growth stagnation that has plagued the BVSP since 2011.
      3. Concerns about Rajoy in Spain and the Italian election led to increasing 10yr bond rates. This led to a sell-off of global "risk" assets which typically throws Brazil and other EMs into the crosshairs.
      4. Concerns about sequestration, etc in the US.
      5. Uncertainty surrounding the Alphaville rumor.

      • 1 Reply to aco_brasil0192
      • For Aco

        November 13th Conference call and the question by the Morgan Stanley analyst - Nicole Hirakawa.

        My analysis of this question and interchange (below) is that the CFO has plans to pay down part of the debt (thus a reduction in overall debt) plus he's already made steps to roll forward some of the debt so that the company's monthly cash generation will increase (which it already has). Based on their current (Jan 15, 2012) cash position of R$ 1.62 BL, I think the company is safely out of the woods on this one.

        "Nicole Hirakawa -- Morgan Stanley

        "...Good morning. My question is about the debt level. You have a corporate debt coming due the next eight months about BRL 1.5 billion it seems. And I’d like to know what you’re doing about that - maybe willingness to hand over or do you think
        you have enough cash to cover this, or will this be conditioned on selling a stake in Alphaville?

        "..And also one of the covenants is 2.22 twice and the minimum is 2.2. So what do you think will happen with this covenant in the next quarter? I know it depends on the volume of receivables and I imagine that it’ll continue to drop. Perhaps you could say a little bit more about that. Thank you.

        Andre Bergstein - CFO and IRO

        "..Hello Nicole, this is Andre. Regarding the question of the debt in the next 12 months in terms of total debt, we have BRL 1.4 billion and this is reasonably split up 50% or more which is 50% of corporate debt. And as far as corporate debt goes in some cases, we have rolled out also – rolled over the covenant. The Tenda debenture is one case where we rolled it over partially. We decreased the amortization and now in October of this year (2012) and next year (2013) and extended the term.

        "...So this improves our cash flow; and then currently there is another debt which is coming due at the end of the year, BRL 1.50 billion (amount?), although it still appears on the report like the others.

        "...In fact, there was not; (rather) it will decrease BRL 150 million and also some other (debts) which we are paying off. So with this partial movement of rollover and also some payoff, we are in a comfortable situation vis-à-vis the payment of the debt which is coming due (and also the – which help also and also with the transfer)(?).

        "..The other point that you mentioned, in fact there was a mistake which we adjusted; and this covenant took into account the receivables but not the cash.
        So anyway, this has been reported in this last quarter. Now at the beginning of October, we have already been talking about this and they are in fact, very close to the limit, and now it is much more inconsistent – consistent with the reality of the covenant. Would you believe that these amortizations for the next 12 or 18 months or so are dealt with? (And regardless of the needs of high – taken out of you or...)
        {What's that phrase mean?}

        Duílio Calciolari - CEO
        Yes, yes. Yes, it will be dealt with with the cash flow, and we will not have to sell any assets. Thank you."


    • are you serious? dude, since you've done all this research why don't you tell me if Total Common Equity ISN'T R$2.637 billion? go to page 17 of the 9/30 filing, net out retained earnings, add treasury stock and divide by shares outstanding (432.27mm). That's your book value: R$6.10/share (~US$6/ADR). It's not rocket science. This stock is very undervalued - fair value in my opinion - is 8 bucks for the ADR but it's not because of some erroneous BV figure you are throwing around. It is undervalued b/c they are starting to generate a lot of cash and the multiples have yet to normalize on that basis. Period.

      • 1 Reply to siemprefue
      • Siemprefue, I went back over my figures, and it is interesting that on the first go-around our numbers were just exactly about half of each others, which would account for the ADR shares listed as 216 ML (On Yahoo), and the Brazilian shares listed as 432.27 ML. I do not know if the ADR figure is accurate, or if it has anything to do in the way the ADR is valued via the currency conversion rate (0.51).

        I went back through the Q3 report again, and calculated everything in R$ and then at the very end did a conversion to $USD/share. Here are my figures. It is interesting to note that cash again increased in Q4 by R$385 ML sequentially from Q3.

        (9/30) 3Q results reported on December 5th, 2012
        Page 17 - R$ 4.174 BL Total Consolidated debt + Obligations
        Page 17 + R$ 1.235 BL Consolidated Cash and Cash Availabilities
        Page 18 + R$ 8.566416 BL Total receivables
        Page 18 + R$ 3.03660 BL Inventory at Market Value

        Total Assets (9/30): R$ 12.838016 BL
        Total Liabilities: - R$ 4.174 BL
        Net: $8.664016 BL
        Brazilian Shares: 432.27 ML
        Per share: R$ 20.043
        Per Share: $ 10.22 USD (0.51 x R$)


        (12/31) 4Q preliminary results reported on January 14th
        Page 01 + R$ 1.62 billion in unaudited cash and cash equivalents


        4Q Cash increase of R$ 385ML sequentially over Q3

1.55-0.04(-2.52%)Sep 23 4:01 PMEDT