Low-income division helps Brazil's Gafisa beat profit estimate
SAO PAULO Aug 7 (Reuters) - Brazilian homebuilder Gafisa SA on Friday reported second-quarter profit that beat analysts' estimates, helped by sales of completed homes as well as an increase in earnings at its division that targets low-income buyers.
Consolidated net profit reached 28.5 million reais ($8 million) in April-June, versus an 851 million real loss a year earlier, according to a securities filing.
Analysts in a Reuters poll expected a 22.7 million reais profit.
Gafisa has focused its efforts in recent quarters on selling unwanted inventory and ramping up operations at its Tenda unit, which specializes in building homes for low-income earners.
The lower end of the market has been relatively resilient this year due to the support of a government housing subsidy program and high levels of repressed demand for affordable housing.
Meanwhile, the more expensive end of the market, which tends to attract real estate investors, has been hammered by higher interest rates and sinking consumer confidence.
The value of new projects launched by Tenda in the quarter rose 132 percent to 229.4 million reais, while the value of projects launched under the middle-income Gafisa brand fell 20 percent to 252.6 million reais as the company adjusts its operations to the current market situation.
Tenda posted a 20 million real profit versus an 18 million real loss a year earlier, mostly due to improved profitability and cost controls in newer projects. Meanwhile, the Gafisa division saw an 8.5 million real profit, down from 17.1 million reais in the second quarter of 2014.
Gafisa's consolidated adjusted gross profit margin, or the percentage of net sales left over after deducting operating costs, declined to 33.9 percent in the quarter from 34.5 percent in the first three months of 2015. ($1 = 3.51 Brazilian reais) (Reporting by Asher Levine; Editing by Lisa Shumaker)
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