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Gafisa Slumps as New Projects Miss Projections: Sao Paulo Mover

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Oct. 16 (Bloomberg) -- Gafisa SA, the Brazilian homebuilder whose sales missed estimates in the past two quarters, fell as new projects trailed the company’s projections, fueling concern that revenue will decline.

Shares dropped 1.1 percent to 3.49 reais at the close of trading in Sao Paulo. The Ibovespa stock benchmark added 1.8 percent.

Gafisa started 1.3 billion reais ($596 million) of new projects in the first nine months of 2013, compared with the company’s projection for the year of 2.7 billion reais to 3.3 billion reais, according to a regulatory filing yesterday after the market closed. The homebuilder reported 7,779 units turned over to buyers, or 50 percent of annual projections.

“The low levels of starts of new projects and deliveries will lead to a cut in estimates for the company’s cash flow,” Eduardo Silveira, an analyst at BES Securities in Sao Paulo, said in a phone interview.

Gafisa will meet its goal for new projects and deliveries in 2013, according to Andre Bergstein, the homebuilder’s chief financial officer. “We’ll accelerate new projects and deliveries in the last quarter of the year,” he said in a phone interview from Sao Paulo, adding that delays were due to difficulties in getting licenses from the government. “Approvals and documents are being finished.”

The Sao Paulo-based company is scheduled to release full third-quarter results on Nov. 13. The average estimate among six analysts surveyed by Bloomberg is for annual sales of 3.4 billion reais this year, a decline of 16 percent from 2012.

To contact the reporter on this story: Denyse Godoy in Sao Paulo at dgodoy2@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net