Apresentação do PowerPoint


3Q15 and 9M15

Earnings Results



São Paulo, November 4th, 2015: PDG Realty S.A. (PDGR3) announces today its results for the third quarter and nine months of 2015. Founded in 2003, PDG develops projects for different segments and publics, operating in the development, construction and sale of residential and commercial units, as well as land development.



Investor Relations:


(+ 55 11) 4383-0001

www.pdg.com.br/ir ir@pdg.com.br


Press:

Danthi Comunicações (+55 21) 3114-0779

(+55 11) 3812-7393

www.danthicomunicações.com.br


Conference Call


Date:

Thursday, November 5th, 2015


  • Portuguese


    11:00 a.m. (Brasília)

    08:00 a.m. (NY)


    Tel.: (+ 55 11) 3193-1001

    (+ 55 11) 2820-4001


    Replay:

    (+ 55 11) 3193-1012

    Password: 1857724#


  • English

(Simultaneous translation)


08:00 a.m. (NY)

11:00 a.m. (Brasília)


Tel.: +1 (888) 700-0802

+1 (786) 924-6977


Replay:

(+ 55 11) 3193-1012

Password: 9002369#

3Q15 Highlights and Recent Events


Gross sales of R$685 million in the quarter, 32% up on 2Q15. Net sales came to R$169 million in 3Q15, 138% more than the R$71 million recorded in 2Q15. (pages 6 and 7)


Cash sales totaled R$149 million in 3Q15, 85% more than the R$80 million recorded in the same period in 2014. In the first nine months, cash sales came to R$300 million, 85% up on 9M14. (page 6)


Successful Na Ponta do Lápis campaign, with sales of R$319 million. A total of 1,087 units were sold from 2,954 visits, a conversion ratio of 37%. (page 6)


For the first time, costs to be incurred stood below R$1 billion, reaching R$838 million in 3Q15, 25% down on 2Q15. (page 18)


The Company's extended leverage, including net financial debt and costs to be incurred, decreased by R$400 million over 2Q15, and by R$2 billion since the beginning of 2015. (page 19)


General and administrative expenses closed 3Q15 5% below 2Q15 and 30% below 3Q14, even considering labor obligations incurred in the quarter, due to the Company's restructuring. (pages 17 and 18)


In October, the Company sold all of its interest (25%) in the Jardim das Perdizes project, in São Paulo, for R$160 million. The proceeds from the operation were allocated to deleverage the Company.


3Q15 and 9M15 Earnings Results 1


TABLE OF CONTENTS


Message from Management 3

Operating and Financial Indicators 5

Operating Performance - Launches and Cancellations 6

Operating Performance - Sales 6

Operating Performance - Cancellations and Resale 8

Operating Performance - Sales Speed (VSO) 10

Operating Performance - Inventory 11

Operating Performance - Landbank 12

Operating Performance - De-risking Panel 13

Operating Performance - Title Individualizations 14

Operating Performance - Historical Data 15

Operating Performance - Mortgage Transfers 15

Financial Performance16

Balance Sheet and Income Statement21


Message from Management


Given the change in the country's economic scenario, the new Management began implementing an action plan based on seven main initiatives: (1) restructuring of the debt (2) acceleration of asset sales; (3) increased efforts to sell inventory units and the speeding up of mortgage transfers; (4) the continuation of cost reductions; (5) more emphasis on execution in order to conclude and individualize titles of projects in advanced stages; (6) the reduction of liabilities; (7) preservation of the Company's cash.


One of the plan's first measures was to begin an ample restructuring of the Company's debt, whose maturities were incompatible with the pace of asset monetization and inefficient in regard to the collateral structure. In order to help with this task, the Company hired Rothschild as its financial advisor.


Another important action plan initiative was the acceleration of asset sales based on the continuous evaluation of non-core assets (shareholding interests, projects, land plots), together with the pursuit of strategic partners for ongoing projects. As part of this strategy, PDG sold its 25% interest in the Jardim das Perdizes project, in São Paulo, for R$160 million in October, the proceeds of which were used to deleverage the Company.


Seeking to further improve the performance of inventory sales, in August we conducted the nationwide Na Ponta do Lápis campaign, which proved highly successful, generating sales of R$319 million from 1,087 units. Another important factor that helped the Company's sales performance was the continuing high resale pace of cancelled units within the same quarter, which remained at around 40%.


We are also taking various steps to continue reducing costs, whose results were reflected in the substantial downturn in general and administrative expenses this quarter. One such example was the subletting of space in PDG's central office, which reduced rental and condominium expenses by more than 24%. We will continue to impose rigid cost control and reduction mechanisms, while adapting PDG's structure to the size of its operation.


The Company had 48 ongoing projects at the close of the third quarter and the cost of works to be incurred totaled R$838 million, less than R$1 billion for the first time, further reducing the execution risk and substantially improving asset quality. Advanced works are the subject of redoubled attention so that their conclusion and title individualization occur as quickly as possible, allowing for the timely transfer of the units and the consequent inflow of cash.


For yet another quarter, PDG recorded positive operational cash generation, reducing its extended leverage by R$400 million. Nevertheless, the Company believes it is necessary to speed up cash inflow and is directing its efforts towards this goal.



There were no launches this quarter, with all attention geared towards the monetization of assets and the reduction of costs and liabilities. The Company has no plans for launches in the short and mid-term.


We believe the quality of the Company's assets, almost entirely delivered and with no execution risk, together with the action plan prepared by the new Management, will allow PDG to successfully overcome all the challenges imposed by the current economic scenario.

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