Gafisa : 2Q19 Earnings Release

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FOR IMMEDIATE RELEASE- São Paulo, August 14, 2019 - Gafisa S.A. (B3: GFSA3; OTC: GFASY), a leading Brazilian homebuilder focused on the upper-middle and high-income segments, announced today its operational and financial results for the second quarter of 2019 ended June 30, 2019.

GAFISA ANNOUNCES

2Q19 RESULTS

Conference Call

August 16, 2019

• 11:00 a.m. Brasília time In Portuguese
  [phone] (Brazil) Code: Gafisa
• 10:00 a.m. US EST

In English (simultaneous translation from Portuguese)

[phone] (USA) Code: Gafisa

Webcast: www.gafisa.com.br/ri

Replay:

[phone] Portuguese: 8875| #270 English: 8876| #732

Shares

GFSA3 - B3

GFASY - OTC

Total outstanding shares: 71,031,8761Average Daily Traded Volume (2Q19): 2,088,185 shares.

(1) including 3,331,542 treasury shares.

120 days building the New Gafisa

We assumed management of the Company at the end of March this year. Since then, we have been working diligently to deliver quality results in the context of the real estate market upturn in Brazil while adhering to guidelines set by shareholders and the Board of Directors:

Capitalization: (i) The first tranche of capital increase was concluded by issuing 26,273,962 new shares and raising R$132 million; (ii) The Board of Directors is discussing the second tranche of capital increase; (iii) The Company's valuation study to support offer pricing is underway and; (iv) Proposal to raise up to US$150 million, which can be placed in the domestic or international market, was approved at the Extraordinary Shareholders' Meeting on April 23, 2019.

Management: We are (i) hiring a new team of executives with broad experience in the real estate market and; (ii) horizontalizing management by bringing in innovative, young-minded new talent as well as by integrating teams and divisions.

Governance:New members with a great deal of experience in the turnaround process have been elected to form the Board of Directors. Management-supporting committees were maintained.

Operational:(i) After capitalization, construction work resumed at an appropriate pace, ensuring all projects are executed in line with Gafisa's high quality standards; (ii) the sales division is being restructured; (iii) measures were adopted to generate liquidity of court deposits; (iv) hired consulting firm Falconi to review processes and optimize expenditures in the short-term.

Quality:The annual quality audit concluded with the recommendation that certificates be maintained. This evidences that the Company successfully complies with all regulations, laws, and standards while ensuring the quality of its products and services. In addition, Gafisa continues apt to observe the financial institution's requirements.

Financial:(i) Operational and financial liabilities are being renegotiated and rescheduled; (ii) projects launched by holding migrate to SPEs in order to enable fundraising via SFH (Brazilian Housing System), ensuring that the Company balance sheet is structured in accordance with the best and most transparent practices in the sector.

Strategic: The company has hired Bain & Company to develop a medium and long-term strategic plan that combines strategic and tactical actions.

In the international scenario, the relisting process at the New York Stock Exchange (NYSE) has been analyzed, concluding that we strive to provide greater visibility to the Company and access to new markets.

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This 120-day period involved hard work, dedication, discipline, and transparency. We are greatly pleased to report that the Company is breaking new grounds throughout its entire ecosystem. These results reflect that we are heading in the right direction-and position us to broaden our horizons. Although an arduous journey, we possess the energy and resources necessary to achieve our goals.

Roberto Luz Portella

Chief Executive Officer, Chief Financial and Investor Relations Officer

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OPERATIONAL RESULTS

Table 1 - Operational Performance (R$ 000)

	2Q19	1Q19	Q/Q (%)	2Q18	Y/Y (%)	6M19	6M18	Y/Y (%)
Launches	-	-	-	399,875	-100.0%	-	538,590	-100.0%
Gross Sales	87,893	91,270	-3.7%	405,858	-78.3%	179,163	699,318	-74.4%
Dissolutions	(31,672)	(41,363)	-23.4%	(59,912)	-47.1%	(73,035)	(117,614)	-37.9%
Pre-sales	56,221	49,907	12.7%	345,946	-83.7%	106,128	581,704	-81.8%
Speed of Sales (SoS)	5.0%	4.3%	0.7 p.p.	19.9%	-14.9 p.p.	9.1%	17.2%	-8.1 p.p.
Delivered PSV	91,317	80,079	14.0%	300,991	-69.7%	171,396	300,991	-43.1%

Table 2 - Financial Performance (R$ 000)

			2Q19		1Q19		Q/Q (%)		2Q186		Y/Y (%)		6M19		6M186		Y/Y (%)
	Net Revenue		99,659		95,421		4.4%		281,930		-64.7%		195,080		515,878		-62.2%
	Adjusted Gross Profit¹		48,862		17,764		175.1%		108,768		-55.1%		66,626		170,309		-60.9%
	Adjusted Gross Margin¹		49.0%		18.6%		30.4 p.p.		38.6%		10.4 p.p.		34.2%		33.0%		1.2 p.p.
	Adjusted EBITDA²		13,923		(23,006)		-160.5%		33,566		-58.5%		(9,083)		39,217		-123.2%
	Adjusted EBITDA Margin²		14.0%		-24.1%		38.1 p.p.		11.9%		2.1 p.p.		-4.7%		7.6%		-12.3 p.p.
	Net Income		(12,724)		(46,354)		-72.6%		(24,957)		-49.0%		(59,078)		(78,475)		-24.7%
	Revenue Backlog		506,418		533,503		-5.1%		701,634		-27.8%		506,418		701,634		-27.8%
	Backlog Results3 4		177,847		193,016		-7.9%		262,828		-32.3%		177,847		262,828		-32.3%
	Backlog Results Margin4 5		35.1%		36.2%		-1.1 p.p.		37.5%		-2.4 p.p.		35.1%		37.5%		-2.4 p.p.
	Net Debt		587,898		727,104		-19.1%		751,873		-21.8%		587,898		751,873		-21.8%
	Cash and Cash		182,817		63,068		189.9%		212,897		-14.1%		182,817		212,897		-14.1%
	Equivalents5
	Equity + Minority		575,353		449,455		28.0%		887,913		-35.2%		575,353		887,913		-35.2%
	Shareholders
	(Net Debt, - Proj. Fin.) /		21.9%		51.1%		-29.2 p.p.		17.7%		4.2 p.p.		21.9%		17.7%		4.2 p.p.
	(Equity + Minority)

¹ Adjusted by capitalized interest.

² Adjusted by capitalized interest with stock option plan (non-cash) and minority shareholders.

• Backlog results net of PIS/COFINS taxes (3.65%), excluding the impact of the PVA (Present Value Adjustment) method according to Law No. 11.638.
  4Backlog results comprise the projects restricted by acondition precedent.5Cash andcash-equivalentsand marketable securities.
  6Restatement due to the adoption of IFRS 15 and IFRS 9.

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Launches

During the first half of the year, Gafisa concentrated on the sales process and inventory monetization. Our current focus is on regaining market and consumer confidence, ensuring the economic feasibility of projects, and restoring delivery schedules before resuming launch cycle.

Launches (R$ million)

	464			400
		90	139		71	119
-							-	-
2Q17	3Q17	4Q17	1Q18	2Q18	3Q18	4Q18	1Q19	2Q19
	2017: R$554 MM			2018: R$729 MM

Sales

Gross sales totaled R$87.9 million in 2Q19, down 3.7% q-o-q and 78.3% y-o-y. The y-o-y variation is due to a higher volume of launches during the second quarter of 2018 (R$400 million) besides the Company's restructuring process, which also affected sales performance in the first half.

In the first 6 months of 2019, gross sales totaled R$179.2 million.

Dissolutions reached R$31.7 million in 2Q19, 23.4% lower than in 1Q19, despite higher a delivered PSV volume of 14%. Year-on-year, dissolutions tumbled 47.1%. Our task force is in charge of negotiations to customers, aiming to consolidate a downward trend of dissolution volume.

The graph below shows the evolution of dissolution volume over the past 2 years, evidencing a consistent downward trend.

Dissolutions (R$ millions)

114		95
	84
			58	60	52	58	41
						32
2Q17	3Q17	4Q17	1Q18	2Q18	3Q18	4Q18	1Q19	2Q19
2017: R$412 MM		2018: R$228 MM		2019: R$73 MM¹

¹ Reflects year-to-date.

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Net pre-sales totaled R$56.2 million in 2Q19, 12.7% higher than in 1Q19. In 6M19, net pre-sales came to R$106.1 million.

Breakdown of Net Sales 2Q19 (%)

Net Pre-Sales (R$ million)

			354			346
38,1%					236
	61,9%	127		122			136	95
							50	56
		2Q17	3Q17	4Q17	1Q18	2Q18	3Q18	4Q18	1Q19	2Q19
Inventory under Construction	Inventory Concluded	2017: R$720 MM	2018: R$813 MM	2019: R$106 MM¹

¹ Reflects LTM.

Sales Over Supply (SoS)

SoS was 5.0% in 2Q19, 70 bps higher than in 1Q19.

SoS L12M

36,8%	37,6%	32,0%	37,5%	43,1%	38,9%	39,9%	35,8%
						24,1%
2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19

							Quarterly SoS
		18,3%			19,9%
				14,4%
7,9%	7,4%	9,4%			7,2%			5,0%
								4,3%

2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19

Inventory (Property for Sale)

Inventory at market value totaled R$1.063 billion in 2Q19, down 5.4% q-o-q.

Table 3 - Inventory at Market Value 1Q19 x 2Q19 (R$ 000)

		Inventories		Launches		Dissolutions		Gross Sales		Adjustments¹		Inventories		Q/Q(%)
		1Q19						2Q19
São Paulo		917,439		-		22,144		(76,916)		(3,111)		859,554		-6.3%
Rio de Janeiro		136,453		-		4,511		(6,433)		3,665		138,196		1.3%
Other Markets		69,681		-		5,018		(4,544)		(5,216)		64,939		-6.8%
Total		1,123,573		-		31,672		(87,893)		(4,663)		1,062,689		-5.4%

• Adjustments in the period reflect the updates related to the project scope, launch date, and pricing.

Inventory turnover LTM increased from 21 months in 1Q19 to 38 months in 2Q19 due to lower sales volume in the last 4 quarters.

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Inventory Turnover LTM

33	34																	38
		29							25
		23	21									21
		20	20			19
										16	18

2Q16

3Q16

4Q16

1Q17

2Q17

3Q17

4Q17

1Q18

2Q18

3Q18

4Q18

1Q19

2Q19

Approximately 68% of inventory is composed of residential units located in the state of São Paulo, which have higher liquidity than commercial and residential units in other regions. We are poised to seize opportunities that develop with Brazil's economic upswing, positioning us to recover the level of inventory turnover LTM historically recorded.

Table 4 - Inventory at Market Value - Financial Progress - POC - (R$ 000)

		Not		Up to 30% built		30% to 70%		More than 70%		Finished		Total 2Q19
		Initiated			built		built		Units
São Paulo		-		-		461,800		150,456		247,299		859,554
Rio de Janeiro		-		-		-		-		138,196		138,196
Other Markets		-		-		13,201		-		51,737		64,939
Total		-		-		475,001		150,456		437,232		1,062,689

* % POC does not necessarily reveal the status of construction works, but the project's financial progress.

Table 5 - Inventory at Market Value- Commercial x Residential Breakdown (R$ 000)

GFSA Inventory %	Residential	Commercial	Total
São Paulo	721,448	138,107	859,554
Rio de Janeiro	31,065	107,131	138,196
Others	64,939	-	64,939
Total	817,451	245,238	1,062,689

Delivered Projects and Transfer

In 2Q19, Gafisa delivered the project Choice Santo Amaro, totaling 227 units, net of swap, with a PSV totaling R$91.3 million, net of brokerage. Currently, Gafisa manages the construction of 13 projects, and work on 4 more projects will start this year. All projects will be delivered in accordance with Gafisa quality standards.

Table 6 - Deliveries

Project

Delivery

Launch Date

Location

% Share

Units

PSV R$000²

Date

100%¹

Like Aclimação

Feb/19

Mar/16

São Paulo/SP

100%

136

80,079

Choice Santo Amaro

May/19

Jun/16

São Paulo/SP

100%

227

91,317

Total 2Q19

227

91,317

Total 2019

363

171,396

• Number of units corresponding to a 100% share in projects, net of swaps; ² PSV = Potential Sales Value of units, net of brokerage and swap.

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The PSV transferred in 2Q19 totaled R$44.2 million, down 31.8% q-o-q. This decline appears because an approximate PSV of R$239 million was delivered in 4Q18 (Hermann Jr, Barra Vista, and Scena Alto da Lapa), while the transfer occurred in 1Q19. By contrast, in 6M19, only 2 projects were delivered, totaling R$171.4 million: the project Choice Santo Amaro, with an approximate PSV of R$91.3 million, delivered at the end of May and with higher transfer volume foreseen for the third quarter of 2019.

In the first 6 months of 2019, PSV transferred totaled R$109 million, down 45.4% from 6M18.

Table 7 - Transfer and Delivery - (R$ 000)

	2Q19	1Q19	Q/Q (%)	2Q18	Y/Y (%)	6M19	6M18	Y/Y (%)
PSV Transferred¹	44,202	64,821	-31.8%	140,505	-68.5%	109,023	199,503	-45.4%
Delivered Projects	1	1	0.0%	5	-80.0%	2	5	-60.0%
Delivery Units²	227	136	66.9%	1,025	-77.9%	363	1,025	-64.6%
Delivered PSV³	91,317	80,079	14.0%	300,991	-69.7%	171,396	300,991	-43.1%

• PSV transferred refers to the effective cash inflow from units transferred to financial institutions;
• Number of units corresponding to a 100% share in projects, net of swaps;

³ PSV = Potential Sales Value of units, net of brokerage and swap.

Landbank

With an estimated PSV of R$3.81 billion, the Company's landbank represents 33 projects/phases, totaling 6,751 units. Approximately 70% of land was acquired through swaps, most of it located in the city of São Paulo.

Table 8 - Landbank (R$ 000)

		PSV		% Swap Total ²		% Swap Units		% Swap Financial		Potential Units		Potential Units Total
		(% Gafisa) ¹					(% Gafisa) ³
São Paulo		2,470,906		79.8%		71.6%		8.2%		4,947		5,307
Rio de Janeiro		748,745		60.1%		60.1%		0.0%		755		892
Others		594,327		30.0%		30.0%		0.0%		1,050		1,320
Total		3,813,979		69.8%		66.2%		3.6%		6,751		7,519

¹ The PSV (% Gafisa) reported is net of swap and brokerage fee.

• The swap percentage is measured compared to the historical cost of land acquisition.

• Potential units are net of swap and refer to the Gafisa's and/or its partners' interest in the project.

Table 9 - Changes in the Landbank (2Q19 x 1Q19 - R$ 000)

		Initial Landbank		Land		Launches		Dissolutions			Adjustments		Final Landbank
			Acquisition
São Paulo		2,486,753		-		-		-		(15,847)		2,470,906
Rio de Janeiro		748,745		-		-		-		-		748,745
Others		594,327		-		-		-		-		594,327
Total		3,829,825		-		-		-		(15,847)		3,813,979

* The amounts reported are net swap and brokerage.

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FINANCIAL RESULTS

Revenue

Net revenue totaled R$99.7 million in 2Q19, up 4.4% from 1Q19, driven by higher net pre-sales volume and the cancelation of suspension clause related to project Scena Tatuapé, launched in 3Q18, generated R$15.5 million in revenue this quarter.

Table 10 - Revenue Recognition (R$ 000)

						2Q19							2Q18
	Launches			Pre-Sales		%		Revenue		% Revenue		Pre-Sales		%		Revenue¹		% Revenue
				Sales					Sales
	2018			-2,276		-4.0%		21,630		21.7%		232,403		67.2%		68,242		24.2%
	2017			1,658		3.0%		12,650		12.7%		20,777		6.0%		9,918		3.5%
	2016			33,694		59.9%		44,403		44.5%		24,171		7.0%		25,034		8.9%
	2015			19,696		35.0%		22,583		22.7%		33,323		9.6%		148,275		52.6%
	<2014			3,449		6.1%		(1,606)		-1.6%		35,271		10.2%		30,461		10.8%
	Total			56,221		100%		99,659		100.0%		345,946		100%		281,930		100.0%

¹Restatement due to the adoption of IFRS 15 and IFRS 9.

Gross Profit & Margin

Gafisa's adjusted gross profit came to R$48.9 million in 2Q19 versus R$17.8 million in 1Q19 and R$108.8 million in 2Q18.

The adjusted gross margin stood at 49.0%, up 3040 bps from 1Q19. Note that this significant increase q-o-q is mainly due to the sale of units with higher margin and a review of 2 landbank projects, which resulted in a reversal of impairment of referred landbank in the amount of R$16.7 million.

Table 11 - Gross Margin (R$ 000)

	2Q19	1Q19	Q/Q(%)	2Q18²	Y/Y (%)	6M19	6M18²	Y/Y (%)
Net Revenue	99,659	95,421	4.4%	281,930	-64.7%	195,080	515,878	-62.2%
Gross Profit	36,971	6,447	473.5%	77,226	-52.1%	43,418	102,495	-57.6%
Gross Margin	37.1%	6.8%	30,3 p.p.	27.4%	9.7 p.p.	22.3%	19.9%	2.4 p.p.
(-) Financial Costs	(11,891)	(11,317)	5.1%	(31,542)	-62.3%	(23,208)	(67,814)	-65.8%
Adjusted Gross Profit ¹	48,862	17,764	175.1%	108,768	-55.1%	66,626	170,309	-60.9%
Adjusted Gross Margin ¹	49.0%	18.6%	30.4 p.p.	38.6%	10.4 p.p.	34.2%	33.0%	1.2 p.p.

¹ Adjusted by capitalized interests.

² Restatement due to the adoption of IFRS 15 and IFRS 9.

Selling, General and Administrative Expenses (SG&A)

In 2Q19, selling, general and administrative expenses totaled R$14.4 million, 70.7% below 2Q18.

As a result of the new Gafisa's due diligence policy and its new, effective structural model, selling expenses tumbled 53.7% to R$3.0 million from 1Q19, mainly reflecting lower marketing, condominium, and IPTU (Urban Property Tax) expenses. In 6M19, selling expenses fell to R$9.5 million, 81.8% lower than the same period last year.

General and administrative expenses totaled R$11.3 million, down 45.6% from 2Q18 due to (i) a R$5.2 million reduction in headcount y-o-y; (ii) a review of services and IT agreements that saved approximately R$1.1 million; and (iii) the relocation of our headquarters, which reduced rental and

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condominium expenses by nearly 30%. The variation quarter-on-quarter is explained by a reversal of provision of stock options (approximately R$2.5 million) in 1Q19.

Table 12 - SG&A Expenses (R$ 000)

	2Q19	1Q19	Q/Q(%)	2Q18	Y/Y (%)	6M19	6M18	Y/Y (%)
Selling Expenses	(3,011)	(6,502)	-53.7%	(28,110)	-89.3%	(9,513)	(52,389)	-81.8%
G&A Expenses	(11,340)	(7,900)	43.5%	(20,845)	-45.6%	(19,240)	(39,541)	-51.3%
Total SG&A Expenses	(14,351)	(14,402)	-0.4%	(48,955)	-70.7%	(28,753)	(91,930)	-68.7%

Other Operating Income/Expenses came to R$23.6 million in 2Q19, up 33.4% from 2Q18 due to a 49.5% increase in litigation expenses y-o-y.

It is worth noting that this provision is diffuse, with key contingencies deriving from i) delayed construction of previous projects and; ii) defects in building units delivered between 2010 and 2012. All legal proceedings have been audited, and a policy of settlements has been elaborated to clear obligations and reduce Company liability.

Table 13 - Other Operating Income/Expenses (R$ 000)

	2Q19	1Q19	Q/Q(%)	2Q18	Y/Y (%)	6M19	6M18	Y/Y (%)
Litigation Expenses	(23,544)	(22,225)	5.9%	(15,747)	49.5%	(45,769)	(27,523)	66.3%
Other	(98)	(1)	9,700%	(1,972)	-95.0%	(99)	(2,401)	-95.9%
Total	(23,642)	(22,226)	6.4%	(17,719)	33.4%	(45,868)	(29,924)	53.3%

Adjusted EBITDA

Adjusted EBITDA totaled R$13.9 million in 2Q19 versus a negative R$23 million in 1Q19.

Table 14 - Adjusted EBITDA (R$ 000)

	2Q19	1Q19	Q/Q(%)	2Q18²	Y/Y (%)	6M19	6M18²	Y/Y (%)
Net Income (Loss)	(12,724)	(46,354)	-72.6%	(24,957)	-49.0%	(59,078)	(78,475)	-24.7%
(+) Financial Results	10,469	9,959	5.1%	19,082	-45.1%	20,428	39,032	-47.7%
(+) Income Tax / Social Contribution	309	404	-23.5%	1,432	-78.4%	713	1,664	-57.2%
(+) Depreciation and Amortization	4,143	4,373	-5.3%	5,140	-19.4%	8,516	9,125	-6.7%
(+) Capitalized Interest	11,891	11,317	5.1%	31,542	-62.3%	23,208	67,814	-65.8%
(+) Expenses w/ Stock Option Plan	(412)	(2,460)	-83.3%	1,369	-130.1%	(2,872)	1,278	-324.7%
(+) Minority Shareholders	247	(245)	-200.8%	(42)	-688.1%	2	(1,221)	-100.2%
Adjusted EBITDA¹	13,923	(23,006)	-160.5%	33,566	-58.5%	(9,083)	39,217	-123.2%

• Adjusted by capitalized interests, with stock option plan(non-cash) and minority shareholders. ² Restatement due to the adoption of IFRS 15 and IFRS 9.

Financial Results

In 2Q19, financial results totaled R$5.4 million, up 59.6% and 43.7% from 1Q19 and 2Q18, respectively, reflecting a higher balance of cash and cash equivalents q-o-q and more prudent investments compared to the previous year.

Financial expenses declined 30.6% to R$15.8 million in 2Q19 due to lower interest rates on funding in view of a lower level of indebtedness y-o-y.

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In 2Q19, the net financial result was negative at approximately R$10.5 million versus a net loss of R$10.0 million in 1Q19 and R$19.1 million in 2Q18.

Net Result

2Q19 recorded a negative adjusted net result of R$12.7 million compared to a net loss of R$46.4 million and R$24.9 million in 1Q19 and 2Q18, respectively, already reflecting the efficiency gains of actions implemented by our new management.

Table 15 - Net Result (R$ 000)

	2Q19	1Q19	Q/Q(%)	2Q18³	Y/Y (%)	6M19	6M18³	Y/Y (%)
Net Result	99,659	95,421	4.4%	281,930	-64.7%	195,080	515,878	-62.2%
Gross Result	36,971	6,447	473.5%	77,226	-52.1%	43,418	102,495	-57.6%
Gross Margin	37.1%	6.8%	30.3 p.p.	27.4%	9.7 p.p.	22.3%	19.9%	2.4 p.p.
(-) Financial Cost	(11,891)	(11,317)	5.1%	(31,542)	-62.3%	(23,208)	(67,814)	-65.8%
Adjusted Gross Result¹	48,862	17,764	175.1%	108,768	-55.1%	66,626	170,309	-60.9%
Adjusted Gross Margin¹	49.0%	18.6%	30.4 p.p.	38.6%	10.4 p.p.	34.2%	33.0%	1.2 p.p.
Adjusted EBITDA²	13,923	(23,006)	-160.5%	33,566	-58.5%	(9,083)	39,217	-123.2%
Adjusted EBITDA Margin²	14.0%	-24.1%	38.1 p.p.	11.9%	2.1 p.p.	-4.7%	7.6%	-12.3 p.p.
Net Result	(12,724)	(46,354)	-72.6%	(24,957)	-49.0%	(59,078)	(78,475)	-24.7%

1. Adjusted by capitalized interests.
2. Adjusted by capitalized interests, with stock option plan(non-cash) and minority shareholders. ³ Restatement due to the adoption of IFRS 15 and IFRS 9.

Revenue Backlog and Results

In 2Q19, the balance of revenue backlog according to the PoC method totaled R$177.8 million, with a margin of 35.1% to be recognized.

Table 16 - Backlog Results (REF) (R$ 000)

	2Q19	1Q19	Q/Q(%)	2Q18	Y/Y (%)
Revenue Backlog	506,418	533,503	-5.1%	701,634	-27.8%
Backlog Costs (units sold)	(328,571)	(340,487)	-3.5%	(438,806)	-25.1%
Backlog Results	177,847	193,016	-7.9%	262,828	-32.3%
Backlog Margin	35.1%	36.2%	-1.1 p.p.	37.5%	-2.4 p.p.

Notes:Backlogresultsnet of PIS/COFINS taxes(3.65%) andexcludingthe impactofPVA (PresentValueAdjustment)methodaccordingto Law No. 11.638.

Backlog results comprise the projects restricted by acondition precedent.

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BALANCE SHEET

Cash and Cash Equivalents and Marketable Securities

On June 30, 2019, cash and cash equivalents and marketable securities totaled R$182.8 million.

Receivables

At the end of 2Q19, total accounts receivable totaled R$1.09 billion, down 5.1% from 1Q19. Of this amount, an estimated R$474.8 million is expected to be paid in 2019, which will account for a significant portion of the Company's new balance sheet.

Table 17 - Total Receivables (R$ 000)

	2Q19	1Q19	Q/Q(%)	2Q18¹	Y/Y (%)
Receivables from developments - Backlog	525,602	553,713	-5.1%	728,214	-27.8%
Receivables from PoC - ST (on balance sheet)	449,356	475,820	-5.6%	562,072	-20.1%
Receivables from PoC - LT (on balance sheet)	116,835	120,614	-3.1%	195,199	-40.1%
Total	1,091,793	1,150,147	-5.1%	1,485,485	-26.5%

¹ Restatement due to the adoption of IFRS 15 and IFRS 9.

Notes: ST - Short term | LT-Long term | PoC - Percentage of Completion Method.

Receivables from developments: Accounts receivable not yet recognized according to PoC and BRGAAP.

Receivables from PoC: Accounts receivable already recognized according to PoC and BRGAAP.

Table 18 - Receivables Schedule (R$ 000)

	Total	2019	2020	2021	2022	2023 - and after
Receivables Backlog	525,602	232,969	172,374	110,957	2,460	6,842
Receivables from PoC	566,191	241,854	218,021	97,839	2,237	6,240
Total	1,091,793	474,823	390,395	208,796	4,697	13,082

Cash Generation

The Company ended the second quarter of 2019 with a positive cash generation of R$6.9 million, excluding the effect of a R$132.3 million capital increase. It is worth mentioning that this was the third consecutive quarter of cash generation, a result of disciplined expense management.

Table 19 - Cash Generation (R$ 000)

	4Q18	1Q19	2Q19
Availabilities 1	137,160	63,068	182,817
Change in Availabilities (1)	(57,285)	(74,092)	119,749
Total Debt + Investors Obligations	889,413	790,172	770,715
Change in Total Debt + Investors Obligations (2)	(70,931)	(99,241)	(19,457)
Capital Increase (3)	-	-	132,266
Cash Generation in the Period (1) - (2) - (3)	13,646	25,149	6,940
Final Accumulated Cash Generation²	(45,583)	25,149	32,089

• Cash and cash equivalents and marketable securities.
• Reflectsyear-to-date.

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Liquidity

In 2Q19, Net Debt/Shareholders' Equity ratio stood at 102.2%, an effect not only of the R$132.3 million capital increase but also due diligence with respect to the Company's funds. Excluding project finance, the Net Debt/Shareholders' Equity ratio stood at 21.9%.

Net debt in 2Q19 totaled R$587.9 million, down 21.8% y-o-y.

Table 20 - Debt and Investor Obligations (R$ 000)

	2Q19	1Q19	Q/Q(%)	2Q18	Y/Y (%)
Debentures - Working Capital (A)	245,086	249,242	-1.7%	223,663	9.6%
Project Financing SFH - (B)	461,640	497,307	-7.2%	594,917	-22.4%
Working Capital (C)	54,376	43,623	24.6%	146,190	-62.8%
Other Operations (D)	9,613	-	-	-	-
Total Debt (A)+(B)+(C)= (E)	770,715	790,172	-2.5%	964,770	-20.1%
Cash and Availabilities ¹ (F)	182,817	63,068	189.9%	212,897	-14.1%
Net Debt (E)-(F) = (G)	587,898	727,104	-19.1%	751,873	-21.8%
Equity + Minority Shareholders (H)	575,353	449,455	28.0%	887,913	-35.2%
(Net Debt) / (Equity) (G)/(H) = (I)	102.2%	161.8%	-59.6 p.p.	84.7%	17.5 p.p.
(Net Debt - Proj. Fin.) / Equity ((G)-(B))/(H) = (J)	21.9%	51.1%	-29.2 p.p.	17.7%	4.2 p.p.

¹ Cash and cash equivalents and marketable securities.

The Company ended 2Q19 with R$266.4 million indebtedness due this year, or 34.6% of total debt. On June 30, 2019, the consolidated debt average cost was 1150% bps or 179.7% of CDI.

We also emphasize that during 2Q19, the Company amortized nearly R$53.6 million of the principal balance of our contracted debt.

Table 21 - Debt Maturity (R$ 000)

				Average cost (p.a.)			Total		Until Dec/19		Until Dec/20		Until Dec/21		Until Dec/22
	Debentures - Working Capital (A)			CDI + 3% / CDI + 3.75% / CDI +			245,086		41,387		160,468		41,644		1,587
			5.25% / IPCA + 8.37%
	Project Financing SFH (B)			TR + 8.30% a 14.19% / 12.87% /			461,640		225,020		174,315		62,305		-
			143% CDI
	Working Capital (C)			135% CDI / CDI + 2.5% / CDI +			54,376		11		2,116		48,489		3,760
			3.70% / CDI + 4.25% / 19.56%
	Other Operations (D)							9,613		9,613		-		-		-
	Total Debt (A)+(B)+(C) = (E)							770,715		266,418		336,899		152,438		5,347
	% of Total Maturity per period								34.6%		43.7%		19.8%		0.7%
	Project debt maturing as % of total debt (B)/ (E)					84.5%		51.7%		40.9%		0.0%
	Corporate debt maturing as % of total debt ((A)+(C))/ (E)					19.1%		48.3%		59.1%		100.0%
	Ratio Corporate Debt / Mortgage			40% / 60%

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São Paulo, August 14, 2019

Alphaville Urbanismo SA released its results for the second quarter of 2019.

Financial Results

In 2Q19, net revenue came to R$21 million and net loss totaled R$232 million.

		2Q19					2Q18			2Q19 vs. 2Q18			6M19				6M18			6M19 vs 6M18
Net Revenue		21				20			5%			-2			106			-102%
Net Income		-232				-198			17%			-417			-290			44%

It is worth mentioning that Gafisa discontinued recognizing its share in future losses after reducing the accounting balance of its 30% stake in Alphaville's share capital to 0.

For further information, please contact our Investor Relations team at [e-mail] or [phone].

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Consolidated Income Statement

				2Q19			1Q19		Q/Q (%)		2Q18¹		Y/Y (%)			6M19			6M18¹		Y/Y (%)
	Net Revenue			99,659			95,421		4.4%		281,930		-64.7%			195,080		515,878		-62.2%
	Operating Costs			(62,688)			(88,974)		-29.5%		(204,704)		-69.4%			(151,662)	(413,383)		-63.3%
	Gross Profit			36,971			6,447		473.5%		77,226		-52.1%			43,418		102,495		-57.6%
	Gross Margin			37.1%			6.8%		30.3 p.p.		27.4%		9.7 p.p.		22.3%		19.9%		2.4 p.p.
	Operating Expenses			(38,670)			(42,683)		-9.4%		(81,711)		-52.7%			(81,353)		(141,495)		-42.5%
	Selling Expenses			(3,011)			(6,502)		-53.7%		(28,110)		-89.3%			(9,513)		(52,389)		-81.8%
	General and
	Administrative			(11,340)			(7,900)		43.5%		(20,845)		-45.6%			(19,240)		(39,541)		-51.3%
	Expenses
	Other Operating			(23,642)			(22,226)		6.4%		(17,719)		33.4%			(45,868)		(29,924)		53.3%
	Revenue/Expenses
	Depreciation and			(4,143)			(4,373)		-5.3%		(5,140)		-19.4%			(8,516)		(9,125)		-6.7%
	Amortization
	Equity Income			3,466			(1,682)		-306.1%		(9,897)		-135.0%		1,784		(10,516)		-117.0%
	Operational Result			(1,699)			(36,236)		-95.3%		(4,485)		-62.1%			(37,935)		(39,000)		-2.7%
	Financial Income			5,369			3,365		59.6%		3,737		43.7%			8,734		9,081		-3.8%
	Financial Expenses			(15,838)			(13,324)		18.9%		(22,819)		-30.6%			(29,162)		(48,113)		-39.4%
	Net Income Before			(12,168)			(46,195)		-73.7%		(23,567)		-48.4%			(58,363)		(78,032)		-25.2%
	Taxes on Income
	Income Tax and			(309)			(404)		-23.5%		(1,432)		-78.4%			(713)		(1,664)		-57.2%
	Social Contribution
	Net Income After			(12,477)			(46,599)		-73.2%		(24,999)		-50.1%			(59,076)		(79,696)		-25.9%
	Taxes on Income
	Minority			247			(245)		-200.8%		(42)		-688.1%		2			(1,221)		-100.2%
	Shareholders
	Net Income			(12,724)			(46,354)		-72.6%		(24,957)		-49.0%			(59,078)		(78,475)		-24.7%

¹ Restatement due to the adoption of IFRS 15 and IFRS 9.

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Consolidated Balance Sheet

				2Q19			1Q19		Q/Q (%)		2Q18¹		Y/Y (%)
	Current Assets
	Cash and Cash equivalents			11,373			12,402		-8.3%		14,161		-19.7%
	Securities			171,444			50,666		238.4%		198,736		-13.7%
	Receivables from clients			449,356			475,820		-5.6%		472,539		-4.9%
	Properties for sale			807,992			819,458		-1.4%		892,101		-9.4%
	Other accounts receivable			133,061			107,370		23.9%		104,086		27.8%
	Prepaid expenses and other			2,318			2,466		-6.0%		4,125		-43.8%
	Land for sale			38,681			38,682		0.0%		34,212		13.1%
	Subtotal			1,614,225			1,506,864		7.1%		1,719,960		-6.1%
	Long-term Assets
	Receivables from clients			116,835			120,614		-3.1%		195,199		-40.1%
	Properties for sale			218,616			228,228		-4.2%		370,192		-40.9%
	Other			125,705			123,755		1.6%		114,656		9.6%
	Subtotal			461,156			472,597		-2.4%		680,047		-32.2%
	Intangible. Property and Equipment			29,344			32,270		-9.1%		41,011		-28.4%
	Investments			302,797			309,668		-2.2%		466,987		-35.2%
	Total Assets			2,407,522			2,321,399		3.7%		2,908,005		-17.2%
	Current Liabilities
	Loans and financing			332,693			307,555		8.2%		255,144		30.4%
	Debentures			170,955			133,636		27.9%		21,875		681.5%
	Obligations for purchase of land advances			96,979			114,237		-15.1%		148,536		-34.7%
	from customers
	Material and service suppliers			161,722			115,114		40.5%		94,632		70.9%
	Taxes and contributions			60,359			57,445		5.1%		55,554		8.6%
	Other			372,617			436,573		-14.6%		344,033		8.3%
	Subtotal			1,195,325			1,164,560		2.6%		919,774		30.0%
	Long-term liabilities
	Loans and financings			192,936			233,375		-17.3%		485,963		-60.3%
	Debentures			74,131			115,606		-35.9%		201,788		-63.3%
	Obligations for Purchase of Land and			157,582			153,947		2.4%		182,723		-13.8%
	advances from customers
	Deferred taxes			49,372			49,372		0.0%		74,473		-33.7%
	Provision for Contingencies			119,559			103,604		15.4%		90,516		32.1%
	Other			43,264			51,480		-16.0%		64,855		-33.3%
	Subtotal			636,844			707,384		-10.0%		1,100,318		-42.1%
	Shareholders' Equity
	Shareholders' Equity			573,554			448,179		28.0%		885,291		-35.5%
	Minority Interest			1,799			1,276		41.0%		2,622		-31.4%
	Subtotal			575,353			449,455		28.0%		887,913		-35.2%
	Total liabilities and Shareholders' Equity			2,407,522			2,321,399		3.7%		2,908,005		-17.2%

¹ Restatement due to the adoption of IFRS 15 and IFRS 9.

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Consolidated Cash Flow

	2Q19	2Q18¹	6M19	6M18¹
Net Income (Loss) before taxes	(14.443)	(23.569)	(60.638)	(78.032)
Expenses/revenues that do not impact working capital	1.983	30.173	(670)	17.687
Depreciation and amortization	4.143	5.140	8.516	9.125
Impairment	(17.011)	(16.061)	(28.219)	(25.237)
Expense with stock option plan	(412)	1.369	(2.872)	1.278
Unrealized interest and fees, Net	2.882	3.563	3.086	7.344
Equity Income	(3.466)	9.899	(1.784)	10.516
Provision for guarantee	(1.444)	(2.459)	(1.782)	(3.293)
Provision for contingencies	13.305	15.306	35.530	26.833
Profit Sharing provision	500	1.273	500	2.504
Provision (reversal) for doubtful accounts	6.075	12.142	(12.464)	(11.363)
Gain / Loss of financial instruments	-	1	-	(20)
Provision for fine due to construction work delay	(2.589)	-	(1.181)	-
Clients	24.187	(61.143)	86.500	(92.202)
Properties held for sale	38.090	61.555	130.479	161.167
Other accounts receivable	(14.100)	(7.117)	(24.095)	(11.626)
Prepaid expenses and deferred sale selling expenses	148	1.011	350	1.410
Obligations on land property acquisitions	(13.623)	53.569	(54.871)	22.425
Taxes and contributions	2.914	3.538	3.082	9.124
Suppliers	36.815	(3.450)	37.138	(3.340)
Payroll, charges, and provision for bonuses	(786)	(129)	(1.820)	365
Other accounts payable	(46.393)	(12.967)	(142.994)	(42.767)
Related party operations	7.429	(3.188)	18.280	(8.457)
Taxes paid	(309)	(1.432)	(713)	(1.664)
Cash used in operating activities	21.912	36.851	(9.972)	(25.910)
Investment Activities				-
Acquisition of properties and equipment	(5.674)	(5.146)	(6.017)	(9.514)
Capital contribution to parent company	-	(1.781)	-	(2.280)
Redemption of securities, collaterals, and credits	(29.322)	196.157	48.134	666.060
Investment in marketable securities and restricted credits	(94.173)	(213.609)	(117.438)	(745.861)
Cash used in investment activities	(129.169)	(24.379)	(72.604)	(91.595)
Funding Activities			-	-
Related party contributions	-	-	-	-
Increase in Addition of loans and financing	29.078	158.392	51.787	210.330
Amortization of loans and financing	(51.417)	(180.653)	(173.571)	(357.802)
Assignment of credit receivables, Net	-	-	-	-
Loan operations	(9.400)	296	(9.358)	(155)
Sale of treasury shares	-	-	148	-
Cash used in financing activities/ discontinued	-	-	-	-
Proceeds from sale of treasury shares	5.702	-	60.374	-
Capital Increase	132.265	-	132.265	167
Subscription and payment of common shares	-	-	-	250.599
Net cash from financing activities	106.228	(21.965)	61.645	103.139
Beginning of the period	12.402	23.654	32.304	28.527
End of the period	11.373	14.161	11.373	14.161
Increase (decrease) in cash and cash equivalents	(1.029)	(9.493)	(20.931)	(14.366)

¹ Restatement due to the adoption of IFRS 15 and IFRS 9.

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This release contains forward-looking statements about business prospects, estimates for operating and financial results, and Gafisa's growth prospects. These are merely projections and, as such, are based exclusively on the expectations of management concerning the future of the business and its continued access to capital to fund the Company's business plan. Such forward-looking statements depend, substantially, on changes in market conditions, government regulations, competitive pressures, the performance of the Brazilian economy, and the industry, among other factors; therefore, they are subject to change without prior notice.

IR Contacts

Telephone: [phone] / 9474

E-mail: [e-mail]

IR Website: www.gafisa.com.br/ri

Media Relations

Fato Relevante

Alcides Ferreira [e-mail] [phone]

[phone]

Edson Gushiken [e-mail] [phone]

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