Gafisa : 3Q20 Earnings Release

FOR IMMEDIATE RELEASE - São Paulo, November 16, 2020 - Gafisa S.A. (B3: GFSA3; OTC: GFASY), a leading Brazilian homebuilder, announced today its operational and financial results for the third quarter ended September 30, 2020.

GAFISA ANNOUNCES

3Q20 RESULTS

Gafisa's growth upturn is a reality, with 253% higher sales volume, R$1.1 billion in launches in 2020, and R$1 billion

PSV in new acquisitions

The third quarter of 2020 was marked by Gafisa's consistent recovery of operational performance, highlighting sales, launches, construction works delivery, and land acquisition. We recorded the best sales performance over the past two years, totaling R$144 million sales, reflecting a 253% quarter-on-quarter increase.

After two years without new launches, we resumed launches in the third quarter of 2020, with Chez Perdizes, High Line Jardins, and Normandie Moema projects, totaling a PSV of R$264 million, all of them located in high-valued regions, with good liquidity in the city of São Paulo. Subsequently to the end of the third quarter, all these three launches today report healthy levels of sales, 20% in Chez Perdizes, 45% in High Line Jardins, and 60% in Normandie Moema. For the fourth quarter, we have other three launches totaling R$875 million, highlighting the Cyano Barra project with R$570 million PSV and a project in Campo Belo, SP, with R$262 million PSV.

Again, we evidence the consistency of the Company's planning and delivery capacity, with two other projects delivered, with a total PSV of R$140 million, the 7th project delivered in 2020. We obtained the occupancy permit for the 8th and 9th projects, now we have achieved 94% of PSV estimated to be delivered in 2020. With the conclusion of the Upcon acquisition, we added two projects to be delivered in 2020, reaching a total of 10 projects with nearly R$1 billion PSV and 1,474 units.

The evolution of construction works was maintained, as well as projects and sales, even during the pandemic. The Company, through its Management Committee - COVID-19, upheld the prevention measures necessary to ensure everyone's safety, evidencing the focus and discipline of Gafisa's new management, even amidst a more challenging international scenario.

Still referring to our operational performance, it is worth noting that we acquired in the quarter two excellent plots of land in the city of São Paulo, one in Vila Mariana district, with an estimated PSV of R$116 million and another in the Butantã district, with an estimated PSV of R$162 million. Upcon also brought to our landbank an estimated PSV of R$900 million. We also concluded negotiations to acquire four projects from Calçada S.A., with an approximate PSV of R$747 million, and the acquisition of the last plot of land at Av. Delfim Moreira, definitively sets Gafisa's return to the city of Rio de Janeiro, through differentiated projects.

Concerning financial results, it is worth noting that we maintained the REF margin (backlog results) at approximately 35%. This evidences that backlog result sustains the Company's margin at healthy levels in a continued and consistent improvement, despite a temporary reduction of adjusted gross margin (no financial cost), due to our conservative approach when recording provision for dissolutions and repricing of older inventories during the pandemic.

We also should point out a continuous improvement of the Company's balance sheet and deleverage. Within one year, we went from a Net Debt/Shareholders' Equity ratio of 162% in 1Q19 to current 7.6% in 3Q20, with a capital increase approved on August 7, 2020, injecting R$218.2 million into the Company's cash.

We are confident that we are reaching a new cycle of high growth in the real estate market, with interest rates nearing the lowest historical levels, unparalleled credit market growth, and development. Furthermore, as fixed-income investments have very low yield, or even negative, real estate investment has increasingly become relevant in the investment portfolio of individuals and institutional investors.

Within this virtuous context of growth in the real estate market and the assertive actions in its real estate development core business, Gafisa is executing its transformation to become a real estate platform to go beyond its core activity of real estate development. From its solid balance sheet and strategic planning, Gafisa set up a new line of business, the Gafisa Properties. We are also developing partnerships and investments in startups to bring innovation, technology, and new services for Gafisa and its clients. Gafisa Properties will own real estate assets to become profitable through leasing flows across the real estate spectrum, such as offices, residential units, shopping malls, and hotels, and its portfolio will be composed of Gafisa's built assets or under construction (e.g., offices, stores, and small residential units of up 50 m2)and new acquisitions with a focus on non-replicable locations and/or assets with turnaround opportunities. As far as innovation is concerned, we will apply our background and market expertise to pursue synergies and new business models according to a real estate Ecosystem vision that transforms Gafisa's real estate assets into business platforms to be explored throughout real estate asset's life cycle, whether assets held Gafisa Properties or sold by Gafisa to its end clients. We are confident that these actions will allow the Company to capture value for its shareholders.

Gafisa relies on a traditional brand and is recognized as a benchmark in the Brazilian market. We are refining our new management model with dynamism and discipline, to prepare the Company for a new development and growth cycle that will restore Gafisa's history of success and value creation for our shareholders.

Ian Andrade

Chief Financial and Investor Relations Officer

OPERATIONAL RESULTS

Table 1 - Operational Performance (R$ 000)

	3Q20	2Q20	Q/Q (%)	3Q19	A/A (%)	9M20	9M19	Y/Y (%)
Launches	263.789	-	-	-	-	263.789	-	-
Gross sales	143.878	41.383	247,7%	39.963	260,0%	185.260	219.127	(15,5%)
Dissolutions	(26.224)	(21.543)	21,7%	(10.210)	156,8%	(47.767)	(83.245)	(42,6%)
Net Sales	117.654	19.840	493,0%	29.753	295,4%	137.494	135.881	1,2%
Speed of Sales (SoS)	10,57%	2,39%	8,2 p.p.	3,00%	7,6 p.p.	12,13%	11,60%	0,5 p.p.
Delivered PSV	140.255	543.720	(74,2%)	-	-	683.975	171.648	298,5%

Table 2 - Financial Performance (R$ 000)

	3Q20	2Q20	Q/Q(%)	3Q19	Y/Y (%)	9M20	9M19	Y/Y (%)
Net Revenue	148.632	83.800	77,4%	89.212	66,6%	304.135	284.292	7,0%
Gross Profit	24.412	22.714	7,5%	38.104	(35,9%)	67.588	81.522	(17,1%)
Gross Margin	16,4%	27,1%	-10,7 p.p.	42,7%	-26,3 p.p.	22,2%	28,7%	-6,5 p.p.
Adjusted EBITDA²	7.922	7.722	2,6%	31.051	(74,5%)	19.756	21.969	(10,1%)
Adjusted EBITDA Margin²	5,3%	9,2%	-3,9 p.p.	34,8%	-29,5 p.p.	6,5%	7,7%	-1,2 p.p.
Net Income²	(56.493)	(23.545)	139,9%	(1.668)	3286,9%	(105.500)	(60.746)	73,7%
Revenue Backlog	291.189	306.484	(5,0%)	465.102	(37,4%)	291.189	465.102	(37,4%)
Backlog Results3 4	100.311	109.614	(8,5%)	166.149	(39,6%)	100.311	166.149	(39,6%)
Backlog Results Margin4 5	34,4%	35,8%	-1,3 p.p.	35,7%	-1,3 p.p.	34,4%	35,7%	-1,3 p.p.
Net Debt	114.839	103.493	11,0%	356.610	(67,8%)	114.839	356.610	(67,8%)
Cash and Cash Equivalents5	630.660	570.156	10,6%	394.216	60,0%	630.660	394.216	60,0%
Equity + Minority Shareholders	1.513.890	1.177.187	28,6%	782.074	93,6%	1.513.890	782.074	93,6%
(Net Debt - Proj. Finance) / (Equity + Minority)	(33,2%)	(39,2%)	6 p.p.	(40,8%)	7,6 p.p.	(33,2%)	(40,8%)	7,6 p.p.

1Adjusted by capitalized interest with stock option plan (non-cash) and minority shareholders.

1. 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.
2. Backlog results comprise the projects restricted by a condition precedent.
3. Cash and cash equivalents and marketable securities.

Launches

In 3Q20, Gafisa resumed launches, three projects with an estimated total PSV of R$264 million. These launches are a result of a relevant restructuring process. It is worth noting that the social distancing rules inflicted by the pandemic of Covid-19, suspended the operation of sales stands, affecting the economic activity in the country. The Company also postponed for a few months the launches foreseen early in the year, evidencing our focus and commitment to the Company's turnaround. As subsequent events, we already launched for 4Q20, other two projects, highlighting the Cyano Barra with R$570 million PSV, and we are already in the pre-launch of another project in Campo Belo, with an estimated PSV of R$262 million.

Launches (R$ MM)

								264
	119
71
		-	-	-	-	-	-
3T18	4T18	1T19	2T19	3T19	4T19	1T20	2T20	3T20
2017: R$554 MM		2018: R$729 MM		2020: R$44 MM

Sales

Gross sales soared 247.7% to R$143.8 million in 3Q20 versus 2Q20, even during the pandemic, sales grew by 260.0% year-on-year. The quarter-on-quarter increase reflects the restructuring of the sales area, with Gafisa Sales' improved structure. The higher speed of sales compared to 3Q19 also reflects greater sales options available, with a resumption of launches and pre-launches in 3Q20.

Dissolutions reached R$24.2 million in 3Q20, surging 12.4% from 2Q20 and 156% year-on-year. The quarter-on-quarterincrease partially stems from a higher volume of deliveries in the period (not a concern for Management) and the pandemic of COVID-19.Efforts endeavored in the 2019 restructuring process advanced, resulting in renegotiations with Gafisa's clients, a more accurate credit analysis of potential clients,as well as the recovery of client confidence in the Company.

Dissolutions (R$ million)

52	58
	41
		32
						22	24
				10	13	10
3Q18	4Q18	1Q19	2Q19	3Q19	4Q19	1Q20	2Q20	3Q20
2017: R$412 MM		2018: R$228 MM			2019: R$97 MM¹

¹ It considers LTM.

Net sales totaled R$117.7 million in 3Q20.

Net Sales Breakdown 3T20			Net Sales (R$ million)
(%)		136
			95							114
29,7%				50	56		60
						30		29	20
	70,3%
		3Q18	4Q18	1Q19	2Q19	3Q19	4Q19	1Q20	2Q20	3Q20
Construction	Delivered units	2017: R$720 MM	2018: R$813 MM	2019: R$196 MM¹
		¹ It considers LTM.

Sales Over Supply (SoS)

Sales Over Supply (SoS) reached 10.6% in 3Q20, an increase of 8.3 p.p. from 2Q20 and 7.6 p.p. from 3Q19. This increase reflects a higher volume of sales and launches in the quarter. We believe that this figure should improve with the Company's next launches, which besides making available new products, usually has a significant impact on inventory units sale.

SoS L12M

38,9%	39,9%	35,8%
		24,1%	19,3%	18,2%	17,0%	14,1%	18,5%
3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20

SoS Quarterly

9,4%													10,6%
7,2%			5,0%			6,4%
4,3%
		3,2%
3,0%	2,3%

3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20

Inventory (Property for Sale)

The Company's inventory at market value consolidated with projects acquired from Upcon totaled R$995.9 million in 3Q20.

Table 3 - Inventory at Market Value 2Q20 x 3Q20 (R$ 000)

	Inventories 2Q20		Launches		Dissolutions		Gross		UPCON		Adjustments			Inventories		% Q/Q
				Sales					3Q20
São Paulo	686.125		45.553		22.749	(132.434)		215.563	4.193		841.749		22,7%
Rio de Janeiro	120.572		-		3.021	(5.134)		-	5.225		123.684		2,6%
Other markets	35.032		-		454	(6.310)		-	1.256		30.433		-13,1%
Total	841.729		-		26.224	(143.878)		215.563		10.675		995.866		18,3%

¹ Adjustments in the period reflect the updates related to the project scope, launch date, and pricing.

Inventory turnover in the last 12 months dropped from 73 months in 2Q20 to 53 months in 3Q20,

27.7% lower than in the previous quarter, owing to higher sales volume in the period.

Inventory Turnover LTM

									73
						50	54	59	53
	25					38
20	20	16	19	18	21

3Q17

4Q17

1Q18

2Q18

3Q18

4Q18

1Q19

2Q19

3Q19

4Q19

1Q20

2Q20

3Q20

Approximately 73% of inventory is composed of residential units located in the State of São Paulo and with higher liquidity.

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

	Not initiated	Up to 30% built	30% to 70% built	More than 70% built	Finished units	Total 3Q20
São Paulo	129.376	72.461	229.018	168.826	242.069	841.749
Rio de Janeiro	-	-	-	-	123.684	123.684
Other markets	-	-	-	8.599	21.834	30.433
Total	129.376	72.461	229.018	177.425	387.587	995.866

• % 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)

				Residential			Comercial			Total
	SP			723.513			118.236			841.749
	RJ		15.641		108.043		123.684
	Others		30.433		-		30.433
	Total		769.587		226.279		995.866

Delivered Projects and Transfer

In 3Q20, we delivered two projects, totaling 421 units, and a total PSV of R$140.3 million. It is also worth noting that besides delivering these two projects, in the third quarter, the Company obtained the occupancy permit for two projects with 160 units and PSV of R$166 million, besides projects delivered in 1H20 with 775 units and PSV of R$608.9 million. Total deliveries foreseen for 2020 is 10 projects with a PSV of R$971.8 million and 1,474 units. Therefore, out of the total, we already delivered/obtained occupancy permit for 9 projects or 94% of PSV.

Table 6 - Deliveries

	Project			Delivery		Launch		Location		%			Units 100% (Ex. swap		PSV %
			date		date			share			units)		R$000
	Vila Rica			feb/20		2016		Santos/SP		50%			69		65.168
	Total 1Q20												69		65.168
	Moov Estação Vila			abr/20		ago/16		São Paulo		100%			150		72.097
	Prudente
	Gafisa Like Alto da Boa			mai/20		ago/16		São Paulo		100%			220		158.676
	Vista
	Gafisa Square Ipiranga			mai/20		out/16		São Paulo		100%			224		263.490
	Marquês 2900			mai/20		dez/16		São Paulo		50%			112		49.455
	Total 2Q20												706		543.719
	Moov Freguesia			ago/20		set/16		São Paulo		100%			307		91.893
	Uplife Interlagos			ago/20		mai/15		São Paulo		100%			114		48.361
	Total 3Q20											421		140.255
	Total 2020												1.196		749.142

¹ Number of units corresponding to a 100% share in projects, net of swaps;

PSV transferred in 3Q20 was R$73.5 million, 3.6% lower than in 2Q20, and 48.7% higher than in 3Q19. The lower volume of transfer reflects a smaller amount of projects delivered this quarter compared to the previous quarter. We highlight that this result was achieved even amidst a pandemic, with restricted business hours at notary offices, banks, people's movement, and our team in home office most of the time. We again reiterate the Company's expectation of a significant increase in PSV transferred during 2020, due to the expected delivery of 10 projects in total.

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

		3Q20		2Q20		Q/Q		3Q19		A/A		9M20		9M19		Y/Y (%)
				(%)			(%)
PSV Transferred¹		70.468		76.244		-7,6%		49.426		42,6%		146.711		158.449		-7,4%
Delivered Projects		2		4		-50,0%		-		-		6		2		200,0%
Delivered Units²		421		716		-41,2%		-		-		1.137		365		211,5%
PSV delivered³		140.255		543.719		-74,2%		-		-		683.974		171.648		298,5%

• PSV transferred refers to the effective cash inflow from units transferred to financial institutions; ² 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$4.8 billion, the Company's landbank represents potential 40 projects/phases totaling 9,599 units. Approximately 49% of the acquisition value of our land consists of most of which are located in the city of São Paulo. This quarter, the Company acquired two plots of land in São Paulo, in Vila Mariana and Butantã districts, with an estimated PSV of R$255 million.

Table 8 - Landbank (R$ 000)

				PSV¹ (%Cia.)			% Swap Total		% Swap Units			%Swap Finan.		Potential Units			Potential Units
										(%Cia.)			(100%)
	São Paulo			2.901.083			38,7%		32,5%			6,2%		6.111			6.339
	Rio de Janeiro		1.282.715		72,2%		72,2%		0,0%		1.641		1.895
	Others		593.614		38,1%		38,1%		0,0%		1.089		1.366
	Total		4.777.412		48,6%		44,6%		4,0%		8.840		9.599

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 (2Q20 vs. 3Q20 - R$ 000)

				Initial Landbank		Land Acquisition		Launches			Dissolutions		UPCON			Adj.			Final Landbank
	São Paulo			2.015.053		255.265		45.553			(232.755)		879.345			(61.378)			2.901.083
	Rio de Janeiro		1.282.715		-		-		-		-		-		1.282.715
	Others		593.614		-		-		-		-		-		593.614
	Total		3.891.382		255.265		45.553		(232.755)		879.345		(61.378)		4.777.412

FINANCIAL RESULTS

Revenue

Net revenue amounted to R$148.6 million in the third quarter of 2020, 77.4% higher than in 2Q20, reflecting higher sales and works in progress in the period. Year-on-year, net revenue soared 66.6%, due to higher sales volume and construction works evolution.

Table 10 - Revenue Recognition (R$ 000)

			3Q20				3Q19
	Launches	Contracted Sales1	% Sales	Revenue	% Revenue	Contracted Sales	% Sales	Revenue	% Revenue
	2018	52.326	45,9%	50.769	34,2%	(1.354)	(4,5%)	3.057	3,4%
	2017	27.241	23,9%	44.396	29,9%	(472)	(1,6%)	13.794	15,5%
	2016	6.450	5,7%	10.739	7,2%	13.091	44,0%	39.625	44,4%
	2015	18.260	16,0%	25.271	17,0%	13.021	43,8%	21.488	24,1%
	<2014	9.671	8,5%	17.457	11,7%	5.467	18,4%	11.247	12,6%
	Total	113.947	100,0%	148.632	100,0%	29.753	100,0%	89.211	100,0%

¹ Contracted sales exclude UPCON sales, as it does not have revenue recognized in the quarter

Gross Profit & Margin

Gafisa's adjusted gross profit reached R$36.6 million in 3Q20, versus R$29.6 million in 2Q20 and R$45.3 million in 3Q19. The adjusted gross margin declined 10.7p.p. in the quarter to 24.6%, on the back of a greater conservative approach when recording provision for dissolutions, expected losses, and price variation in the period, amidst a challenging scenario of Covi-19 pandemic. Adjusted gross margin in 3Q20, excluding non-recurring items was 29.4%, higher than the margin of 2.3 p.p. recorded in 2Q20.

Table 11 - Gross Margin (R$ 000)

	3Q20	2Q20	Q/Q (%)	3Q19	Y/Y (%)	9M20	9M19	Y/Y (%)
Net Revenue	148.632	83.800	77,4%	89.212	66,6%	304.135	284.292	7,0%
Gross Profit	24.412	22.714	7,5%	38.104	(35,9%)	67.588	81.522	-17%
Gross Margin	16,4%	27,1%	-10,7p.p.	42,7%	-26,3p.p.	22,2%	28,7%	-6,5p.p.
(-) Financial Costs	(12.175)	(6.857)	77,6%	(7.147)	70,4%	(25.307)	(30.356)	-17%
Adjusted Gross Profit ¹	36.587	29.571	23,7%	45.251	(19,1%)	92.895	111.878	-17%
Adjusted Gross Profit Margin	24,6%	35,3%	-10,7p.p.	50,7%	-26,1p.p.	30,5%	39,4%	-8,8p.p.

¹ Adjusted by capitalized interests.

Selling, General and Administrative Expenses (SG&A)

Selling, general and administrative expenses totaled R$23.5 million in 3Q20, 22.3% higher than in 2Q20, and 57.9% higher than in 3Q19.

General and administrative expenses came to R$19.5 million, 29.1% higher than the previous quarter, due to a provision for a bonus of R$3.0 million in the period. In 3Q20, recurring general and administrative expenses totaled R$12.1 million, 18% lower than the R$14.2 million recorded in 2Q20.

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

	3Q20	2Q20	Q/Q (%)	3Q19	Y/Y (%)	9M20	9M19	Y/Y (%)
Selling Expenses	(3.909)	(4.047)	-3,4%	(2.170)	80,1%	(10.749)	(11.683)	-8%
G&A Expenses	(19.543)	(15.133)	29,1%	(12.678)	54,1%	(51.136)	(31.918)	60%
Total SG&A Expenses	(23.452)	(19.180)	22,3%	(14.848)	57,9%	(61.885)	(43.601)	42%

Other Operating Income/Expenses totaled expenses of R$26.5 million. Out of this amount, R$21.3 million refers to the provision for litigation and settlements made by the Company, as part of its project to settle contingent liabilities.

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

	3Q20	2Q20	Q/Q (%)	3Q19	Y/Y (%)	9M20	9M19	Y/Y (%)
Litigation Expenses	(21.357)	(19.353)	10,4%	-	0,0%	(52.708)	(45.769)	15,2%
Others	(5.100)	(662)	670,4%	169	-3117,8%	(6.509)	70	-9398,6%
Total	(26.457)	(20.015)	32,2%	169	-15755,0%	(59.217)	(45.699)	29,6%

Adjusted EBITDA

Adjusted EBITDA came to R$7.9 million in 3Q20, 2.6% higher than the R$7.7 million reported in the previous quarter. Year-on-year, Adjusted EBITDA declined compared to R$31.1 million.

Table 14 - Adjusted EBITDA (R$ 000)

	3Q20	2Q20	Q/Q (%)	3Q19	Y/Y (%)	9M20	9M19	Y/Y (%)
Net Income (Loss)	(56.493)	(23.545)	139,9%	(1.668)	3286,9%	(105.500)	(60.746)	73,7%
(+) Financial Results	28.049	2.354	1091,5%	21.548	30,2%	38.799	41.976	-7,6%
(+) Income Tax / Social Contribution	1.604	886	81,0%	508	215,7%	3.619	1.221	196,4%
(+) Depreciation and Amortization	1.936	1.882	2,9%	3.223	-39,9%	5.984	11.739	-49,0%
(+) Capitalized Interest	12.175	6.857	77,6%	7.147	70,4%	25.307	30.356	-16,6%
(+) Expenses w/ Stock Options Plans	(6)	47	(112,7%)	174	-103,4%	(362)	(2.698)	-86,6%
(+) Minority Shareholders	(700)	(112)	525,0%	119	-688,2%	(799)	121	-760,3%
(+) Litigation Expenses	21.357	19.353	10,4%	-	0,0%	52.708	45.769	15,2%
Adjusted EBITDA¹	7.922	7.722	2,6%	31.051	-74,5%	19.756	67.738	-70,8%

• Adjusted by capitalized interests, with a stock option plan (non-cash) and minority shareholders.

Financial Result

Net financial result totaled (R$28.1) million in 3Q20 from (R$2.4) million in 2Q20, reflecting the volatility of certain securities in the period and the effect of swap operation contracted.

Net Result

Net result in 3Q20 came negative at R$56.5 million, compared to net losses of R$23.5 million and R$1.7 million recorded in 2Q20 and 3Q19, respectively.

Table 15 - Net Result (R$ 000)

	3Q20	2Q20	Q/Q (%)	3Q19	Y/Y (%)	9M20	9M19	Y/Y (%)
Net Revenue	148.632	83.800	77,4%	89.212	66,6%	304.135	284.292	7,0%
Gross Result	24.412	22.714	7,5%	38.104	-35,9%	67.588	81.522	-17,1%
Gross Margin	16,4%	27,1%	-39,4%	42,7%	-61,5%	22,2%	28,7%	-22,5%
(-) Financial Costs	12.175	6.857	77,6%	(7.147)	-270,4%	25.307	(30.356)	-183,4%
Recurring Adjusted Gross Result¹	36.587	15.857	130,7%	45.251	-19,1%	92.895	111.878	-17,0%
Recurring Adjusted Gross Margin¹	24,6%	18,9%	30,1%	50,7%	-51,5%	30,5%	39,4%	-22,4%
Adjusted EBITDA²	7.922	7.722	2,6%	31.051	-74,5%	19.756	21.969	-10,1%
Adjusted EBITDA Margin²	5,3%	9,2%	-42,2%	34,8%	-84,7%	6,5%	7,7%	-15,9%
Adjusted Net Result³	(56.493)	(23.545)	139,9%	(1.668)	3286,9%	(105.500)	(60.746)	73,7%
( - ) Litigation Expenses	(21.357)	(19.353)	10,4%	-	0,0%	(52.708)	(45.769)	15,2%
Net Result (ex-Litigation Expenses)	(35.136)	(4.192)	738,2%	(1.668)	2006,5%	(52.792)	(14.977)	252,5%

1. Adjusted by capitalized interests.
2. Adjusted by capitalized interests, with a stock option plan (non-cash) and minority shareholders.

Revenue Backlog and Results

At the end of 3Q20, the balance of revenue backlog according to the PoC method totaled R$100.3 million, compared to R$109.6 million and R$166.1 million reported in the previous quarter and the same period last year, respectively. Margin to be recognized was 34.4%, in line with 2Q20.

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

	3Q20	2Q20	Q/Q (%)	3Q19	Y/Y (%)
Revenue Backlog	291.189	306.484	-5%	465.102	-37%
Backlog Costs (units sold)	(190.878)	(196.870)	-3%	(298.953)	-36%
Backlog Results	100.311	109.614	-8%	166.149	-40%
Backlog Margin	34,4%	35,8%	-132bps	35,7%	-127bps

Notes: Backlog results net of PIS/COFINS taxes (3.65%) and excluding the impact of the PVA (Present Value Adjustment) method according to Law No. 11.638.

Backlog results comprise the projects restricted by acondition precedent.

BALANCE SHEET

Cash and Cash Equivalents and Marketable Securities

On September 30, 2020, cash and cash equivalents and marketable securities totaled R$630.7 million, compared to R$570.2 million in 2Q20, reflecting the inflow of funds from a capital increase of R$218.2 million and debt amortization in the period, so that to sustain a liquidity cushion and enable our growth resumption. The Company believes that disciplined cost control and the maintenance of a liquidity reserve are essential for the operation. This business vision and team's readiness allowed the company to go through this period of uncertainty very consistently and smoothly.

Receivables

At the end of 3Q20, total accounts receivable came to R$933.2 million. Of this amount, R$630.9 million were already recognized in the balance sheet.

Table 17 - Total Receivables (R$ 000)

	3Q20	2Q20	Q/Q(%)	3Q19	Y/Y (%)
Receivables from developments - backlog	302.220	318.095	-5%	482.721	-37%
Receivables PoC - ST (on balance sheet)	544.147	445.811	22%	409.212	33%
Receivables PoC - LT (on balance sheet)	86.843	93.529	-7%	119.765	-27%
Total	933.210	857.435	9%	1.011.698	-8%

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		2020		2021		2022		2023		2024 - Onwards
	Receivables Backlog		302.222		106.367		105.594		76.631		3.690		9.940
	Receivables PoC		630.990		260.387		360.332		5.334		1.310		3.627
	Total		933.212		366.754		465.926		81.965		5.000		13.567

Cash Generation

Table 19 - Cash Generation (R$ 000)

	1Q19	2Q19	3Q19	4Q19	1Q20	2Q20	3Q20
Cash 1	63.068	182.817	394.216	414.330	363.337	570.156	630.660
Change in Cash Available (1)	(74.092)	119.749	211.399	20.114	(50.993)	206.819	60.504
Total Debt	790.172	770.715	750.826	730.678	710.169	673.649	745.499
Change in Total Debt (2)	(99.241)	(19.457)	(19.889)	(20.148)	(20.509)	(36.520)	71.850
Capital Increase (3)	-	132.265	206.927	65.768	-	259.729	218.171
Cash Generation in the Period (1) - (2) - (3)	25.149	6.941	24.361	(25.506)	(30.484)	(16.390)	(229.517)
Final Accumulated Cash Generation ²	25.149	32.090	56.451	30.945	461	(15.929)	(245.446)

• Cash and cash equivalents and marketable securities. ² It considers LTM.

Liquidity

Advancing the work of strengthening the Company's balance sheet, the Net Debt/Shareholders' Equity ratio reached 7.6% at the end of 3Q20, compared to 8.8% reported in 2Q20, due to higher cash deriving from capital increase. Within one year, we went from a Net Debt/Shareholders' Equity ratio of 45.6% in 3Q19 to current 7.6% in 3Q20. Net debt increased to R$123.5 million from R$114.8 million reported in the previous quarter.

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

	3Q20	2Q20		Q/Q(%)	3Q19	Y/Y (%)
Housing Financial System - SFH	259.432	266.210		-2,5%	267.923	-3,2%
Real Estate Financial System - SFI	126.340	146.613		-13,8%	175.565	-28,0%
Debentures (Projects)	172.578	112.338		53,6%	194.625	-11,3%
Bank Credit Notes (Projects)	59.696	40.219		48,4%	37.794	58,0%
Subtotal Project Debt (A)	618.046	565.380		9,3%	675.907	-8,6%
Debentures (Working Capital)	70.232	33.529		109,5%	49.646	41,5%
Bank Credit Notes (Working Capital)	40.922	62.799		-34,8%	14.899	174,7%
Other operations (Working Capital)	16.299	11.941		36,5%	10.374	57,1%
Subtotal Working Capital Debt (B)	127.453	108.269		17,7%	74.919	70,1%
Total Debt (A)+(B)= (C)	745.499	673.649		10,7%	750.826	-0,7%
Cash and Cash Equivalents1 (D)	630.660	570.156		10,6%	394.216	60,0%
Net Debt (C) - (D) = (E)	114.839	103.493		11,0%	356.610	-67,8%
Shareholders' Equity + Minority (F)	1.513.890	1.177.187		34,3%	782.074	93,6%
(Net Debt) / (SE) (E)/(F)=(G)	7,6%	8,8%		-121bps	45,6%	-3801bps
(Net Debt - Proj. Fin.) / (SE) ((E)-(A))/(F)=(H)	(33,2%)	(39,2%)		600bps	(40,8%)	759bps

¹Cash and cash equivalents and marketable securities.

The Company ended 3Q20 with R$332.6 million indebtedness falling due this year, accounting for 44.6% of total debt. Note that approximately 82.9% of the Company's debt is linked to projects, therefore, maturities are connected with the delivery of projects to still occur in 2020, and we already delivered or obtained the occupancy permit for 9 projects, or 94% of PSV estimated for this year's deliveries. On September 30, 2020, the consolidated average cost of debt was 9,5% p.a.

Table 21- Debt Maturity (R$ 000)

			Average cost (a.a.)			Total		Until		Until		Until		Until		After
						Dec/20		Dec/21		Dec/22		Dec/23		Dec/23
	Housing Financial System - SFH		TR + 7,00% a 14,20%			259.432		187.455		-		-		-		71.977
	Real Estate Financial System - SFI		Pre +13,66% / 143% CDI			126.340		519		77.298		7.800		7.800		32.923
	Debentures (Projects)		CDI + 3% / CDI + 3,75% / CDI			172.578		73.669		8.361		465		-		90.083
		+ 5,00% / CDI + 6,00%
	Bank Credit Notes (Projects)		CDI + 3,50% / Pre + 16,77%			59.696		12.292		23.027		19.660		4.717		-
	Subtotal Project Debt (A)					618.046		273.935		108.686		27.925		12.517		194.983
	Debentures (Working Capital)		IPCA + 7,8%			70.232		42.279		11.426		10.670		5.857		-
	Bank Credit Notes (Working Capital)		CDI + 3,7%/ 4,25%			40.922		62		40.860		-		-		-
	Other operations (Working Capital)		Pre + 11,36%			16.299		16.299		-		-		-		-
	Subtotal Working Capital Debt (B)					127.453		58.640		52.286		10.670		5.857		-
	Total Debt (A)+(B)= (C)					745.499		332.575		160.972		38.595		18.374		194.983
	Total maturity per period %				-				44,6%		21,6%		5,2%		2,5%
	Project debt maturity as % of total debt (B)/ (E)			-		-		82,4%		67,5%		72,4%		68,1%
	Working capital maturity as % of total debt ((A)+(C))/ (E)			44,6%		44,6%		17,6%		32,5%		27,6%		31,9%

Consolidated Income Statement

		3Q20	2Q20	Q/Q (%)	3Q19	Y/Y (%)	9M20	9M19	Y/Y (%)
Net Revenue		148.632	83.800	77,4%	89.212	66,6%	304.135	284.292	7,0%
Operational Costs		(124.220)	(61.086)	103,4%	(51.108)	143,1%	(236.547)	(202.770)	16,7%
Gross Result		24.412	22.714	7,5%	38.104	(35,9%)	67.588	81.522	-17,1%
Gross Margin		16,4%	27,1%	-10,7p.p.	42,7%	-26,3p.p.	22,2%	28,7%	-244,9%
Operational Expenses		(51.952)	(43.131)	20,5%	(17.597)	195,2%	(131.469)	(98.950)	-277,0%
Selling Expenses		(3.909)	(4.047)	(3,4%)	(2.170)	80,1%	(10.749)	(11.683)	-8,0%
General and Administrative Expenses		(19.543)	(15.133)	29,1%	(12.678)	54,1%	(51.136)	(31.918)	60,2%
Other Operating Revenue/Expenses		(26.457)	(20.015)	32,2%	169	(15755,0%)	(59.217)	(45.699)	29,6%
Depreciation and Amortization		(1.936)	(1.882)	2,9%	(3.223)	(39,9%)	(5.984)	(11.739)	-49,0%
Equity Income		(107)	(2.054)	(94,8%)	305	(135,1%)	(4.383)	2.089	-309,8%
Operational Result		(27.540)	(20.417)	34,9%	20.507	(234,3%)	(63.881)	(17.428)	-294,1%
Net Financial Result		(28.049)	(2.354)	1091,5%	(21.548)	30,2%	(38.799)	(41.976)	-252,9%
Financial Income		(6.512)	21.091	(130,9%)	3.229	(301,7%)	22.578	11.963	88,7%
Financial Expenses		(21.537)	(23.445)	(8,1%)	(24.777)	(13,1%)	(61.377)	(53.939)	13,8%
Net Income Before Taxes on Income		(55.589)	(22.771)	144,1%	(1.041)	5240,0%	(102.680)	(59.404)	-191,6%
Deferred Taxes		-	-	-	-	-	-	-	-
Income Tax and Social Contribution		(1.604)	(886)	81,0%	(508)	215,7%	(3.619)	(1.221)	196,4%
Net Income After Taxes on Income		(57.193)	(23.657)	141,8%	(1.549)	3592,3%	(106.299)	(60.625)	75,3%
Minority Shareholders		(700)	(112)	525,0%	119	(688,2%)	(799)	121	-760,3%
Net Income		(56.493)	(23.545)	139,9%	(1.668)	3286,9%	(105.500)	(60.746)	73,7%

Consolidated Balance Sheet
	3Q20	2Q20	Q/Q (%)	3Q19	Y/Y (%)
Current assets
Cash and Cash Equivalents	6.705	19.512	-66%	12.819	-48%
Securities	623.955	550.644	13%	381.397	64%
Receivables from clients	544.147	445.811	22%	409.212	33%
Properties for sales	1.317.144	855.315	54%	820.892	60%
Other account receivable	148.435	178.058	-17%	119.897	24%
Prepaid expenses and other	1.045	1.131	-8%	2.159	-52%
Land for sale	7.014	7.014	0%	38.681	-82%
Subtotal	2.648.445	2.057.485	29%	1.785.057	48%
Non current assets
Receivables from clients	86.843	93.529	-7%	119.765	-27%
Properties for sales	191.985	293.573	-35%	190.953	1%
Other account receivable	224.683	221.739	1%	145.232	55%
Subtotal	503.511	608.841	-17%	455.950	10%
Intangible, property and equipment	21.297	17.444	22%	24.465	-13%
Investments	272.497	138.566	97%	300.726	-9%
Total Asset	3.445.750	2.822.336	22%	2.566.198	34%
Current liabilities
Loans and financing	349.348	283.923	23%	364.766	-4%
Debentures	127.147	119.367	7%	179.423	-29%
Obligation for purchase of land	259.336	111.790	132%	105.823	145%
Material and service suppliers	131.054	131.941	-1%	129.825	1%
Taxes and contributions	82.979	83.689	-1%	64.886	28%
Provision for contingencies	193.357	184.084	5%	179.681	8%
Other liabilities	297.086	253.603	17%	207.540	43%
Subtotal	1.440.307	1.168.397	23%	1.231.944	17%
Non current liabilities
Loans and financing	153.340	243.859	-37%	141.789	8%
Debentures	115.663	26.500	336%	64.848	78%
Obligation for purchase of land	87.942	92.998	-5%	147.147	-40%
Deferred taxes	12.114	12.114	0%	49.372	-75%
Provision for contingencies	86.250	78.809	9%	110.564	-22%
Other liabilities	36.244	22.472	61%	38.460	-6%
Subtotal	491.553	476.752	3%	552.180	-11%
Shareholders' Equity
Shareholders' equity	1.509.624	1.175.852	28%	780.159	94%
Minority Interest	4.266	1.335	220%	1.915	123%
Subtotal	1.513.890	1.177.187	29%	782.074	94%
Total Liabilities and Shareholders' Equity	3.445.750	2.822.336	22%	2.566.198	34%

Balance Sheet by brand - Consolidated 3Q20

	Gafisa	Upcon	Consolidated
Current assets
Cash and Cash Equivalents	5.190	1.515	6.705
Securities	623.955	-	623.955
Receivables from clients	512.367	31.780	544.147
Properties for sales	902.215	414.929	1.317.144
Other account receivable	210.381	9.656	148.435
Prepaid expenses and other	1.045	-	1.045
Land for sale	7.014	-	7.014
Subtotal	2.262.167	457.880	2.648.445
Non current assets
Receivables from clients	83.588	3.255	86.843
Properties for sales	191.985	-	191.985
Other account receivable	223.848	835	224.683
Subtotal	499.421	4.090	503.511
Intangible, property and equipment	19.877	1.420	21.297
Investments	270.123	2.374	272.497
Total Asset	3.051.588	465.764	3.445.750
Current liabilities
Loans and financing	312.371	108.579	349.348
Debentures	127.147	-	127.147
Obligation for purchase of land	128.280	131.056	259.336
Material and service suppliers	128.777	2.277	131.054
Taxes and contributions	77.662	5.317	82.979
Provision for contingencies	193.357	-	193.357
Other liabilities	280.023	17.063	297.086
Subtotal	1.247.617	264.292	1.440.307
Non current liabilities
Loans and financing	128.881	24.459	153.340
Debentures	115.663	-	115.663
Obligation for purchase of land	61.404	26.538	87.942
Deferred taxes	12.114	-	12.114
Provision for contingencies	77.226	9.024	86.250
Other liabilities	20.686	15.558	36.244
Subtotal	415.974	75.579	491.553
Shareholders' Equity
Shareholders' equity	1.387.362	122.262	1.509.624
Minority Interest	635	3.631	4.266
Subtotal	1.387.997	125.893	1.513.890
Total Liabilities and Shareholders' Equity	3.051.588	465.764	3.445.750

Consolidated Cash Flow

	3T20	3T19	9M20	9M19
Net Income (Loss) before taxes	(55.589)	(1.041)	(102.681)	(59.404)
Expenses/revenues that do not impact working capital	31.713	1.522	108.686	11.897
Depreciation and amortization	1.936	3.223	5.984	11.739
Impairment	-	(2)	(1.044)	(28.221)
Expenses with stock option plans	(5)	174	(362)	(2.698)
Unrealized interest and fees, net	(4)	1.216	2.130	4.302
Equity income	107	(305)	4.383	(2.089)
Warranty provision	1.998	(2.136)	1.102	(3.918)
Provision for contingencies	21.358	-	52.708	45.885
Profit sharing provision	3.107	-	6.194	500
Provision (reversal) for doubtful accounts	2.833	(5.342)	34.197	(17.116)
Provision for fine due to construction work delay	383	1.935	3.394	754
Quotas assignment		2.759		2.759
Receivables	(62.895)	42.139	(83.182)	127.949
Properties for sale	54.688	14.765	(27.289)	145.244
Other receivables	(22.053)	(11.886)	(88.096)	(35.981)
Prepaid expenses	86	159	815	509
Obligations for purchase of land	(15.104)	(1.590)	(32.744)	(56.461)
Taxes and contribution	(6.027)	4.528	7.794	7.610
Suppliers	(2.960)	(39.327)	33.726	(2.189)
Payroll, charges and bônus provision	(2.834)	(546)	(7.721)	(2.366)
Other accounts payable	(110.900)	62.090	(71.268)	(93.534)
Transactions with related parties	25.623	7.765	47.135	26.045
Paid taxes	(1.604)	(508)	(3.619)	(1.221)
Cash used in operating activities	(167.856)	78.070	(218.444)	68.098
Acquisition of properties and equipment	(4.369)	1.656	(4.618)	(4.361)
Redemption of securities, collaterals, and credits	151.192	2.311	287.594	50.445
Investment in marketable securities and restricted credits	(226.018)	(209.548)	(511.169)	(326.986)
Equity Securities	-	(2.717)	-	-
Cash used in investing activities	(79.195)	(208.298)	(228.193)	(280.902)
Increase of loans and financing	192.447	37.885	310.900	89.672
Amortization of loans and financing	(182.030)	(58.990)	(359.646)	(232.561)
Loan operations	(3.464)	(759)	(9.013)	(10.117)
Sale of treasury shares	-	-	-	148
Proceeds from sale of treasury shares	7.605	(53.389)	19.251	6.984
Capital increase	218.171	-	477.900	132.266
Subscription and payment of common shares	-	206.927	-	206.927
Cash acquired from Upcon	1.515	-	1.515	-
Cash Flow from Financing Activities	234.244	131.674	440.907	193.319
Increase (Decrease) in cash and cash equivalents	(12.807)	1.446	(5.730)	(19.485)
Beginning of the period	19.512	11.373	12.435	32.304
End of the period	6.705	12.819	6.705	12.819

This release contains forward-looking statements about business prospects, estimates for operating and financial results, and Gafisa's growth prospects. Readers can identify many of these statements when reading words such as "estimates," "believes," "expects," and "will," as well as similar words or their respective negatives. Although management believes the expectations conveyed in such statements to be reasonable, it is unable to guarantee that such expectations will come to fruition, and they should not be deemed as projections. By their nature, forward-looking statements require us to make assumptions and, as such, are subject to risks and uncertainties. They are mere expectations and therefore are based exclusively on what management expects 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. The forward-looking statements included in this release are based on the assumption that our plans and operations will not be affected by such risks, but if our plans and operations happen to be affected by these risks, the forward-looking statements might become inaccurate. We do not commit to revising these forward-looking statements unless it is explicitly required by the applicable securities regulation.

IR Contacts

Telephone: [phone] / 9317

E-mail: [e-mail]

IR Website: ri.gafisa.com.br