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Gafisa's new management eyeing 53M reais in annual savings

Brazilian property developer Gafisa SA expects total savings of about 53 million reais per year as a result of several cost-cutting measures announced by its new management.

Among other measures, the company is cutting 21 jobs, a move that is likely to result in annual savings of 8.3 million reais.

Gafisa said its new registered office in Sao Paulo will be smaller and less expensive. As a result of negotiating the lease of the new office, the company expects a reduction in rent, condominium fee and property tax costs of about 4 million reais per year.

The company also temporarily canceled its enrollment in some trade associations, reducing general and administrative expenses by 1.3 million reais per year with related expenses.

Its board also approved the cancellation of 1,030,325 shares acquired under the company's recent share repurchase program.

Gafisa noted that it aims to cut costs by a further 20 million reais to 50 million reais through an ongoing round of its cost reduction plan, which includes the revision of processes and agreements with its suppliers.

As of Dec. 26, US$1 was equivalent to 3.93 Brazilian reais.