1Q06 Earnings Results Conference Call

(1)

1Q06 Earnings Results

Conference Call

(2)

Forward Looking Statements

Notice

Notice – – Information and Outlook Information and Outlook

The material shown is a presentation of general information about Rossi Residencial S.A.’s record until the present date. It’s a summary of the information with no intention of being complete, that should not be taken under consideration by potential investors as a recommendation. We make no statements nor guarantee the correctness, the conformity or the scope of the following information and any investment decision should not be based on them.

Although ROSSI believes in the expectation and assumption contained on this statement, as well as the prospective information to be reasonable and also based on current data available to its management, ROSSI could not guarantee results nor future events.

ROSSI fully exempts itself from the duty of updating any one of the prospective statement and information.

.

(3)

Agenda

2. Performance – 1 ^st Quarter 2006 3. Financial Information

1. Company’s Highlights

4. Closing Remarks

(4)

History

X

In 1980, Grupo Rossi established Rossi Residencial, which enabled a new focus to the group’s activities in the real estate market. Since then, Rossi Residencial became the leader, operating in all real estate segments and in several Brazilian regions.

1980 1992 1996 1997 1999 2000 2002 2003 2006

Plano 100 Launch

Establishment of Rossi Residencial

Launch of the Vida Nova Product Line

Launch of a new concept for housing: Villa Flora

Beginning of the corporate

restructuring per region.

Implementation of the SAP system.

IPO: Listing at Bovespa and NYSE

Acquisition of America Properties

Issuance of R$80 million in shares and adhesion to

Bovespa’s Corporate Governance Level 1

Public Offering

above R$1 billion

and adhesion to

Bovespa’s Novo

Mercado

(5)

Ownership Structure

After the IPO After the IPO

Free Float 56.59%

Rossi Family

43.41%

(6)

Shares Price and Traded Volume Performance

(7)

PERFORMANCE – 1Q06

(8)

Excellent Growth History

Contracted Sales – in R$ (million) Contracted Sales – in R$ (million)

2001 – 2005 CAGR = 38%

80,6

131,7

1Q05 1Q06

63% 63%

(9)

Per Region Per Region

52%

33%

8% 6%

29%

15%

34%

22%

SÃO PAULO CAMPINAS PORTO ALEGRE RIO DE JANEIRO

Year 2005 1st Quarter 2006

Contracted Sales Segmentation

(10)

Per Property Price

Contracted Sales Segmentation

(11)

Launches 1Q06

TLV ( R$ 000 )

Usable area (m

²

)

Number of units

% - Rossi's

Share % Sold TLV Rossi's

share Metropolitan Region of São Paulo

Gran Vita Parque Club 35,632 15,674 152 100.0% 23.7% 35,632 Porto Alegre

Terra Mater Club House 45,644 25,556 119 75.0% 83.2% 34,233 Campinas and Sumaré

Praça Capital - Fase III 4,282 1,811 44 70.0% 75.0% 2,997 Condominio das Violetas 3,708 3,445 58 100.0% 27.6% 3,708 Condominio das Camomilas 5,038 4,743 80 100.0% 7.5% 5,038

Launches

(12)

Launches

HISTORY OF LAUNCHES SCHEDULED

2002 2003 2004 2005 Average

1st.Quarter 1.9% 7.5% 22.0% 1.5% 8.2%

2nd. Quarter 32.4% 33.1% 12.4% 36.4% 28.6%

3rd. Quarter 19.3% 54.4% 3.1% 16.4% 23.3%

HISTORY OF LAUNCHES SCHEDULED

2002 2003 2004 2005 Average

1st.Quarter 1.9% 7.5% 22.0% 1.5% 8.2%

2nd. Quarter 32.4% 33.1% 12.4% 36.4% 28.6%

3rd. Quarter 19.3% 54.4% 3.1% 16.4% 23.3%

5,8

94,3

1Q05 1Q06

TLV - ( R$ million )

HISTORY OF THE LAUNCHES SHCEDULE

2002 2003 2004 2005 Average

1Q. 1.9% 7.5% 22.0% 1.5% 8.2%

2Q. 32.4% 33.1% 12.4% 36.4% 28.6%

HISTORY OF THE LAUNCHES SHCEDULE

2002 2003 2004 2005 Average

1Q. 1.9% 7.5% 22.0% 1.5% 8.2%

2Q. 32.4% 33.1% 12.4% 36.4% 28.6%

(13)

Landbank

Total constructible area ( m ² )

Metropolitan Region of São

Paulo

Campinas and Sumaré

Rio de Janeiro and

Niterói

Porto Alegre Curitiba Other cities T O T A L

In December 2005 1,084,086 162,352 160,996 75,033 20,591 64,111 1,567,170

( + ) Acquisitions (48,410) 63,461 182,735 27,385 - 5,714 230,885

( - ) Launches (25,694) (11,973) - (28,182) (65,849)

(14)

FINANCIAL

INFORMATION

(15)

Net Indebtedness

Indebtedness 1Q05 1Q06 Chg (%)

Indebtedness – Short Term:

Construction financing 43,229 67,974 57.2%

Loans – Working capital 30,381 1,882 -93.8%

Indebtedness – Long Term:

Construction financing 22,932 25,159 9.7%

Loans – Working capital 10,148 1,059 -89.6%

Total Indebtedness 106,690 96,074 -10.0%

Cash and Cash Position:

Cash and banks 3,696 13,653 269.4%

Short Term Investments 10,628 574,626 5,306.7%

Long Term Investments 4,111 1,816 -55.8%

(16)

Solid Financial Positioning Net Debt – in R$ (MM)

74,3 360,2

Lo ng Term Receivables

Construction Cost Long Term Short Term Receivables

35%

Receivables X Development Costs – in R$ (MM)

(17)

Balance Sheet

ASSETS Mar-06 AV% Dec-05 AV% LIABILITY Mar-06 AV% Dec-05 AV%

CURRENT ASSETS CURRENT LIABILITIES

Cash and Banks 13,653 1.0 9,641 1.2 Financing 69,856 5.1 121,938 15.4

Short term investments 574,626 42.3 6,108 0.8 Suppliers 12,645 0.9 11,118 1.4

Customers 133,914 9.8 149,651 18.9 Wages and payroll chrages 3,317 0.2 3,551 0.4

Inventories 302,473 22.2 299,226 37.7 Taxes and contributions receivables 7,304 0.5 11,346 1.4

Prepaid expenses 23,711 1.7 28,244 3.6 Land payable 40,440 3.0 45,799 5.8

Sundry receivables 53,736 4.0 47,780 6.0 Dividend payable 4,797 0.4 4,796 0.6

Associated companies - - 37,701 4.7

Advance to customers 18,310 1.3 34,751 4.4

Other payables 25,119 1.8 16,799 2.1

1,102,113

81.1 540,650 68.1 181,788 13.4 287,799 36.3

LONG TERM ASSETS LONG TERM LIABILITIES

Customers 172,495 12.7 183,304 23.1 Financing 26,218 1.9 18,643 2.3

Long term investments 1,816 0.1 2,133 0.3 Land payable 75,211 5.5 85,908 10.8

Judicial deposits 28,841 2.1 28,373 3.6 Taxes and contributions receivables 26,993 2.0 27,356 3.4 Deferred social contributuion and income tax 47,349 3.5 29,813 3.8 Deferred social contributuion and income tax 19,314 1.4 15,098 1.9

Associated companies - - 4,508 0.6 Associated companies - - 28,076 3.5

Other receivables - - 182 0.0

250,501

18.4 248,313 31.3 147,736 10.9 175,081 22.1

MINORITY INTEREST - - 38,352 4.8

PERMANENT ASSET Shareholder's equity

Investments 3,401 0.3 1,484 0.2 Capital stock 445,117 32.7 230,732 29.1

Fixed 1,695 0.1 1,757 0.2 Capital reserve 548,115 40.3 - -

ON MARCH 31, 2006 AND IN DECEMBER 2005 ( in thousand reais )

Balance Sheet

(18)

Income Statement

Mar-06 AV% Mar-05 AV%

GROSS OPERATING REVENUE

Real state and services sales 87,745 103 85,615 103 Sales deduction (2,535) (3) (2,861) (3)

Operating net income 85,210 100 82,754 100 REAL STATE AND SERVICES SALES COST (59,667) (70) (57,148) (69)

Gross profit 25,543 30 25,606 31

(EXPENSES) OPERATING INCOME

Administrative (8,013) (9) (7,579) (9)

Commercial (9,827) (12) (9,304) (11)

Financial Income 20,552 24 18,951 23 Financial expenses (18,808) (22) (19,387) (23) Other Operating Income (Expenses) 13 0 16 0

Operational profit (Loss) 9,460 11 8,303 10 (EXPENSES) NON OPERATING INMCOME (46,870) (55) (130) (0)

RESULT BERORE TAXATION AND

INTEREST (37,410) (44) 8,173 10

INCOME TAX AND SOCIAL CONTRIBUTION 12,457 15 (1,354) (2) NET PROFIT (LOSS) BEFORE

ROSSI RESIDENCIAL S.A.

RESULT STATEMENT (in R$ thousand)

(19)

Cash Flow

CASH FLOW STATEMENTS ON MARCH 31, 2006 AND 2005 (in thousand reais)

2006 2005

OF THE OPERATING ACTIVITIES

Net profit (loss) (24,953) 6,819

Adjustments to the net profit (loss)

Depreciation and amortization 218 399

Interest in a controlled company - - Goodwill amortization (729) 167

Deffered income tax and social contribution (12,977) 1,000 Net interests and financing charges (5,692) (15,353) Adjusted net profit (44,133) (6,968) Variation on asstes and liabilities Customers 6,713 3,151 Real state to be sold (28,505) (9,022) Prepaid expenses 201 (1,367) Advance for suppliers 1,196 821

Customers pass on (2,796) (310)

Accounts receivables (13,362) (600)

Judicial deposits (744) (41) Accounts payable for land acquisition 3,406 3,541

Consolidated

(20)

Cash Flow

2006 2005

OF INVESTMENTS ACTIVITIES

Investments increase - -

Capital contribution in maneuver (28,797) 14,592

Minority interest - 2,735

Fixed asset acquisition (47) (209)

Softwares acquisition and development (442) (107) Net cash deriving from investments activities (29,286) 17,011 OF FINANCING ACTIVITIES

Capital increase 214,385 -

Goodwill on shares issuing 548,115 -

Debt

Funding 41,876 24,600

Amortization (83,660) (32,269)

Financial activities net flow 720,716 (7,669)

Net increase (decrease) of cash 575,649 (1,006)

CASH, BANKS AND FINIANCING INVESTMENTS

At the beginning of the period 12,629 21,471

Consolidated

X

SAP / Integrated operations

X

Capacity of managing a high number of projects

X

Strong market acknowledgment

Month

Accumulated

Sales % 0% 60% 80% 85% 90% 95% 100%

Cost Incurred

% - - 5% 41% 82% 100% 100%

Appropriated

Revenues % - 14% 25% 47% 77% 100% 100%

CONSTRUCTION Commercial

Launch

Incorporation Confirmation

Construction Start

Delivery of Keys

End of Receivables

Repass

(26)

Cash Flow for a Typical Project

(2.050.000) (1.800.000) (1.550.000) (1.300.000) (1.050.000) (800.000) (550.000) (300.000) (50.000) 200.000 450.000 700.000 950.000 1.200.000 1.450.000 1.700.000 1.950.000 2.200.000

Purchase of the site -5 -4 -3 -2 -1 Commercial Launch 1 2 3 4 5 6 7 8 9 Beginning of the developments 11 12 13 14 15 16 17 18 19 20 21 22 23 Conclusionofthedevelopments Deliveryofthekeys 26 27 Securitization 29 30 31 32 33 34 35 36

1Q06 Earnings Results Conference Call