UPDATE 1-Brazil's Cielo beats profit estimates as prepayment revenue jumps

martes 28 de octubre de 2014 18:55 GYT
 

(Adds details of results, paragraphs 3-9)

SAO PAULO Oct 28 (Reuters) - Profit at Cielo SA beat estimates in the third quarter as robust prepayment revenue at Brazil's largest card payment processor helped offset steady transaction volumes and higher costs and expenses.

The Barueri, Brazil-based company earned 820.5 million reais ($333 million) in the quarter, topping the average estimate of 808 million reais in a Reuters poll of eight analysts. Profit rose 3 percent and 18.7 percent on a quarterly and annual bases, respectively, according to a securities filing on Tuesday.

Prepayment of receivables rose 15 percent on a quarterly basis, and hit a record. Costs and expenses per transaction rose within the guidance range of 0.75 reais to 0.78 reais even after transaction volumes rose at the slowest pace in at least three quarters.

Net revenue rose 5.3 percent to 1.94 billion reais, missing the poll's 2.02 billion reais estimate. Analysts in the poll expected prepayment of receivables, which reached 404.7 million reais last quarter, to decline 3.2 percent.

Revenue, which climbed 5.3 percent from the second quarter, got a boost from the impact of a decline in the Brazilian real on income from Cielo's U.S. subsidiary Merchant e-Solutions, the filing noted.

Expenses hit 0.767 reais per transaction, slightly above the poll's 0.76 reais estimate but within Cielo's guidance.

Earnings before interest, tax, depreciation and amortization, a gauge of operational profit known as EBITDA, was roughly stable on a quarterly basis at 957.3 million reais, the filing said. The indicator, however, fell short of the 969 million reais estimate in the poll.

EBITDA fell to 49.4 percent of revenue in the third quarter, down from 51.9 percent the prior quarter but above the 48 percent margin predicted in the poll.

Management plans to discuss results in a conference call early on Wednesday.

($1 = 2.4606 Brazilian reais) (Reporting by Guillermo Parra-Bernal; Editing by Grant McCool)