UPDATE 1-Brazil's MRV misses profit estimates as expenses soar
(Adds details on economy, MRV comment, information on results)
By Juliana Schincariol
RIO DE JANEIRO, March 5 (Reuters) - MRV Engenharia e Participações SA, Brazil's largest low-income homebuilder, on Thursday missed fourth-quarter profit estimates after expenses soared amid the fastest inflation in about a decade.
The Belo Horizonte, Brazil-based builder controlled by billionaire Rubens Menin and his family earned 103 million reais ($34.3 million) in the quarter, according to a securities filing. The result fell short of the 112.7 million real profit estimate in a Reuters poll of seven analysts.
On an annual basis, MRV posted a 42.1 percent jump in fourth-quarter earnings that reflected efforts to contain building costs and a steep decline in financial and other debt-servicing expenses. On a quarterly basis, earnings plunged 23.9 percent as inflation helped stoke a jump in sales, general and administrative expenses.
MRV and fellow homebuilders were widely expected to deliver weak results due to the mounting impact of a slowing economy. Sales and new project launches fell across the industry in 2014, with most builders focused on cutting unwanted inventory in preparation for a period of weaker demand.
The Brazilian economy will probably contract this year at the steepest pace in more than two decades, leading to financial worries among potential homeowners and driving consumer confidence to a record low.
"This year will be the year of austerity," Rafael Menin, co-chief executive officer of MRV, said in an interview.
He said project sale cancellations should remain stable at around the same level as 2014, of 1.44 billion reais. Deliveries rose 37 percent last year. Continuación...