(Adds comment from CFO, details on results, background )
SAO PAULO, May 7 (Reuters) - Cetip SA Mercados Organizados , Latin America's largest securities depositary and clearinghouse, reported first-quarter profit rose 2.7 percent on Thursday, beating estimates, as expenses and taxes fell sharply.
Net income at the São Paulo-based firm totaled a record 120.8 million reais ($39.9 million) in the quarter, topping the 113 million reais forecast in a Reuters poll. On an annual basis, profit rose 20.8 percent, the company said in a securities filing.
The results underscore Cetip's resilience as Brazil grapples with a severe economic downturn, the steepest in over two decades. While the company is exposed to weak credit demand trends, Chief Executive Officer Gilson Finklesztain's efforts to control expenses and deliver new fixed-income, derivatives products and data services are bearing fruit.
"It was a good result in spite of the tough environment," Chief Financial Officer Willy Jordan said in a phone interview. Management will discuss results with investors at a conference call on Friday.
Sales, general and administrative expenses sank 8.8 percent on a quarterly basis after spending in outsourced services, marketing and telecommunications services fell. Results also reflected a tax credit stemming from a currency hedge transaction.
Earnings before interest, tax, depreciation, amortization and stock options, a gauge of operational profits, rose to a record 191 million reais in the quarter. The poll expected EBITDA of 184 million reais.
EBITDA rose to 71.5 percent of revenue, compared with 68.2 percent in the prior quarter.
Net revenue totaled 267 million reais, in line with the poll's estimate of 266 million reais, after proceeds from registration, custody and trading of securities rose more than expected. Revenue from the sale of loan liens, which is closely correlated to disbursements of auto loans, fell more than the poll predicted.
A sharp drop in the value of Brazil's currency against the U.S. dollar during the quarter led to a shortfall of 51 million reais in the financial expenses line.
$1 = 3.0331 Brazilian reais Reporting by Guillermo Parra-Bernal and Aluísio Alves; Editing by Ken Wills and Leslie Adler