Hypermarcas profit slides as Brazil inflation takes off
SAO PAULO, July 24 (Reuters) - Brazilian health and hygiene company Hypermarcas SA reported a 9 percent drop in second-quarter profit from a year earlier due to rising debt costs and a low-price strategy aimed at winning market share as inflation accelerated.
The consumer goods maker posted quarterly net income of 111 million reais ($33 million), according to a Friday securities filing, missing an average forecast of 126 million reais in a Reuters survey of analysts.
Net sales rose 11 percent from a year earlier, slightly ahead of consumer prices that climbed nearly 9 percent in the period. Gains were focused in consumer segments where Hypermarcas could offer attractive prices to win share in a personal care market that has stagnated as unemployment rises.
The company's gross profit, or sales minus the cost of goods, fell to 62.3 percent of revenue in the quarter, from 65.6 percent a year earlier, underscoring the low-price strategy.
Sales, administration and marketing expense rose in line with inflation. Rising interest rates and higher net debt pushed up financial expenses by 9 percent to 109 million reais.
Earnings before interest, taxes, depreciation and amortization, slipped 4 percent to 261 million reais.
($1 = 3.36 Brazilian reais) (Reporting by Brad Haynes; Editing by Bernard Orr)
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