Brazil's Votorantim profit rises 18 percent, aided by cost cuts
SAO PAULO Aug 18 (Reuters) - Net income at Votorantim Industrial SA, Brazil's largest industrial conglomerate, jumped 18 percent in the second quarter as geographical diversification and cost-cutting efforts helped offset the impact of a steep downturn in Brazil and declining global metals and mineral prices.
Profit came in at 608 million reais ($175 million) last quarter on revenue of 7.8 billion reais, according to a statement on Tuesday. Earnings before interest, taxes, depreciation and amortization, a gauge of operational profit known as EBITDA, soared 22 percent compared with a year earlier.
EBITDA remained stable at 22 percent of revenue in the quarter, as operational profit expanded at a slower pace than sales.
Despite the tough outlook in Brazil, where the economy may contract this year at the steepest pace in a quarter century, results showed resilience, Chief Executive Officer João Miranda said in the statement.
"The robustness of these results is due mainly to our diversified portfolio in terms of the sectors and geographies we work in," Miranda was quoted by the statement as saying. "It's also an outcome of the efficient management of our companies."
Capital spending in the quarter totaled 610 million reais, up 19 percent from a year earlier. In recent years, one in every four reais that Votorantim invested went to expanding its five main businesses.
Stable investment is helping Votorantim reduce leverage, even as a currency slump and rising borrowing costs made debt servicing more expensive for Brazilian companies this year. Net debt ended June at 2.42 times 12-month trailing EBITDA through June, from 2.85 times a year ago, the statement said. ($1 = 3.4798 Brazilian reais) (Reporting by Guillermo Parra-Bernal Editing by W Simon)
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