Brazil's Votorantim profit rises on asset sales, Fibria
SAO PAULO, June 1 (Reuters) - Profit at Votorantim SA rose in the first quarter as gains from asset sales and robust results at pulpmaker Fibria SA offset the impact of Brazil's recession on the nation's largest diversified industrial conglomerate.
Net income totaled 144 million reais ($40 million) last quarter, up from 68 million reais a year earlier, according to a statement on Wednesday. The group, controlled by the billionaire Ermirio de Moraes family, reversed a loss of 219 million reais in the preceding quarter.
São Paulo-based Votorantim, which has interests in sectors from cement and aluminum to agribusiness and energy, tried to prioritize cash generation amid economic and political turmoil in Brazil. Cash rose 26 percent from a year earlier, while debt denominated in Brazilian reais continued to fall during the quarter.
The sale of Sirama, a subsidiary tied to Votorantim's cement unit, and Fibria's profit contributed to almost 700 million reais in profits last quarter, which were offset partially by surging financial expenses and an operational loss.
Still, net revenue declined in the wake of Brazil's harshest and longest recession since at least the 1930s. The recession, which has shrunk the gross domestic product to its size of six years ago, hampered Votorantim's local long steel and cement units and led to the build-up of provisions against the temporary closure of nickel operations.
Adjusted earnings before interest, tax, depreciation and amortization, a gauge of operational profit known as EBITDA, slumped 40 percent to 845 million reais last quarter. Net revenue fell to 6.72 billion reais in the first quarter, 6 percent less than that of a year earlier and 18 percent below that of the fourth quarter.
Over the past decade, Votorantim expanded across Latin America and Europe to broaden the group's client base in sectors like cement and mining while curbing revenue dependence on Brazil. Profit has fallen 20 percent in the 12 months through March as asset writedowns and higher taxes offset otherwise resilient revenue outside Brazil.
Net debt rose to 2.87 percent of 12-month trailing EBITDA at the end of March, according to the statement.
($1 = 3.5861 Brazilian reais) (Reporting by Guillermo Parra-Bernal and Alberto Alerigi Jr Editing by W Simon)
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