Brazil's Cielo raises estimates for costs, expenses on volume growth
SAO PAULO Aug 2 (Reuters) - Cielo SA raised estimates on cost and expense growth for this year, reflecting resilient transaction volumes for Brazil's largest card payment processor in spite of the nation's harshest recession in over eight decades.
In a statement late on Monday, Cielo said cost and expense growth would range between 6 percent and 8 percent this year, compared with a previous guidance range between 4 percent and 6 percent.
Barueri, Brazil-based Cielo also expects transaction volumes on debit and credit card usage in Brazil to grow between 7 percent and 9 percent this year, faster than previously expected. Capital spending estimates were raised to about 450 million reais ($138 million) from 400 million reais previously.
According to analysts at Goldman Sachs Group Inc, the decision followed "uninspiring" second-quarter results at Brazil's largest card payment processor. Cielo narrowly topped profit estimates on Monday as transaction volumes grew despite a harsh recession.
Cost and expense growth estimates replaced a prior estimate of unit costs, or per transaction, as guidance for management efforts to control expenditures. Sales, general and administrative expenses jumped about 21 percent on an annual basis due to a costlier payroll and the launch of a new product, Goldman Sachs analysts led by Marcelo Cintra said in a client note.
($1 = 3.2608 Brazilian reais) (Reporting by Guillermo Parra-Bernal; Editing by Mark Potter)
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