UPDATE 1-Brazil's Cyrela misses profit estimates as credit crunch bites
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SAO PAULO Aug 9 (Reuters) - Cyrela Brazil Realty SA , Brazil's biggest listed homebuilder, missed second-quarter profit estimates on Tuesday as expenses soared and a credit crunch affecting homebuyers intensified amid the nation's harshest recession in decades.
Net income totaled 45 million reais ($14 million) last quarter, missing a consensus estimate of 59.2 million reais compiled by Thomson Reuters. On an annual basis, profit fell about 21 percent, Cyrela said in a securities filing.
In the filing, Cyrela said operating expenses rose due to a jump in general and administrative expenditures and a 150 percent surge in compensation payments - mainly because homebuyers failed to secure a mortgage loan and banks cut access to fresh credit as defaults soared. Net revenue slumped 21 percent last quarter.
As Brazil struggles with a deep recession, persistently high inflation and borrowing costs at the highest level in a decade, Cyrela has remained cautious about the outlook for recovery in homebuilding activity.
Management plans to discuss second-quarter results at a conference call on Wednesday.
Cyrela said an improvement in industry conditions "will necessarily" come in the form of a decline in interest rates, adding that a cycle of reductions in the benchmark Selic rate could begin before year-end.
"More credit to the sector not only would raise sales but also would reduce the number of cancellations," the filing said.
Earnings before interest, tax, debt and amortization, a gauge of operational profitability known as EBITDA, came in at 63 million reais, below the 133.9 million reais consensus estimate.
($1 = 3.1467 Brazilian reais) (Reporting by Ana Mano; Editing by Guillermo Parra-Bernal, David Gregorio and Chris Reese)
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