Brazil's MRV 2nd-qtr net income falls despite lower sales cancellations
By Ana Mano
SAO PAULO Aug 11 (Reuters) - MRV Engenharia e Participações SA, Brazil's largest low-income housing builder, said on Thursday that its quarterly profit fell 13.6 percent to 138 million reais ($43.94 million), squeezed by the country's severest recession since the 1930s.
Total sales dropped 5.5 percent in the second quarter to 1.3 billion reais, according to a securities filing.
Still, a drop in sales cancellations helped the company weather the storm, Co-chief executive officer Rafael Menin said in an interview. He added the low-income segment is less affected by the recession because its buyers can take out government-subsidized loans unavailable to buyers of more expensive houses, a segment where the company does not operate.
"In some cases, rents are more expensive than the installments of a loan," Menin said.
Cancellations dropped to 23 percent of gross sales from nearly 30 percent a year ago, the lowest level since the third quarter of 2014, the company said. As a result, MRV generated 324 million reais of free cash flow, a record for the first half in any year of operation.
Earnings before interest, tax, debt and amortization, a measure of operating profitability, fell 15 percent to 163 million reais.