(Adds analyst comment, additional context, share move)
By Asher Levine
SAO PAULO, May 9 (Reuters) - Brazilian homebuilder PDG Realty SA expects selling and general expenses to continue to decline through the year, Chief Executive Officer Carlos Piani said on Friday.
“In line with the reduction in the size of the company’s operations, we have a bit more freedom to optimize,” Piani said on a conference call with analysts to discuss first-quarter earnings.
PDG Realty posted a quarterly profit of 2.8 million reais ($1.26 million) on Thursday, as cutbacks in the scale of operations helped it swing from a net loss of 73.8 million reais a year earlier.
Selling and general expenses declined 28.4 percent from a year earlier as the company continued to hone operations after a poorly controlled expansion led to significant losses in recent quarters. Still, analysts remained concerned about the company’s high debt levels and dwindling cash balance.
“PDG is still in the process of turning around its operations and despite the improvement in first quarter results, we believe the deleveraging process will take longer than expected,” wrote Espirito Santo Investment Bank analyst Eduardo Silveira in a client note on Friday.
Shares of PDG Realty rose 2.56 percent to 1.6 reais in early afternoon Sao Paulo trading, while the country’s benchmaark Bovespa stock index was down 0.1 percent. ($1 = 2.22 Brazilian reais) (Reporting by Asher Levine; Editing by Chizu Nomiyama)