UPDATE 1-Votorantim sees global reach offsetting impact of Brazil woes

martes 5 de abril de 2016 13:22 GYT

(Recasts to add comments from CEO Miranda throughout)

By Guillermo Parra-Bernal and Cesar Bianconi

SAO PAULO, April 5 (Reuters) - Votorantim Industrial SA's steps to reduce debt and expand outside Brazil will help the nation's largest diversified industrial conglomerate maintain current profitability levels in a challenging year, Chief Executive Officer João Miranda said on Tuesday.

São Paulo-based Votorantim, which has interests in sectors from cement and aluminum to agribusiness and energy, will keep privileging cash generation over expansion as economic and political turmoil stay high in Brazil, Miranda said in an interview to discuss last year's financial results.

Over the past decade, Votorantim, which is controlled by the Ermirio de Moraes family, 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 fell 77 percent last year as asset writedowns and higher taxes offset otherwise resilient recurring revenue outside Brazil.

Last year, Brazil's economy shrank at the fastest pace in a quarter-century. Analysts expect it to contract this year and next, marking the longest and harshest recession in Latin America's No. 1 economy in more than a century.

"Beyond capital discipline and the best possible use of our budget, we always insist on the importance of geographical diversification during times of local or global economic hardship," Miranda said.

Consolidated net income at Votorantim came in at 382 million reais ($104 million) on revenue of 31.5 billion reais, according to a statement on Tuesday. Adjusted earnings before interest, taxes, depreciation and amortization fell 2 percent to about 7 billion reais from 2014, the statement added.

EBITDA fell slightly to 22 percent of revenue, a sign that cost and expense controls helped mitigate the weakness of some business segments in Brazil. Capital expenditures rose 32 percent last year, totaling 3.3 billion reais, the statement said.   Continuación...