April 5, 2016 / 4:05 PM / 2 years ago

Profit at Brazil's Votorantim drops due to taxes, write-downs

SAO PAULO, April 5 (Reuters) - Votorantim Industrial SA, Brazil’s largest diversified industrial conglomerate, reported a 77 percent drop in net income for 2015 as asset write-downs and higher taxes offset otherwise resilient mining and metal revenue outside the country.

Profit at São Paulo-based company came in at 382 million reais ($104 million) on revenue of 31.5 billion reais, according to a statement on Tuesday. Earnings before interest, taxes, depreciation and amortization fell 2 percent from 2014.

EBITDA remained stable at around 22 percent of revenue, a sign that cost and expense controls are helping mitigate the weakness of some business segments in Brazil. Capital expenditures rose 32 percent last year, totaling 3.3 billion reais, the statement said.

Despite the profit decline, the numbers underscore Chief Executive Officer João Miranda’s success in increasing efficiency in cement, mining and agribusiness operations and cutting debt.

Votorantim, which is controlled by the Ermirio de Moraes family, has grown outside Brazil to offset the effects of declining commodity prices and the country’s protracted downturn.

Net debt fell to 2.78 percent of 12-month trailing EBITDA at the end of last year, according to the statement. The company ended 2015 with more than 15 billion reais in cash holdings and equivalents.

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.

$1 = 3.6578 Brazilian reais Editing by Lisa Von Ahn

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