July 25, 2017 / 6:45 AM / a year ago

UPDATE 1-Services group Edenred eyes higher 2017 profit despite tough Brazil conditions

* H1 EBIT 201 mln euros, up 14.7 pct l-f-l

* Sees 2017 EBIT at 420-445 mln eurs vs 370 mln in 2016

* Employee benefits business to stay difficult in Brazil in H2

* CEO: company to pursue active acquisition policy (Adds CEO comments from call)

By Dominique Vidalon

PARIS, July 25 (Reuters) - French prepaid meal voucher and card provider group Edenred predicted on Tuesday a rise in full year 2017 operating profit, after strong first-half growth in Europe and in spite of tough conditions in Brazil.

Edenred, which helps firms manage staff expenses and is best know for its “Ticket Restaurant” vouchers, said it should continue to deliver robust growth in the second half, with a good momentum in Europe amid favourable economic conditions.

In Latin America, which makes 43 percent of its business, strong growth was expected in Mexico, although high unemployment in recession-hit Brazil was still set to be an issue for Edenred’s business dealing with employee benefit programmes.

“In Brazil, the second half of 2017 should look like the first half where we were slightly negative. Medium-term, I am very positive on Brazil,” Chief Executive Bertrand Dumazy told a conference call.

Edenred, whose recent acquisitions include Brazilian expenses management group Embratec and German fuel card issuer UTA, will also pursue an “active” and earnings boosting acquisition policy, Dumazy said.

Edenred, which competes with caterers Sodexo and Compass as well as credit card networks MasterCard and Visa, forecast earnings before interest and tax (EBIT) between 420 million euros ($490 million) and 445 million euros, against 370 million euros in 2016.

The forecast compares with average market expectations of 434 million euros for full year EBIT, ThomsonReuters I/B/E/S data showed.

Edenred said first-half EBIT reached 201 million euros, helped by cost control and higher revenue notably in Europe, which since the UTA deal accounts for over half of revenue.

This was a like for like rise of 14.7 percent, excluding currency impacts, acquisitions and divestments, with Edenred performing well in spite of the difficult conditions in Brazil, where revenue declined 0.7 percent in the first-half.

Overall group revenue reached 650 million euros, a reported rise of 23.7 percent rise, thanks to acquisitions. On a like-for-like basis, revenues grew 8.2 percent.

$1 = 0.8578 euros Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta

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