May 7, 2018 / 11:38 PM / 7 months ago

RPT-UPDATE 1-Brazil homebuilder MRV to boost housing starts after hitting profit estimates

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By Gram Slattery

SAO PAULO, May 7 (Reuters) - MRV Engenharia e Participações SA, Latin America’s largest homebuilder by units sold, is planning to launch a robust new slate of projects in the coming months after hitting quarterly profit estimates, an executive told Reuters.

In a Monday securities filing, MRV reported first quarter net income of 160 million reais ($45.1 million), up 22 percent from the same period last year and roughly in line with Reuters estimates.

The company also reported healthy margins, with earnings before interest, taxes, depreciation and amortization (EBITDA) coming in at 229 million reais, up some 44 percent from the same period a year ago, and slightly above Reuters forecasts.

MRV’s improving operational figures, while expected, represent a larger rebound in Brazilian real estate, as delinquencies begin falling, credit opens up, and consumers gain confidence after a years-long recession.

In an interview, MRV co-Chief Executive Officer Eduardo Fischer struck an upbeat tone, saying real estate demand was strengthening and operational numbers at the homebuilder would continue to improve throughout 2018.

“We’re very optimistic about the rest of the year,” he said. “We’re seeing very strong demand for real estate.”

He added that the homebuilder would significantly pick up the pace of new project launches in the second quarter.

MRV had previously set an ambitious goal of launching 50,000 new home units in 2018. However, in previously released numbers, the company reported launching just over 5,000 new units in the first quarter.

Fischer said the first quarter has historically been weak in terms of project launches, and he pledged to maintain the company’s original 50,000-unit target.

“In 2018, we’ll get there,” he said.

In the first quarter, some of MRV’s more upscale competitors, such as Cyrela Brazil Realty SA and Eztec Empreendimentos e Participações SA, faced bureaucratic headwinds, after a court effectively invalidated many building permits in the key city of Sao Paulo, at least temporarily.

Fischer emphasized that, unlike competitors, none of MRV’s projects had been affected by the issue.

$1 = 3.55 reais Reporting by Gram Slattery Editing by Chris Reese

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