SAO PAULO, Aug 15 (Reuters) - Votorantim SA, one of Brazil’s largest diversified conglomerates, on Thursday reported a significant increase in second-quarter profit, helped by lower debt servicing expenses.
Net income came in at 225 million reais ($56 million) in the period, up 54% from 146 million reais a year ago.
In a statement, Votorantim said a weaker Brazilian currency also helped net income, as results from international operations are consolidated in reais.
Votorantim’s revenue remained stable in the period, at 7.9 billion reais, as zinc and aluminum prices dropped and demand for the group’s products remained weak in Brazil.
“The group’s revenue is tied up with Brazil’s GDP and economic recovery remains sluggish,” Chief Financial Officer Sergio Malacrida told Reuters. “So there is no relevant pick-up in volumes.”
Votorantim’s businesses include Nexa Resources, cement, aluminum, energy, steel, orange juice, mid-sized lender Banco Votorantim SA and a stake in pulpmaker Suzano SA .
The group’s net debt ended June at 10.4 billion reais, slightly up from March. This is equivalent to 1.56 times adjusted earnings before interest, taxes, depreciation and amortization (EBITDA).
Malacrida said Votorantim’s leverage ratio is likely to remain at this level, although the group still seeks opportunities to extend maturities or take cheaper loans.
In the last months, Votorantim has used most of the proceeds from the sale of pulpmaker Fibria SA to Suzano to pay off debt.
Reporting by Carolina Mandl; Editing by Steve Orlofsky