Brazil's Votorantim profit falls despite higher revenues
Votorantim SA, one of Brazil's biggest diversified industrial groups, on Friday posted a sharp drop in net income in the third quarter from a year earlier, as a weaker Brazilian currency hit the company.
Net income came in at 112 million reais in the third quarter, down 78.4 percent from a year earlier.
In a statement, privately owned Votorantim said a weaker currency pushed up dollar-denominated debt costs, offsetting stronger revenues.
Following the partial sale of pulp producer Fibria Celulose SA to Suzano Papel e Celulose SA in March, Votorantim is not consolidating Fibria in its results. The move also reduced Votorantim's profit, the group said.
Higher prices for cement, zinc and aluminum helped Votorantim's revenues rise 22 percent from a year earlier, to 9 billion reais.
Earnings before interest, tax, depreciation, amortization, dividends and the one-time effects of asset sales, a gauge of operational profit known as adjusted EBITDA, rose 30 percent to 1.7 billion reais.
Votorantim ended September with net debt of 2.59 times its EBITDA, slightly lower than 2.69 times EBITDA in the prior quarter.
Chief Financial Officer Sergio Malacrida said in an interview Votorantim should end 2018 with net debt around 2 times EBITDA, excluding proceeds from the sale of Fibria.
Malacrida said the group will likely maintain capital expenditure at around 2018's level of 2.6 billion reais.
Nexa Resources SA, a unit of Votorantim, has just approved a $392 million capital expenditure in a zinc mining project in the Brazilian state of Mato Grosso.
(Reporting by Carolina Mandl; Editing by Cynthia Osterman).