Votorantim swings to profit on higher metal prices
Votorantim SA, one of Brazil's biggest diversified industrial groups, on Friday reported net income of 150 million reais ($42 million) in the first quarter, compared with a loss of 546 million reais a year ago, due in part to higher metal prices.
In a statement, Votorantim said profit was also boosted by sales growth in its aluminum and cement businesses, as well as higher net income from wood pulp producer Fibria SA and lender Banco Votorantim SA.
Revenue rose 20 percent from a year earlier to 6.785 billion reais in the quarter.
Adjusted earnings before interest, tax, depreciation and amortization, a gauge of operational profit known as adjusted EBITDA, jumped 87 percent to 1.506 billion reais.
Amid Brazil's gradual economic recovery, Votorantim decided on a strategy of prioritizing cash generation to reduce indebtedness.
Votorantim ended March with net debt of 2.58 times its EBITDA, down from 3.89 times 12 months earlier, but flat compared to the end of 2017. CFO Sérgio Malacrida said in an interview with Reuters the group is still aiming for net debt of less than 2 times its EBITDA by the end of this year, excluding proceeds from the sale of Fibria.
"Leverage will fall more steeply in the coming quarters of 2018," said Malacrida. He said Votorantim does not plan to take out new loans this year, except to pay outstanding debts.
Reporting by Carolina Mandl Editing by Phil Berlowitz.