Brazil's Votorantim launches property arm in bet on post-Covid rebound
08/04/2021 14:00
By Carolina Mandl
SAO PAULO, April 8 (Reuters) - Votorantim SA, one of
Brazil's biggest diversified holding companies, is launching a
real estate arm, its chief executive said in an interview on
Thursday, betting on further growth in demand for housing and a
revamped office market.
Altre, as the newly-launched firm is called, is initially
being seeded with unused Votorantim-owned industrial land, but
CEO Joao Schmidt said it is looking for new assets, including
the development of office buildings.
"After the pandemic, companies will change the way people
work, with more room for remote work, but employees will still
need a place to gather," Schmidt told Reuters.
He added that tenants are likely to demand more space
between workers and higher ceilings for better ventilation.
Votorantim's push into real estate is part of an effort to
diversify and provide a more stable stream of dividends. Apart
from real estate, Votorantim is eyeing acquisition targets in
infrastructure, energy, healthcare and cement plants outside
Brazil.
On Thursday, the company announced it had swung to a 3.1
billion real ($552.78 million) loss in 2020 from a 4.9 billion
real net income a year earlier, due to impairment charges on
reduced cash generation expectations for mines in Peru and to
higher debt payments in dollar-indexed debt.
Still, revenues grew by 19% to 36.7 billion reais and
earnings before interest, taxes, depreciation and amortization
(EBITDA) soared 39%.
Votorantim's net debt ended 2020 at 1.63 times its EBITDA,
the lowest level for that ratio since 2008, and is expected to
end this year in the same range.
Chief Financial Officer Sergio Malacrida said the group
posted an undisclosed profit in the first quarter of 2021, but
the holding declined to provide any full-year outlook.
"There is a lot of uncertainty ahead, including the speed of
vaccination and lower cash emergency payments by the government
to help weather the pandemic," Schmidt said.
He was also unsure whether Brazilians would renovate their
homes at the same pace as they did in 2020, when many people
upgraded amid lockdowns, boosting cement sales.
($1 = 5.6080 reais)
(Reporting by Carolina Mandl
Editing by Mark Heinrich)
((carolina.mandl@thomsonreuters.com; +55 11 5644 7703; +55 11
97116-3806;))