Cement boom, metal sales boost Brazil's Votorantim results
12/11/2020 14:11
By Carolina Mandl
SAO PAULO, Nov 12 (Reuters) - Votorantim SA, one of Brazil's
biggest diversified holding companies, reported on Thursday a
third-quarter net income of 77 million reais, driven mainly by a
jump in cement and metal sales and reversing a loss posted in
the year earlier period.
Earnings before interest, taxes, depreciation and
amortization (EBITDA) soared 125% year-on-year, to 2.7 billion
reais, as revenues grew by roughly one third.
"All portfolio companies posted growth in EBITDA. It is
almost unbelievable what is happening amid a pandemic," Chief
Financial Officer Sergio Malacrida said in an interview.
Votorantim's portfolio includes mining company Nexa
Resources NEXA.N , cement maker Votorantim Cimentos, Companhia
Brasileira de Aluminio, orange juice producer Citrosuco and
lender Banco Votorantim SA.
A boom in Brazil's housing sector, both in new homes and
renovations, has bolstered cement sales, the volume of which was
up 15% year-on-year. Given the unexpected spike in sales,
Malacrida said that for a short period Votorantim's output was
below consumers' demand.
A weaker Brazilian currency also helped the holding's
results, as commodities are priced in dollars and it has cement
plants outside Brazil and exports aluminum.
Still, Votorantim took a 350 million reais impairment charge
on reduced cash generation expectations for mines in Peru.
Malacrida predicted that Votorantim's net debt is likely to
continue to fall by year-end, as EBITDA remains strong. It ended
September at a 2.69 times ratio, down from 3.92 times in June.
For next year, the CFO sees some uncertainties, such as how
the Brazilian economy will perform if the government's cash aid
program to help the poor during the pandemic is not extended.
But the holding continues to look for new investments to
further diversify its portfolio, such as private-public
partnerships in sanitation and healthcare assets.
(Reporting by Carolina Mandl; Editing by Kirsten Donovan)
((carolina.mandl@thomsonreuters.com; +55 11 5644 7703; +55 11
97116-3806;))