Hypermarcas posts second-quarter loss as debt costs surge
* Loss comes in smaller than poll forecast
* Tumble in currency drove debt costs high
* Sales policy helps boost EBITDA, revenue
SAO PAULO, Aug 11 (Reuters) - Hypermarcas, the largest Brazilian maker of disposable consumer goods, posted a net loss in the second quarter slightly below analysts' estimates as a tumble in the currency led to a surge in debt-servicing costs.
The Sao Paulo-based company had a shortfall of 29.9 million reais ($14 million), compared with a profit of 53.3 million reais a year earlier, according to a securities filing on Saturday. The result was slightly below the average loss estimate of 38 million reais in a Reuters poll of five analysts.
Net revenue grew 11 percent as Hypermarcas's plan to toughen sales terms for clients helped bolster prices in segments such as sales of generic drugs. A decline in local borrowing costs was more than offset by an 11 percent drop in the nation's currency in the second quarter drove financial expenses up.
The results underscore the volatile nature of Hypermarcas' businesses, which are feeling the impact of a slowing economy and a reduction in disposable income among Brazilian families. Many analysts said in the aftermath of the company's first-quarter results that the improved environment which allowed Hypermarcas to post a profit back then may not prevail in coming quarters.
Net financial expenses, or debt-servicing costs excluding income from financial investments, rose almost four-fold to 231.3 million reais from a year earlier, after the currency tumble made it more expensive for Hypermarcas to pay for its foreign currency-denominated liabilities.
Net revenue rose to 957 million reais, while marketing expenses - an equivalent to capital expenditures - fell 11 percent. Sales, general and administrative expenses fell too, helping management buffer the company's balance sheet from the sole impact of the currency decline.
Earnings before interest, tax, depreciation, amortization and some one-off expenses, a gauge of operational profitability known as adjusted EBITDA, edged 6.3 percent higher to 224.5 million reais from the year-earlier period.
The result, however, beat the 195 million reais estimate in adjusted EBITDA predicted in the Reuters poll.
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