Brazil builder Cyrela posts 28 pct rise in second-quarter earnings
* Profit of 182.7 mln reais falls short of estimates
* Margins pressured by higher sales of existing units
RIO DE JANEIRO Aug 14 (Reuters) - Brazil's largest homebuilder Cyrela posted a rise in second-quarter earnings on Wednesday, though a recent improvement in margins showed signs of slowing due to higher sales from less-profitable inventory.
Cyrela reported net income of 182.7 million reais ($78.75 million), according to a securities filing. The figure represented a 28 percent rise from the same period a year ago, though it fell short of the average estimate of 214.4 million reais from five analysts polled by Reuters.
Cyrela is widely seen as ahead of its peers in terms of revamping its operations after a period of aggressive over-expansion led to huge cost overruns and big quarterly losses across the industry.
Efforts to increase productivity helped lead to a 5.7 percent drop in general and administrative expenses in the quarter.
Last month Cyrela reported that sales for the second quarter jumped 38.5 percent from the same period last year and the value of new projects launched during the quarter rose 37.2 percent.
The company posted a gross profit margin, or the portion of revenue left over after construction costs, of 32.6 percent in the quarter, up from 29.7 percent in the same period last year, but down slightly from 32.7 percent in the first quarter. The decline in gross margin on a quarterly basis snapped an improvement trend that has lasted for over two years.
The company said margins were pressured by high levels of sales from existing inventory built from 2007 to 2009. Many of those projects, launched during the company's aggressive expansion phase, suffered from high construction costs and are less profitable.
Earlier this year, Cyrela estimated a gross margin for 2013 of between 31 percent and 35 percent.
Adjusted earnings before interest, taxes, depreciation and amortization, a gauge of operating profit known as EBITDA, rose 0.7 percent from a year earlier to 274 million reais, missing the average estimate of 323.9 million reais in the Reuters survey.
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