UPDATE 1-Profit at Brazil's BM&FBovespa, Cetip in line with estimates

Thu May 8, 2014 9:06pm EDT

(Recasts with details on both companies' results, background throughout)

By Guillermo Parra-Bernal and Aluísio Alves

SAO PAULO May 8 (Reuters) - Brazilian securities clearinghouse Cetip SA Mercados Organizados and financial exchange BM&FBovespa SA posted quarterly profit in line with analysts' estimates, as they curbed exposure to flagging local capital markets.

Transaction volumes for BM&FBovespa's equities segment and Cetip's securities registration unit were weak in the first quarter, while new products at both companies failed to play a significant role in revenue, the companies said in separate securities filings on Thursday.

The companies are contending with the slowest start to a year in domestic capital markets in a decade, a volatile financial trading environment, and increased politicking ahead of the October presidential election.

For Cetip, revenue from clearing and custody activities grew 1 percent on a quarter-on-quarter basis as average prices rose. Volume for the liens unit shrank, with a one-time price hike in January limiting the revenue decline to 2.9 percent.

Net income at Cetip reached a record 99.98 million reais ($45 million) in the quarter, up 25 percent from a year earlier and 4.1 percent from the prior quarter. A Reuters poll of four analysts expected a profit of 98 million reais.

On an annual basis, net revenue fell 1.9 percent from the fourth quarter, slightly more than the estimated 0.9 percent decline. But sales, general and administrative expenses dropped 6.6 percent, less than the 16.2 percent consensus forecast.

Earnings before interest, tax, depreciation and amortization, a gauge of operational performance known as EBITDA, rose 1.4 percent to 169 million reais from the prior quarter. Analysts' had estimated EBITDA of 168 million reais.

BM&FBovespa's performance in the first quarter was less affected by market volatility than analysts had expected.

BM&FBovespa's net income surged 41.5 percent from the prior quarter to 256 million reais, in line with the poll of four analysts. Profit fell 4 percent on an annual basis.

Net revenue rose 3 percent, in line with estimates, as the robust performance of the BM&F derivatives segment offset disappointing cash equities and listing activity at the Bovespa equities unit. Expenses sank 27 percent in the quarter, more than expected.

Cetip and BM&FBovespa are scheduled to discuss results with investors on separate conference calls on Friday.

($1 = 2.20 Brazilian reais) (Reporting by Guillermo Parra-Bernal; Editing by Richard Chang)

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