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SAO PAULO May 6 Cielo SA, Brazil's
largest card payment processor, beat first-quarter profit
estimates on Tuesday as transaction volumes and equipment
rentals came in atypically high in what usually is a weak
The Barueri, Brazil-based company earned net income of 805.9
million reais ($361.3 million) in the quarter, well above the
average estimate of 737 million reais in a Reuters poll of five
analysts. Profit jumped 11.5 percent from the prior quarter and
25.3 percent from a year earlier, according to a securities
Transaction volumes surged on an annual basis, but fell on a
quarterly basis because of a seasonal decline in retail and
commercial activity. Chief Executive Officer Romûlo Dias stepped
up efforts to limit cost growth, helping push operating margins
to the highest in a year.
Net revenue rose 17.5 percent from a year earlier, while
costs rose 18.4 percent and sales, general and administrative
expenses climbed 28.3 percent. Net revenue, at 1.82 billion
reais, fell short of the 1.95 billion reais that analysts
estimated in the poll.
Rental of payment processing equipment, known as POS, had an
increase of 7.4 percent on an annual basis and of 2 percent on a
quarterly basis, the filing said. Prepayments of receivables
rose 80 percent on an annual basis, helping drive net income
Earnings before interest, tax, depreciation and
amortization, a gauge of operational profitability known as
EBITDA, rose 16.7 percent to 1 billion reais in the quarter. The
poll predicted EBITDA of 927 million reais.
EBITDA rose to 55.1 percent of revenue in the first quarter,
the highest so-called EBITDA margin in a year, the filing
showed. In the poll, the expected margin was 55.8 percent.
Management will host a conference call with analysts to
discuss first-quarter earnings early on Wednesday.
($1 = 2.23 Brazilian reais)
(Reporting by Guillermo Parra-Bernal; Editing by David Gregorio
and Eric Walsh)