UPDATE 1-Brazil steelmaker CSN posts sharp 2007 profit rise

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SAO PAULO, March 10 (Reuters) - Brazilian steelmaker CSN (CSNA3.SA: Quote, Profile, Research, Stock Buzz)(SID.N: Quote, Profile, Research, Stock Buzz) reported on Monday a fourth-quarter net profit of 508 million reais ($299 million), up from earnings of 83.4 million reais in the same quarter in 2006 on strong domestic demand.

Earnings before interest, taxes, depreciation and amortization, a measure of cash flow known as EBITDA, rose to 1.27 billion reais from 984 million reais in the fourth quarter of 2006.

Strong domestic demand, which accounts for nearly three-quarters of total sales, was the main reason for the better performance, CSN said in a statement to the security and exchange commission CVM.

CSN said the Brazilian automobile industry, which helped fuel strong steel demand in 2007, is expected to grow by another 9 percent in 2008.

Brascan brokerage firm had forecast a Q4 net profit of 660 million reais.

For the whole of 2007, CSN posted a net profit of 2.9 billion reais compared with 1.2 billion reais in 2006. ($1=1.71 reais) (Reporting by Raymond Colitt; Editing by Gary Hill)