August 6, 2019 / 10:23 PM / a year ago

UPDATE 1-Brazil's Iguatemi 2nd-qtr profit slips amid higher taxes, depreciation

(Adds CFO comments, EBITDA rises 3.9%)

SAO PAULO, Aug 6 (Reuters) - Brazilian upscale mall operator Iguatemi Empresa de Shopping Centers SA posted a quarterly net profit 0.8% lower year-on-year with higher taxes and asset depreciation overshadowing strong revenue in the period.

In a securities filing on Tuesday, the company said second-quarter net income hit 60.1 million reais ($15.2 million), down from 60.56 million reais in the same period of 2018.

Chief Financial Officer Cristina Betts said the opening of a new mall outlet in the south of Brazil partially affected results, contributing to higher depreciation levels, as well as lowering the group’s overall occupancy rate to 92.1% in June against 94.6% a year ago.

“Every mall has its own maturity curve, so this was all expected and even so we managed to deliver a very good revenue performance,” Betts added.

Iguatemi’s net revenue grew by 7.2% in the second quarter to 187.67 million reais. Same-store sales increased by 6.9% year-on-year, while same-area sales rose by 7.2% by the same comparison.

Earnings before interest, taxes, depreciation and amortization (EBITDA) climbed by 3.9% to 137.67 million reais, largely in line with a consensus estimate of 137.2 million reais compiled by Refinitiv.

Iguatemi, which has a portfolio of 16 malls, two premium outlets and four commercial towers, plans to launch an e-commerce platform called Iguatemi 365 in the second half of 2019, Betts said.

Last week, rival Multiplan also reported a net profit almost 21% smaller in the second quarter because of higher depreciation and expenses.

$1 = 3.9553 reais Reporting by Gabriela Mello; Editing by Matthew Lewis and Grant McCool

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