May 10, 2010 / 11:00 PM / 8 years ago

UPDATE 1-Brazil's Pao de Acucar Q1 net up 33 pct on sales

* First-quarter profit jumps 33 pct on appliance sales

* Net sales jump 50 pct to 7.0 billion reais

* EBITDA rises 31 pct to 410.4 million reais (Adds tax breaks, details on earnings, Ebitda)

SAO PAULO, May 10 (Reuters) - Grupo Pao de Acucar, Brazil’s largest retailer, on Monday reported a 33 jump in first-quarter profits as tax breaks and low borrowing costs stoked demand for appliances, though profits were below analyst estimates.

Net income jumped to 126.2 million reais ($71 million), compared with 94.9 million reais in the same period a year earlier, the company said. The Sao Paulo-based company was expected post 140 million reais in profits, according to the average forecast of five analysts in a Reuters poll.

Monday’s earnings figures included results from Globex, owner of the Ponto Frio chain of appliance stores, which Pao de Acucar acquired last year. Globex posted a loss in the first quarter.

“The current trend is for (Globex) to post a profit soon, especially because of the increase in electronics sales due to the World Cup (soccer championship),” Jose Antonio Filippo, Pao de Acucar finance vice president, told reporters.

Excluding Globex, the company would have posted earnings of 129.9 million reais.

Earnings before interest, taxes, depreciation and amortization, a gauge of cash flow known as EBITDA, rose 31 percent to 410.4 million reais.

Net sales soared by more than 50 percent to almost 7.0 billion reais from the year-earlier period.

Gross sales of electronics jumped 65 percent, helped by tax breaks on household appliances created by the government of President Luiz Inacio Lula da Silva to spur consumer spending in the wake of the 2008 financial crisis.

Brazilian consumers last year helped pull the country’s economy out of a brief recession and retailers that rode out the crisis are now capitalizing on the better times. Consumer spending makes up about 60 percent of Brazil’s $1.9 trillion economy.

($1=1.777 reais)

Reporting by Cesar Bianconi, Writing by Elzio Barreto

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