August 9, 2018 / 11:35 PM / a year ago

Brazil's MRV confident on future of housing subsidy program

SAO PAULO, Aug 9 (Reuters) - MRV Engenharia e Participacoes SA, Latin America’s largest homebuilder, is confident there will be no major changes to a housing subsidy program that is key to the company and its competitors operating in the low-income segment, an executive said on Thursday.

In an interview following the firm’s second-quarter results, Rafael Menin, MRV’s co-chief executive, said no electable candidate in Brazil’s wide-open October presidential election was set to slash the ‘Minha Casa, Minha Vida’ program, which benefits millions of Brazilians.

“We’ve had conversations with the candidates, and the economists responsible for government policy,” Menin said. “Eventually, there will be some adjustments, but it’s hard to imagine that there will be a rupture.”

In the second quarter, MRV posted a net profit of 166 million reais ($43.7 million), up 19 percent from the same period a year ago, and roughly in line with a Reuters consensus estimate.

Earnings before interest, taxes, depreciation, and amortization (EBITDA) came in at 248 million reais, also roughly in line with expectations.

The firm benefited from cost savings and increased revenue as home launches and sales increased, Menin said. However, the soccer World Cup held profit back by reducing the flow of potential home buyers, he added.

In July, MRV reported significant growth in sales and new home launches in the second quarter. Menin predicted those metrics would improve in the second half of the year.

“We’ll have a strong third quarter, and an even stronger fourth quarter,” he said.

Reporting by Gabriela Mello; Writing by Gram Slattery, Editing by Rosalba O'Brien

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