Hypermarcas 4Q profit falls on debt costs
SAO PAULO (Reuters) - Hypermarcas (HYPE3.SA: Quote), the largest Brazilian producer of disposable consumer goods, saw profit plunge 41 percent in the fourth quarter from the same period a year earlier, as financial expenses more than doubled after the company took on debt to fund a string of acquisitions in recent years.
Hypermarcas earned a profit of 49.6 million reais ($27.9 million) in the fourth quarter, compared with a net income of 84.1 million reais in the same quarter a year earlier, according to a securities filing.
Hypermarcas, which sells more sweeteners, hangover pills, shaving cream and lotions than anyone else in Brazil, saw revenue up 1.3 percent to 841.8 million reais in the fourth quarter in a year-on-year basis, while revenue from its pharmaceutical division fell 3.8 percent compared with the same quarter the previous year.
Net financial expenses rose to 128.6 million reais in the fourth quarter, a 142 percent increase from 53.1 million reais in the same period the previous year. The company pointed to the increased burden of interest payments relating to higher debt levels after the company borrowed to carry out acquisitions in the previous two years, according to the filing.
Earnings before interest, taxes, depreciation and amortization (EBITDA) dropped 37.8 percent to 139.1 million reais in the quarter, compared with 223.5 million reais a year earlier.
($1 = 1.78 Brazilian reais)
(Reporting by Asher Levine; Editing by Vicki Allen)
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