Brazil Cyrela Q1 net jumps 73 pct
Reuters, May 14, 2010
* Real estate developer sees "strong" demand in economy * Shares drop 4.8 pct, underperforming Bovespa index SAO PAULO, May 14 (Reuters) - Cyrela Brazil Realty, Brazil's largest real estate developer, posted a 73.4 percent jump in first-quarter profit on Friday as its focus on low-income housing buoyed sales, but the results fell short of analysts' expectations. Net income rose to 174.2 million reais ($98 million) from 100.5 million a year earlier, Cyrela said in a securities filing. The company posted a profit of 207.7 million reais in the fourth quarter of 2009. Cyrela was expected to post a profit of 195.5 million reais, according to the average forecast of four analysts surveyed by Reuters. Cyrela shares slumped 4.8 percent in late-morning trade in Sao Paulo to 19.42, compared with a 1.96 percent decline in the benchmark Bovespa index. Shares of Brazilian homebuilders have surged the past year as investors snapped up stocks on expectations the strongest expansion in decades in Latin America's largest economy will drive demand for new houses. The Sao Paulo stock exchange's real estate index .IMOB jumped 56 percent over the past year, even after sliding 13 percent since the beginning of 2010. "We continue to be optimistic with Brazil's macroeconomic outlook," Cyrela said in the filing. "Consumer confidence, the increase in real wages and the unemployment rate, which are important variables to our industry, indicate demand for real estate will stay strong." Net sales jumped 68.7 percent year-on-year to 1.13 billion reais in the first quarter as Cyrela launched 15 new developments, up from nine a year earlier, and focused on existing projects to reduce its stock of apartments and homes. The $20 billion "Minha Casa, Minha Vida" low-income housing program launched last year by President Luiz Inacio Lula da Silva has driven revenue for Cyrela and rivals Gafisa and Rossi Residencial. Cyrela's Living unit, which specializes in low-income homes, accounted for 54.3 percent of all new developments in the first quarter, the company said. The unit accounted for 21 percent of all sales in the first quarter, compared with 18 percent a year earlier.