SAO PAULO, April 26 Localiza Rent a Car SA
, Brazil's biggest car rental company, posted an
unexpected 17 percent rise in first-quarter profit due to rapid
fleet growth and falling interest rates.
Net income rose from a year earlier to 120 million reais
($38 million), according to a securities filing on Wednesday.
Earnings beat an average forecast of 103 million reais from
analysts surveyed by Thomson Reuters.
The strong performance may reinforce some investors' bets on
Brazilian transportation stocks as a leading sector in a gradual
recovery from the country's worst recession on record. Localiza
shares are up 29 percent in 2017, after a record high last week.
Car rental volumes rose 25 percent from a year earlier, near
the 27 percent expansion of the car rental fleet. Average daily
rates slipped 5 percent, but growing rental volumes diluted
fixed costs, delivering stronger operating margins.
Earnings before interest, taxes, depreciation and
amortization (EBITDA) rose 15 percent to 297 million reais,
better than an average forecast of 277 million reais. EBITDA as
a share of car rental revenue rose to 36.6 percent in the
quarter from 34.5 percent a year earlier.
Lower interest rates meant that financial expenses rose just
11 percent from a year earlier, despite a 34 percent jump in net
debt as the company added some 22,500 cars to its fleet.
($1 = 3.17 reais)
(Reporting by Brad Haynes; Editing by Bill Trott)