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UPDATE 1-Edenred expects Latam to be broadly in line with last year
February 23, 2017 / 8:27 AM / 9 months ago

UPDATE 1-Edenred expects Latam to be broadly in line with last year

(Adds CEO comments, details on Latin America)

By Alan Charlish

Feb 23 (Reuters) - Prepaid meal voucher and card provider Edenred said on Thursday it expects growth this year in Latin America, its biggest market, to be broadly in line with 2016 as strength in Mexico offsets weakness in Brazil.

Chief Executive Bertrand Dumazy, however, said the situation in Brazil was gradually improving.

“The recovery of macroeconomic indicators doesn’t mean there will be an immediate recovery in the real economy. For example, our Employee Benefits business depends on the unemployment rate,” he told reporters on a call.

Unemployment in Brazil stood at 12.0 percent at the end of December 2016, up from 9.0 percent a year earlier, according to government data.

For 2017, the company is targeting overall like-for-like growth of more than 7 percent in operating revenue and more than 9 percent in earnings before interest and tax (EBIT), in line with its medium-term goals announced in October.

Edenred, which helps firms manage staff expenses and is best know for its “Ticket Restaurant” vouchers, said its comparable issue volume, an indicator of the nominal value of the vouchers issued, rose 10 percent in 2016 to 19.81 billion euros ($20.9 billion).

The company confirmed in October that it expected like-for-like issue volume growth to be at the lower end of its historic target range of 8 percent to 14 percent.

Issue volume in Latin America, which represents 49 percent of the total, grew 12.4 percent on a like-for-like basis. Growth in Brazil was 4.2 percent despite the weak economic environment and high unemployment.

Edenred said EBIT rose 8.4 percent to 370 million euros for the full year. The company proposed a dividend of 0.62 euros, a decrease of 16 percent from the previous year. ($1 = 0.9471 euros) (Editing by David Clarke)

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