BR Properties Tumbles as Decline in Currency Helps Erode Profit

Brazilian real estate developer BR Properties SA (BRPR3) fell the most in five weeks after profit trailed estimates for the first time in 11 quarters, dragged down by a weaker real.

The shares dropped 3.3 percent to 18.46 reais at 2:35 p.m. in Sao Paulo, the biggest decline on a closing basis since July 2. The Ibovespa (IBOV) equity benchmark slid 1.7 percent.

Adjusted net income decreased 85 percent to 49.2 million reais ($21.5 million) in the second quarter from a year earlier, according to a regulatory filing yesterday after the market closed. That compares with an average estimate of 66.4 million reais among four analysts surveyed by Bloomberg. The financial loss was 176 million reais, worse than expected, analysts at Banco Bradesco SA’s brokerage unit led by Edigimar Maximiliano wrote today in a research note to clients.

Part of that amount “refers to losses on the Brazilian currency depreciation’s impact on the company’s dollar-denominated indebtedness,” and part is related to financial derivatives, the analysts wrote.

Sao Paulo-based BR Properties has fallen 28 percent this year, while the Ibovespa has declined 22 percent. The real lost 8.1 percent in the first half of 2013.

To contact the reporter on this story: Denyse Godoy in Sao Paulo at dgodoy2@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

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