SAO PAULO, July 19 (Reuters) - Brazilian real estate giant MRV&Co will prioritize profitability through price hikes over the growth of its sales volume, the firm's chief financial officer, Ricardo Paixao, told Reuters.
Last week, MRV raised roughly 1 billion reais ($209.11 million) in a share offering on the same day that the Brazilian government restarted a federal housing program that is expected to heat up the real estate sector.
The executive, however, said the decision to raise capital was unrelated to the updated version of the government's program, as the firm does not intend to sell a higher number of housing units.
"Our strategic direction is to keep the company at its current size," he said, adding that the proceeds will be used to reduce debt within the company's main business, real estate development in Brazil.
Instead, the developer aims to boost revenue through sustained price increases.
"We have raised prices a lot over the last 18 months and will continue increasing them above inflation," Paixao said, arguing that the strategy of maintaining constant volume while raising prices will lead to substantial revenue and profit growth.
The firm also intends to generate cash in the second half of the year, offsetting the amount that was burned in the first six months, "with the prospect of having a positive cash generation result for the year." ($1 = 4.7822 reais) (Reporting by Patricia Villas Boas in Sao Paulo Writing by Peter Frontini Editing by Matthew Lewis)
