By Aluisio Alves
SÃO PAULO (Reuters) – Cielo posted a strong increase in fourth-quarter profit, reflecting growth in the volume captured in card payments, recovery of revenue yield and cost control.
The largest electronic payment company in the country announced this Thursday that its recurring profit from October to December totaled 490 million reais, up 63.3% compared to the same stage in 2021.
Cielo’s recurring operating result measured by recurring earnings before taxes, interest, depreciation and amortization (Ebitda) reached 1.1 billion reais from July to September, 40% more than a year earlier. The forecast of analysts was 1.19 billion reais.
The numbers show how, after nearly a decade losing market share to a growing number of rivals in the acquiring market, the company has been using the strength of its controllers, Bradesco and Banco do Brasil, in recent quarters, with a more competitive offer of financial products small and medium-sized retailers.
Cielo’s term products, especially earnings from interest on the prepayment of receivables offer, reached a record 30.2 billion reais in the quarter, up 25% over a year earlier.
The so-called revenue yield, a metric of the level of profitability in the acquiring market, rose from 0.66% to 0.72%.
With greater market dominance, the company allowed itself to focus on the most profitable customer range, cutting subsidies for micro-entrepreneurs. As a result, the active customer base ended the year at 1.057 million, down 3.4% in three months and 12.4% year-on-year.
At the other end, the cost of services provided in its main line of business grew 6.7% year on year, to 899 million reais, at a much lower pace than net revenue, which grew 22.2%, to 1.677 billion.
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