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Brazil's Votorantim eyes infrastructure, property investments

By Carolina Mandl

SAO PAULO, April 4 (Reuters) - Votorantim SA, one of Brazil's biggest diversified industrial group, is looking to diversify investments into new areas such as infrastructure and commercial properties, its chief executive officer said on Wednesday.

Following the partial sale of pulp producer Fibria Celulose SA to Suzano Papel e Celulose SA in March, Votorantim is seeking less volatile assets to ensure a steady flow of dividends to its controlling shareholder, the billionaire Ermirio de Moraes family.

In an interview to discuss annual results, CEO João Miranda said that in addition to more investments in its energy unit, the group is considering new assets in infrastructure such as roadways and urban mobility. Venture capital investments and the acquisition of office properties are also on the table.

In 2017, Votorantim posted net income of 810 million reais ($242 million), compared with a loss of 1.3 billion reais the year before due to a large asset impairment. Some 150 members of the Ermirio de Moraes family will get some 750 million reais in dividends this year, the company said.

Miranda said returns from the sale of Fibria may be invested outside Brazil, in sectors in which the conglomerate already operates. Votorantim, with interests in sectors from cement to basic metals, aims to match revenues and costs in a strong currency.

Votorantim net debt dropped 16 percent to 12.4 billion reais at the end of 2017. That equals about 2.60 times adjusted earnings before interest, taxes, depreciation and amortization in the year, down from 3.46 times EBITDA in 2016.

Miranda said the group is aiming for a ratio below 2 times EBITDA in 2018, excluding proceeds from the sale of Fibria, which is still subject to approval by antitrust authorities.

Miranda did not rule out further asset sales, but did not mention any specific areas.

Last year, the group sold part of miner Nexa Resources in a U.S. initial public offering, disposed of some cement assets and combined its long steel operations with ArcelorMittal SA.

Despite weaker cement sales, Votorantim's net revenue rose by 5 percent to 27.2 billion reais last year due to higher metal and energy prices.

Adjusted EBITDA, a gauge of operational profit excluding one-time effects, rose 12 percent to 4.8 billion reais. ($1 = 3.34 reais) (Reporting by Carolina Mandl Editing by Jeffrey Benkoe)