Mobile payment decreases profit from Cielo

In card merchant acquirer and Cielo, the bet payments via mobile phone ("mobile payment", in English) will take longer than expected to bring fruits, Romulus of Mar, President of the company. "The development of the ' mobile payment ' will take longer to happen than anticipated, but we have no doubt that he will come," he said yesterday in the Conference call on the results of the merchant acquirer and.
The discussion on payments via mobile phone came to light after an extraordinary loss shrank the merchant acquirer and result in $ 30.5 million in the second quarter.
The expense is related to the recognition of loss due to a higher than expected estimate in relation to goodwill from the acquisition of Paggo (former Oi Paggo), a company focused on the development of technology for acceptance of payments via mobile phone, bought in 2010, for undisclosed amount. The Cielo realized that the mobile payments market will progress more slowly than expected, hurting the ability of the Paggo generate cash positive. Hence, the low made in the quarterly results, with effect only.
"There is a learning curve to worldwide payment via mobile phone is disseminável, gain scale and reach a sustainable business model," said Davis. The Executive compared the "mobile payment" to the development of electronic commerce, in the sense that there was a delay of the largest companies in the industry to deliver results. Although the mobile payment cost to flourish, he states that this type of investment is critical to maintaining the merchant acquirer and competitive. "We have to be present in the ' mobile payment '. If not, we run the risk of this being a disruptive technology to our business model, "he said.
Was the low caused by Paggo the main factor that caused the net profits of the Cielo were below the average of five Analyst estimates compiled by the value, of R $ 639,6 million. The merchant acquirer and recorded net income of r $ 623,3 million in the second quarter, a 13.6% in comparison with the same period last year.
For analysts, there is no reason to abandon the optimism with the merchant acquirer and. The analysis of Credit Suisse, in a report titled "the greatest winner of quarter", stated that "continues to view the environment as favorable, with Cielo ready for all weather conditions."
Two factors support this positive Outlook. First, the market share gains on the main competitor, the Redecard, in the second quarter. Second, the growth of the anticipation of payments cards to retailers.
In the second quarter, the card market moved $ 192,2 billion financial volume, considering the numbers of the three largest companies in the segment. This represents a growth of 17.8% in comparison with the same period last year.
Of this total, the Cielo responded by a slice of 55.3%. In the first three months of the year, the share was 54.5%. Already the Redecard captured, between April and June, a slice of 39.7% of the market, up from 40.8% in the first quarter. "The competition has been more benign than expected," wrote analysts at Deutsche Bank.
The anticipation for retailers also gave an important jump. The financial volume of anticipated transactions totaled r $ 10.6 billion, representing 16.1% of the total volume of credit and showing growth of 71.7% compared to the same period last year. Votorantim Corretora considered as "amazing" and attributed the performance to increase Cielo of operations with larger retailers.
Earlier this year, the Cielo estimated between 7% to 10% net profit growth in 2013, goal that hit in the first and second quarters. Days stated that, in fact, the target was "conservative", but that the company would not make new projection. The reason is uncertainty as to the behavior of the economy and competition. He said, however, that the cards market follows heated in the second half and should close the year with growth around 18% in volumes transacted.