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SAO PAULO, Nov 14 (Reuters) - Brazil's Localiza Rent a Car SA on Monday reported third-quarter earnings down 27.6%, landing below analyst expectations as the company faced mounting costs of debt and cars in its fleet lost value.
The firm posted adjusted net profit of 682.1 million reais ($127.9 million), below Refinitiv's forecast of 758.2 million reais. Net profit came in at 423.6 million reais.
Its net debt meanwhile climbed to 21.20 billion reais, up from 16.21 billion a year earlier as Brazil faces surging interest rates.
The Belo Horinzonte-based rental firm also pointed to costs of integrating its former rival Unidas, a 3.6 billion real deal it completed last month adding close to 50,000 vehicles and nearly 200 stores.
As part of the deal, Localiza sold its Ouro Verde unit to Canada's Brookfield Asset Management (TSX:BAMa). It said it should start seeing cash effects from the fourth quarter and would reinvest proceeds in growing its fleet.
Localiza's fleet spans more than 300,000 vehicles mainly in Brazil, but the group also present in four other South American countries.
It reported core earnings of 2.28 billion reais for the three months ended Sept. 30, up 26% from a year earlier, while revenues climbed 40% to 6.14 billion reais, boosted by higher prices and bigger trading volumes. ($1 = 5.3321 reais) (Reporting by Peter Frontini, Carolina Pulice and Sarah Morland)