Cencosud Reports Second Quarter 2018 Results
- Adjusted EBITDA up 6.6% and Adj. EBITDA margin expanded 81bps reflecting improved profitability in Argentina, Brazil and Peru, along with efficiency initiatives across the organization - Increase in operating results did not entirely flow through to bottom line as net profit was impacted by a non-cash FX loss due to the CLP devaluation against USD, partially offset by lower tax expenses - The online channel of the retail businesses posted a 54% increase compared to 2Q17 - Net Financial Debt / Adj. EBITDA ratio stood at 3.99x
SANTIAGO, CHILE / ACCESSWIRE / August 30, 2018 / Cencosud S.A. (BCS: CENCOSUD), a leading South American retailer with operations in Chile, Argentina, Brazil, Peru and Colombia, today announced its consolidated financial results for the second quarter of 2018. All figures are in Chilean pesos (CLP), except where indicated otherwise, and in accordance with IFRS.Revenues decreased 6.9% in comparison to 2Q17 impacted by currency depreciation against the CLP in all countries the Company operates and food deflation in Brazil and Peru. At a constant exchange rate, revenues increased 8.3% explained mainly by the improved performance of Argentina, Peru, Chile and Brazil. The operational highlights were Supermarkets Brazil and Peru, which achieved Same Store Sales (SSS) above inflation, together with Home Improvement across all countries of operation which posted sales increase above inflation, as well as Department Stores in Peru. Adjusted EBITDA increased 6.6% YoY (+22.4% at constant exchange rate) reaching CLP 153,241 million and margin expanded 81 basis points (bps) driven by the improved profitability in Argentina, Brazil and Peru. Argentina achieved higher profitability in Home Improvement and Financial Services. Peru achieved higher profitability in most of its business units. Net Profit for the period was CLP 3,682 million, a decrease of CLP 20,364 million YoY explained by a decline in the income from foreign exchange variations (CLP 47,223 million) and a lower asset revaluation (CLP 12,689 million) partially offset by the higher profitability from the businesses (+CLP 13,570 million) and lower tax expenses. Net Debt to Adjusted EBITDA stood at 3.99x.
Please visit www.investors.cencosud.com to obtain the complete fourth quarter earnings release, including financial results and tables.
We are continuing to see the benefits from successfully executing our strategic pillars. However, the macro environment across the region, particularly with respect to currency, became more challenging as we moved through the quarter. By contrast, we had the positive benefit from the Soccer World Cup. Taking all of these events into account, we saw positive same store sales trends for Supermarkets, Home Improvement and Department stores in many of the countries in which we operate.
We are particularly pleased with the growth we are seeing with e-commerce as consumers are responding favorably to this channel with sales increasing 54% in the quarter. We have also been implementing cost saving initiatives, which are key to continue delivering higher profitability. As a result of this we saw an increase in Adjusted EBITDA of 6.6% and 81 bps margin expansion.
In summary, we continue to focus on strengthening and differentiating our product offering, getting better and more efficient with marketing and promotions, building our omni-channel business, and expanding what has proven to be a very successful retail model. Our relentless focus on cost savings initiatives is showing positive results and we remain committed to carefully managing our expenses in order to drive efficiencies in the business and improve profitability.
The Company will host a conference call to discuss these results on Friday, August 31, 2018 at 12:00PM Chilean time/ 11:00AM EST. To participate on the day of the call, dial (1-877) 407 8133 or (1201) 689 8040 approximately ten minutes before the call and tell the operator you wish to join the Cencosud Conference Call. A webcast of the conference call will be available online at http://investors.cencosud.com/English/investor-overview/financials/quarterly-reports/default.aspx
The telephone replay of the conference call will be available until September 7, 2018 at 09:00AM Chilean time/ 08:00AM EST. Callers can access the telephonic replay by dialing (1877)-481-4010 or 1-919-882-2331 and utilizing the passcode 37317 when prompted. Webcast replay will be available until November 24, 2018 at 09:00AM Chilean time/ 08:00AM EST.
In addition to historical information, this release contains “forward-looking statements” that reflect management’s expectations for the future. The forward-looking statements included herein represent Cencosud’s views as of the date of this release. A variety of important factors could cause results to differ materially from such statements. These factors are laid out in Cencosud’s filings with the CMF in Chile. The Company undertakes no obligation to revise or update publicly any forward-looking statement for any reason unless required by law.
Maria Soledad Fernandez
Phone +5622959 0545
Phone +5622959 0368
Phone +562 2355 8395
SOURCE: Cencosud S.A.