- Adjusted EBITDA up 7.0% and Adj. EBITDA margin of 7.6% reflecting improved operations and profitability in Argentina, along with productivity and cost saving initiatives across the organization
- Increase in operating results did not flow through to bottom line as net profit was impacted by lower gains from exchange differences and higher income taxes
- The online channel of the retail businesses posted an increase of 44.2% compared to 1Q17
- Net Financial Debt / Adj. EBITDA ratio stood at 3.86x
SANTIAGO, CHILE / ACCESSWIRE / May 24, 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 first quarter of 2018. All figures are in Chilean pesos (CLP), except where indicated otherwise, and in accordance with IFRS.
- Revenues decreased in comparison to 1Q17 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, revenue increased 7.2% explained mainly by the good performance in Chile of Supermarkets (+5.4%) and Shopping Centers (+3.6%); in Argentina of Financial Services (+64.9% in local currency) and Home Improvement (+30.6% in local currency); and in Peru of Department Stores (+20.6% in local currency) and Financial Services (+23.1% in local currency).
- Adjusted EBITDA increased 7.0% YoY (+19.9% at constant exchange rate) reaching CLP 183,161 million, driven by margin expansion (+77 bps); in Chile (+15 bps), Argentina (+266 bps) and Colombia (+74 bps) as a result of the good performance of Home Improvement in all countries and Financial Services in Argentina. This was partially offset by the depreciation of all currencies against CLP and the weaker performance YoY of Supermarkets in Peru and Brazil.
- Net profit decreased 23.0% YoY explained by lower non-operating income due to a decline in income from foreign exchange variations and higher income taxes, partially offset by increased operating income.
- Net Debt to Adjusted EBITDA stood at 3.86x.
Please visit www.investors.cencosud.com to obtain the complete fourth quarter earnings release, including financial results and tables.
Management Comment
We delivered solid results for the quarter including an increase of 7% in EBITDA, reaching a 7.6% margin in 1Q18.
Additionally, an important event occurred subsequent to quarter end that further improved our financial position. On May 9th we announced an agreement to sell a 51% stake in Banco Cencosud Peru to Scotiabank, a significant step that will allow us to continue growing the business and servicing our customers through this Joint Venture, while focusing our resources in our core retail & real estate operations. This is a step forward in our commitment to strengthen our financial position and deliver on our $US 1 billion non-core asset sales Plan. We anticipate proceeds from this sale to be US$ 100 million, which will be used to reduce debt. The transaction is subject to regulatory approval in both Peru and Canada. Although we have no control on the timing of approvals, we expect the transaction to close during the second half of this year.
In summary, our performance in the quarter reflects ongoing successful execution of our key strategic pillars. The first quarter results validate our long-term strategic plan and demonstrates the progress we continue to make in executing on our plan to drive sustained profitable growth. We remain careful in our expense and capital management to deliver consistent financial performance while positioning the business to succeed for years to come.
Conference Call
The Company will host a conference call to discuss these results on Friday, May 25, 2018 at 12:00PM Chilean time/ 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 June 8, 2018 at 12:00PM Chilean time/ EST. Callers can access the telephonic replay by dialing (1877)-481-4010 or 1-919-882-2331 and utilizing the passcode 33427 when prompted. Webcast replay will be available until August 25, 2018 at 12:00PM Chilean time/ EST.
Forward-Looking Statements:
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.
Investor Relations
Maria Soledad
Phone +5622959 0545
[email protected]
Fernandez Natalia
Phone +5622959 0368
[email protected]
Nacif Alexandra Kemp
Phone +562 2355 8395
[email protected]
SOURCE: Cencosud S.A.