Cencosud reports first quarter 2013 results Revenues rose 14% to more than CLP 2,460 billion

Gross profit rose 14%, driven by double-digit increase in gross profit in every division except Financial Services

Positive indicators in Brazilian supermarkets, Johnson department stores show progress in turnarounds

SANTIAGO, Chile, May 30, 2013 /PRNewswire/ -- Cencosud S.A. (NYSE: CNCO), a leading multi-format Latin American retailer with presence in five countries, announced today its consolidated financial results for the first quarter of 2013. All figures are in Chilean pesos (CLP), except where indicated otherwise, and in accordance with International Financial Reporting Standards (IFRS). Variations refer to the comparison between the 1Q2012 and 1Q2013.

First quarter highlights:

  • Cencosud revenue increased 14%, driven by the consolidation of the Colombian supermarket operation, as well as positive SSS in almost every division and country. Moreover, Cencosud added 179 stores versus 1Q12, with an increase of 24% in selling space.
  • Gross profit rose 14.3% in CLP, driven by a 14.8% increase in the supermarket division, and double-digit increases in every division except financial services, which saw a small decrease.
  • Gross margin remained steady at 27.9%, despite the consolidation of the Colombian supermarket operation, which had a gross margin of 19.5% compared to an average of 24.4% for Cencosud's overall  supermarket business.
  • Adjusted EBITDA totaled CLP 152,848 million, up 5% on improved results from the Shopping Centers division and the consolidation of the Colombian supermarket operation. These factors were partially offset by a lower performance from the financial service division, which made a CLP 20,000 million provision to cover claims related to credit card fees. Excluding the provision effect, consolidated adjusted EBITDA increased 19% versus 1Q12. In the case of Chilean department store adjusted EBITDA grew 86% YoY.
  • Cencosud entered the Peruvian department store market, with the opening of its first Paris store in Arequipa.  
  • Cencosud's Annual Ordinary Shareholders Meeting took place and a new Board of Directors was elected. The Board is composed of three members of the controlling family, Mr. Horst Paulmann, Mr. Peter Paulmann and Mrs. Heike Paulmann.  The Shareholders Meeting also elected members representing the countries where Cencosud has operations: Mr. Cristian Eyzaguirre (Chilean), Mr. Roberto Philipps (Argentine), Mr. Erasmo Wong (Peruvian) and Mr. Julio Moura (Brazilian). The Board group also includes two representatives of minorities' shareholders elected by the votes of AFP (Chilean Pension Funds): Mr. David Gallagher and Mr. Richard Buchi.
  • The Company concluded the preemptive rights period of its Capital increase, with 299,688,946 shares subscribed and paid by existing shareholders. The Capital increase was approved at an Extraordinary Shareholders Meeting on November 20, 2012. As of March 31, 2013, the Company had a total of 2,806,792,161 shares outstanding.

Management comment:

"The first quarter of 2013 was very important for Cencosud, we consolidated for the first time our newly acquired supermarket operation in Colombia, while we also entered the Peruvian department store market with a Paris store," said Daniel Rodriguez, CEO of Cencosud.  "Operationally, Cencosud made significant progress in its strategy in the first quarter, with double digit growth in revenue and gross margin, driven by positive SSS in almost every division as well as an expanded footprint. We also continue the turnaround of units including our Brazilian supermarket operation, which posted positive SSS, and the Johnson department store, which saw gross margin reach 29.7%.  On the financial side, our recent capital increase and strong cash flow generation allowed us to repay a loan taken out to finance our Colombian acquisition, helping us to lower net debt/ EBITDA to 3.7x, from 4.6x at the end of 2012.

"Looking ahead, we will focus on integration and efficiency in our recent acquisitions, including rebranding our Colombian supermarket operation, while continuing the process of deleveraging to further strengthen our balance sheet," Mr. Rodriguez concluded.  

Consolidated Revenue

Consolidated revenues were CLP 2,468 billion in the first quarter 2013, compared with CLP 2,169 billion in the first quarter of 2012, a 14% increase YoY.

  • Supermarket revenues in 1Q13 increased 15.3%, reaching CLP 1,863 billion, driven by the consolidation of Supermarkets Colombia, positive SSS and the net opening of 73 new supermarkets in the region since March 2012. Total supermarket selling space rose 9%, excluding the acquisition of Carrefour, and 35% including supermarkets in Colombia.
  • Home Improvement revenues increased 7.7%, reaching CLP 279 billion in 1Q13.  The growth reflects a 7.2% SSS increase in Chile and the net opening of two Easy stores. The results were partially offset by lower revenues from Colombia, due to the appreciation of the Chilean peso and the impact of competition in Colombia, which resulted in low single digit negative SSS.
  • Department Store revenues totaled CLP 206 billion, up 11.4%, driven by a strong performance in Chilean operations. Paris and Johnson had sales growth of 10.3% and 18.0% respectively, and a SSS increase of 4.9% (including Johnson)
  • Shopping Center revenues grew 34.1%, reaching CLP 44 billion driven by two new shopping malls in Chile (Costanera and Osorno), the continuing development of the shopping center business in Peru and the inclusion of Colombian real estate operations.
  • Financial Services operations remained stable with revenues rising 0.1%, to CLP 73 billion, reflecting the integration of Colombian financial services and higher revenues from Peru, offset by lower revenues from Chile.

Please visit www.cencosud.com/inversionistas.htm to obtain the full first quarter earnings release.

The company will hold a conference call to review the 1Q13 results on Friday, May 31, 2013 at 15:00 pm Santiago/Eastern Time with a live webcast available through its website.  The conference call dial-in is +1(866) 652-5200 or +1(412) 317-6060. A webcast of the conference call will be available online at http://www.cencosud.com/eng/inversionistas.htm.

About Cencosud S.A.

Cencosud is a leading multi-brand retailer in South America, headquartered in Chile and with operations in Chile, Brazil, Argentina, Peru and Colombia. The company, founded by Chairman Horst Paulmann, operates in supermarkets, home improvement stores, shopping centers and department stores', always aiming to deliver the right product at the right price to Latin America's growing middle class. In 2012, the Company listed American Depositary Receipts (ADRs) on the New York Stock Exchange.

Corporate Communications
Andrea Brajovic
Phone: +56-2-2959-0024
Email    andrea.brajovic@cencosud.cl  

Investor Relations
Maria Soledad Fernandez
Phone: +56-2-2959-0545
Mariasoledad.fernandez@cencosud.cl

Natalia Nacif
Phone: +56-2-2959-0368
natalia.nacif@cencosud.cl

 

CONSOLIDATED INCOME DATA



(In millions of Chilean pesos as of March 31st, 2013)







First Quarter


2013

2012


CLP MM

CLP MM

Net revenues

2,468,439

2,168,909

Cost of sales

- 1,779,460

- 1,566,107

Gross profit

688,979

602,802

Selling and administrative expenses 

- 597,549

- 483,892

Other income by function

16,868

22,419

Other gain (Losses)

9,111

- 8,239

Operating income  

117,409

133,091

Participation in profit or loss of equity method associates

1,356

1,100

Financial Income

1,546

2,808

Finance Costs [for Non-Financial Activities]

- 69,941

- 49,784

Income (loss) from foreign exchange variations 

- 2,283

6,619

Result of indexation units

- 2,843

- 8,647

Non-operating income (loss) 

- 72,165

- 47,904




Income before income taxes

45,244

85,186

Income taxes  

- 25,039

- 28,311




Profit (Loss)

20,063

54,415




Profit (Loss) Attributable to Equity Holders of Parent

20,205

56,875

Profit (Loss) Attributable to Minority Interest

-142

-2,460

Net income per share 

7.9

24.0

Number of shares outstanding (in millions)

2,807

2,264

 

CENCOSUD S.A.

CONSOLIDATED BALANCE SHEETS DATA

(In millions of Chilean pesos as of March 31st, 2013)




March 2013

Dec 2012


CLP MM

CLP MM

Current Assets:




Cash and Cash Equivalents


149,233

237,721

Other Financial Assets, Current


78,670

68,167

Other Non-Financial Assets, Current


15,433

9,992

Trade and Other Receivables, Net, Current


992,284

1,060,333

Accounts receivable from related parties, Current


715.068

323.624

Inventories


925,991

926,762

Tax Assets, Current


38,146

31,270

Total Current Assets


2,200,473

2,334,567

Non-Current Assets:




Other Financial Assets, Non-Current


37,385

41,007

Other Non-Financial Assets, Non-Current


37,649

38,268

Trade and Other Receivables, Net, Non-Current


147,265

142,306

Equity Method Accounted Investments in Associates


43,214

42,272

Intangible Assets, Net


539,106

544,512

Capital gain


1,780,561

1,824,973

Property, Plant and Equipment, Net


2,949,344

2,977,838

Investment Property


1,473,487

1,471,344

Current tax assets, Non-Current


9,039

4825.534

Deferred Tax Assets


269,355

252,087

Total Non-Current Assets


7,286,407

7,339,432





TOTAL ASSETS


9,486,880

9,674,000

Current Liabilities:




Other Financial Liabilities, Current


555,031

1,179,132

Trade and Other Payables, Current


1,673,843

1,902,396

Notes and accounts payable to related companies, Current


813.452

974

Provisions, Current


41,759

22,624

Current Tax Payables


37,112

46,798

Current provisions for employee benefits


68,983

78,800

Other Non-Financial Liabilities, Current


84,415

84,317

Total Current Liabilities


2,461,957

3,315,041

Non-Current Liabilities:




Other Financial Liabilities, Non-Current


2,311,812

2,359,501

Trade and Other Payables, Non-Current


7,704

7,411

Provisions, Non-Current


112,614

111,321

Deferred Tax Liabilities


396,059

397,606

Current tax liabilities


9,505

0

Other Non-Financial Liabilities, Non current


70,262

70,909

Total Non-Current Liabilities


2,907,956

2,946,747

Equity:




Issued Capital


2,303,312

1,551,812

Issued Premium


506,322

477,341

Other Reserves


-577,789

-484,364

Retained Earnings (Accumulated Losses)


1,884,177

1,866,746

Equity Attributable to Equity Holders of Parent


4,116,022

3,411,534

Minority Interest


945

678

Total Equity


4,116,967

3,412,212





TOTAL EQUITY AND LIABILITIES


9,486,880

9,674,000

 

SOURCE Cencosud S.A.



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