- Stable revenues as growth in Chile, Peru and Argentina was impacted by currency depreciation in Argentina and Colombia
- Adjusted EBITDA down 4.5% and Adj. EBITDA margin of 5.9%
- Net Financial Debt / Adj. EBITDA ratio of 4.2x; successful liability management
SANTIAGO, CHILE / ACCESSWIRE / November 21, 2017 / 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 third quarter of 2017. All figures are in Chilean pesos (CLP), except where indicated otherwise, and in accordance with IFRS.
- For the third quarter, revenues were marginally higher to CLP 2,487,536 million reflecting growth across Chilean operations (3.3%) including Supermarkets (SSS +3.8%), Financial Services (42.5% in CLP) and Home Improvement in Argentina (SSS 23.0%).
- Adjusted EBITDA of CLP 146,521 million was mainly impacted by the 16% Argentine peso devaluation and weak performance in Department Stores in Chile and Supermarkets in Brazil, Colombia and Perú. Adjusted EBITDA margin was 5.9%.
- Net Debt to Adjusted EBITDA stood at 4.2 times. This reflects lower Adjusted EBITDA in the last twelve months related to lower proceeds from the sale of non-core assets. The liability management operation in July enhanced the Company's liquidity and debt amortization schedule with no major maturities until 2023.
Please visit http://investors.cencosud.com to obtain the full third quarter earnings release, including financial results and tables.
Management Comment
Cencosud continues to strengthen its reputation as a best-in-class South American retailer, focusing on disciplined strategy execution to generate sustainable growth, even as the operating backdrop remains uneven. As such, we had stable revenues for the period, supported by resilience in Chile, while we expand selectively in Colombia.
Strategically, we are reinforcing our value proposition through investments in technology, the customer experience, a better product mix and focus on efficiencies through process changes and the clustering of stores. Our omnichannel strategy is enabling us to gain market share and reaffirms our reputation as an innovative regional retailer.
For the quarter, Adjusted EBITDA fell 4.5% YoY reflecting peso devaluation, lower results from Department Stores in Chile, and a challenging macroeconomic backdrop where we operate in Brazil. Adjusted EBITDA margin was 5.9%.
Net Profit reflects higher financial costs from the tender of 2021 and 2023 Notes and premium paid, along with higher taxes. However, our working capital position is solid, with no major debt maturities until 2023.
We expect our Net Debt to Adjusted EBITDA position to improve as our strategic initiatives impact results and consumption recovers across the region.
Looking ahead, we remain focused on strengthening our financial position and advancing in the sale of non-core assets. We are starting to see green shoots in Argentina, particularly in the Home Improvement division which posted impressive SSS in September and October. In addition, we are confident that Argentina will show improved profitability in the fourth quarter as the macroeconomic backdrop improves, while Perú is also demonstrating more encouraging revenue performance. As the consumption environment improves in both these markets, we expect better performance in the fourth quarter.
Conference Call
The Company will host a conference call to discuss these results on Wednesday, November 22, 2017 at 12:00PM Chilean time/ 10:00AM EST. To participate on the day of the call, dial (1877) 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 archived version of the webcast and a telephone replay of the conference call will be available until February 22, 2018. Callers can access the telephonic replay by dialing (1877)-481-4010 or 1-919-882-2331and utilizing the passcode 22000 when prompted.
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 SVS in Chile and the SEC in the United States. The Company undertakes no obligation to revise or update publicly any forward-looking statement for any reason unless required by law.
Corporate Communications
Danica Radnic
Phone +5622959 0024
danica.radnic@cencosud.cl
Investor Relations
Maria Soledad Fernandez
Phone +5622959 0545
mariasoledad.fernandez@cencosud.cl
Natalia Nacif
Phone +5622959 0368
natalia.nacif@cencosud.cl
Alexandra Kemp
Phone +562 2355 8395
alexandra.kemp@cencosud.cl
SOURCE: Cencosud S.A.