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March 31, 2014

CHILE: Cencosud ends year of lower profits with Q4 rise

Chile-based retailer Cencosud saw profits fall in 2013, although its earnings jumped in the fourth quarter.

By Dean Best

Chile-based retailer Cencosud saw profits fall in 2013, although its earnings jumped in the fourth quarter.

The company, which has stores in five South American markets, booked net profit of CLP229.77bn (US$419.1m) for 2013, down 15.8% on 2012.

Cencosud reported increased finance costs after its debt grew to pay for businesses including its acquisition of Carrefour’s business in Colombia a year ago. Its losses from foreign exchange were also higher.

Net sales in 2013 were up 13% at CLP10.34bn thanks to the Carrefour outlets in Colombia, the opening of supermarkets and the retailer’s new department stores in Peru.

In the last three months of the year, Cencosud saw its net income jump 40% to CLP158.1m. Cencosud revenue increased 11% to CLP2.86bn.

“Our results for the fourth quarter of 2013 highlight the strength of our position as a leading supermarket retailer in Chile and Argentina, as well as our expertise in home improvement, department stores, shopping centres and financial services right across South America,” Cencosud said.

“In 2014, our focus will be on improving results in Colombia and Brazil while also lowering our leverage through operational excellence, reduced capex and the strategic monetization of non-core assets. We remain well-positioned in the South American retail market, with unique scale and diversity, and are confident that 2014 will be a successful year.”

In January, Cencosud said it would be investing less in expansion this year as it focuses on consolidating its Brazilian and Colombian operations.

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