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November 19, 2013

CHILE: Sales up but profits down at LatAm retailer Cencosud

Chile-based retailer Cencosud has reported a fall in third-quarter earnings on the back of costs linked to recent acquisitions and to store openings, although sales increased.

By Dean Best

Chile-based retailer Cencosud has reported a fall in third-quarter earnings on the back of costs linked to recent acquisitions and to store openings, although sales increased.

The company, which has stores in five South American markets, booked net income of CLP43.66bn (US$84.1m) for the three months to the end of September, down 34.8%.

Cencosud pointed to higher finance costs after its debt grew to pay for businesses including its acquisition of Carrefour’s business in Colombia a year ago.

Operating income was down 2.8% at CLP131.66bn. Profits from supermarkets, its largest division, fell 15% thanks in part to losses in Colombia, where industrial action in the agriculture and transport sectors hit the business.

Revenue, however, was up 14.1% at CLP2.43trn, driven by the former Carrefour stores in Colombia. Cencosud said it had also opened 62 other stores in its markets since last year’s third quarter.

The results mirrored those seen in the previous two quarters of 2013, meaning Cencosud’s profits in the first nine months of the year were down but sales were up.

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