UPDATE: Brazil CBD Profit Disappoints On One-Time Costs
July 28 2010 - 12:49PM
Dow Jones News
Brazil's largest retailer, Companhia Brasileira de Distribuicao
(CBD, PCAR5.BR), or CBD, posted a second-quarter net profit
Wednesday of 62.3 million Brazilian reals ($35.2 million), down
from BRL131.7 million in the year-ago period.
The company, which is also known as Pao de Acucar, attributed
the reduction of its net profit in part to a nonrecurring expense
worth BRL40.8 million. The company began paying municipal and state
taxes in installments, cutting total profit this quarter.
Figures included results from recently acquired household goods
retailer Ponto Frio. If the results from Ponto Frio are stripped
out, CBD's profit was BRL82.5 million, it said.
CBD said costs of goods sold increased during the quarter. The
inclusion of Assai brand stores in the company's sales also reduced
margins, Chief Financial Officer Jose Antonio Filippo said in a
conference call Wednesday.
The company's food retail business reported profit below
estimates by BTG Pactual analyst Fabio Monteiro, while earnings in
the home electronics business were in line.
"Despite negative news on the operating expense front, which we
believe is partially down to restructuring charges and costs
related to renegotiating the agreement with Casas Bahia, we
continue to envisage meaningful mid-to-long term value arising from
this deal," Monteiro wrote.
Shares of CBD fell 4.29% to BRL61.11 in Wednesday trading.
Net sales rose to BRL6.97 billion from BRL5 billion in the same
quarter the year before. Excluding Ponto Frio, net sales totaled
BRL5.64 billion.
Earnings before interest, taxes, depreciation and amortization,
or Ebitda, increased to BRL394.9 million from BRL345.1 million a
year earlier. The Ebitda margin was 5.7% in the quarter, down from
6.9%.
CBD is jointly controlled by the Diniz family of Sao Paulo, the
chain's founders, and by French retail company Casino
Guichard-Perrachon SA (CO.FR). Its main competitors in Brazil
include U.S. retail giant Wal-Mart Stores Inc. (WMT) and France's
Carrefour SA (CA.FR).
-By Paulo Winterstein, Dow Jones Newswires; 55-11-3544-7073;
paulo.winterstein@dowjones.com
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