- Increased Profitability Despite the 6.6% Decline in Revenues in CLP Resulting from Currency Depreciation
- Higher Traffic in Supermarkets in Chile, and Department Stores Chile and Peru
- Better SSS Performance in Chile, Argentina, and Brazil Compared to 2Q16
- Continued Progress in the Sale of Non-Core Assets
- Net Profit Reached CLP 34,950 Million, Reflecting a CLP 64,851 Million Increase Year Over Year
SANTIAGO, CHILE / ACCESSWIRE / November 22, 2016 / Cencosud S.A. (BCS:CENCOSUD) (CNCO), 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 2016. All figures are in Chilean pesos (CLP), except where indicated otherwise, and in accordance with IFRS. Variations refer to the comparison between 3Q16 and 3Q15.
Consolidated revenues reached CLP 2,496,037 million in the quarter, with growth in local currency in all countries, except Brazil, achieving higher Same Store Sales in Chile, Argentina, and Brazil, and posting sequentially improving sales. Revenues in Chilean Pesos, however, decreased 6.6% due to the devaluation of the Argentine Peso (38.3%), Peruvian Sol (5.9%), and Colombian Peso (4.3%) against CLP. Excluding the FX effect (assuming the same exchange rate as of September 30, 2015), consolidated revenues would have increased by 7.9%.
Adjusted EBITDA increased 11.5% YoY to CLP 153,418 million in the quarter, while the Adjusted EBITDA margin expanded 100 bps to 6.1%. Excluding the FX effect (assuming the same exchange rate as of September 30, 2015), Adjusted EBITDA would have increased by 33.4%, driven by higher efficiency in expenses and non-recurrent charges in 3Q 2015.
Net Income for the quarter reached to CLP 34,949 million, compared to the CLP 29,901 million loss recorded in the year-ago quarter. This improvement was mainly driven by the increase in Adjusted EBITDA and a greater foreign exchange gain.
Please visit investors.cencosud.com to obtain the full third quarter earnings release, including financial results and tables.
We delivered a strong operational and financial performance this quarter as we continue to make headway in the execution of our strategy. Consolidated Adjusted EBITDA was up 11.5% while Adjusted EBITDA margin expanded 100 basis points, reflecting our ongoing focus on cost management and efficiency. More importantly, higher profitability was achieved despite the 6.6% decline in consolidated revenues in Chilean pesos resulting from currency depreciation in Argentina, Peru, and Colombia. Note that at constant exchange rates, consolidated Sales and Adjusted EBITDA would have increased 7.9% and 33.4%, respectively.
Our efforts to build a team focused on client satisfaction and accountability have enabled us to move up in the Great Place to Work rankings, and advance in customer loyalty and satisfaction initiatives. We have made significant progress in the execution of our E-Commerce and Omnichannel initiatives to become the region's leading online retailer. More importantly, we have also advanced on the sale of non-core assets, with the renegotiation of the Colpatria JV agreement in Colombia, the sale of Teleticket in Peru, and further agreements to sell properties in Chile.
Our focus on profitability allowed us to deliver Net income of CLP $35 billion, a CLP $65 billion improvement from the loss reported in the year-ago quarter. Results also benefited from a positive foreign exchange rate impact on our dollar denominated debt and non-recurring events registered in 3Q15.
Looking ahead, we remain committed to driving sustainable profitable growth. To achieve this, we are further enhancing the customer experience, reinforcing a lean and efficient operational base, and will maintain our commitment to disciplined financial management. Furthermore, we will continue divestiture of non-core assets and the review of our store portfolio.
While mixed economic conditions persist, these initiatives combined with our expertise in retail, will ensure we have a diversified portfolio that is uniquely positioned to benefit from an improvement across the macroeconomic backdrop.
The Company will host a conference call to discuss these results on Wednesday, November 23, 2016 at 11:00AM Chilean time / 09:00AM EST. To participate on the day of the call, dial +1(888) 349-0108, +1(412) 902-4201, or +1230-020-0479 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 at approximately 1:00PM Santiago / 11:00AM EST until November 30, 2016. Callers can access the telephonic replay by dialing +1 (877) 344-7529 or +1 (412) 317-0088 and utilizing the passcode 10096595 when prompted.
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.
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SOURCE: Cencosud S.A.