Cencosud reports second quarter 2013 results

                 Cencosud reports second quarter 2013 results

-Revenues rose 14% to CLP 2,508 billion on positive SSS, expanded regional
footprint

-Adjusted EBITDA rose 19%; adjusted EBITDA margin grows to 6.4%

-Colombia supermarket integration and rebranding results in 3.6% SSS growth

-Johnson turn around continues, posting positive EBITDA

PR Newswire

SANTIAGO, Chile, Aug. 30, 2013

SANTIAGO, Chile, Aug. 30, 2013 /PRNewswire/ --Cencosud S.A. (BCS: CENCOSUD;
NYSE: CNCO), a leading multi-format Latin American retailer with presence in
five countries, announced today its consolidated financial results for the
second quarter of 2013. All figures are in Chilean pesos (CLP), except where
indicated otherwise, and in accordance with International Financial Reporting
Standards (IFRS). Variations refer to the comparison between the 2Q2012 and
2Q2013.

  oCencosud revenue increased 14% YoY to CLP 2,508 billion in 2Q13 in CLP,
    with the consolidation of supermarkets in Colombia and positive SSS in
    almost every division and country.
  oCencosud added 175 stores and 4 shopping centers versus 2Q12, with an
    increase of 18% in selling space. Excluding the Colombia acquisition,
    Cencosud added 79 stores and 3 shopping centers.
  oGross profit rose 14.8% to CLP 716,166 million in 2Q13, with a
    double-digit increase in every division except Home Improvement. Gross
    margin was flat at 28.6%, from 28.4% in 2Q12, despite the addition of the
    lower-margin Colombian supermarket business which is undergoing a
    rebranding process.
  oOperating Income decreased 4.1% to CLP 112,138 million in 2Q13 vs. 2Q12,
    due to lower income from the revaluation of assets. Excluding this
    revaluation, operating income increased 9.6% in 2Q13.
  oNet income decreased 78% versus 2Q13, from CLP 36,167 million in 2Q12 to
    CLP 7,967 million in 2Q13, reflecting higher financial costs (CLP 8,786
    million), mainly due to higher debt levels related to acquisitions, as
    well as higher losses from foreign exchange variations (CLP 18,694
    million). The results also reflect a 79% decrease in income from the
    revaluation of assets (CLP 14,330 million).
  oAdjusted EBITDA^1 reached CLP 159,355 million, up 19% YoY on improved
    results from the Financial Services and Shopping Centers divisions (with a
    full quarter of operations for the Costanera center), as well as the
    consolidation of the Colombian supermarket acquisition.
  oThe turnaround of Johnson continued, with the business posting positive
    EBITDA for the first time since being acquired in 2012. Cencosud expanded
    Johnson's gross margin by 595 bps from 2Q12 and is continuing the process
    of integrating the unit with the Paris department store business.
    Together, Paris and Johnson reported total revenue of CLP 230, 716
    million, up 9.1%, and total adjusted EBITDA of CLP 18, 124 million, up
    21.5%.
  oOn June 17^th, 2013, Cencosud announced a binding agreement with Itau
    Unibanco Holding S.A. for the joint development of the financial retail
    business in Chile and Argentina. A total upfront cash payment of US$1.58
    billion will be made to Cencosud. Under the terms of the agreement, Itau
    Chile will acquire 51% of the shares of Cencosud Administradora de
    Tarjetas (CAT), Cencosud's credit card operator in Chile. In Argentina,
    Cencosud will create a new entity, to which Itau Argentina will contribute
    equity, to jointly develop the business. Additionally, in both countries
    Itau will provide funding to finance 100% of the current credit portfolio
    and future growth.

Management Comment

In the second quarter, Cencosud made important progress in its strategy to
integrate its recent acquisition of Carrefour Colombia and reduce leverage.
Highlights for the quarter include 3.6% SSS in our Colombian supermarkets,
while still undergoing the rebranding process.

Other notable developments in the second quarter include the agreement with
Itau Unibanco Holding SA to jointly develop Cencosud's financial retail
business in Argentina and Chile. This agreement will give our clients the
benefit of working with a market leader in financial services, while also
providing substantial funds that Cencosud will use to reduce leverage and
finance growth.

Cencosud also made advances in corporate governance in the second quarter,
with Mr. Richard Buchi being elected as a second independent director,
bringing a wealth of private and public sector experience to the board.

Consolidated revenues

Consolidated revenues were CLP 2,508 billion in the second quarter of 2013,
compared with CLP 2,198 billion in the second quarter of 2012, a 14% increase
YoY.

  oSupermarket revenues in 2Q13 increased 15.4% YoY, reaching CLP 1,870
    billion, driven by the consolidation of the Colombian supermarket
    division, positive SSS in almost every country and the net opening of 73
    new supermarkets in the region since June 2012 (excluding Colombia).
  oHome Improvement revenues increased 8.7% YoY, reaching CLP 277 billion in
    2Q13. The growth reflects a 4.1% SSS increase in Chile, 30.9% increase in
    SSS in Argentina and the net opening of one Easy store in the region.
  oDepartment Store revenues totaled CLP 231 billion, up9.1% YoY, driven by a
    strong performance of the Chilean operation. Paris and Johnson had sales
    growth of 7.9% and 9.1% respectively, and a combined SSS increase of 2.9%.
    Paris Peru contributed CLP 2,152 million of sales in 2Q13, reflecting two
    openings this quarter, in addition to the first Peruvian Paris store,
    which was opened in Arequipa in late March 2013.
  oShopping Center revenues grew 35.5% YoY, reaching CLP 50 billion, driven
    by higher revenues from Chile. This is mainly explained by the revenues
    from the Costanera Center, which was only in operation for 19 days in
    2Q12, as well as the opening of three new shopping centers in the region,
    and the addition of the real estate operations in Colombia.
  oFinancial Services revenues increased 5.5% YoY, to CLP 76 billion,
    reflecting the integration of Colombian financial services and higher
    revenues from Peru, offset by lower revenues from Chile as the average
    portfolio ( on a last twelve months basis) decreased in size.

Please visit www.cencosud.com/inversionistas.htm to obtain the full second
quarter earnings release.

The company will hold a conference call to review the 2Q13 results on
Wednesday, September 4, 2013 at 11:00 am Santiago/Eastern Time with a live
webcast available through its website. The conference call dial-in is +1(866)
652-5200 or +1(412) 317-6060. A webcast of the conference call will be
available online at http://www.cencosud.com/eng/inversionistas.htm.

About Cencosud S.A.

Cencosud is a leading multi-brand retailer in South America, headquartered in
Chile and with operations in Chile, Brazil, Argentina, Peru and Colombia. The
company, founded by Chairman Horst Paulmann, operates in supermarkets, home
improvement stores, shopping centers and department stores', always aiming to
deliver the right product at the right price to Latin America's growing middle
class. In 2012, the Company listed American Depositary Receipts (ADRs) on the
New York Stock Exchange.

^1 Please see "Reconciliation of Non-IFRS measures" starting on page 33 for a
reconciliation of EBIT, EBITDA and Adjusted EBITDA to Profit/Loss. EBIT
represents profit attributable to controlling shareholders before net interest
expense and income taxes. EBITDA is defined as EBIT plus depreciation and
amortization expense. Adjusted EBITDA represents EBITDA as further adjusted to
reflect foreign exchange differences, increases (decreases) on revaluation of
investment properties and gains or (losses) from indexation. Adjusted EBITDA
margin and Adjusted EBIT margin are calculated as a percentage of revenues. 



CONSOLIDATED INCOME DATA
(In millions of Chilean pesos as of June 30th, 2013)
                            Second Quarter         Six-month, ended June 30th
                            2013       2012        2013          2012
                            CLP MM     CLP MM      CLP MM        CLP MM
Net revenues                2,508,008  2,197,784   4,976,447     4,366,693
Cost of sales               -1,791,842 -1,573,368  -3,571,301    -3,139,475
Gross profit                716,166    624,416     1,405,145     1,227,218
Selling and administrative  -607,988   -526,686    -1,205,537    -1,010,578
expenses
Other income by function    7,015      19,502      23,883        41,921
Other gain (Losses)         -3,055     -272        6,056         -8,511
Operating income          112,138    116,960     229,547       250,050
Participation in profit or
loss of equity method       1,414      1,140       2,769         2,240
associates
Financial Income            2,265      1,881       3,811         4,688
Finance Costs [for          -57,400    -48,230     -127,341      -98,014
Non-Financial Activities]
Income (loss) from foreign  -27,920    -9,226      -30,203       -2,607
exchange variations
Result of indexation units  -802       -5,381      -3,644        -14,029
Non-operating income        -82,443    -59,816     -154,607      -107,721
(loss)
Income before income taxes  29,695     57,143      74,939        142,330
Income taxes              -21,249    -20,441     -46,288       -48,752
Profit (Loss)               7,976      36,167      28,039        90,582
Profit (Loss) Attributable  8,446      36,702      28,651        93,578
to Equity Holders of Parent
Profit (Loss) Attributable  -470       -535        -612          -2,995
to Minority Interest
Net income per share       11         40          10.5          40.0
Number of shares            2,829      2,356       2,829         2,356
outstanding (in millions)

CENCOSUD S.A.
CONSOLIDATED BALANCE SHEETS DATA
(In millions of Chilean pesos as of June 30th, 2013 )
                                                          June 2013 Dec 2012
                                                          CLP MM    CLP MM
Current Assets:
Cash and Cash Equivalents                                 115,347   237,721
Other Financial Assets, Current                           55,473    68,167
Other Non-Financial Assets, Current                       14,951    9,992
Trade and Other Receivables, Net, Current                 1,011,877 1,060,333
Accounts receivable from related parties, Current         1,108     324
Inventories                                               985,778   914,605
Tax Assets, Current                                       20,597    31,270
Total Current Assets                                      2,205,132 2,322,411
Non-Current Assets:
Other Financial Assets, Non-Current                       43,217    41,007
Other Non-Financial Assets, Non-Current                   40,116    38,280
Trade and Other Receivables, Net, Non-Current             147,093   142,306
Equity Method Accounted Investments in Associates         43,178    42,260
Intangible Assets, Net                                    541,880   544,899
Capital gain                                              1,664,556 1,718,393
Property, Plant and Equipment, Net                        3,142,063 3,135,745
Investment Property                                       1,488,200 1,471,344
Current tax assets, Non-Current                           18,211    4,826
Deferred Tax Assets                                       284,187   260,102
Total Non-Current Assets                                  7,412,702 7,399,162
TOTAL ASSETS                                              9,617,834 9,721,573
Current Liabilities:
Other Financial Liabilities, Current                      619,501   1,179,132
Trade and Other Payables, Current                         1,715,362 1,903,582
Notes and accounts payable to related companies, Current  1,316     974
Provisions, Current                                       41,723    22,624
Current Tax Payables                                      42,003    46,798
Current provisions for employee benefits                  82,890    78,800
Other Non-Financial Liabilities, Current                  27,323    84,317
Total Current Liabilities                                 2,530,119 3,316,226
Non-Current Liabilities:
Other Financial Liabilities, Non-Current                  2,288,914 2,359,501
Trade and Other Payables, Non-Current                     6,457     7,411
Provisions, Non-Current                                   117,187   111,321
Deferred Tax Liabilities                                  458,518   443,994
Current tax liabilities                                   0         0
Other Non-Financial Liabilities, Non current              68,975    70,564
Total Non-Current Liabilities                             2,940,050 2,992,790
Equity:
Issued Capital                                            2,321,381 1,551,812
Issued Premium                                            526,633   477,341
Other Reserves                                            -592,354  -484,364
Retained Earnings (Accumulated Losses)                    1,890,179 1,866,746
Equity Attributable to Equity Holders of Parent           4,145,839 3,411,534
Minority Interest                                         1,491     678
Total Equity                                              4,147,330 3,412,212
TOTAL EQUITY AND LIABILITIES                              9,617,500 9,721,228



Corporate Communications
Andrea Brajovic
Phone: +56-2-2959-0024
andrea.brajovic@cencosud.cl 

Investor Relations
Maria Soledad Fernandez
Phone: +56-2-2959-0545
Mariasoledad.fernandez@cencosud.cl

Natalia Nacif
Phone: +56-2-2959-0368
natalia.nacif@cencosud.cl

SOURCE Cencosud S.A.

Website: http://www.cencosud.com/eng/inversionistas.htm
 
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