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 firstname.lastname@example.org Investor Relations Maria Soledad Fernandez Phone: +56-2-2959-0545 Mariasoledad.email@example.com Natalia Nacif Phone: +56-2-2959-0368 firstname.lastname@example.org SOURCE Cencosud S.A. Website: http://www.cencosud.com/eng/inversionistas.htm
Cencosud reports second quarter 2013 results
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