Natura Declines Most in Three Months on $309 Million Tax Dispute

Natura Cosmeticos SA (NATU3) fell the most in three months after the Brazilian cosmetics company disclosed that the government has ordered it to pay 627.9 million reais ($308.7 million) in back taxes.

Shares slumped 4.7 percent to 55.20 reais, the steepest decline on a closing basis since Sept. 20. The benchmark Bovespa index retreated 1.3 percent.

Natura, based in Itapecerica Da Serra, said in a regulatory filing late yesterday that Brazil’s tax authority accused the company of using incorrect prices to calculate the levy paid in 2008, and it must now pay the difference. Natura said it is appealing the order because it can prove that “the procedures adopted are legitimate,” according to the filing.

“The charges could strongly impact Natura’s results and dividends if they are really applied,” Marcelo Varejao, an analyst at brokerage Socopa Corretora, said by phone from Sao Paulo. “But this is a process that should take some time, and the company already said it is going to defend itself.”

The company reported adjusted net income that rose 18 percent in the third quarter to 237.3 million reais from the same period in 2011. Its dividend yield during the three-month period was 2.63 percent, below the average of 2.68 percent of 68 companies on the benchmark Bovespa index.

Natura has risen 50 percent in the past year, while the benchmark index gained 4.3 percent.

To contact the reporter on this story: Denyse Godoy in Sao Paulo at dgodoy2@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

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