Exito 1Q 2022 Net Income Dips 24% Year-on-Year, but EBITDA Rises
Medellin-based multinational supermarket and dry-goods retailer Grupo Exito announced May 3 that its first quarter (1Q) 2022 net income dropped 24% year-on-year, to COP$64 billion (US$15.9 million), from COP$85 billion (US$21 million) in 1Q 2021.
However, sales actually rose 22% year-on-year, to COP$4.37 trillion (US$1.08 billion), while recurring earnings before interest, taxes, depreciation and amortization (EBITDA) likewise rose 15.8% year-on-year, to COP$355 billion (US$88 million).
The company blamed the profits decline on “a higher tax rate than in the same quarter of the previous year and higher interest rates.”
On the other hand, the boost in EBITDA came as a result of “great commercial dynamism and operational efficiencies in the three countries where it has a presence,” namely Colombia, Argentina and Uruguay.
“The strengthening of the omnichannel strategy in Colombia allowed e-commerce and direct channels to reach a share of 11.8% of [Exito’s total Colombia] sales in the quarter,” according to the company.
Meanwhile, “innovative formats continue to be important levers of differentiation and competitiveness. ‘Success Wow’ represented 29.5% of the brand’s total sales while ‘Carulla FreshMarket’ took 46.3%. Likewise, ‘Super Inter Vecino’ took 47% and ‘Surtimayorista’ took 4.7% of the total sales of the operation in Colombia.
“Sales from electronic and direct commerce channels in Colombia reached $395.8 billion [US$98 million] in the quarter and already represent 11.8% of the company’s total sales,” according to Exito.
“The diversification strategy of complementary businesses, mainly real estate, continued to contribute to the result. The occupancy rate of shopping centers reached 93.1% in Colombia and 89.6% in Argentina in March.
“The gradual recovery of the economy in Uruguay, benefited by the tourist season, was reflected in a growth in sales of 11.8% in local currency, higher than the annualized inflation. A higher recurring EBITDA margin of the operation in that country (11.2%) was the result of greater productivity and strict control of expenses.
“The participation in sales of direct and electronic commerce channels in Uruguay was 2.6%. The stores that operate under the ‘Fresh Market’ model participated with 46.6% of total sales, growing 13.7 points more than the non-reformed stores.
“In Argentina, ‘Grupo Libertad’ sales in local currency grew by 62.4% — above the high level of inflation — and benefited by economic reactivation and the result of electronic and direct commerce channels, which reached a share of total sales of 2.3%,” the company added.