Éxito Posts Small Net Loss in 1Q 2017; Brazil Results Improve
Medellin-based multinational grocery retailer Exito on May 16 posted a tiny COP$7.6 million (US$2,600) net loss for first quarter (1Q 2017), down slightly from an even more miniscule COP$760,000 (US$260) net profit in 1Q 2016.
However, operating income rose 12.9% year-on-year, to COP$13.5 trillion (US$4.6 billion), while earnings before interest, taxes, depreciation and amortization (EBITDA) jumped 24.9% year-on-year, to COP$731 billion (US$250 million).
Éxito’s recent entry into Brazil is now showing positive results, thanks to a gradual recovery of the Brazilian economy. As a result, 1Q 2017 sales grew 9.5% year-on-year (measured in Brazilian reais), while consolidated EBITDA hit COP$503 billion (US$172 million).
Aside from the improving sales in Brazil, Colombia also showed a sales increase year-on-year, to COP$2.6 trillion (US$891 million), while Uruguay delivered a 9.9% EBITDA margin and sales continue to grow thanks to the “Devoto Express” retail format.
Argentina sales also grew more briskly than competitors, and the commercial real-estate division continues to stand-out as the third-largest developer in the country, according to the company.
Corporate synergies across all of Éxito’s divisions delivered US$25 million in savings during 1Q 2017, matching that of the entire 2016 year, according to the Company.
The company now has 1,559 retail food locations, including 563 in Colombia, 888 in Brazil, 80 in Uruguay and 28 in Argentina.
On a parallel front, the “Aliados” network of mini-markets grew to 1,336 outlets in Colombia plus another 150 in Brazil.
“The first-quarter results this year reflect the benefits of the strategy of internationalization of the company,” added Éxito president Carlos Mario Giraldo, “in large part thanks to the gradual and consistent recovery that is seen in Brazil..
“Colombia is now experiencing a temporary reduction in consumer confidence, but we nevertheless believe that the gradual assimilation of the [increase] in value-added tax, reduction in interest rates and fortifying of sectors such as tourism, infrastructure and exports, will augur a better second-quarter for commerce,” Giraldo added.