Grupo Exito 1Q 2021 Net Income Quadruples Year-on-Year
Medellin-based multinational supermarket and dry-goods retailer Grupo Exito on May 4 reported a four-fold jump in net income for first quarter (1Q) 2021, to COP$84.8 billion (US$22 million), versus COP$21.9 billion (US$5.7 million) in 1Q 2020.
Recurring earnings before interest, taxes, depreciation and amortization (EBITDA) rose 16.7% year-on-year, to COP$306 billion (US$79 million), even though sales dipped 7.9% (or 4.1% when including exchange-rate effects), to COP$3.6 trillion (US$933 million) in 1Q 2021 versus 1Q 2020.
“Sales were impacted by mobility restrictions and strict closures of trade to contain the levels of contagion of Covid-19” in the three countries where it operates: Colombia, Argentina and Uruguay, the company noted.
“Although the company’s income was affected, Grupo Éxito recorded a consolidated recurring EBITDA of close to COP$307 billion, mainly favored by the growth of expenses below inflation in the three countries, the royalties received by TUYA and the non-recurring income received from the closure of the development of the Envigado and Tunja real estate projects[ in Colombia],” according to the company
During the latest quarter, Grupo Exito “recorded higher income tax expenses and higher financial expenses. However, net income reached close to COP$85 billion, mainly due to the optimization of expenses in the operation in all countries and the contribution of the diversification strategy that favored better income from the real estate and financial businesses,” according to the company.
Consolidated revenues dipped 1.9% and sales by 4.1%, both figures excluding the exchange rate effect, “explained by the high comparison bases of the first quarter of 2020, due to the fact that the onset of the Coronavirus pandemic in mid-March led to accelerated sales growth in the region,” according to Exito.
Profit improvements came especially from “performance of innovative formats including ‘Exito Wow’ and ‘Carulla FreshMarket,’ dynamism in the electronic and direct commerce channels, and the diversification of our businesses,” according to Exito.
Home-delivery sales and electronic commerce accounted for10.7% of consolidated sales, “which places Grupo Éxito as one of the leaders in digital penetration in Latin America,” according to the company.
In Colombia, direct and electronic commerce channels represented 13% of total sales here, while the “Éxito Wow” and “Carulla FreshMarket” formats took a 19.7% share of the company’s sales in Colombia.
“The business diversification strategy contributed to counteract the negative effect that the financial and real estate businesses had in 2020,” the company added.
In Uruguay, “although border closures affected the summer vacation season, the operation reported high profitability levels thanks to activities to reduce spending and efficiencies in the operation, with a recurring EBITDA [earnings before interest, taxes, depreciation and amortization] margin of 10.3%,” according to Exito.
In Argentina, “sales remain resilient amid a challenging context, and grew at double digits in local currency,” according to the company.