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Cencosud Reports Second Quarter 2016 Results

Thursday, 25 August 2016 05:05 PM

Cencosud S.A.

Topic:
Earnings

- Solid performance despite challenging retail environment
- Positive SSS growth across operations except Brazil
- Continued progress on efficiency measures, under-performing store program and sale of non-core assets
- Adjusted EBITDA rises to CLP 206.6 billion on better operational performance and profit achieved from the sale of non-core assets
- Net debt to Adjusted EBITDA falls to 3.2 times

SANTIAGO, CHILE / ACCESSWIRE / August 25, 2016 / Cencosud S.A. (BCS: CENCOSUD; NYSE: CNCO), a leading South American retailer with operations in Chile, Argentina, Brazil, Peru and Colombia, today announced its consolidated financial results for the second quarter 2016. All figures are in Chilean pesos (CLP), except where indicated otherwise, and in accordance with IFRS. Variations refer to the comparison between 2Q16 and 2Q15.

  • Cencosud reported improved 2Q16 results despite a more challenging economic environment and deceleration in consumption across the region. Results were underpinned by efficiency measures, focus on core operations, resilience of main businesses and geographic diversification.
  • Revenues in local currency continue to increase in all markets with the exception of Brazil. Nevertheless, revenue in Chilean pesos decreased 4.2%, due to the devaluation of the Argentine peso (30.8%), Colombian peso (9.3%) and Brazilian real (4.0%) over the same period last year.
  • Adjusted EBITDA margin expanded 428 bps reaching 8.2% in 2Q16. Adjusted EBITDA grew 99.2% in the period, despite currency devaluation, due to better operational results and profit from the sale of non-core assets.
  • Net Profit increased 66.3%, reaching CLP 86,367 million driven by better operational performance, sale of non-core assets, the positive impact of the exchange rate over dollar denominated debt and asset revaluation. In contrast with extraordinary negative one off effects registered in 2015.

Please visit investors.cencosud.com to obtain the full second quarter earnings release, including financial results and tables.

Management Comment

In the second quarter of 2016, we continued to execute on our strategy of cost discipline and emphasis on profitability in the face of a challenging retail environment. Our revenues for the quarter were lowered by headwinds including currency depreciation and moderate economic growth. Even so, our operations still generated solid financial results, with positive SSS figures in nearly every business. Financial results this quarter also benefited from the sale of non-core assets. We also continue to deleverage our balance sheet, and have reduced our Net Debt / Adj. EBITDA to 3.2x.

We are pleased with the way we have navigated challenging operating conditions so far in 2016, and remain confident in our ability to execute our strategy to drive profits for the remainder of the year. We are cautiously optimistic on the prospect of improving economic conditions and believe Cencosud has the scale and experience a privilege position to take advantage of this dynamic.

Conference Call

The Company will host a conference call to discuss these results on Friday, August 26th, 2016 at 1:00PM Chilean time/ 12:00PM EST. To participate on the day of the call, dial 1-888-349-0108 or 1-412-902-4201 approximately ten minutes before the call and tell the operator you wish to join the Cencosud Conference Call. A webcast of the conference call will be available online at http://investors.cencosud.com/English/investor-overview/financials/quarterly-reports/default.aspx.

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 on the New York Stock Exchange.

Forward-Looking Statements:

In addition to historical information, this release contains "forward-looking statements" that reflect management's expectations for the future. The forward-looking statements included herein represent Cencosud's views as of the date of this release. A variety of important factors could cause results to differ materially from such statements. These factors are laid out in Cencosud's filings with the SVS in Chile and the SEC in the United States. The Company undertakes no obligation to revise or update publicly any forward-looking statement for any reason unless required by law.

Corporate Communications

Renato Fernandez
Phone +5622959 0905
[email protected]

Investor Relations

Maria Soledad Fernandez
Phone +5622959 0545
[email protected]

Natalia Nacif
Phone +5622959 0368
[email protected]

Valentina Klein
Phone +5622200 4395
[email protected]

SOURCE: Cencosud S.A.

Topic:
Earnings
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