The income of the Chilean retail multinational reached a timid growth of 0.2% year-on-year.
Cencosud, the Chilean multinational retail company, today reported its financial results for the fourth quarter of 2023, which were impacted by the strong devaluation of the Argentine peso, but at the same time compensated by the solidity and resilience of the supermarket business.
Regarding revenues for the year, they reached CLP $14,230,642 million (US$ 14,668 million), which is equivalent to an increase of 0.2% year-on-year.
The above reflects the negative impact of the accounting adjustment of Argentina's hyperinflationary economy, and a challenging macroeconomic situation, which resulted in lower levels of consumption and low levels of growth in the countries where Cencosud operates.
Excluding the accounting adjustment of the hyperinflationary economy in said country, the company achieved an increase in revenue of 6.6% in the year, explained by the opening of 44 new stores, which are equivalent to 27,992 m2 of new sales area, the opening of Cenco La Molina in Peru and the growth of sales in e-grocery in the year of 11.2%, among other advances.
Regarding profitability levels, 2023 closed with an Ebitda Margin of 9.7%. Excluding the accounting adjustment of the hyperinflationary economy in Argentina, Cencosud's Adjusted Ebitda grew by 3.0%, reaching CLP $1,634,048 million or US$ 1,684 million (Adjusted Ebitda Margin of 10.7%).
Regarding the reported Net Profit, it reached CLP $292,213 million (US$301 million), a decrease of 27.8% compared to the same period of the previous year. Excluding the accounting adjustment of the hyperinflationary economy in Argentina, Profit for the year grew by 20.2%, reaching CLP $823,175 million (US$848 million).
“2023 was a year marked by a challenging macroeconomic situation, where the Andean countries suffered the effects of the “El Niño” climate event and a historic devaluation of the Argentine peso.
Despite this, Cencosud reported slight growth in revenue and maintained a double-digit Ebitda Margin, which is the result of a strategy focused on financial strengthening, profitable growth and the consolidation of our digital ecosystem,” commented the Corporate General Manager. from Cencosud, Rodrigo Larraín.
A notable aspect of the last fiscal year was the strengthening of the regional Private Label model, which has improved the value proposition for customers and has had a positive impact on Cencosud's profitability.
In 2023, this progress was reflected in a new record for total sales, reaching US$ 2.5 billion, with a sales penetration of 15.5%.
FOURTH QUARTER RESULTS
In the last three months of the year, the Company's income was CLP $3,299,029 million (US$3,400 million), which represented a drop of 15.9%. Excluding the accounting adjustment of the hyperinflationary economy in Argentina, revenues reached CLP $4,424,735 million (US$ 4,560 million), which is equivalent to an increase of 2.8% compared to the previous year.
Adjusted Ebitda in the quarter reached CLP $357,439 million (US$368 million), this is an Adjusted Ebitda Margin of 10.8%. Excluding the accounting adjustment for the hyperinflationary economy in Argentina, Cencosud's Adjusted Ebitda grew 8.7% in the quarter, and the Adjusted Ebitda Margin reached 11.8%, an increase of 64 basis points year-over-year.
Regarding the Net Income reported in the same period, this was negatively impacted by the effect of devaluation of the Argentine peso, reaching a reported Net Income of CLP $ 108,359 million (US$ 111 million). Excluding this impact, Net Profit grew by 49.2%.
INVESTMENT PLAN 2024
Cencosud will invest US$641 million in 2024, which focuses on accelerating organic growth, innovation, strengthening the physical-digital ecosystem and achieving greater operational efficiencies and profitability.
The Plan for the year considers the incorporation of 43 new stores and the addition of 50,171 m2 of sales room, around 80% more than the square meters added in 2023. In addition, more than 33,000 m2 of GLA are expected to be added to the business of shopping centers.
