Brazil's Carrefour swings to profit in first quarter

Published 05/07/2024, 07:26 PM
Updated 05/07/2024, 08:29 PM
© Reuters. A woman holds a candle during a protest in front of a Carrefour supermarket in Brasilia, Brazil, after Joao Alberto Silveira Freitas was beaten to death by security guards at a Carrefour supermarket in Porto Alegre, November 26, 2020. REUTERS/Adriano Mach
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SAO PAULO (Reuters) -Carrefour Brasil, which is controlled by France's Carrefour (EPA:CARR), reported a net profit of 39 million reais ($7.7 million) for the first quarter, reversing losses in the same period last year, as higher food inflation expanded its profits.

On an adjusted basis, it also swung back to the black with a 52-million-real net profit, although this profit came in below the forecast of 137.4 million reais from analysts polled by LSEG.

Carrefour Brasil had already disclosed its first-quarter sales figures in late April, which rose 2.5% year-on-year, with hybrid wholesale unit Atacadao, which accounts for nearly 70% of the group activity, growing sales by 6.6%.

"We have seen a recovery of food inflation to positive levels, which obviously had positive effects in our prices and volumes," CEO Stephane Maquaire told journalists on Tuesday.

He added that recent food inflation trends have triggered improved sales by Atacadao to corporate customers, mainly smaller grocery stores, which had reduced their purchases due to financial pressures from lower margins.

"Merchants have been recovering their dynamics of buying to replenish stocks," he said, adding this dynamic is just "in the beginning".

About Carrefour Brasil's retail segment, which saw sales slip more than 10% in the quarter, Maquaire said management has been starting to test lower prices for some basic products aiming to increase the unit performance.

Carrefour Brasil said its consolidated adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) rose 36.6% to 1.42 billion reais, slightly above analysts forecast of 1.33 billion reais.

Adjusted EBITDA margins rose to 5.7% from 4.3% a year earlier.

Maquaire also said the company temporarily closed seven stores of almost 100 owned in Brazil's southernmost state of Rio Grande do Sul, where heavy rains have caused deadly floods in recent days.

© Reuters. A woman holds a candle during a protest in front of a Carrefour supermarket in Brasilia, Brazil, after Joao Alberto Silveira Freitas was beaten to death by security guards at a Carrefour supermarket in Porto Alegre, November 26, 2020. REUTERS/Adriano Machado

He added the company decided to freeze all prices in Rio Grande do Sul until the end of May.

($1 = 5.0744 reais)

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