Carrefour Brasil has a 28% drop in profit in the 4th quarter of 2022

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The result was pressured by the costs of converting stores acquired from BIG and by the increase in financial expenses. Unit of the supermarket chain Carrefour André Feites Carrefour Brasil announced this Monday (13) a drop of 28.2% in adjusted net profit for the fourth quarter of 2022 compared to a year earlier, to R$ 550 million. The result was pressured by the costs of converting stores acquired from BIG and by the increase in financial expenses, while net sales advanced 36.3%. The group, whose main asset is Atacadão, completed the acquisition of BIG last year and has a plan already underway to convert more than 120 points acquired into other brands by the beginning of 2024. Analysts have been closely watching the effect of inflation and interest on the company’s business. Without excluding extraordinary effects, including those related to the integration of BIG, the company’s net income would be R$ 426 million, a decline of 58.1%. “The conversion of stores has an effect on net income, we have this negative effect of ‘one-off’ (extraordinary) of the conversion of stores, but when it is already converted we observe a growth in sales”, said to journalists the Director of Finance and Relations with the company’s Investor, David Murciano. He said that this pressure on profit is “natural” and that the company hopes to compensate with growth in cash generation. With a higher debt after the acquisition and amid a Selic that was 13.75%, Carrefour Brasil saw its net financial result worsen by almost 200% in the fourth quarter on an annual basis, for a loss of R$ 790 million. Questioned about how the relationship with banks is after the crisis at the Americanas retailer, he said that the environment is “a little more complicated”, but that Carrefour has been having “good talks” with financial institutions. Cash generation measured by earnings before interest, taxes, depreciation and amortization (Ebitda) at Carrefour Brasil in the quarter was R$ 1.97 billion in the period, an increase of 12.4%. Murciano highlighted the level of margin even with inflation showing signs of cooling, which could impact Atacadão’s business. The group’s net sales rose 36.3%, to R$ 28.2 billion, compared to the fourth quarter of 2021, with a 22.6% increase in the cash and carry division, while retail, a segment that includes, for example, Carrefour stores, grew 47.7%. Carrefour Brasil, owned by French Carrefour, said that the integration of BIG is in line with plan and conversions were above expectations last year, with 59 stores, compared to the estimated 37. Asked whether Americanas’ Natural da Terra fruit and vegetable chain could be of interest to the group, the executive said that the banner “fits perfectly into Carrefour’s organization”, but that the focus at the moment is on integrating BIG, not doing acquisitions. As for the start of 2023, he said business overall remained “in line” with the end of 2022, but that “traction” had dropped “a little”.

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