Feb 24, 2011
Brazil's Pao de Acucar profit surges on sales
Feb 24, 2011
Feb 23 - Grupo Pao de Açucar, Brazil's largest diversified retailer, said on Wednesday that fourth-quarter net income surged 145 percent as red-hot demand propelled sales of everything from food products and apparel to consumer electronics.
Logo of Pao de Açucar supermarket
The Sao Paulo-based company, which in 2009 purchased Brazil's top two home appliances retailers, said profit totaled 447 million reais ($266 million) for the period, compared with 203.5 million reais in the last quarter of 2009.
Net income came in well above the average 253 million reais estimate of six analysts polled by Reuters. Pao de Açucar earned million reais in the third quarter of 2010.
Consumers, emboldened by strong job creation and rising income last year, snapped up record quantities of clothes, appliances and foodstuffs at the end of the year. Air travel and credit card usage soared, supporting the boom.
Earnings data from other retailers is adding to evidence that government steps to slow Brazil's expansion fell short of their goal. Easy credit probably bolstered demand among an emerging middle class -- which added about 25 million consumers since 2006.
The retailer, controlled by France's Casino and Brazil's Diniz family, said net revenue surged to 11 billion reais from 6 billion reais the year-earlier period.
Total operational expenses doubled to 2 billion reais in the same period.
The earnings figures included results from Globex, owner of the Ponto Frio chain of appliance stores that Pao de Açucar acquired in June 2009, and Casas Bahia, the home appliance retailer that was acquired in December 2009 last year.
Excluding Globex net income would have totaled 498 million reais.
Earnings before interest, taxes, depreciation and amortization, a gauge of cash flow and operational profitability known as EBITDA, jumped to 769 million reais from 520 million reais in the fourth quarter of 2009.
According to the Reuters poll of analysts, EBITDA was forecast to rise 35 percent in the quarter to 665 million reais.
The so-called EBITDA margin was 7 percent compared to 8.6 percent a year earlier.
(Reporting Raymond Colitt; Writing by Guillermo Parra-Bernal, editing by Bernard Orr)
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