Interest rates

Carrefour Brasil’s profit drops nearly 60% due to high interest rates

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SAO PAULO, November 9 (Reuters)Carrefour Brazil CRFB3.SA Wednesday reported third-quarter adjusted net profit that fell 59% from a year earlier, hit by high interest rates on the retailer increase in debt following its acquisition of Grupo BIG.

The Brazilian branch of the French supermarket giant Carrefour CARR.PA posted a quarterly profit of 256 million reais ($49.5 million) compared to 621 million reais in the same period last year.

The company pointed to the high interest rates on its debt, as well as the costs it incurred to its acquisition of Grupo BIG, one of Brazil’s largest food retailers, who he agreed to buy Last year for a price of 7.5 billion reais.

“We’ve had the effect of the cost of acquisition, debt going up, interest rates going up as well. It has a logical effect on the level of bottom line,” chief financial officer David Murcia.

“This drop (in earnings) was already expected,” he said.

Carrefour’s net debt almost doubled from a year earlier to almost 19 billion reais, largely thanks to the acquisition, while its operating costs rose 56% to 3.57 billion. of reais.

Brazil’s benchmark interest rate is currently at 13.75% after aggressive monetary tightening aimed at curbing high inflation.

Group turnover Neverthelessclimbed 40% to 26.38 billion reais, bringing its adjusted profit before interest, taxes, depreciation and amortization (EBITDA) up 14% to 1.7 billion reais.

Carrefour Brasil announced that it had opened six new hybrid wholesale stores and converted seven stores acquired from Grupo BIG during the quarter.

($1 = 5.1740 reais)

(Reporting by André Romani, writing by Carolina Pulice; Editing by Sarah Morland)

((Carolina.Pulice@thomsonreuters.com;))

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