14 August 2009

Chile's Cencosud Quarterly Profit Slides More Than Estimated

By James Attwood and Nathan Gill
Aug. 14 (Bloomberg) -- Cencosud SA, Chile’s biggest retailer by sales, posted a steeper-than-estimated drop in second-quarter profit on lower sales and currency losses.

First-half net income fell 66 percent, the Santiago-based company reported in a regulatory filing today without giving separate second-quarter results.

Second-quarter profit fell to 8.96 billion pesos ($16.2 million), according to Banchile Inversiones. That compares with the 28 billion-peso average estimate of four analysts surveyed by Bloomberg News. Cencosud’s press department said quarterly profit was $16.8 million in an e-mailed response to a Bloomberg News query, without elaborating.

“The results were quite a bit lower than projections, both in terms of operations as well as the bottom line,” Patricio Hernandez, an analyst at Banchile, said today in a telephone interview. “Outlays for provisions are reflected in higher costs and there was a negative effect from the exchange rate, especially in Argentina and Brazil.”

Rival retailer SACI Falabella SA reported earlier today a 48 percent slump in second-quarter profit on lower sales and wider foreign-exchange losses. Cencosud’s sales in the first six months of the year fell 25 percent from a year earlier.

Cencosud, which also runs stores in Brazil, Peru, Colombia and Argentina, fell 0.5 percent to 1,510 pesos in Santiago trading today, trimming a gain this year to 67 percent.