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

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

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SAO PAULO, Nov 9 (Reuters) – Carrefour Brasil (CRFB3.SA) on Wednesday reported third-quarter adjusted net profit that fell 59% from a year earlier, hit by high interest rates on the increasing debt of the distributor following its acquisition of Grupo GROS.

The Brazilian branch of French supermarket giant Carrefour (CARR.PA) posted a quarterly profit of 256 million reais ($49.5 million) against 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 in its acquisition of Grupo BIG, one of Brazil’s largest food retailers, which it 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 Murciano told reporters. journalists.

“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.

The group’s net sales, however, climbed 40% to 26.38 billion reais, taking its adjusted profit before interest, tax, depreciation and amortization (EBITDA) up 14% to 1.7 billion reais.

Carrefour Brasil announced that it 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

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