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Retail

Brazil's GPA Reports Sharply Narrower Fourth-Quarter Loss

By Reuters
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Brazil's GPA Reports Sharply Narrower Fourth-Quarter Loss

Brazilian food retailer GPA, controlled by France's Casino, reported that its fourth-quarter loss narrowed to 303 million reais (€57.57 million), improving from a loss of 1.1 billion reais (€209 million) a year earlier.

The bottom line was negatively affected by provisions the firm had to make for labour contingencies and the termination of a contract to buy electricity, according to a securities filing.

GPA has been selling assets during the last quarter to cut debt, while also restructuring its business, turning its focus to higher-income clients.

Performance Highlights

The company said total sales for the period grew 6.3% to 5.63 billion reais (€1.07 billion), backed by an expansion of its chain of proximity stores. GPA opened 11 new stores of that format in the quarter, totaling 56 in 2023.

Net revenue grew 7.3% to 5.26 billion reais (€999.4 million).

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Adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) stood at 404 million reais (€76.76 million) in the quarter, up 70.7% from a year earlier, while the EBITDA margin grew 2.9 percentage points to 7.7%.

Potential Offering Of Primary Shares

In December 2023, Reuters reported that the Brazilian food retailer hired banks to evaluate a potential offering of primary shares worth 1 billion reais (€190 million) as part of a broader plan to reduce financial leverage.

The company has engaged Itau BBA and BTG Pactual to analyse the feasibility and terms of the potential transaction, while BR Partners has been hired as a financial advisor, according to a securities filing.

If the offering is successful, "the funds raised will be used to reduce the company's debt, consequently lowering its leverage," GPA said.

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