Carrefour Brasil reported a 95.2% drop in second-quarter adjusted net profit to reach 29 million reais (€5.52 million), hit by the financial impact of its integration with BIG Group.
The Brazilian arm of French retailer Carrefour SA said that net sales rose 8.1% to reach 25.95 billion reais (€4.94 billion) in the second-quarter, while its wholesale units posted 4.6% sales growth year-on-year.
Carrefour's Brazilian unit said operating expenses soared 32.2% from a year earlier to total 3.8 billion reais (€720 million).
Store Conversion
Carrefour Brasil, which bought BIG in mid-2022, said it concluded the conversion of BIG stores in June, and that it plans to ramp-up sales there by the next quarter.
Chief executive Stephane Maquaire told reporters that the company now plans to develop the converted stores to see its positive impact in results in the coming months.
"The more we have the maturation of sales, the more we have the opportunity to grow EBITDA margin," he said.
Read More: Carrefour Brasil Expanding Hybrid Wholesale, Eyes Real Estate Carve-Out
Profit Performance
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for the company fell 21.7% to total 1.34 billion reais (€250 million), but the firm saw 6% drop in adjusted EBITDA when excluding Grupo BIG, reaching 1.5 billion reais (€290 million)
Carrefour Brasil said it opened six new wholesale format stores and 47 converted BIG stores in the second-quarter.
Earlier this summer, Carrefour Brasil launched a franchise model of convenience stores in the Brazilian market, aiming to tap into its know-how from years of experience in Europe.
Commenting in June, Carrefour Brasil's convenience executive director Joao Edson Gravata said that the franchise format would put Carrefour in a stronger position to take on competitors.
Read More: Carrefour Brasil Closes 2022 With 91 New Stores
Additional reporting by ESM
