Cencosud Reports 35% Drop in Net Profits amid Macroeconomic Challenges


The Santiago-based company, Cencosud, experienced a taxing year last year, which was highlighted by a steep 35% decline in annual net earnings as a result of Argentina’s rampant hyperinflation and a universal slowdown in consumption, as indicated by CEO Ostenrieder to financial analysts. Cencosud’s 2024 outlook is deemed pragmatic amidst the unabating macroeconomic hurdles, with predictions pointed towards marginally weaker revenues and adjusted EBITDA. Nevertheless, improved results are projected for this year, particularly for the company’s department stores and shopping centers in Chile. Cencosud also anticipates sustainable growth in the United States, particularly in adjacent markets, as well as increased profitability in Colombia and Brazil.

2024 Outlook for Cencosud Amidst Economic Challenges

Cencosud showed resiliency in the face of the past economic hurdles, and looks ahead with a sensible outlook for 2024 considering the ongoing economic challenges. Ostenrieder said the estimates foresee slightly weaker revenues and adjusted EBITDA, or earnings before interest, taxes, depreciation, and amortization.

Projected Improved Results for Chilean Stores and Shopping Centers

Marisol Fernandez, the investor relations manager at Cencosud, envisions marginally improved performance for the current year within the department stores and shopping centers in Chile. Simultaneously, Cencosud supermarkets in Chile are projected to grapple with a challenging year, although sales have demonstrated an upward trend in the first few months.

Anticipated Sustained Growth Stateside

In the United States, Cencosud is confident about achieving sustained growth, specifically within adjacent markets, as announced by the Chief Executive, Rodrigo Larrain.

Efforts to Amplify Profitability in Colombia and Brazil

Boosting profitability in Colombia and Brazil is also a focus for the company, according to CEO Larrain, although details were not given.

Strategic Investment Insights

Investors should keep in mind Cencosud’s efforts in combating macroeconomic instabilities. Despite significant financial obstacles, the pro-active approach witnessed in efforts for sustained growth in the United States, and beneficial adjustments in Colombia and Brazil, are indicative of potential opportunities. However, caution should be exercised given the slightly weaker revenue and adjusted EBITDA forecasted for 2024, along with potential challenges in the Chilean market. Sound investment decisions could be based on continued financial monitoring of Cencosud’s ongoing strategies and market performance.

Source: https://finance.yahoo.com/news/retailer-cencosud-posts-profit-down-204102566.html

PIP Penguin