Cencosud Sales Growth Drives Revenue Increase of 22%, reaching more than CLP 2,198 billion in 2Q2012

SANTIAGO, Chile, August 31, 2012 /PRNewswire/ -- Cencosud S.A. (NYSE: CNCO), a leading Latin American retailer, announced today its consolidated financial results for the second quarter ended June 30, 2012. All figures are in Chilean pesos (CLP), except as otherwise provided, and presented in accordance with International Financial Reporting Standards (IFRS). Variations (%) refer to the comparison between the 2Q2011 and 2Q2012. For a more detailed review of the results filed with the SVS (Chilean Securities and Exchange Commission), please visit the investor section of the Cencosud website at http://www.cencosud.cl/eng/index.htm 

• Cencosud recorded a 22% increase in revenues with the consolidation of Prezunic in Brazil and Johnson stores in Chile, double-digit Same Store Sales (SSS) in Argentina and 82 newly opened stores as compared to 2Q11.
• Operating Income^[1] in 2Q12 totaled CLP 116,960 million, a decrease of 12% versus 2Q11. 
• Net income decreased 43% versus 2Q11, reflecting higher SG&A and non-operating losses due to increased financial costs and larger losses from foreign exchange variations.
• The Company reported EBITDA^[2] of CLP 138,027 million, down 10% YoY due to the effect of the variation of the UBS option (CLP -5,529 million) on the sale of its stake in Argentina's Jumbo market to the Company, lower results from the Financial Services segment due to the restructuring of Banco Paris (CLP -4,532 million) and to a lesser extent lower results from Financial Services Brazil (CLP -692 million).
• The Paris department store EBITDA margin was 9.0% in 2Q12, while the Johnson turn-around is on track with EBITDA improved to negative CLP 1,093 million in 2Q12from negative CLP 4,790 million in 1Q12.
• Cencosud began trading on the New York Stock Exchange on June 22, 2012 under the ticker CNCO and was the second largest Latin American listing to date.
• Cencosud opened Costanera Center, the largest shopping mall in South America and a landmark for the city of Santiago, Chile, increasing total regional Gross Leasable Area (GLA) to 702,764 m² with the addition of 140,000 m² of GLA.

^[1]On March 21 2012 the Chilean Superintendency of Securities and Insurance, "Superintendencia de Valores y Seguros" or SVS, published a new model presentation of financial Statements 2012, whereby Operating Results now includes Other Gain (Losses) and excludes "Participation in profit or loss of equity method associates".
^[2] Please see "Reconciliation of Non-IFRS measures" starting on page 31 of the full extent Earnings Release document, for a reconciliation of EBIT, EBITDA and Adjusted EBITDA to Profit/Loss. EBIT represents profit attributable to controlling shareholders before net interest expense and income taxes. EBITDA is defined as EBIT plus depreciation and amortization expense. Adjusted EBITDA represents EBITDA as further adjusted to reflect foreign exchange differences, increases (decreases) on revaluation of investment properties and gains or (losses) from indexation. Adjusted EBITDA margin and Adjusted EBIT margin are calculated as a percentage of gross sales.

Highlights of Consolidated Results

Consolidated net revenues were CLP 2,198 billion in the second quarter of 2012, compared with CLP 1,807 billion in the second quarter of 2011, a 22% increase YoY. This increase was driven by double-digit SSS in Argentina, the acquisitions of Prezunic and Johnson, positive SSS across all lines of retail businesses, and the 20% increase in selling area in 2Q12 versus the same period last year. 

• Supermarket revenues in 2Q12 increased 22.8% YoY, reaching CLP 1,620 billion, driven by the consolidation of Prezunic, double-digit SSS in Argentina, positive SSS in Chile and Peru, and the opening of 82 new supermarkets in the region since June 2011 (+17% increase in selling space).  These increases were partially offset by depreciation of the Brazilian Real and the Argentine peso against the Chilean peso.
• Home Improvement revenues increased 17.9% YoY, reaching CLP 254 billion in 2Q12.  The growth reflects double-digit SSS growth in Argentina (+31.0%) and positive SSS in Chile and Colombia, the opening of the Easy store in the Costanera Center shopping mall in June, and the three months operation of Calama's store compared with only one and a half months of operation in 2Q11. Other factors driving this increase include the growth in the wholesale and retail businesses in Chile.
• Department Store revenues totaled CLP 211 billion, +27.7% YoY, driven by the consolidation of Johnson, two new Paris Stores opened since 2Q11 (Osorno and Costanera) and a 5.5% increase in SSS.
• Shopping Center revenues grew 18.8% YoY, reaching CLP 37 billion after the enlargement of one shopping center in Chile (Belloto) and the opening of the Costanera Center and Portal Osorno.
• Financial Services operations showed a decrease in revenue of 0.8% YoY, totaling CLP 72 billion, reflecting a decrease in revenues from Chile due to lower revenues from sales of insurance policies (-CLP 2,805 million), as a result of changes in Chilean insurance regulations and lower revenues from Banco Paris^[3]  (CLP -3,615 million) due to a reduction in the size of the loan portfolio loans and interest rate. This was partially offset by higher revenues in Argentina and Peru, mainly due to larger loan portfolios, and the incorporation of the Johnson portfolio (CLP 3,254 million).

The company will conduct a conference call to review the 2Q12 results Tuesday, September 4, 2012 with a live webcast available through its website.  A real-time webcast of these results will be available online at http://www.cencosud.cl/eng/inversionistas.htm beginning at 10:00 a.m. Santiago/ 9:00 a.m. Eastern time.

About Cencosud S.A.
Cencosud is a leading multi-brand retailer in South America, based on revenues, selling space, number of stores and gross leasable area in the sectors and countries in which it operates. Cencosud operates through a number of formats, including supermarkets, home improvement stores, shopping centers and department stores. Cencosud is headquartered in Chile and has operations in Chile, Argentina, Brazil, Colombia and Peru.

Email [email protected]
Website www.cencosud.cl

^[3] Banco Paris is the entity of banking services in Chile.

SOURCE Cencosud