SANTIAGO, May 27 (Reuters) - Chilean retailer Cencosud’s first quarter results slightly beat market expectations as it continued its aggressive expansive push in South America, although the Argentine peso depreciation dragged on income.
Net profits rose 81 percent from a year ago to 36.5 billion Chilean pesos ($65.65 million), on a 2.8 percent sales increase to $4.6 billion, the company reported late on Tuesday.
That compared with market forecasts for net income of around 32.8 billion pesos, according to a Reuters poll. Revenues were in line with estimates.
The large jump in profit was largely due to a low base of comparison after one-off costs last year related to the firm’s buy of Carrefour assets in Colombia.
The owner of brands such as supermarket chain Jumbo, home improvement chain Easy, and Paris department stores has pushed into the Argentine, Brazilian, Colombian and Peruvian markets as well as being an important presence in Chilean commercial centers.
It opened 41 new stores in the January to March period, it said.
However, Cencosud’s expansion has not always been smooth. It has a high debt-to-earnings ratio after increasing its leverage to make acquisitions, and its credit rating is just above junk.
And of all large Chilean companies, Cencosud has been the most exposed to neighboring Argentina’s volatile economy. Despite strong supermarket sales in Argentina, rising inflation caused by the peso devaluation ate into the retailer’s first quarter results, it said. ($1 = 556.0200 Chilean Pesos) (Reporting by Rosalba O‘Brien; Editing by Richard Chang)