SAO PAULO (Reuters) -Carrefour Brasil, which is controlled by France Carrefour (EPA:), reported a net profit of 39 million reais ($7.7 million) for the first quarter, reversing losses in the same period last year as higher food inflation boosted profits.
On an adjusted basis, the currency also returned to the black with a net profit of 52 million reais, although this profit came in lower than the 137.4 million reais forecast from analysts surveyed by LSEG.
Carrefour Brasil already announced its first quarter sales figures at the end of April, which rose by 2.5% year-on-year, while its hybrid wholesale unit Atacadao, which accounts for almost 70% of the group’s activity, reported sales growth of 6. 6% knew.
“We have seen a recovery in food inflation to positive levels, which obviously had positive effects on our prices and volumes,” CEO Stephane Maquaire told reporters on Tuesday.
He added that recent trends in food inflation have led to improved Atacadao sales to business customers, especially smaller supermarkets, who had scaled back their purchases due to the financial pressure of lower margins.
“Traders have restored their buying momentum to replenish inventories,” he said, adding that this momentum is only “in the beginning.”
On Carrefour Brasil’s retail segment, where sales fell by more than 10% in the quarter, Maquaire said management has started testing lower prices on a number of basic products, with the aim of improving the unit’s performance.
Carrefour Brasil said consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) rose 36.6% to 1.42 billion reais, slightly above analyst expectations of 1.33 billion reais.
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Adjusted EBITDA margins increased to 5.7% from 4.3% a year earlier.
Maquaire also said the company has temporarily closed seven stores of nearly 100 in Brazil’s southernmost state, Rio Grande do Sul, where heavy rains have caused deadly flooding in recent days.
He added that the company has decided to freeze all prices in Rio Grande do Sul until the end of May.
($1 = 5.0744 reais)