GPA profits 20% less in the second quarter

GPA had a 20.3% drop in net income for the second quarter, impacted by operating costs and other expenses linked to the acquisition of the Colombian group Almacenes Éxito, which minimized the jump in sales amid the coronavirus pandemic.
Owner of the pão de Açúcar, Assaí and Extra flags, GPA had consolidated net income from operations in Brazil, Argentina, Colombia and Uruguay of R$ 333 million from April to June, according to a balance sheet released on Wednesday (29).
Considering only continued operations, GPA's net income rose to R$ 274 million from R$ 65 million in the second quarter of 2019.
In November, GPA's parent company, the French casino group, completed a corporate reorganization of its assets in Latin America in which GPA incorporated Éxito.
GPA's consolidated gross revenue jumped 61.1% in the second quarter to R$ 22.9 billion, of which R$ 17.08 billion came from Brazil.
Gross sales rose 26.4% in the Assaí attacking network and 13.6% in the unit called "multivarejo", which involves the extra, sugar loaf and buy well flags.
E-commerce operations soared 272% over the second quarter of last year as a effect of social isolation.
Overall costs, with sales and administrative, as well as financial expenses jumped more than 50%, while depreciation and amortization expenses, including logistics, skyrocketed more than 70%.
The fundraising for the acquisition of Éxito raised GPA's net debt to approximately R$ 9.5 billion at the end of June compared to R$ 1.4 billion a year earlier.
Earnings before interest, taxes, depreciation and amortization (Ebitda) increased 83.2% to R$ 1.54 billion, and adjusted Ebitda margin increased from 6.6% to 7.6%.
GPA shares have advanced nearly 11% so far in July, while rival Carrefour Brasil's shares have risen nearly 13%.
On Monday, Carrefour Brasil reported a rise of nearly 76% in net income, driven by higher sales and cost controls, citing expectations of strong performance in the third quarter due to sales already recorded in July.