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UPDATE 1-Chile's Cencosud Q1 profit tumbles on Colombia deal
May 30, 2013 / 4:40 PM / 4 years ago

UPDATE 1-Chile's Cencosud Q1 profit tumbles on Colombia deal

SANTIAGO, May 30 (Reuters) - Chilean retailer Cencosud’s first-quarter net profit fell sharply due to costs from a loan to pay for the acquisition of French retailer Carrefour SA’s Colombian assets and exchange rate fluctuations, the company said on Thursday.

Net profit at Cencosud fell 63 percent from a year ago to 20.063 billion pesos, or $42.4 million.

Struggling Carrefour, Europe’s largest retailer, agreed in October to sell its Colombian assets to Cencosud for $2.6 billion.

To pay for the acquisition, Cencosud signed a $2.5 billion loan agreement with JP Morgan Chase Bank.

Cencosud’s bottom line was also hurt by a 20 billion peso provision after Chile’s Supreme Court fined it about $70 million for a unilateral hike in its supermarket unit’s credit card maintenance fees in 2006.

“Excluding the one-time effect of the provision, net profit fell 26 percent versus the first quarter 2012,” Cencosud said.

Sales during the first three months of the year totaled 2.468 trillion pesos, a 13.8 percent jump from the prior year.

The diversified retailer operates nearly 1,000 supermarkets, department and home improvement stores and shopping malls in Argentina, Brazil, Chile, Colombia and Peru.

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