October 25, 2018 / 11:11 PM / a year ago

UPDATE 1-Brazil's GPA hits quarterly targets as 'cash-and-carry' delivers again

(Adds details of results)

SAO PAULO, Oct 25 (Reuters) - Brazilian food retailer GPA posted in-line quarterly results on Thursday as the end of food deflation and another strong performance from its wholesale division offset rising costs and lingering weakness at some traditional supermarkets.

In a securities filing, GPA, owned by France’s Casino Guichard Perrachon SA, said net income grew 37 percent from the 2017 third quarter to 138 million reais ($37.2 million).

Earnings before interest, taxes, depreciation and amortization (EBITDA) rose 49 percent over the same period to 611 million reais, but below the Reuters consensus estimate of 657 million reais.

Weighing on the results were 59 million reais in restructuring costs, legal fees and write-offs that, when excluded, would bring EBITDA to 670 million reais, the firm said.

Overall, results followed a similar pattern to previous quarters, with the firm’s ‘cash-and-carry’ Assai stores - which offer a no-frills, wholesale experience to consumers - leading EBITDA and profit growth.

At the cash-and-carry unit, EBITDA adjusted for one-time factors jumped some 49 percent from the same period last year. EBITDA at GPA’s more traditional supermarkets - collectively known as Multivarejo - climbed 4.8 percent.

Assai’s same-store sales, at outlets open for at least 12 months, climbed above inflation, while they stayed in line with inflation at Multivarejo. Multivarejo posted a profit of 39 million reais after a 72-million-real loss in the same period last year.

Sales related, general and administrative expenses jumped about 24 percent year-over-year at the Assai unit, limiting the potential for a positive surprise in GPA’s bottom line. However, as a proportion of net revenue, those expenses decreased 0.1 percent, the company said. ($1 = 3.71 Brazilian reais) (Reporting by Gram Slattery; Editing by Richard Chang)

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