(Adds conference call details in paragraphs 5-8)
SAO PAULO Feb 23 Via Varejo SA, Brazil's
largest appliance retailer, posted pro forma fourth-quarter net
income of 13 million reais ($4 million) on Thursday, boosted by
a hefty tax benefit along with cost savings from the integration
of online unit Cnova Brasil.
The company swung to a profit, when accounting for a full
three months of online and brick-and-mortar operations, from a
net loss of 474 million reais in the year-earlier period.
Analysts' consensus estimate was for a net loss of 206 million
reais, according to Thomson Reuters.
When only the two months of integrated online operations
were included, Via Varejo's quarterly net profit was 75 million
Units of Via Varejo, a blend of preferred and
common shares, rose 3 percent on the Sao Paulo stock exchange.
Executives said the company would continue to benefit from
the overhaul of its online sales platform and logistics
processes during the recent integration.
"Conclusion of this work helped us cut costs, which will
positively impact on the company's profitability going forward,"
Chief Executive Peter Estermann said during a conference call to
discuss the results.
Still, management said the first half of 2017 will be
challenging because of economic weakness in Brazil, and it has
not decided whether to open new stores in the second half of the
Via Varejo executives said they did not expect a significant
impact from a future sale of a controlling stake in the company
by Grupo Pão de Açúcar. That stake was put on the
market last year.
Earnings before interest, taxes, debt and amortization, a
gauge of profitability known as EBITDA, rose tenfold from a year
earlier on a pro forma basis to 469 million reais.
Via Varejo booked 406 million reais in tax credits in the
fourth quarter from the first nine months of 2016. The tax break
on electronics has lowered the cost of goods for retailers,
boosting their gross profit margins.
Via Varejo had held off using the incentives due to legal
uncertainties, but a senior executive told Reuters in October
that the benefit would have boosted EBITDA by more than 300
million reais from January to September of last year.
Via Varejo posted a net loss of 90 million reais in the
third quarter as Brazil's prolonged recession eroded consumer
confidence and demand for electronic goods.
The head of the company's e-commerce unit, Flavio Dias, told
Reuters in a separate interview that online sales should grow in
the first quarter after a 10 percent drop in the last three
months of 2016.
($1 = 3.08 reais)
(Reporting by Ana Mano and Paula Laier; Editing by Jeffrey
Benkoe and Paul Simao)