Bloomberg News

Cencosud Climbs as Earnings Top Estimates: Santiago Mover

March 23, 2012

Cencosud SA (CENCOSUD), Latin America’s third- biggest retailer, rose for the first time in five days after reporting better-than-forecast profit on record sales.

The shares jumped 1.4 percent to 3,180 pesos at 12:45 p.m. in Santiago after retreating 3 percent in the previous four days. Chile’s benchmark equity index advanced 0.2 percent.

Fourth-quarter net income slid to 108 billion pesos ($221 million) from 110 billion pesos a year ago, according to data on the Chilean securities regulator’s website, beating a 99.7 billion-peso average estimate of 11 analysts in a Bloomberg survey. Sales rose 20 percent to 2.19 trillion pesos, the highest level since at least 2004 when Bloomberg records begin.

“Numbers were mostly in line with my expectations, although net income was a little surprising to the upside,” said Christopher Disalvatore, an analyst at IM Trust SA in Santiago. “There are some issues with the upcoming share issuance but fundamentals remain strong.”

Cencosud is preparing to sell as many as 270 million new shares in Chile and New York, which at today’s price would raise $1.75 billion to finance expansions.

Billionaire controller Horst Paulmann resumed a regional expansion in late 2009 as Chile’s economy recovered from its steepest slump in a decade. Cencosud forecasts sales of $18 billion this year, from $15 billion last year, and budgeted $1.3 billion for expansion, according to a Feb. 10 statement.

Santiago-based Cencosud is the third-biggest retailer in Latin America by sales after Wal-Mart de Mexico SAB and Brazil’s Cia Brasileira de Distribuicao Grupo Pao de Acucar, according to data compiled by Bloomberg.

To contact the reporter on this story: Eduardo Thomson in Santiago at ethomson1@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net


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