SAO PAULO: Brazilian food retailer GPA says its first quarter net loss for continuing operations widened by nearly 28% from a year ago, weighed down by tax effects and an impairment related to a real estate sale.

The company reported a net loss for continuing operations of 407 million reais (US$80.2mil) in the quarter.

GPA said the losses deepened on expenses related to a tax renegotiation programme it had joined, an impairment from the sale of offices and lower tax gains.

Excluding those effects, GPA’s net loss for the quarter would have been 197 million reais.

On the operational front, its gross revenue grew 8.2% to 4.87 billion reais.

Core earnings, or adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) jumped 41% to 372 million reais, with the Ebitda margin increasing from 6.3% to 8.1% year-on-year.

GPA sold assets during the last quarter to cut debt, while also restructuring its business, turning its focus to higher-income clients.

It also raised US$142mil with a share offer in March.

Net debt including credit card receivables ended the quarter at 1.6 billion reais, falling from three billion a year earlier, while financial leverage dropped to three times from 9.8 times.

Chief financial officer Rafael Russowsky said debt figures also came in, apart from asset sales and better capital structure, after a “very significant” operational improvement.

“These figures bring us closer and closer to really ending this ‘turnaround’ phase in the company, to live a new moment and look at growth”, the chief financial officer added.

He did not give a target for financial leverage, but said for a business such as GPA, he sees something close to one to 1.5 times as “reasonable”.

 - Reuters