Chile’s Cencosud announces investment plan, confirms interest in Brazilian assets

RIO DE JANEIRO, BRAZIL – Retail has experienced a great 2021 because of the consumption boom due to the high liquidity of people. It is time to project 2022, so companies are already adjusting the investment guide to maintain good numbers.

In this line, Cencosud announced investments for US$640 million, of which US$553 million will go to Capex with a view to organic growth, transformations, and expansion plan of the digital ecosystem.

With this, the company expects to achieve double-digit growth in revenues, reaching US$15.1 billion and an Ebitda of US$1.8 million.

He also explained that the company would focus on three areas this year: organic growth in the region and inorganic growth; focus on optimizing business profitability; and leadership in innovation and new trends.

“This investment plan is expected to be financed through the cash flow generated by the company,” said Cencosud in a presentation.

STORE PROJECTIONS

Regarding stores, the company linked to the Paulmann family indicated that it expects to open at least 37 new stores in the supermarket, home improvement, and electro-show formats.

Meanwhile, for its shopping centers, it will invest US$134 million focused on the omnichannel proposal and the new malls in Colombia and Peru. It also includes the remodeling and expansion of Portal Altos del Prado and Limonar.

In Chile, it is estimated that more than 40,000 m2 of additional GLA will be added through expansions, conversions, and the refurbishment of existing spaces.

In the plan to transform supermarkets to Cash & Carry format in Peru and Brazil, at least five stores will be intervened.

FOCUS ON BRAZIL

Cencosud also spoke of “potential acquisitions in Brazil to improve the competitive position and achieve economies of scale in different areas such as purchasing, back office, among others”.

It confirms what the company said at the end of last year when in a round with investors, it indicated that it could make a new purchase in Brazil.

The company had plans to open its business to the local stock market in that nation. Although this was expected to take place in 2021, it did not happen in the end.

Consulted at a past press conference, María Soledad Fernández, corporate manager of Investor Relations and Sustainability of Cencosud, said that they were happy because already, as of this quarter, they are publishing the results of Cencosud Brazil to the local body, as a new company of the group.

“We already have a company operating following Brazilian market regulations, and as soon as the markets recover, we will look again at the possibility of doing an IPO,” said Fernandez.