Brazil food retailer Assai posts 21% profit decrease in Q2

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SÃO PAULO, August 8 (Reuters) - Brazilian food retailer Assai posted on Thursday a 21.2% fall in its second-quarter net profit from the same period a year earlier.

Assai, which operates a chain of stores in a hybrid wholesale format, posted a net profit of 123 million reais ($22 million) for the quarter ended in June.

Chief Financial Officer Vitor Faga told Reuters the profit decrease came mainly due to higher tax benefits in the same period last year.

Assai's net revenue rose 11.8% year-on-year to 17.9 billion reais, with same store sales rising 2.9%, adjusted to calendar effects.

"This was another quarter that consolidates our growth path, especially related to hypermarket conversions," Faga said

Assai has been converting in the last two years almost 70 Extra hypermarkets it had purchased from GPA, with the inaugurations almost completed by now.

The firm said that sales per month in the 47 converted stores that are at a more advanced stage of maturation rose 5% from the last quarter of 2023.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) totaled 1.29 billion reais, up 15.7%, with adjusted EBITDA margins rising 0.2 percentage points to 7.2%.

Assai, which has been focusing on lowering financial leverage after years of strong expansion, maintained its guidance to end 2024 with a net debt/adjusted EBITDA ratio of below 3.2 times.

It stood at 3.65 times in the quarter, from 3.75 in the first three months of the year. ($1 = 5.5585 reais) (Reporting by Andre Romani; Editing by Brendan O'Boyle)