C&A Profit Surges, Leverage Falls as GPA Turns Profitable on Tax Credits

Overview

• C&A reported R$69.5 million in Q3 net income, up 62.2% year over year, on higher EBITDA and a 2.3% rise in net revenue to R$1.84 billion.
• C&A sharply reduced leverage to 0.1x with net debt down 89.6% to R$91.5 million, while financial-services revenue fell 41% after the end of the Bradescard partnership.
• GPA posted a Q3 net profit reported at R$133 million by Valor and R$137 million by ISTOÉ, largely supported by recognition of R$418 million in tax credits enabled by a federal rule change.
• GPA said the recognized credits are expected to be realized over about a decade and do not generate immediate cash inflows, as part was used to settle federal tax transactions.
• GPA recorded R$4.55 billion in net revenue and R$412 million in adjusted EBITDA, with net debt rising to R$2.68 billion and leverage increasing to 1.5x as Capex totaled R$146 million.