SAO PAULO (Reuters) – Brazilian retailer Magazine Luiza reported on Monday a second-quarter adjusted net loss of 198.8 million reais ($40 million), blaming the country’s high interest rate for hitting its financial expenses.
Losses from the second quarter compare to the company’s 112 million reais net loss posted in last year’s second quarter.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) fell 10.6% year-on-year to total nearly 440 million reais.
The company, popularly known as Magalu , posted 5.8% growth in total sales, including online business, to reach 14.7 billion reais.
E-commerce sales grew 7% in the April-to-June period to 10.7 billion reais.
Financial expenses, meanwhile, rose 0.4 percentage points compared to the year-ago period, due to higher borrowing costs this year, the retailer added.
Brazil’s central bank has carried out one of the world’s most aggressive interest rate hiking cycles since early 2021 in a bid to tame high inflation, holding the key Selic rate at a six-year high of 13.75% until earlier this month.
In its quarterly earnings report, Magalu noted it has received 850 million reais ($171.1 million) from insurer Cardif for the renewal of their commercial agreement. The deal, sealed in June, included the sale of Magalu’s stake in the insurance venture it has with the firm.
($1 = 4.9687 reais)
(Reporting by Carolina Pulice; Editing by David Alire Garcia and Brendan O’Boyle)
