Falabella ended 2023 with an 8.5% drop in its income in Chile, but reduced debt

Falabella ended 2023 with an 8.5% drop in its income in Chile, but reduced debt

Financial Diary – Santiago

Falabella published its consolidated financial statements for 2023, which closed with an 8.5% drop in revenue, in a year that, for the firm linked to the Solari and Del Río, was marked by a complex consumer environment and spending cuts and asset sales to reduce debt.

However, in a statement, The company highlighted that the declines in sales have moderated. “In the fourth quarter they registered a reduction of 6% versus 2022, which is compared to the 10% decrease in the third quarter, reaching US$3,559 million“, said.

On the other hand, the indicator of net financial debt over Ebitda showed significant decreases and stood at a ratio of 6.5x. This indicator is one of those that has most worried investors, as it rose to a ratio of 8.6x, while the company has stated that it feels comfortable with levels of 3x.

The interim general manager of Falabella, Alejandro González, highlighted that in the fourth quarter Ebitda improved 30% and stated that the company’s strategic plan has allowed them to “significantly improve margins, meet our efficiencies plan and be very selective in our investments, despite the challenging consumer environment.”

Falabella reported annual profits of US$69 million to the Financial Market Commission (CMF). However, this figure includes an accounting adjustment due to asset revaluation that was made this year. Without this effect, the company would have reported losses of around US$39 million.