2023-08-11 03:00:15
© Reuters.
Por Andre Romani
SÃO PAULO (Reuters) – Via, owner of the Casas Bahia and Ponto brands, announced a new business plan this Thursday, which includes a reduction of up to 1 billion reais in inventories this year and a change in the way of raising funds to finance credit.
The business transformation comes after a change in the company’s top management during the second quarter. Renato Horta Franklin came from Movida (BVMF:) to assume the presidency of the retailer, and Elcio Mitsuhiro, with passages at Iochpe-Maxion (BVMF:) and BRF (BVMF:), came to the chair of financial director.
In addition, the plan is added to another quarterly loss, this time of 492 million reais in the period from April to the end of June, after a profit of 6 million reais a year earlier, in what was the company’s last accounting quarterly profit since then.
The balance sheet released this Thursday shows the last line of the result pressured by a negative financial result of 801 million reais, and falling revenue.
“We have a change in the company’s strategy. The company had a strategy of growing GMV, opening new channels, expanding stores, investing in fintechs,” Franklin told Reuters.
“And we understand that all this was done, we built a super platform and it is already big. So, between investing to grow this platform even more, or taking and monetizing what I have here, we prefer to make money with what we have here “, he added.
For this, Franklin said that Via has already started to reduce the number of stores, with a plan to close in 2023 from 50 to 100 points that are operating at a loss, in addition to cutting 6 thousand employees, while, in the sales channels, it will migrate commercialization of products that currently do not generate profit, mainly lower priced items, for its marketplace.
Part of these measures will help reduce the level of inventories by up to 1 billion reais, one of the main objectives of the new plan, which would also ease the pressure on the company’s financial management.
“This here, this adjustment of the 100 stores, will bring us a release of stocks of 200 million reais”, said Franklin.
The company also said it will reduce the level of investments (“capex”), with an estimate of reaching a level of up to 40% lower compared to 2022.
With the implementation of these operational transformations, the company estimates it will be able to generate 1 billion reais in net profit before income tax, although there is no prediction of when.
The plan has a range of potential pre-tax earnings gains through 2025, but Mitsuhiro noted that this “is not a plan that will take until 2025” without giving details of the timeline, citing governance concerns.
Via’s new management also announced changes to strengthen the company’s capital structure. One of the main changes is related to fundraising.
Via currently has 50% of its credit exposure linked to installment plans, Mitsuhiro said. That is, when a customer buys a product in installments, Via advances the amounts to be received from banks and then returns, with interest, when the customer finishes paying.
Now, the plan is to place the credit card portfolio on the capital market through a receivables investment fund (FIDC) and assignment of the credit card portfolio to the FIDC.
“When I start to transfer this to an FIDC structure, I have a release of credit limits of around 5 billion reais or more. And then I can use this limit for other purposes within the company, and my credit card is being financed via the capital market directly,” he said.
In a material fact, the company said that it engaged Banco BTG Pactual (BVMF:) and Polígono Capital with a view to structuring a first FIDC, as well as a study of the potential issuance and offer of quotas of this FIDC, in the amount of up to 1.5 billion reais.
Via also announced continuity in its tax credit monetization strategy, which is expected to generate 2.5 billion reais this year, with around 1.2 billion reais already monetized, according to the executives.
The company still aims to generate another 500 million reais with monetization of other assets, such as “sale and leaseback” operations with stores, which involves the sale of properties and their subsequent lease, said Mitsuhiro.
2º THREE
In the second quarter, Via had adjusted earnings before interest, taxes, depreciation and amortization (Ebitda) of 469 million reais, down 32.1% year-on-year.
Net revenue fell 2.1% year-on-year, to 7.49 billion reais, with a gross margin of 28.5%, down 2.9 percentage points against the same period of the previous year.
In sales, total gross GMV was stable at 11 billion reais, up 9% in the marketplace and down 1.2% in direct-to-consumer sales.
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