panhia Brasileira de Distribuicao(US:CBD)2024-02-21 16:00Discontinued Operations - The Company reported a discontinued operation related to the divestiture of its subsidiary Almacenes Exito S.A., resulting in a total amount of R$1,555 million, which includes R$1,360 million from recycling comprehensive income and R$760 million from the remeasurement of the remaining investment[40]. - The company recorded a net result of R$1,564 million from the transaction related to discontinued operations[149]. - The Company completed the segregation of its subsidiary Exito in Q3 2023, enhancing operational focus and efficiency[142]. Financial Performance - Net income for the year was a loss of R$2,271 million, compared to a loss of R$172 million in the previous year[96]. - Comprehensive income for the year was a loss of R$621 million, significantly improved from a loss of R$2,498 million in 2022[96]. - Adjusted EBITDA for Q4 2023 totaled R$404 million, with a margin of 7.7%, an increase of 1.8 percentage points compared to the previous year[82]. - Gross profit rose to R$4,728 million in 2023, up from R$4,126 million in 2022, marking an increase of 14.6%[25]. - The company reported a profit from operations of R$620 million in 2023, compared to a loss of R$697 million in 2022, indicating a significant turnaround[25]. - The company recorded financial expenses of R$1,069 million in 2023, up from R$737 million in 2022, indicating increased borrowing costs[25]. - The company generated net cash from investing activities of R$19 million in 2023, a significant decrease from R$3,457 million in 2022[139]. Credit Losses and Risk Management - The Company adopted the full lifetime expected credit loss model for provisions related to accounts receivable, which reflects a significant change in estimating credit losses[11]. - The Company considers a financial asset to be in default if it is overdue by more than 90 days, which is a key criterion for assessing credit risk[13]. - The expected credit losses are measured at present value based on cash insufficiencies, with losses discounted by the effective interest rate of the financial asset[15]. - The Company applies a practical expedient for trade accounts receivable, utilizing a loss matrix for different maturity ranges to estimate expected credit losses[11]. - The Company evaluates the credit risk of financial assets based on historical losses and projections, which are critical for determining expected credit losses[12]. Tax Provisions and Liabilities - Management recorded provisions for tax claims amounting to R$1,108 million as of December 31, 2023, with additional claims and assessments outstanding totaling R$13,376 million for which no provision was recorded[55]. - The company is contingently liable for tax claims related to divested subsidiary operations totaling R$1,739 million, with no provision recorded[55]. - Management's assessment of the likelihood of loss on tax claims involves significant judgment due to the complexity of Brazilian tax legislation and case law[55]. - The audit concluded that Management's assessment of tax credit recoverability and related disclosures are acceptable within the context of the financial statements[53]. Operational Developments - In 2023, the company opened 61 new stores, primarily in the Proximity format, under the Minuto Pão de Açúcar banner[82]. - E-commerce revenue grew by over 20% in Q4 2023 compared to Q4 2022, supported by operational changes that integrated e-commerce with store operations[82]. - The company achieved a product availability level of 95%, a benchmark for Brazilian retail, through a large category management project[82]. - The company's Net Promoter Score (NPS) increased by 10 points compared to Q4 2022, reflecting improvements in customer service[82]. - Market share increased by 0.3 percentage points in Q4 2023 compared to Q4 2022, marking the fifth consecutive quarter of growth[82]. Asset and Liability Management - The company reported a total asset value of R$21,942 million as of December 31, 2023, compared to R$22,050 million in the previous year[89]. - Total current liabilities decreased to R$6,129 million in 2023 from R$6,404 million in 2022[89]. - The company’s long-term assets and liabilities are adjusted to their present value, while short-term assets and liabilities are not subject to this adjustment[5]. Strategic Initiatives - The company aims to accelerate earnings in 2024, focusing on consolidating its position in the premium market and strengthening its brands[82]. - The decision to sell remaining shares in Exito and the stake in Cnova has made the company a 100% Brazilian entity, enhancing its focus on the national food market[82]. - The company plans to focus on market expansion and new product development to drive future growth[102]. - The Company approved the sale of its indirect equity interest in Cnova for R$53.5 million, with 80% of the payment (R$42.8 million) received in cash and the remainder to be paid by June 30, 2024[179]. Audit and Compliance - The Company’s financial statements for the year ended December 31, 2023, were audited and presented fairly in accordance with Brazilian accounting practices and IFRS[37]. - The Audit Committee evaluated the quality and integrity of the financial information, including management reports and financial statements[66]. - The individual and consolidated statements of value added were appropriately prepared in accordance with technical pronouncements and consistent with financial statements[56]. - The Company’s financial statements are prepared in accordance with IFRS and presented in millions of Brazilian reais (R$)[181].