Brazil’s Natura & Co reports 292% increase in fourth-quarter net profit By Reuters

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© Reuters. A natura product is pictured at the company’s distribution center in Sao Paulo, Brazil December 19, 2019. REUTERS/Amanda Perobelli

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(Reuters) – Brazilian cosmetics maker Natura & Co reported a 292% rise in fourth-quarter net profit on Wednesday, buoyed by structural changes and a faster-than-expected synergy with Avon.

The company reported net profit of 695.4 million reais ($138.74 million), beating Refinitiv’s forecast of 161 million reais.

The company, which owns brands like Avon, The Body Shop and Aesop, posted quarterly net sales of R$11.6 billion, down 3% from a year earlier but in line with forecasts from Refinitiv of 11.5 billion reais.

Its adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) margin reached 13.3%, up 90 basis points from the same quarter last year.

The company said synergies from its purchase of Avon, purchased in 2019, accelerated faster than expected, “with approximately 50% of target already achieved by year-end, helping Natura & Co to compensate for commodity inflation and the negative effects of exchange rates,” he said.

In an interview with Reuters, Natura CEO Roberto Marques said the company’s plans to transfer its primary listing to the New York Stock Exchange (NYSE) had been put on hold for the time being.

“For all that’s going on, the expectation of a very volatile market, with a lot of uncertainty…maybe now isn’t the time,” he said.

Marques also said the company is looking at a difficult half-year due to the Ukraine conflict and is cutting spending in the face of expected volatility.

He added that Natura had suspended exports from its Avon factory in Russia and was transferring volumes to its factory in Poland. It also suspended its Body Shop and Aesop operations in Russia.

($1 = 5.0123 reais)

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