Brazilian cosmetics maker Natura &Co NTCO3.SA posted better-than-expected second-quarter earnings from its core business late on Monday but saw its bottom line hit by writedowns as U.S. subsidiary Avon Products filed for bankruptcy protection. Why it matters Natura &Co is a cosmetics giant that has pushed through a turnaround, shedding global assets including sales of the Aesop and The Body Shop brands as it focused on Latin America to integrate Avon and its namesake brand.
Potro Caballero gives his take on Adrian Marcelo and withdraws his support on the show Following the numbers Natura posted net revenue of 7.35 billion reais ($1.34 billion) in the April-June quarter, up 5.4 percent from a year earlier and above the 6.78 billion expected by analysts polled by LSEG. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) rose 14.2% to 803.5 million reais. Analysts had expected 763.8 million reais.
Key quote “We started to see a better trend in top-line dynamics, reflecting a strong performance of the Natura brand, with Brazil and Mexico accelerating the pace,” CEO Fabio Barbosa said. Chapter 11 Natura said Avon Products (API), a US-based non-operating holding company it bought in 2020 as part of its acquisition of Avon, filed for Chapter 11 bankruptcy protection to deal with high debt. Natura &Co is API’s largest creditor and supports the move, committing to a $43 million debtor-in-possession financing and a $125 million offer to buy Avon’s non-US operations.
The API move led Natura &Co to post a net loss of 859 million reais in the second quarter, wider than the loss of 732 million reais last year, mainly due to write-downs.
Market reaction Analysts at JP Morgan said Natura &Co continued to show a good track record in delivering the expected results from the Avon integration in Latin America, but that the results were still tainted by many non-recurring items and by Avon International. “In this noisy context, we expect a positive reaction of the share price to the better-than-expected results from Latam.”
Source: mediotiempo
