Business

Via announces BRL 638 million loss in Q3 after reviewing its provision for labor liabilities

On the other hand, the company reported a net income of BRL 101 million in its operation in the third quarter, practically in line with the positive result of 2020

Via Q3 results
Photo: REUTERS/ Nacho Doce
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Via, the parent company to retail chain Casas Bahia and the digital bank banQi, announced this week a net loss of BRL 638 million in the third quarter, impacted by revisions in its provisions by labor claims.

The company stated in a relevant notice that the average value of lawsuits grew 32% from 2020 to 2021 compared to the years 2019 and 2020 and that the entry of new lawsuits against the company soared 82% in the first half compared to the first half of last year.

As a result, the company set up a provision of BRL 2.5 billion at the end of September for these lawsuits, compared to a BRL 1.2 billion planned in June.

READ ALSO: Via surpasses 100,000 third-party sellers and bolsters its marketplace strategy

Recently, the founder of Casas Bahia, Samuel Klein, was the subject of a series of reports exposing cases of employee harassment and sexual abuse that occurred at the company years ago, when Casas Bahia was not yet part of Via Varejo (Via’s previous name).

Via said in the balance sheet that the processes stem mainly from layoffs promoted by the company since 2011, in a strategy of downsizing the workforce to “improve its profitability” and that it hired a specialized consultancy to help it create an action plan on the labor lawsuits.

Although part of the lawsuits has been settled, Via said on Wednesday that “there are many cases in higher courts that cost 32% more compared to 2019 and 2020”. With that, it started to estimate that it will have a cash impact of BRL 300 million up to BRL 400 million with the processes in the fourth quarter, reaching between BRL 1.5 billion and BRL 2 billion in 2022.

With the update, the company’s informs its Ebitda was negative by BRL 342 million in the quarter.

Growth in digital sales

In operational terms, Via had a net income of BRL 101 million in Q3, practically in line with the positive result of a year earlier.

Via, which is investing in the creation of a sales ecosystem made up of digital and physical assets, posted a 5.7% growth in total gross sales (GMV) in the quarter, pressured by a 14.3% drop of in-store performance physical.

READ ALSO: In the race for the fastest delivery, Mercado Libre launches app for autonomous delivery drivers

However, digital sales, own or third parties, had a GMV growth of 34.7%, to BRL 6.6 billion, increasing the share of the group’s total sales by 12.9 percentage points, to 59.8%.

In an interview with LABS, published in October, Via’s chief digital officer (CDO), Helisson Lemos explained the group’s digital strategy, as well as the plan for open innovation. The company acquired fintech banQi and logistics operator ASAP Log to complement retail demands.

“We keep an eye on the company’s growth and transformation and the other on new businesses, new units. And things complement each other, there is a bit of positive feedback in this cycle that we are creating”, says Lemos.

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The company competes with rivals such as Magazine Luiza, Americanas and Mercado Libre, and saw its marketplace sales rise 132.8%, to around BRL 2 billion from July to September, assuming a share of total digital sales of 29.8 %, 12.6 points above a year earlier.

In these terms, Ebitda grew 6.7%, to 669 million reais, with the margin increasing from 8% to 9.1%.

Via’s executive director of logistics and supply, Fernando Gasparini detailed for LABS the objectives of Via — one of the largest physical retailers in the country — by opening up to partner sellers in its digital platform. “The idea of ​​bringing sellers in is the strategy of diluting costs that we already have. What does this bring to your advantage? The competition, to reach the number of square meters that we have in Via, will have costs. We [on the other hand] are going to dilute the costs we already have, so we are only going to improve our results”, points out Gasparini.

(Translated bt LABS)

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