Pague Menos loss drops 41.2% in 1Q24- Capitalist

The pharmacy chain Pague Menos (PGMN3) announced its financial results for the first quarter of 2024 (1QR24), revealing an adjusted net loss of R$29.6 million. This represents a considerable reduction of 46.5% compared to the same period of the previous year.

The company explained that, although there was a significant expansion in the operating result, the negative impact of the financial result affected the company’s net performance. High leverage and high interest rates were identified as the main factors responsible for this pressure on financial results.

Additionally, seasonal factors, such as the sales mix and the promotional calendar, contributed to a lower gross margin, along with a reduction in operating leverage due to the inflationary lag and the decrease in sales business days. Finally, higher financial expenses were also observed due to cash consumption in the pre-high period.

In relation to adjusted EBITDA, Pague Menos presented a value of R$96.9 million in 1QR24, representing a significant increase of 77.4% compared to the same period of the previous year. The adjusted Ebitda margin had a positive variation of 1.2 percentage points, reaching 3.1%.

Pay Less (PGMN3)

Gross revenue reached R$3.095 billion in 1QR24, representing growth of 10.0% compared to 1QR23. The company highlighted that 82% of this revenue was generated by Pague Menos and 18% by Extrafarma. Furthermore, the gross margin registered a slight expansion of 0.1 percentage point compared to the same period of the previous year, reaching 29.2%.

Other highlights include the growth of digital channels, responsible for 58% of sales, and the increase in private label sales by 54.5%. The company also saw a dilution in general and administrative expenses, as well as a reduction in selling expenses and financing costs.

The ratio between net debt and adjusted Ebitda was 2.6x in the first quarter of 2024, compared to 3.0x in the same period of the previous year. The company plans to direct cash generation to reduce the level of debt, thus accelerating the ongoing financial deleveraging process.

The company

Pague Menos SA is a Brazilian pharmacy chain, one of the largest in the country. Founded in 1981 in the city of Fortaleza, in the state of Ceará, the company stands out for offering a wide variety of pharmaceutical products, as well as health and well-being services. Pague Menos aims to provide easy access to quality medicines and products at affordable prices for its customers.