The supermarket chain Day has reduced its net profit for fiscal year 2017 from 110 million to 90 million euros after an adjustment of 20 million euros. An adjustment corresponding, for the most part, to overestimations made at the end of that period in the commercial discounts to be received from suppliers, as announced on Monday by the company, the National Securities Market Commission (CNMV).
The entity already reported on the 15th that it lowered its results estimates for the 2018 financial year, due to the fall in sales and the impact of the Argentine crisis, and suspended the dividends for 2019He explained then that the firm was forced to adopt these measures after "a process of review" of the original forecasts for the closing of the current year, which would also force to make "adjustments to the financial statements" of 2017.
The negative equity effect is reduced to 56 million
Initially, the supermarket chain calculated the "negative equity effect" of around 70 million in 2017, although today it explained in its statement to the CNMV that "after calculating its fiscal effect", the company has concluded that the patrimonial effect is reduced to approximately the 56 million euros"
Specifically, following the process of reviewing the financial closure estimates for 2018, the supermarket chain considered that certain adjustments to the consolidated financial statements for fiscal year 2017 should be incorporated, which were estimated to have a negative equity effect for an amount valued at approximately 70 million euros. After calculating its fiscal effect, Dia has concluded that the negative equity effect is reduced to approximately 56 million euros and is largely attributable to the business in Iberia.
The effect corresponds to overestimates made
In accordance with current accounting regulations, once the process of validation and confirmation of this amount has been completed, when the annual accounts for 2018 are drawn up, Dia will restate 2017 figures, which will be presented for comparative purposes. In this way, once the tax effect is considered, they will have an impact of 56 million euros on the net equity as of December 31, 2017.
Regarding the "effect" on the 2017 profit, of 20 million or 26 million before the tax effect, the company has indicated that it corresponds "to a large extent" to the "overestimations made at the end of that period in the commercial discounts to be received from suppliers ".
On the effects on reserves, which figure at 18 or 24 million before the fiscal effect, has specified that "it is due to pending invoices received from suppliers that were subject to registration in a different period to that which corresponded. He added that the remaining 18 million euros, 20 million before the fiscal effect, correspond to "estimates of provisions that were dragged from one benefit to another and that are not significant either individually or as a whole and that the company has decided to register in the appropriate period ".
Even so, Dia has warned that the disaggregated corrections that it has communicated today, with which it has tried to impute to each exercise the income and expenses that correspond, are "still provisional" and have not supposed "in any case" cash movements.
On Monday he made the third 'profit warning' in a year
Last Monday, Dia lowered its adjusted EBITDA projection for 2018, the third profit warning in one year, up to between 350 and 400 million euros compared to the 568 million obtained in 2017. And that, without taking into account the impact of hyperinflation in Argentina, one of the two emerging markets where it is present. The news caused a strong stock market crash of the group's shares, as well as reductions in the rating of its debt to the junk bond category of agencies such as Moody's or S & P.
The group experienced a real anxiety in the stock market and even fell 42% in a single session, immediately after notifying the market of the worsening of its forecasts for 2018. The group, with 7,388 stores spread across Spain, Portugal, Brazil and Argentina, closed 2017 with a profit of 109.6 million euros (37% less than a year before) and its net turnover contracted by 0.56%, to 8,620 million euros.