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Petz Swings To R$43.1 Million Loss As Acquisition Costs Hit Q4 Results
(MENAFN- The Rio Times) Brazilian pet retailer Petz reported a net loss of R$43.1 million ($7.56 million) in the fourth quarter of 2024, according to the company's latest financial statement. The loss reversed a profit of R$5.1 million from the same period in 2023.
CFO Aline Penna attributed the loss primarily to mark-to-market effects on derivative instruments related to dollar -linked swap operations. This accounting adjustment negatively impacted net income by R$12.8 million ($2.25 million) without affecting cash flow.
The company also faced significant costs from impairment tests on previously acquired operations. These tests resulted in a R$36.6 million ($6.42 million) hit to net income and a R$55.4 million ($9.72 million) impact on EBITDA.
Petz conducted accounting adjustments related to the acquisition of Cão Cidadão in November 2021. The company discovered certain expected services from this subsidiary never materialized, necessitating a write-down.
The ZeeDog acquisition from August 2021, which cost over R$700 million ($122.8 million), also underwent reassessment. "At the time, the price seemed very high, but most payments used company shares that were highly valued," Penna explained.
Petz Q4 2024 Results: Growth Amidst Challenges
Despite these setbacks, quarterly revenue reached R$878.7 million ($154.16 million), increasing 7.1% compared to Q4 2023. For full-year 2024, Petz recorded R$3.3 billion ($578.95 million) in net revenue, a 4.7% increase over 2023.
The adjusted net income showed more positive results, totaling R$22.4 million ($3.93 million) for Q4, representing a 49.7% year-over-year growth.
EBITDA fell sharply to R$13.9 million ($2.44 million), a 71.4% contraction from the previous year. For the full year, EBITDA reached R$176.6 million ($30.98 million), down 23.3% from 2023.
Capital expenditures decreased significantly, totaling R$44.9 million ($7.88 million) for the quarter, 39.1% lower than the same period in 2023. Annual investments also contracted by 35.4% to R$158.3 million ($27.77 million).
These results reflect Petz's ongoing efforts to integrate its acquired businesses while building Brazil's leading pet ecosystem across physical retail, e-commerce, and specialized pet services.
CFO Aline Penna attributed the loss primarily to mark-to-market effects on derivative instruments related to dollar -linked swap operations. This accounting adjustment negatively impacted net income by R$12.8 million ($2.25 million) without affecting cash flow.
The company also faced significant costs from impairment tests on previously acquired operations. These tests resulted in a R$36.6 million ($6.42 million) hit to net income and a R$55.4 million ($9.72 million) impact on EBITDA.
Petz conducted accounting adjustments related to the acquisition of Cão Cidadão in November 2021. The company discovered certain expected services from this subsidiary never materialized, necessitating a write-down.
The ZeeDog acquisition from August 2021, which cost over R$700 million ($122.8 million), also underwent reassessment. "At the time, the price seemed very high, but most payments used company shares that were highly valued," Penna explained.
Petz Q4 2024 Results: Growth Amidst Challenges
Despite these setbacks, quarterly revenue reached R$878.7 million ($154.16 million), increasing 7.1% compared to Q4 2023. For full-year 2024, Petz recorded R$3.3 billion ($578.95 million) in net revenue, a 4.7% increase over 2023.
The adjusted net income showed more positive results, totaling R$22.4 million ($3.93 million) for Q4, representing a 49.7% year-over-year growth.
EBITDA fell sharply to R$13.9 million ($2.44 million), a 71.4% contraction from the previous year. For the full year, EBITDA reached R$176.6 million ($30.98 million), down 23.3% from 2023.
Capital expenditures decreased significantly, totaling R$44.9 million ($7.88 million) for the quarter, 39.1% lower than the same period in 2023. Annual investments also contracted by 35.4% to R$158.3 million ($27.77 million).
These results reflect Petz's ongoing efforts to integrate its acquired businesses while building Brazil's leading pet ecosystem across physical retail, e-commerce, and specialized pet services.
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