Brazilian group Natura posts loss of nearly €70 million in first half

In August, the Brazilian company Natura reported a net loss of 410 million reais (about 68 million euros or nearly 80 million dollars) for the first half of the year, compared with a net profit of 44 million reais in the same period of 2023.

Between April and June alone, the cosmetics manufacturer posted a profit of 35 million reais (around 7 million dollars or 6 million euros), helping to offset first-quarter losses, but this represents an 82 per cent decline compared with the profit recorded in the second quarter of the previous year.

According to the results statement released to the market, the weak performance was driven by its results in Brazil, its main market, which came under pressure from product unavailability, an adverse macroeconomic climate and a temporary tax timing mismatch in the state of São Paulo.

This overshadowed the solid performance in the Spanish-speaking markets, which grew by 7.2 per cent in the quarter with a “strong expansion in profitability”, while Argentina maintained a gradual recovery.

The company’s management acknowledged that “a large part of the challenges faced in the first half of the year” in Brazil “were self-inflicted; that is, they were execution issues rather than structural problems within the business or misguided strategic decisions, although the macroeconomic environment also played a part.”

To get back on track for the second half of the year, management said it has set up “a task force dedicated to resolving bottlenecks in the supply chain and stabilising support systems.”

The Brazilian multinational’s net revenue in the first half of the year totalled 9.915 billion reais ($1.929 billion dollars or 1.650 billion euros), down 8.5 per cent on the first half of 2023.

Meanwhile, Natura’s EBITDA (earnings before interest, tax, depreciation and amortisation) reached 965 million reais (188 million dollars or 160 million euros) in the first half of the year, a year-on-year decline of 26.2 per cent.

The company’s net debt stood at 3.864 billion reais ($752 million dollars or 643 million euros) at the end of June, down from 4.042 billion reais ($786 million or 673 million euros) in the first quarter of this year.