(Reuters) – Chilean retailer Falabella on Tuesday posted a net profit for the first quarter, reversing a year-ago loss, boosted by operations in Peru.

The store operator and financial services provider’s net profit reached 58.50 billion pesos ($59.55 million) for the January-to-March period.

The result was driven by an operating profit from the retailer’s Peru unit, while its units in Chile, Colombia and Brazil trimmed year-ago losses.

Revenues, meanwhile, were up 4% to 2.86 trillion pesos, largely explained by the foreign-exchange effect of the weaker Chilean peso against stronger local currencies.

Falabella saw increased visits to shopping centers and reduced its inventories by 11% in the quarter, CEO Alejandro Gonzalez said in a statement.

Its loan portfolio gained 1% year-over-year, though delinquent payments also rose slightly to 4.4%.

Core earnings, or earnings before interest, taxes, depreciation and amortization (EBITDA), more than doubled to 296.95 billion pesos.

Falabella operates supermarkets, department and home improvement stores, as well as delivery and financial services across Latin America, including in Argentina, Brazil, Colombia, Mexico, Peru, Uruguay and its home market of Chile.

Earlier this year, Falabella said it planned to invest $508 million in 2024, with more than half the sum destined for store openings and remodeling, while other expenditures would be focused on e-commerce, digital banking and logistics.

At the time, the company said the spending plan would mark a drop of about a quarter compared to last year’s investments and was aimed boosting profitability. It also launched a plan last year to sell off non-core assets, mainly real estate.

Falabella has been working to bring down its leverage, defined as net financial debt over EBITDA, after losing an investment-grade rating late last year.

In the first quarter, the retailer’s leverage stood at 5.7x, from 7.3x a year ago.

($1 = 982.38 Chilean pesos at end-March)

(Reporting by Kylie Madry; Editing by Brendan O’Boyle and Stephen Coates)

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