Croatia's Agrokor Continues Turnaround, Posts Operating Profit Gains
Croatian retail and food conglomerate Agrokor is continuing its turnaround, with the latest monthly report from the group's extraordinary administration noting an increase in operating profits in its Food and Retail & Wholesale divisions.
Total revenues in retail stood at HRK 8.97 billion (€1.21) billion in the period measured, 11 September to 10 October, with the administrators saying that its main retail chain, Konzum, 'continues to operate successfully', posting a 3% year-on-year increase in sales.
Konzum benefited from an increased number of transactions as well as a larger average basket size, with strong promotional activities and investment in quality products proving appealing to shoppers, the group said.
In August, Konzum introduced a new loyalty programme, 'Zdravoljupci' ('Health Lovers'), to tap into increased demand for healthy products.
'Sales revenue in retail, Konzum's largest area of operations, has grown against plan by 4% over the first eight months, while in August it exceeded budget by 3%,' the administrators said in their report.
'The results of saving measures, activities aimed at increasing profitability and processes initiated in late 2017 and early 2018 are visible in the operating costs being lower than planned in August and cumulatively for the year.'
Across Agrokor's three main operating segments, Retail & Wholesale, Food and Agriculture, the group generated HRK 16.07 billion in revenues and HRK 1.46 billion in operating profits.
In the Food sector, the administrators noted that all companies were 'able to maintain or increase their respective market shares and strengthen their market positions'.
In particular, Frikom, Agrokor's ice cream business, posted 'significantly higher-than-budgeted operating profits (EBITDA)' in August, the group said. Elsewhere, its Frozen Food and Edible Oil subsegments saw he implementation of a cost-control programme, as well as a renewed focus on profitable product groups.
The administrators said that EBITDA across the group has outperformed expectations by HRK 26 million.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine