S Group Posts Operating Profit Of €45m In First Half
Finnish retail conglomerate S Group has posted an operating profit (FAS) of €45 million in the first half of its financial year, up from a profit of €35 million in the same period last year.
SOK Corporation's operating result (IFRS) for the first six months amounted to a loss of €6 million, down from an operating profit of €1 million last year.
S Group's total retail sales before tax increased by 5.2% in the first half to just under €5.9 billion.
CEO of SOK, Hannu Krook, explained, "Our market trade has grown throughout the interest rate crisis. Last year, the effects of the corona [pandemic] pushed sales up sharply, but we believe this year’s growth will come more from our own actions.
"The improved result of the entire S Group is also due to the strong growth in the supermarket trade. Correspondingly, the hotels have pulled down the result of the SOK Corporation in particular."
S Group's grocery trade grew slightly more than the rest of the market in the first half of the year, the retailer noted.
In the home and specialty goods trade, Prisma emerged as a success story in the COVID-19 era for the retailer.
Sales of various hobby equipment saw strong growth across different seasons. During the winter months, the sales of skis and other winter sport equipments skyrocketed, while in the spring, bicycles were a popular purchase.
Krook added, "Our online stores are also still in good shape. In the online food store, we have expanded more and more geographically throughout Finland and have also achieved better growth than the market.
"Our strong development work continues in both food and consumer goods online stores. We want to achieve a position in them similar to our other size."
The early part of the year was challenging for ABC traffic stores due to the restrictions on restaurant businesses.
However, the movement of Finns became more active during the year.
In the summer, due to domestic tourism and good weather, passenger car traffic was busier than in the previous summer, exceeding the 2019 level in July.
At ABC, this was reflected in increased volumes in the fuel trade and stronger sales in convenience store restaurants and supermarkets than in the previous summer.
The sales of the entire chain increased by 20%–30% in June – July compared to last summer.
For hotels and restaurants, it was difficult until June, when sales rose, after restrictions were lifted and weather improved.
Although growth in the entire business was more than 60% in June from the previous year, sales were still clearly below the 2019 level.
July brought clear relief, especially for hotels, where sales increased by more than 35%, the retailer noted.
S Group remains confident about the future of hotels and restaurants amid uncertainties due to the pandemic.
"It is really important to remember that before COVID-19, tourism was Finland's third largest service export sector, and its export value was about €5 billion in 2019. We trust the bright future of Finnish tourism, but it also requires the attention of decision-makers," comments Hannu Krook.