Spain's Eroski Sees Operating Profits Up 30.2% In FY 2020
Spanish retailer Eroski has reported 30.2% year-on-year growth in operating profits, to €252 million, in its 2020 financial year.
The company's total sales amounted to €5.4 billion, up 2.1% compared with 2019, despite the adverse effects of COVID-19 on its non-food businesses and reduced mobility and opening restrictions during the pandemic.
EBITDA exceeded €330 million, increasing 26% year-on-year, the retailer added.
The company's online channel reported 82% growth in 2020.
'An Exceptional Year'
Commenting on its performance, Eroski president Agustín Markaide said, "2020 will go down in history as an exceptional year due to the incidence of COVID that has conditioned all social and business life.
"The general performance of Eroski has been very positive, although some businesses such as gas stations, travel or sports have suffered a significant negative impact."
The company added that the growth in turnover was achieved amid a 3.5% reduction in the group's sales area.
The group reduced its total commercial area by 40,000 square metres due to the closure of a number of hypermarkets.
However, the company continued to expand operations in the northern part of the country by opening more than 70 stores, both owned and franchised.
In 2020, Eroski reduced its financial debt by €140 million, achieving a reduction of more than €2 billion since 2010.
Last year, Eroski updated the valuation of its assets, applying a more prudent valuation to the future projections of the businesses affected by the pandemic and adapting the discount rates of these projections to the economic and financial uncertainties perceived in the environment.
Due to these extraordinary provisions, both the consolidated accounts of the Eroski group and those of Eroski S. Coop witnessed negative results of €77.56 million and €442 million, respectively, despite the excellent operating results during the financial year.
Markaide added, "We believe that the assessment of business risks should be more prudent, especially when we are going through a pandemic that has surprised us all with its speed and impact.
"This has led us to be more cautious when valuing assets that are evaluated against future projections. As a result, in 2020, we have incorporated significant provisions, both in the individual and consolidated accounts. These criteria of greater prudence leave us in a better disposition to attend to any future circumstance."