Jerónimo Martins Sees First Half Profit Down By More Than A Third
The COVID-19 pandemic strongly affected the first half performance of Portuguese retail group Jerónimo Martins, with profit falling 36.2% year-on-year in the period, to €104 million.
Consolidated sales increased 4.6% to €9.3 billion in the first half, the group said, but dropped by 1.3% to €4.6 billion in the second quarter.
Group EBITDA fell 4.9% to €635 million due to the increase in operating costs and containment measures in the context of the pandemic.
In Poland, the group's Biedronka business posted 7.8% growth in first-half sales to €6.5 billion, and 3.4% growth in the second quarter, to €3.2 billion. In the six month period, the banner opened 32 new stores (29 net additions) and remodelled 71 existing stores.
In its home market of Portugal, sales at Pingo Doce fell 2.9% to €1.83 billion in the first half and by 8.8% to €902 million in the second quarter. In the reference period, the supermarket banner opened three new stores and completed the remodeling of six existing outlets.
Also in Portugal, cash & carry chain Recheio saw H1 sales down by 14.4% to €400 million, due to the closure of the HoReCa channel until 17 May, while the drop in Q2 reached 26.7%, to €185 million.
Lastly, in Colombia, local supermarket chain Ara recorded a 33.4% increase in sales to €423 million (+16.7% in the quarter to €188 million), opening 23 stores since January (15 net additions).
According to Jerónimo Martins, the pandemic has led some consumers to reduce the frequency of purchases and give greater preference to stores with more space and fewer customers.
The group is especially optimistic regarding Biedronka, which has adapted "swiftly to market circumstances, creating very attractive opportunities as a way of strengthening its relevance to the consumer and its competitive position”, it said.
The group estimates direct costs incurred by its banners due to the pandemic at around €29 million.
In the period, Jerónimo Martins invested €142 million worth of capex, with Poland absorbing 43% of this amount.
© 2020 European Supermarket Magazine – your source for the latest retail news. Article by Branislav Pekic. Click subscribe to sign up to ESM: The European Supermarket Magazine