Portuguese retailer Jerónimo Martins reported a 36% increase in first-half net profit as high inflation boosted sales, especially in Poland where it operates the Biedronka chain.
The company reported a net profit of €356 million in the period between January and June.
Consolidated sales rose 22% to €14.5 billion, driven by Biedronka, where sales increased 24.5% to €10.3 billion.
Inflation Levels
The company said in a statement that while food inflation gradually declined in the second quarter, it was 'still difficult to predict the inflation reduction for the second half'.
It plans to keep investment in 2023 at last year's levels of around €1 billion to open 130 to 150 stores in Poland and remodel 350 others, add over 200 locations in Colombia, around 20 Hebe-brand stores in the Czech Republic and Slovakia, as well as 10 new Pingo Doce stores in Portugal in the full year.
'The First Choice'
Outlining the company's priorities, chief executive Pedro Soares dos Santos said Jerónimo Martins sought to be "the first choice of an increasingly fragile consumer, to grow sales, to reinforce efficiency, and to protect profitability".
EBITDA Margin
While consolidated earnings before interest, taxes, depreciation and amortisation (EBITDA) grew 18% to €1.0 billion, the EBITDA margin, a key measure of profitability, fell to 6.9% from 7.2% a year earlier following price investments and cost inflation.
"We know that in uncertain times with intense pressure on real household disposal income, it is essential to continuously provide the best saving opportunities by strongly investing in price to guarantee that consumers choose our stores," he said.
"We must also execute the expansion plans to reinforce proximity and convenience while investing in refurbishments to improve our stores' attractiveness and shopping experience."
