Portuguese food retailer MC Sonae said that turnover in the first quarter of its financial year totalled €1.5 billion, up 13.5% year-on-year and 11.8% in like-for-like terms.
Contributing to the positive performance were the company's hypermarkets and supermarkets, operating under the Continente banner, which grew sales by 8.9% and 17.4%, respectively.
Online sales also grew in the quarter, as Continente maintained its strong e-commerce leadership position in the Portuguese market.
The group's profit margin continues to be impacted by MC Sonae’s partial absorption of inflationary price pressures, the product mix, aggravated trading down by consumers, and increases in operational costs mainly due to inflation.
However, the group managed to deliver a stable 8.4% margin, with EBITDA growing by 14% to €124 million.
Read More: Portugal's Sonae Profit Buoyed By One-Off Gains Despite Retail Margin Squeeze
Investment In Network
During the quarter, the retailer invested €49 million, mainly for the expansion and refurbishment of the store network and the optimisation of technological and logistics capabilities.
As of the end of the quarter, net financial debt stood at €494 million, while the ratio of total net debt to EBITDA was 2.8x, slightly down on the 2.9x in Q1 2021.
Sonae pointed out that the Portuguese food retail market remained challenging in the first quarter of 2023 with consumer demand highly pressured by food inflation (20.5%) that continued to erode households’ purchasing power.
Read More: Sonae Teams Up With Bankinter To Create Portuguese Consumer Credit Operator
© 2023 European Supermarket Magazine – your source for the latest Retail news. Article by Branislav Pekic. Click subscribe to sign up to ESM: European Supermarket Magazine.