Mercator Group has reported a net profit of €1.1 million in the first quarter of 2020, compared to a net loss of €3.7 million in the corresponding period the previous year, in what the group said was a 'positive' performance.
The Slovenia-based group increased its quarterly sales revenues by 10.8%, to €530.4 million, while retail revenue grew by 14.1%.
Poslovni Sistem Mercator, the largest company in the group, recorded quarterly revenue growth of 10.3%, to €305.9 million, as well as posting net profit growth of 36%, to €1.73 million.
In the group's other markets, the largest revenue growth was achieved in Bosnia and Herzegovina (15.3%), followed by Serbia (12.4%), and Montenegro (9.8%).
The only drop was in Croatia (-11.0%), in what the group said was non-core business activity.
'Positive performance trends regarding revenue, EBITDA and net income are a result of successful execution of the business strategy and all business goal attainment initiatives,' the group said in a statement. 'In the first month of the 2020 fiscal year, we identified a strong trend of solid performance and profitability.
'Insistence on regular and precise monitoring of all operating plans has proven a successful method for accomplishment of all strategic goals laid down by the Mercator Group.'
During the first three months of the year, Mercator Group continued construction work on a new logistics and distribution centre in Ljubljana, while at the same time adding three new stores – one each in Slovenia, Montenegro and Bosnia and Herzegovina.
Mercator Group ended the first quarter with 986 retail outlets (465 in Slovenia, 321 in Serbia, 122 in Montenegro and 78 in Bosnia and Herzegovina) and 19 wholesale/cash & carry stores (of which 13 are in Slovenia).
During the reference period, investments amounted to €5.6 million, of which 59.7% was invested in Slovenia and the remaining 40.3% in international markets.
According to CEO Tomislav Čizmić, the positive business trend for the quarter is the result of the successful implementation of its Value Creation Plan, which consists of 125 different initiatives in Slovenia, Serbia, Bosnia and Herzegovina, Montenegro and Croatia.
Following the declaration of the coronavirus pandemic in March, Mercator Group introduced a series of initiatives to stem the effect of the epidemic on its business.
It said that due to its timely response, it has succeeded in sustaining the positive performance trends from the start of the fiscal year.
© 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