Sonae, owner of Portugal's largest food retailer, has reported a 21% jump in fourth-quarter net profit as one-off capital gains more than offset the impact of high inflation and energy costs on its supermarkets business.
The conglomerate, with businesses in sectors from retail to telecoms, made net profit of €132 million in the three months to 31 December after booking €142 million in one-off capital gains, mainly from asset sales.
Excluding those gains, the company made a quarterly loss of €10 million due to discounting, higher operating costs and a reduction in asset values.
The squeeze on margins from soaring inflation and energy costs meant net income at Sonae MC, which runs about 300 hypermarkets and supermarkets, fell 16% to €56 million, despite a 14% increase in sales to €1.68 billion.
Food prices rose 19.5% in the quarter, Sonae said.
"To avoid a greater burden on family budgets, our retail businesses bore part of the inflationary pressure at the expense of their own profitability," chief executive Claudia Azevedo said in a statement.
Underlying consolidated earnings before interest, tax, depreciation and amortisation (EBITDA) rose 4.9% to €195 million in the quarter. However, the underlying EBITDA margin – a key measure of profitability – fell to 8.7% from 9.3% a year earlier.
Finance minister Fernando Medina said on Tuesday the food and economic security authority, ASAE, was investigating profit margins at large food retailers, such as Sonae and Jerónimo Martins, as officials suspect they were taking advantage of rising inflation to boost margins.
Chief financial officer Joao Dolores told a news conference the "retail sector is not making undue gains" and called for a debate based on facts, "not trying to find who to blame."
Sonae said 'high inflation and a sharp rise in interest rates will continue to impose constraints on the economy, namely to households' disposable income, with negative impact on private consumption.'