Portugal's Sonae, which owns the country's largest food retailer, swung to a net profit of €1 million in the first quarter of its financial year on robust sales, despite the COVID-19 pandemic.
The group, which runs around 300 Continente hypermarkets and large supermarkets and non-food stores such as Worten consumer electronics shops, Sportzone stores and other retail chains, reported a net loss of €59 million between January and March 2020, due to a high level of provisions as the pandemic hit the country.
Consolidated sales in the first quarter of this year rose 5.8% to €1.6 billion, with sales from the food retail unit Sonae MC increasing 6.6% to €1.3 billion, the company said.
Underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) jumped 14% to €114 million. The underlying EBITDA margin - an important measure of profitability - rose to 6.9% from 6.4% a year earlier.
Portugal was in lockdown for most of the quarter, from mid-January until mid-March, to contain a surge in coronavirus cases, with supermarkets and hypermarkets among the few stores open.
Worten sales jumped 17% in the first quarter due to online purchases, the company said.
"In Portugal, the start of 2021 was a dramatic period in terms of public health as we were confronted with a third wave of the pandemic that forced us once again into harsher lockdown measures," Sonae's chief executive officer Claudia Azevedo said in a statement.
"We faced a very adverse context, with many of our stores, cinema theatres and shopping centres closed (or practically closed) for 2.5 months. But, once again, the resilience, resourcefulness and digital readiness of our businesses were critical to overcome this context.
"We were able to continue to serve our customers across multiple channels, with a particular focus on our e-commerce platforms, and showed the resilience of our value chains and the solidity of our value propositions. And our customers recognised our commitment and dynamism."
She added that despite the challenging environment, offline and online sales at Sonae MC and Worten had allowed the company to offset results from business lines most affected by the closures.
Sonae said capital expenditure more than doubled to €126 million, from a year earlier and net debt rose by €164 million to €1.4 billion at the end of March from a year ago.