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Retail

Portugal's Sonae Sees Q4 Profit Fall As COVID-19 Impacts Shopping Centres

Portugal's Sonae, which operates the Continente supermarket chain, said that its fourth-quarter net profit fell 3.4% from a year ago as the COVID-19 pandemic took its toll on its shopping centre business.

The group, which runs around 300 Continente hypermarkets and large supermarkets, Worten consumer electronics stores, Sportzone stores and other retail chains in the country said on Thursday its net profit fell to €75 million in the October-December period.

Consolidated sales rose 6.6% to €1.92 billion in the fourth quarter, with sales from the food retail unit Sonae MC increasing 8.5% to €1.38 billion, the company said.

The sales increase was offset by higher provisions due to COVID-19 and losses from its shopping malls, which were hurt by the curfew and partial weekend lockdowns imposed in Portugal in early November to curb the pandemic.

Worten's sales rose 12.2% to €386 million, while sales from its shopping centre and real estate unit Sonae Sierra fell 46.7% to €21 million.

Underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) fell 4.6% to €187 million in the period. Its EBITDA margin - a key measure of profitability - slipped to 9.8% from 10.9% a year earlier.

Overcoming Adversity

On the performance of its Continente business, Sonae MC chief executive Luís Moutinho said, “Throughout 2020, with the spread of the coronavirus pandemic, Sonae MC was able to overcome emerging adversities, adapting its operational processes with agility, guaranteeing a high-level execution of its teams, and continuing to provide an excellent service to its customers, thus boosting superior performance.

"The throes of the pandemic should last some more time and Sonae MC will continue to live up to its critical role in the grocery industry. We have a renewed set of ambitions and feel confident and well prepared to face 2021.”

Online sales at Sonae MC rose by 80% in the past year, the group added, driven by the pandemic.

News by Reuters, edited by ESM. Click subscribe to sign up to ESM: European Supermarket Magazine.

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