Jeronimo Martins' profit rises, food deflation a challenge

Jeronimo Martins SGPS SA

06/03/2024 19:23

LISBON, March 6 (Reuters) - Portuguese retailer Jeronimo
Martins  JMT.LS  on Wednesday posted a 16% jump in
fourth-quarter net profit, driven by a sales increase at its
Polish market-leading chain, Biedronka, but said food deflation
would likely shrink its margins.    
    The company made a net 198 million euros ($216 million) in
the quarter, slightly exceeding the 193.6 million average
forecast by analysts polled by LSEG.       
    In a statement, Chief Executive Pedro Soares dos Santos said
"as we enter 2024, we know that the food deflation expected for
the first half of the year will be our biggest challenge".
    The company also expected its costs to increase, adding that
"this combination will further pressure our margins". 
    Even as consolidated earnings before interest, taxes,
depreciation and amortisation (EBITDA) grew 14% to 578 million
euros, its EBITDA margin - a measure of profitability - slipped
to 7.1% at end-2023 from 7.2% a year earlier.
    Consolidated sales rose 16.7% to 8.16 billion euros in the
quarter, fuelled by a 17.2% rise at Biedronka, where sales
reached 5.7 billion euros.
    At home, supermarket chain Pingo Doce posted a 5.4% rise in
sales to 1.3 billion euros, while the company's growing
Colombian network Ara booked 685 million euros in sales, up
43.8% from a year earlier.      
    Jeronimo Martins plans to keep investment in 2024 at last
year's levels of around 1.2 billion euros, opening 130-150
stores in Poland and remodelling 300 others, adding 150
locations in Colombia and 10 Pingo Doce stores in Portugal. 
    It also expects to open its first few stores in Slovakia by
year-end.    
    For the full-year 2023, profit rose 28% to 756 million euros
as sales grew 21% to a record 30.6 billion euros. The board will
propose a dividend payment of 0.655 euros per share, which
represents an increase of 19.1% from the previous year.
($1 = 0.9171 euros)

 (Reporting by Patrícia Vicente Rua; Editing by Andrei Khalip
and Barbara Lewis)
 ((patricia.rua@thomsonreuters.com; +351 21 123 2775; Reuters
Messaging: patricia.rua.reuters.com@reuters.net))