Q1-3 Net Profit Falls 30% at Mercator

By , 27 Nov 2019, 17:02 PM Business
Q1-3 Net Profit Falls 30% at Mercator JL Flanner

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STA, 27 November 2019 - The Slovenian retail group Mercator posted EUR 6.21 million in net profit in the first nine months of the year, down 30.3% year on year. The parent company's net profit was meanwhile up 7.6% to over EUR 15 million, the company announced on Wednesday.

Mercator explained in a press release that the group results for this and last year were not fully comparable because of a change in accounting standards and last year's sale of a hopping centre and land in Serbia.

The effect of the extraordinary effects excluded, the group's net profit would be higher by EUR 9.56 million.

The Mercator group increased its sales revenue by 1.6% to EUR 1.64 billion, and the parent company by 5.6% to EUR 929 million.

The group's net financial debt was down compared to the end of the third quarter last year by 18.1% or EUR 139.4 million to EUR 629.2 million.

Most of the decrease is accounted for by Mercator selling in February the premises of ten of its shopping centres to Supernova, which it now leases from the Austrian shopping centre operator.

The EUR 116.6 million from the sale was intended for settling financial obligations, the company said, adding that it would continue to sell non-core investments on all of its markets.

In addition to deleveraging, the group employing 19,800 people continues with its largest investment in history, a new logistics and distribution centre in Ljubljana.

"A clear strategy, new commercial platforms and new, innovative concepts increase Mercator's competitiveness and apparently produce good operating results," chairman Tomislav Čizmić said in the release.

The group's most important markets are Slovenia and Serbia, where it generated 57.3% and 31.1% of its sales, respectively. Sales in Montenegro accounted for 5.6% of total sales, and in Bosnia-Herzegovina for 5.1%.

Sales revenue in the retail segment was up by 1.4% to EUR 1.24 billion. In Slovenia alone, sales in this segment were up by 4.7% to EUR 691.4 million.

With a 69.57% stake, the Croatian conglomerate Agrokor is Mercator's largest owner, followed by Russia's Sberbank (18.54%), Hungary's OTP Bank (6.74%) and Austria's Addiko Bank (2.84%).

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