Net sales

Sonae’s Portuguese Q4 profit rises 46% and sees challenges ahead

Sonae, which owns the largest food retailer in Portugal, said fourth quarter net profit rose 46% after most coronavirus restrictions were lifted, although challenges remain.

Sonae, whose business ranges from food distribution to telecoms, earned 109 million euros from October to December, up from 75 million euros a year earlier when the pandemic was still restricting private consumption.

Consolidated sales rose 6.7% to 2 billion euros in the fourth quarter, it said in a statement.

Inflation rising

As the effects of the pandemic fade, the company is dealing with the consequences for the Portuguese economy of the war in Ukraine, including inflation due to food shortages.

Sales at its Sonae MC food distribution unit, which operates around 300 hypermarkets and large supermarkets under the Continente brand, rose 8.9% to 1.5 billion euros, even as the war in Ukraine and rising Energy costs “could put pressure on its business,” the statement said.

Chief Executive Claudia Azevedo said that in 2022 the uncertainty and challenges “will not be less” than in the last two years of the pandemic, but Sonae has a “very stable financial situation, which allows it to explore exciting new opportunities”.

Earnings before interest, taxes, depreciation and amortization (EBITDA) increased by 7.9% to 208 million euros in the quarter, while its EBITDA margin remained stable at around 10.3%.

Rise in profits

For the whole of 2021, Sonae’s profit almost quadrupled to €268 million, while EBITDA increased by 18% to €738 million

Its debt was reduced by almost half to 563 million euros in 2021, while operational investments increased by 5.8% to 279 million euros, he said.

Portuguese rival Jeronimo Martins reported a 49% increase in fourth-quarter net profit last week.

News by Reutersedited by ESM- your source for the latest retail news. Click subscribe to register ESM: European Supermarket Magazine.