Reuters: Hot Stocks: UPDATE 1-J.Martins quarterly profit drops on tough competition in Poland

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UPDATE 1-J.Martins quarterly profit drops on tough competition in Poland Oct 31st 2013, 09:18 Share this Email Print Reprints Thu Oct 31, 2013 5:18am EDT * EBITDA growth seen slightly lagging sales in 2013 * Net profit 115 mln euros, below forecasts of 124 mln euros * EBITDA up 3 pct at 224 mln euros * Shares down 3.4 pct (Adds sales in Poland, Portugal, EBITDA outlook, share price) LISBON, Oct 31 (Reuters) - Portuguese retailer Jeronimo Martins missed forecasts with a 3.8 percent drop in third-quarter net profit which was hit by heavy sales promotions in a tough competitive environment in its key market, Poland. Jeronimo Martin's shares fell 3.5 percent in early trading to 13.8 euros as the company also warned on Thursday its 2013 growth in earnings before interest, taxes, depreciation and amortisation (EBITDA) would slightly lag sales growth. Previously it expected EBITDA to rise in line with double-digit sales growth. Net profit fell to 115 million euros ($158 million), the company said in a statement. Analysts had forecast, on average, a net profit of 124 million euros. Jeronimo Martins, which is the second-largest retailer in Portugal and Poland's largest food retail firm via its Biedronka discount chain, said total sales rose almost 10 percent in the quarter from a year ago to nearly 3.06 billion euros, compared to 3.07 billion euros expected by analysts. "Since the end of the second quarter the food retail market (in Poland) has become much more competitive with a high level of promotions throughout the quarter," the company said, adding that its market share in Poland continued to increase. Same-store sales in Poland rose 4 percent in the quarter. In Portugal, food retail sales increased about two percent and the company said that although the environment remains tough, there are some signs of stabilization as the bailed out country started to emerge from its worst recession in decades. EBITDA rose about 3 percent in the quarter to 224 million euros, compared to 233 million expected by analysts. In the first nine months of the year, EBITDA rose 7.8 percent while sales increased 11.5 percent. "For the full year we expect the consolidated sales to grow double-digit in constant currency. The groups EBITDA will increase slightly below sales, with EBITDA margin around 20-30 basis points below 2012 due to higher price investment in Poland and to the impact of the investments in the start-up businesses," the company said. ($1 = 0.7262 euros) (Reporting By Andrei Khalip; Editing by Elaine Hardcastle) Link this Share this Digg this Email Reprints

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