Biedronka expansion hits JM's profits - Warsaw Business Journal - Online Portal - wbj.pl
Biedronka expansion hits JM's profits
12th March 2012
The firm opened 239 Biedronka stores in 2011
Courtesy of Biedronka
The 2011 net profit of Portuguese retail group Jeronimo Martins (JM) was lower than forecast, due in large part to the expansion of its Polish discount food chain holding, Biedronka.
Jeronimo Martins’ full-year 2011 profit came in at €340 million, representing a year-on-year increase of 21 percent. The average estimate of a Bloomberg poll of analysts taken prior to the results’ release saw the retailer earning €363.5 million. Sales increased 13 percent to €9.8 billion in 2011.
Jeronimo Martins, which has witnessed a slowdown in its home market, re-focused its attention on Poland, opening 239 new Biedronka stores there last year. The full impact of this investment was not factored in by most analysts, hence Jeronimo Martins’ results coming in below their forecasts.
Polish investments in 2011 corresponded to 70 percent of the group’s total investment program.
Jeronimo Martins’ earnings before interest, taxes, depreciation, and amortization (EBITDA) rose 15.6 percent on the year. According to the company, EBITDA would have been higher but for the opening of a large number of new stores in Poland and the weakening of the złoty against the euro. Analysts say this latter factor led to an increase in rent prices in Poland.
“We expect 2012 to be another good year, driven by the strong growth of Biedronka in Poland,” the company said in a statement.
Of the €650 million it plans to invest in 2012, 80 percent will be pumped into Biedronka. This will include the opening of around 250 new stores this year.
From Warsaw Business Journal by Gareth Price
