The first six months of the year were Jeronimo Martins’ winnings. The owner of Pingo Doce announced a 78.9% increase in earnings. Net income was 186 million euros, compared to 104 million in the same period in 2020, when the company recorded a 36% drop in profits due to the impact of the pandemic.
Consolidated sales rose 6.3% to €9.9 billion. The company says a “strong performance” of sales boosted profitability. EBITDA grew 12.6% to €715 million. The EBITDA figure includes “Covid-19-related costs of €10 million, compared to €29 million recorded in the first half of 2020.
The investment amounted to 200 million euros, of which 60% was allocated to Pedronka. The group says that the first half “was a period of strong cash generation”, which amounted to 82 million euros, further strengthening the balance sheet. Good management of 1H’s working capital flows also contributed to the performance. 20, shown at the time, was affected by lower sales growth and an unfavorable calendar. “The group’s main banner, the Polish Pedroncka, recorded a 9.8% increase in sales in local currency, with sales compared to 7.7%. In the euro, sales reached 7 billion, which is an increase of 6.8% compared to the same period last year.” To better control the epidemiological situation and the consequent relaxation of restrictive measures, there has been an increase in visits to stores. Biedronka took advantage of a greater number of opportunities to interact with consumers,” the group justifies.
Looking only at the second quarter of 2021, the increase in sales in euros was 9.8% to 3.6 million. EBITDA increased 6% to €624 million. Between January and June, 53 stores were opened and 153 stores were reconfigured.
The Polish company Hebei recorded an increase in sales of 7.3% to 123 million euros. In the second quarter, the increase was 30.4% to 66 million. “Online sales made a relevant contribution to the company’s overall performance,” says the company led by Pedro Soares dos Santos, which represented 14% of total sales for the quarter. He reveals that “the brand is already testing its entry into new markets through its e-commerce platform.”
‘Low’ consumption in Portugal
In Portugal, the company highlighted that “consumption remained low and was affected by the sharp drop in tourist activity”.
Pingo Doce sales also felt limited by the number of people that could be inside stores, as well as restrictions on restaurants and cafes and “poor circulation in city centres”. Sales rose 4.6% to €1.9 billion per semester. In the second quarter, the increase was 10.1% to 993 million euros. The ‘sales dynamism’ boosted operating leverage, as EBITDA grew 29.2% to 112 million. Pingo Doce opened three stores in the classroom and renovated seven stores.
At Recheio, sales were similar to those in the same period the previous year, amounting to 398 million euros. Despite restrictions on restaurants and hotels being kept, the banner benefited, in the second quarter, from the reopening of restaurants, a “slight recovery in tourism and a more favorable “comparative basis” from the same period a year earlier, which led to sales to grow by 21.1% to 244 million euros.
In Colombia, Jerónimo Martins felt that the operating environment was “increasingly difficult from April onwards, as restrictions imposed to control the epidemic intensified, albeit less severe than in 2020” and that the May protests in the country “stressed, in certain areas on the functioning of the market. In local currency, Ara’s sales were up 20.9% in the quarter, and the second-quarter increase was 32.8%. Sales in euros were 473 million in the quarter, up 11.9%, and 237 million between April and June, up 26.1%. In the first six months of 2021, Ara opened 41 new stores “in line with its expansion goals”.
For the remainder of 2021, the group maintains the prospects presented in March, “although uncertainty remains regarding the evolution of the pandemic and the extent and depth of its effects on the economies in which we operate,” reads the statement sent to CMVM.
The group expects Poland to be the country with “the strongest foundations for encouraging domestic consumption”. In Portugal, Jerónimo Martins notes that “the recovery in 2021 is still highly dependent on the development of the health crisis, the progress of the vaccination program and its effects on the local market and on the recovery of tourism.” By the end of the year, the group plans to invest 700 million euros, 60% of which will be in Pedronca, “if the restrictive measures that may still be in place in the markets in which we operate do not affect the ability to implement” the plan.
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