LJUBLJANA (Slovenia), September 24 (SeeNews) – Slovenian retailer Mercator [LJE:MELR] said on Thursday it turned to a consolidated net loss of 69.2 million euro ($80.6 million) in the first half of 2020, from a consolidated profit of 2.4 million euro in the like period of 2019.
"Due to the revaluation of property and impairments to other assets, especially due to the effect of COVID-19, Mercator Group ended the period 1–6 with a negative net income of EUR 69.2 million. It should be underscored that these impairments comply with the International Accounting Standards (IAS 36) and that they did not affect Mercator Group's cash flow or business performance," Mercator said in a statement.
When adjusted to the effects of property revaluation and other impairments to property, plant, and equipment, Mercator Group's comparable net income for January-June is a positive 86,000 euro.
Consolidated sales revenue rose 4.4% on the year to 1.07 billion euro in January-June, while revenue from retail sales was up 7.4% to 860 million euro.
Consolidated normalised EBITDA went up by an annual 1.7% to 83.4 million euro in the first six months of the year.
"Despite the pronouncedly negative effects of the epidemic, Mercator Group succeeded in sustaining the positive trends especially in its core activity – fast-moving consumer goods retail," the company noted.
It added that its wholesale activity was negatively affected by the coronavirus-prompted closure of all hospitality establishments and public institutions such as schools and kindergartens which are among the main customers of Mercator Group's wholesale operations.
"Moreover, Mercator Group also felt the impact of the epidemic in its manufacturing operations, mostly due to considerable decrease in orders. The same applies to technical consumer goods, due to the temporary lock-down of its stores," the company said.
The group's total assets shrank 5.9% on the year to 1.9 billion euro at the end of June.
The number of employees rose 0.9% to 20,381, with half of them employed in Slovenia and the other half in the company's units in Serbia, Montenegro, Bosnia and Croatia.
On Tuesday, the European Commission approved unconditionally the proposed acquisition of Mercator by Croatia's Fortenova Group, successor to the collapsed food-to-retail concern Agrokor.
Mercator was part of the Agrokor group from 2014 until April 2019, when all Agrokor assets except Mercator were transferred to Fortenova under a settlement agreement with Agrokor's creditors.
"The strong owner will enable Mercator's further growth and development and support Mercator's strategic projects, including a EUR 130 million investment in a new logistics center in Ljubljana,” Mercator's management board president, Tomislav Cizmic, said in the statement.
Mercator's shares traded flat at 14.30 euro by 13:26 CET on Thursday on the Ljubljana bourse.
($=0.859087 euro)
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