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LJUBLJANA (Slovenia), December 14 (SeeNews) - Slovenian retailer Mercator [LJE:MELR] said on Wednesday that consolidated sales revenue for 2017 is budgeted at 2.4 billion euro ($2.5 billion), as 68.5 million euro will be allocated to investments.
The planned revenue for next year is less than the 2016 estimate mainly due to divestment of non-core activities this year, including the sale of brand Modiana and the Intersport Group, the company said in a Ljubljana bourse filing.
The drop of revenue will be the highest in Croatia and Bosnia and Herzegovina, as in these markets Mercator will only conduct its real estate operations in 2017.
"Mercator's key policy remains focusing on satisfying the needs of modern consumers and offering well-priced shopping. Positive effects of synergistic effects generated, withdrawal from underperforming markets and adoption of the new strategy in March 2016 are already evident in performance," the company noted.
In terms of investment, the majority of the 68.5 million euro will be dedicated to a project to build a logistics and distribution centre in Ljubljana, scheduled for opening in 2019. Thus, Slovenia will absorb the predominant part - 72% - of the total investment funding.
Aside from the funds for the new Ljubljana centre, 39.7% of the remaining investment funds will be allocated to refurbishments and investment maintenance of the existing sales units, 34.4% will be dedicated to expansion of retail capacity, 19.2% for logistics, 4.6% for IT, and 2.1% will be invested into non-trade activities.
Mercator Group's net financial debt as at the end of 2017 is planned at 784.4 million euro. Cash flow to be generated by Mercator Group in 2017 will be largely allocated to deleveraging or repayment of financial liabilities maturing in 2017, the company also said.
Earlier this year, Mercator said its sees revenues of 2.6 billion euro this year.