top of page

Portugal: Jerónimo Martins' profits grow 59% between January and March

Jerónimo Martins, owner of discount retail chains ARA in Colombia and Biedronka in Poland, saw net income rise across the group to 140 million euros in the first quarter of this year, up 59.1% from 88 million in the same period last year, according to the statement sent by the company to the CMVM.

EBITDA (earnings before interest, taxes, depreciation and amortization) increased by 20.1% to 446 million euros, while sales grew by 23.4% to 6.8 billion.

The EBITDA margin stood at 6.6%, which compares with 6.7% in the first quarter of last year, according to Jerónimo Martins. "As anticipated, and reflecting the pressure on gross margin exerted by the price investment made by all food retail brands, the group's EBITDA margin fell," the statement read.

Despite this, "the strong sales performance, resulting from the intense commercial dynamics and the strengthening of price competitiveness" in the different brands "drove a solid growth in the value of EBITDA", the group argues, although consumption has "remained pressured by the effects of inflation".

Growth is seen in "all countries" in which Jerónimo Martins operates: "In Poland, Biedronka increased volumes and mitigated the impact on its Like-for-Like growth of the substitution for lower-priced products", while "in Portugal and Colombia, Pingo Doce and Ara recorded increases in sales of the same store park despite the acceleration of the 'trade-down' in the quarter having impacted their respective growth rates."

Still, the company adds, "comparisons with last year will become more demanding from the second quarter of 2023, as the comparison is made with 2022 values that incorporated progressively more intense food price increases."

Pingo Doce sales grow 9.4% In Portugal, according to Jerónimo Martins, Pingo Doce "maintained its investment in strong and relevant promotions for consumers", with sales growing by 9.4% to 1.1 billion euros. In the first quarter, Pingo Doce opened two new stores and remodeled seven others.

In Recheio (cash & carry), there was "a strong increase in sales, which reached 295

million euros (+29.2%), in a context of healthy growth of HoReCa" and that the group attributes to the "competitiveness" of this segment.

"It is anticipated that the challenges posed by the fragility of domestic consumption and the installed trend of 'trading-down' will remain throughout 2023," the company says. However, at the same time, it expects that "tourism will remain the main growth engine of the HoReCa sector" [hotels, restaurants and cafes].

The EBITDA of the two businesses in Portugal was 77 million euros, 13.5% higher than the same period last year, with "the respective margin standing at 5.6%, in line with the first quarter of 2022".

"While in Pingo Doce the EBITDA margin fell by 13 bps [basis points] following the strong price investment and the impact of the trade-down, in Recheio the margin rose, following the trend associated with the recovery of operating leverage," the retailer detailed.

'An anti-inflationary force'

Quoted in the statement, the group's CEO, Pedro Soares dos Santos, noted that "food inflation remains high in the three countries" where Jerónimo Martins has business, considering that it "continues to put pressure on consumer confidence and the purchasing power of families." It guarantees, therefore, that there is a "bet on investing in price" to strengthen market positions.

"The results of the first three months of the year confirm the operational and competitive strength of our brands," he says, arguing that "they show great ability to read the surroundings and the flexibility necessary to adjust their proposals to the needs of consumers."

"We will remain, as before, committed to being an anti-inflationary force," the CEO promises, assuring that it will "absorb some of the pressure of rising prices on consumers," and at the same time realize the planned investment program.


bottom of page