Jerónimo Martins results driven by Polish division

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Portuguese group Jerónimo Martins has announced a 78 per cent
increase in its half yearly profits, boosted by a significant
increase in its Polish retail operations, helping the division to
increase its lead in that market.

The groups consolidated results saw net profits reach €30 million, on the back of sales increasing by 1.3 per cent on a like for like basis to €1.618 billion. The company said that the result was also helped by a good operating performance and a reduction in financial costs, which helped to reduce debts by €230 million.

However, the company did also point out that further benefits had been made from its recent switch to international accounting standards (IAS/IFRS), which had some positive affect on goodwill and other intangible assets. Further to this debt had also been reduced due to increased share investment and subsequent reinvestment.

Although results in the Portuguese market were relatively flat due to a slow down in consumption and increased competition, the group's performance in Poland was anything but. The company reported that its Biedronka chain continued to show a strong sales and operational cash flow performance, consolidating its leadership of the Polish food market.

The strong performance meant that the company was able to increase its Polish sales by 14.9 per cent in local currency, helped by the fact that the company is currently increasingly the number of stores from 637 to 690 by the end of the year.

Sales stood at €67.831 million, accounting for 28.9 per cent of the group's total turnover. This result came despite the fact that the zloty has been largely devalued following Poland's accession to Europe on 1 May. The company also reported that the division's gross profit margin (EBITDA) for the half rose to 4.5 per cent of the total sales for the chain.

The company said that it considered the results to be even more significant considering that one of the most important business categories - drinks - was adversely affected during the last three months by the bad weather in the whole Central Europe.

Jerónimo Martins​ said that for the second half it was still concentrated on finalising the sale of its shares in Eurocash, which will see payments made over a nine year period. On top of that the capital increase experienced in the first half of the year is expected to give the financial flexibility to benefit from further investment opportunities, allowing it to grow in a strategic and planned manner.In Poland, the company said that Biedronka will continue with its expansion plan, which will enable it to consolidate its position and will lead to even higher levels of return.

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