Portugal's Sonae Q3 net profit falls on record energy, transport costs
Sonae, which owns Portugal's largest food retailer, said on Thursday third-quarter net profit fell 4.2%, despite a solid increase in sales, as record energy and transport costs dented its margins. With businesses ranging from food retail to telecoms, Sonae earned 92 million euros ($92.13 million) from July to September, down from 96 million a year earlier.
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Sonae, which owns Portugal's largest food retailer, said on Thursday third-quarter net profit fell 4.2%, despite a solid increase in sales, as record energy and transport costs dented its margins.
With businesses ranging from food retail to telecoms, Sonae earned 92 million euros ($92.13 million) from July to September, down from 96 million a year earlier. Net income at its food retail unit Sonae MC, which runs about 300 hypermarkets and large supermarkets, dropped 41% to 61 million euros in the quarter, even though sales rose 16%, as it focused on keeping prices low to mitigate the impact of inflation on families, it said in a statement.
Consolidated sales rose 15% to 2.04 billion euros in the third quarter. Consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) fell 5.4% to 224 million euros in the quarter, and the EBITDA margin fell by 2.4 percentage points to 11%.
"Profit margins were naturally depressed, driven by record energy and transport costs, higher supplier prices and by customer migration movements to low-end and low-price products," said Chief Executive Claudia Azevedo. "Nevertheless, consolidated results showed a strong level of resilience, and we continue to have a very solid financial position."
Net debt increased year-on-year by 164 million euros to 1 billion euros by September and the company said it had more than 1 billion euros in cash and unused credit facilities in its vaults. It is fully financed until early 2024 at a cost of about 1%. Portuguese rival Jeronimo Martins reported an increase of 14% in third-quarter net profit two weeks ago. ($1=0.9986 euros)
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