By Sergio Goncalves
(Reuters) -Portuguese retailer Jeronimo Martins on Wednesday posted a 19.7% drop in fourth-quarter net profit despite robust sales, as discounts offered in its key market Poland, along with stubborn cost inflation, hit its margins.
The food retailer said in a statement it earned 159 million euros ($173.1 million) in the quarter, missing the 175 million average forecast by analysts polled by LSEG.
Consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) grew 3.6% to 598 million euros, but its EBITDA margin slipped to 6.9% at end-2024 from 7.1% a year earlier.
CEO Pedro Soares dos Santos said that, despite the “very high” uncertainty in its three markets – Poland, Portugal and Colombia – the retailer is focused on “delivering the most competitive prices”, reinforcing cost discipline to manage margin pressure.
He said the group suffered from “deflation in its baskets after two years of substantial price increases”, high cost inflation and intense competition, especially in its Polish market-leading chain, Biedronka.
Consolidated sales increased by 6.7% to 8.7 billion euros in the quarter, with growth across all its brands, notably at Biedronka, where sales rose by 7.4% to 6.1 billion euros.
At home, chain Pingo Doce posted a 4% rise in sales to 1.36 billion euros, while the company’s growing Colombian network Ara booked 724 million euros in sales, up 5.6% from a year earlier.
For the full year 2024, profit fell 21% to 599 million euros as sales grew 9.3% to 33.5 billion euros.
The board will propose a dividend payment of 0.59 euros per share, compared to 0.655 euros the previous year.
It plans to invest around 1.1 billion euros in 2025, the same it invested last year, opening 130-150 stores in Poland.
It expects to add 150 locations in Colombia, 10 Pingo Doce supermarkets in Portugal and plans to open 50 stores in Slovakia, where it has just entered, until the end of 2026.
($1 = 0.9184 euros)
(Reporting by Sergio Goncalves; editing by Diane Craft and Stephen Coates)
