Jeronimo Martins' third-quarter profit soars 28%, margin narrows

By Patricia Vicente Rua

LISBON (Reuters) - Portuguese retailer Jeronimo Martins on Wednesday posted a 28% jump in third-quarter net profit, driven by a robust sales increase at its market-leading chain Biedronka in Poland, although its profitability narrowed.

In a statement, Chief Executive Pedro Soares dos Santos expected profitability to remain under pressure in what remains of the year from substantial cost inflation, while the company has to reduce its prices to sell more.

He added that "with the war in Ukraine with no end in sight and the escalation of tension in the Middle East, the impacts on the fragile consumer confidence are highly unpredictable."

The company reported a net profit of 202 million euros ($214 million) between July and September.

Consolidated sales rose 22% to 7.9 billion euros in the quarter, fuelled by a 24% rise at the discount chain Biedronka, where sales reached 5.5 billion euros.

At home, its Pingo Doce supermarkets posted a 9.3% rise in sales to 1.3 billion euros, while in Colombia, its expanding Ara chain booked 666 million euros, up 42.5% from a year earlier.

Consolidated earnings before interest, taxes, depreciation and amortisation (EBITDA) grew 18% to 586 million euros, but the EBITDA margin - a key measure of profitability - slipped to 7.4% from 7.6% a year ago.

The company plans to keep investment in 2023 at last year's levels of around 1 billion euros, of which about 45% will be invested in Poland, it said.

($1 = 0.9454 euros)

(Reporting by Patrícia Vicente Rua; Editing by Andrei Khalip)