Jeronimo Martins' first-quarter profit jumps 59%, margin narrows

By Patricia Vicente Rua

LISBON (Reuters) -Portugal's second-largest retailer Jeronimo Martins on Wednesday posted a 59% jump in first-quarter net income as higher prices to offset soaring inflation boosted sales, though its margins narrowed.

After inflation showed only early signs of abating in the first quarter, a further slowdown is expected this year, but it is still difficult to predict by how much relative to the high prices recorded in 2022, Chief Executive Pedro Soares dos Santos said in a statement.

The company booked a net profit of 140 million euros ($154.71 million) between January and March.

"The Group had a strong start to the year, building on continued solid sales growth despite the pressure of high inflation on consumer demand in the first three months of the year," the company said in a statement.

Consolidated sales in the first three months of the yearrose 23.4% to 6.8 billion euros, driven by its Biedronka chain in Poland, where sales increased 26% to 4.8 billion euros.

Although Polish consumers have grown even more cautious and price-sensitive since the last quarter of 2022, spending on food at Biedronka's discount outlets outpaced food inflation of a whopping 22.9% in the first quarter.

In Portugal, sales at the Pingo Doce supermarket chain rose 9.4% to 1 billion euros, while in Colombia, its Ara stores booked 494 million euros in sales, up 29.4% from a year earlier.

Consolidated earnings before interest, taxes, depreciation and amortisation (EBITDA) grew 20.1% to 446 million euros in the quarter. The EBITDA margin fell to 6.6% from 6.7% a year earlier, reflecting pressure from investments made in the period.

The company plans to invest around 1 billion euros this year, 45% of which in Poland where it wants to open between 130-150 stores and remodel about 350 stores.

($1 = 0.9049 euros)

(Reporting by Patricia Vicente Rua; Editing by Andrei Khalip and Emelia Sithole-Matarise)