Slovenia's Mercator Group financial result from operating activities in 2014 was positive at €12.4 million euro, compared to €36 million a year earlier.
Despite the good performance, the Slovenian retailer ended 2014 with a net loss of €44.5 million, due to restructuring and reprograming of financial obligations. In comparison, the net losses a year earlier amounted to €16.9 million. Revenue declined by 4.1 per cent to €2.6 billion in 2014.
The lower revenue is a result of closing down of underperforming sales units, a decrease in overall retail area, changes in consumer shopping behaviour, and transfer of retail units in Croatia and Bosnia and Herzegovina to Konzum as a part of the integration process of Agrokor and Mercator Group. The loss of revenue was partly offset by the transfer of Agrokor's Idea units in Serbia to Mercator.
Mercator will continue to implement cost optimisation measures to improve its profitability and expects to turn to net profit of €59.6 million in 2015 on revenues of €2.8 billion.
Separately, Mercator has sold Pekarna Grosuplje, its in-house bakery and Slovenia's second largest bakery, to local baked goods producer Don Don. The transaction is in line with Mercator’s strategy to focus on its core activities and should be completed by mid-year. The value of the deal was not disclosed, but unofficial reports claim the bakery is worth around €30 million. Last year Pekarna Grosuplje baked 15,200 tonnes of products, placing second after market leader Žito.
© 2015 European Supermarket Magazine – your source for the latest retail news. Article by Branislav Pekic
