Spanish supermarket chain DIA posted a net loss of €352.6 million ($400 million) in 2018, the company said on Friday, three days after its main shareholder launched a takeover bid.
That compared to a profit of €101.2 million a year earlier, the company said, adding that sales were €7.3 billion for the full year, down from €8.2 billion in 2017.
'A Turbulent Year'
Chief executive, Borja de la Cierva, said, "2018 was a turbulent year for DIA, probably the most difficult since the company's foundation more than forty years ago. However, it is also clear that despite recent events the Company’s vast store network has continued to perform and delivered over €7 billion in net sales.
"We continue to be a major grocery retailer because every day, millions of loyal customers in Spain, Portugal, Argentina and Brazil put trust in our offer and enjoy convenience of our stores, quality of our products and attractiveness of our prices."
Loss Of Market Share
DIA has failed to halt a steady loss of market share in Spain, where its low-cost model flourished during a painful recession, but has since languished behind competitors including Germany discounters Aldi and Lidl, and domestic rival Mercadona.
Russian tycoon Mikhail Fridman, who currently holds just under 30% of the company, moved on Tuesday to buy the whole group in a bid valuing it at more than €400 million.
Fridman's offer, made through his LetterOne (L1) fund, aims to block a €600 million share issue DIA's management agreed in December as part of a sorely-needed financing deal.
DIA shares, prone to volatility after an almost 85% drop in the last year, slipped 0.7% in early trade compared to 0.45% fall of the Ibex.
Outlook
De la Cierva added, "Our new strategy is a transformational plan articulated around better offer, improved service and great experience for our customers. It is rooted in our fundamental strengths, yet the way we do business, the organisation and its culture will all undergo significant changes to help us regain credibility and ensure we remain the preferred choice for consumers.
"The management team has already started to implement the plan, and is fully committed and incentivised to deliver its targets.[...]We are fully determined to make it a success for us and our stakeholders, and to continue winning on convenience, value and quality."
News by Reuters, edited by ESM. Click subscribe to sign up to ESM: European Supermarket Magazine.
