Business News

Mercator Halves Last Year's Profit

Ljubljana, 25 February (STA) - The group around Slovenia's No. 1 retailer Mercator generated EUR 21.1m in net profit last year, down 48.2% on 2008. The company blamed the fall in profit on the economic turmoil and investment, as well as on lower extraordinary profits compared with 2008.

The results, released after they were reviewed by the supervisory board of the company on Thursday, put the group's sales revenues for 2009 at EUR 2.6bn, which is down 2.4%, mainly due to the depreciation of the Serbian currency, the dinar.

Mercator spent EUR 159.2m on investment, the bulk in the development of its retail network. It entered the Bulgarian market in October by opening a hypermarket in Stara Zagora, and then expanded to the Albanian market with a hypermarket and a sports goods store in Tirana in December.

The release from Mercator highlighted 2009 as a very demanding business year. Economic activity in all its markets was much lower than expected, which reflected in lower consumer demand and changes in its structure.

At the end of last year Mercator agreed a strategic tie-up with Croatian retailer Getro, which it completed in February this year. The accord gave Mercator long-term lease on 16 cash&carry-type stores, which enhanced its position as the second biggest retailer in Croatia.

The group's headcount at the end of December was 21,404, 40% of this on foreign markets.

The group plans to generate EUR 2.75bn in sales revenues and EUR 21.9m in net profit this year. It will earmark EUR 120m for investment and increase its headcount to 22,167.

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