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Mercator Reports EUR 22M Net Loss After Nine Months

Ljubljana, 13 November (STA) - The group around Slovenia's leading retailer Mercator reported on Tuesday a EUR 22m net loss after the first nine month of 2012, attributing it to the slowing economy in the region, the debt crisis, the drop in exports and imports in Slovenia and unfavourable currency movements in Serbia.

The loss comes despite a 0.7% year-on-year increase in net sales revenues to EUR 2.1bn, which is 72.2% of the yearly plan. Revenue in Slovenia was down 2%, while it increased 4.4% abroad.

Revenue increase the most, by 53.7%, in Bosnia-Herzegovina, mostly as a result of the takeover of the operations of Drvopromet, said Mercator, which employed 24,208 people on the level of the group at the end of September.

The group's nine-month earnings before interest, taxes, depreciation, and amortization (EBITDA) were notably EUR 95.1m, which is 61.8% of the yearly plan. Sales profit amounted to EUR 33.8m, which is 44.2% of the yearly plan.

While blaming the crisis as well as the more than 8% depreciation of the Serbian dinar for the below-target results, Mercator pointed out it had managed to reduce its debt by EUR 42m in the first nine months.

The group moreover invested EUR 56m in the development of its retail network. It expanded its gross surface area by 43,000 square metres, mostly via rental.

Efforts to sell real estate are continuing, as Mercator has received several non-binding bids and is now engaged in the second round of negotiations before a final analysis and decision which is expected before the end of November.

Cost cutting, which remains one of the top priorities, is also continuing, with savings of EUR 5m already registered in the third quarter.

The management of Mercator has responded to changes on markets by drawing up a new vision and defining the principles of corporate management which strive to make the company the biggest and most successful retailer in the region.

The development of the group will be based on a stable ownership structure and trust by all stakeholders, Mercator moreover wrote in its press release.

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