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Mercator's Net Profit Down 21.6% in 2011

Ljubljana, 19 January (STA) - The group around Slovenia's No 1 retailer Mercator made a EUR 23.8m net profit in 2011, down 21.6% year-on-year, while its sales revenues increased by 5.4% to EUR 2.93bn. The group's net profit is expected to decrease by further 34% this year, the company said on Thursday.

The group's net profit decreased in 2011 because of the increasingly difficult economic situation in the second half of the year, the negative trend of the Serbian dinar and the Croatian kuna in the last quarter of 2011, and because of the extra investments needed for price competitiveness, the company said.

The supervisory board of Mercator, which was in session today, moreover adopted the group's business plan for 2012, which will be adjusted quarterly because of the uncertain situation on the markets.

The group expects to make EUR 15.7m in net profit in 2012, which is 34% less than last year, because of the strained economic situation which will also lead to fewer investments. The retailer curbed its investment plan, which will amount to a total of some EUR 88.5m.

Net sales revenues, on the other hand, are to exceed EUR 3bn, up 3.3% year-on-year, this being in line with Mercator's marketing activities and business plans of the company's subsidiaries in Bosnia-Herzegovina and Serbia.

Planning on selling EUR 250m-worth of its real estate, the company said today that it would spend that money to reduce its debt.

The Ljubljana-based group, which employed 24,267 people at the end of 2011, more than 12,000 of them in Slovenia, is not planning major changes in the number of workers this year.

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