Mercator's operating profit rises steeply in the first half of 2021
Despite the ongoing COVID-19 epidemic and many measures that restricted our operations, Mercator Group's normalized EBITDA increased by 11.1% in the period 1–6, 2021, and amounted to EUR 92.4 million for the period. Operating profit (EBIT) increased in the first half of 2021 and reached EUR 40.4 million. Mercator Group's sales revenue in the first half of 2021 on track relative to the budget, and it increased by EUR 40 million, or 3.9%, relative to the equivalent period before the declaration of the COVID-19 epidemic (1–6, 2019). The highest growth of revenue was recorded in retail. In Slovenia, revenue from these operations increased by 7.3% relative to the equivalent period prior to the declaration of the COVID-19 epidemic (1–6, 2019).
In the first half of 2021, Mercator Group's sales revenue amounted to EUR 1.1 billion, which is 0.4% less than in the corresponding period of the preceding year. Sales revenue was also lower than in the last year's equivalent period in retail, by 1.3%; however, such comparison should consider the above-average retail revenue growth in March 2020 due to the onset of the COVID-19 epidemic, and the effects of restrictions of our operations because of the epidemic in 2020 across all Mercator's non-core operations.
"In order to alleviate the negative effects of the COVID-19 epidemic, Mercator introduced a number of activities and initiatives for optimization and cost efficiency, which completely neutralized the negative effect of the drop of revenue due to the epidemic. As a result, normalized EBITDA increased by 9.9%. Only timely and responsible preparation for the crisis allowed Mercator Group to sustain its positive performance trends. In the recent period, Mercator also took a big leap forward in terms of digitalization and personalization of offer, which yields additional competitive advantage," stressed Tomislav Čizmić, President of Mercator's Management Board.
As at June 30, 2021, Mercator Group's net financial debt (not taking into account the IFRS 16 Leases) amounted to EUR 558.2 million, which is 5.1% less than as at June 30, 2020. Decrease in total financial liabilities in the first half of 2021 relative to the same period last year was a result of complete repayment of certain financial leases in Slovenia. Mercator Group's total financial liabilities increased by EUR 23.7 million relative to December 31, 2020, which is mostly a result ˙of partial increase of the Super Senior loan.
In the first half of 2021, Mercator Group's capital expenditure amounted to EUR 13.6 million. Of the total investment amount, 71.1% was used for investments in Slovenia and 28.9% was used for investments in international markets. Investments into refurbishments or updates of existing stores account for 54.2% of total investments in the period.
