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Slovenia Business Week no. 35: Mercator Beats Profit, Sales Forecasts

Retailer Mercator generated sales of SIT 193.3bn (EUR 805m) and made a net profit of SIT 5.65bn (EUR 23.6m) in the January-to-June period, which is almost as much as in the whole of last year

Retailer Mercator generated sales of SIT 193.3bn (EUR 805m) and made a net profit of SIT 5.65bn (EUR 23.6m) in the January-to-June period, which is almost as much as in the whole of last year.  

Sales exceeded plans by 7.6%, and the end-year figure could top SIT 400bn (EUR 1.67bn), chief executive Zoran Jankovic said after a meeting of the supervisory board on Tuesday, 23 August.  

Moreover, the Croatian network of retailer Era, which Mercator has recently acquired, will add about SIT 10bn (EUR 41.7m) to the end-year figure.  

The profit has been boosted by a one-off sale of the company's stake in chemical group Sava, which earned Mercator a net profit of SIT 1.5bn (EUR 6.3m).  

Jankovic attributes the half-yearly profit to the effects of sales growth and streamlining. "The first results of takeovers and the resulting reduction of overhead are starting to show," he said.

Not all companies in the group posted a profit, though. Food company Eta and the Ljubljana department store Maximarket posted a loss, as well as the Mercator subsidiaries in Croatia and Bosnia-Herzegovina.  

The latter two are to achieve the break-even point next year. "In the phase of intensive investment, companies are encumbered by expenses before the projects are completed and start to generate revenue," he noted.  

According to Jankovic, construction of a new shopping centre in Sarajevo is nearing completion and the facility will open in December. Construction is also underway at three locations in Croatia, while a megamarket is to open in Cacak, Serbia-Monrenegro, in December.  

The supervisory board also confirmed the minutes of the last session, at which the supervisors endorsed a 20% capital increase worth SIT 24.4m (EUR 101.8m).  

Jankovic said the supervisors has no complaints about the contract with Era either. The purchase of Era's assets in Croatia will add 1,000 employees to the group's payroll, increasing the total number to 17,000. The company has 4,000 employees outside Slovenia.

Source: Slovene Press Agency STA

Author: STA