# Inflation boosts Jeronimo Martins’ Q4 profit but dents margins
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2023-03-23
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Jeronimo Martins reports 23% profit rise despite inflation
Meta Description: Discover how Portugal's second-largest retailer Jeronimo Martins saw a 23% increase in net profit in Q4, driven by soaring sales in Poland amidst high
URL: https://financedigest.com/inflation-boosts-jeronimo-martins-q4-profit-but-dents-marginshtml

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LISBON (Reuters) – Portugal’s second-largest retailer Jeronimo Martins on Wednesday posted a 23% jump in fourth-quarter net profit as soaring inflation boosted sales – especially in Poland, its key market – but also dented its margins.

The company, which netted 171 million euros ($185.65 million) from October to December, warned that food inflation remained high and only showed early signs of abating.

“Almost three months into 2023, inflation in the countries where we operate is more persistent than expected at the end of 2022, reducing consumer confidence and household purchasing power and continuing to put pressure on our margins and costs,” it said in a statement.

Consolidated sales in the last quarter of 2022 rose 23% to 7 billion euros, driven by the company’s market-leading Polish supermarket chain Biedronka, which [posted a sales](https://www.financedigest.com/mercedes-posts-rise-in-q1-sales-boosted-by-evs-premium-cars.html "Mercedes posts rise in Q1 sales boosted by EVs, premium cars") increase of 24% to 4.9 billion euros.

Although Polish consumers have grown more cautious and price-sensitive, spending on [food has outpaced food inflation](https://www.financedigest.com/average-annual-uk-food-bill-set-to-rise-454-pounds-as-inflation-soars.html "Average annual UK food bill set to rise 454 pounds as inflation soars"), which rose throughout 2022 to reach an average of 15.4%.

At home, supermarket chain Pingo Doce posted a 13.7% rise in sales to 1.2 billion euros, while in Colombia, its Ara stores booked 477 [million euros](https://www.financedigest.com/germanys-merck-to-invest-300-million-euros-in-us-gas-plant.html "Germany’s Merck to invest 300 million euros in US gas plant") in sales, up 38.5% from a year earlier.

Consolidated earnings before interest, taxes, depreciation and amortisation (EBITDA) grew 14.8% to 506 [million euros](https://www.financedigest.com/hellofresh-sees-2023-core-profit-of-460-540-million-euros.html "HelloFresh sees 2023 core profit of 460-540 million euros") in the quarter. The EBITDA [margin fell to 7.2% from 7.8% a year](https://www.financedigest.com/inpost-sees-better-margin-in-poland-plans-no-job-cuts-this-year.html "InPost sees better margin in Poland, plans no job cuts this year") earlier.

Although a disinflation scenario is expected for this year, it is still difficult to anticipate the level of disinflation for the [second half of the year,”](https://www.financedigest.com/ericssons-board-rebuked-by-shareholders-at-agm-for-second-year-in-a-row.html "Ericsson’s board rebuked by shareholders at AGM for second year in a row") the company said.

For the full-year 2022, Jeronimo Martins’ [profit rose](https://www.financedigest.com/zur-rose-delays-profitability-break-even-to-2024.html "Zur Rose delays profitability break-even to 2024") 27.5% to 590 million euros, while EBITDA increased 17% to 1.85 billion euros. Sales grew 21.5% to 25.4 [billion euros](https://www.financedigest.com/telecoms-group-orange-signs-sustainability-linked-refinancing-of-6-billion-euros-syndicated-credit-facility.html "Telecoms group Orange signs sustainability-linked refinancing of 6 billion euros syndicated credit facility").

The company added its capex programme is expected to be in line with 2022, with 45% of it in Poland.

($1 = 0.9211 euros)

(Reporting by Patricia Vicente Rua; Editing by David Latona and Richard Chang)


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