Strong sales swing Portugal's Sonae to Q1 profit despite pandemic

LISBON, May 20 (Reuters) - Portugal’s Sonae, which owns the country’s largest food retailer, swung to a net profit of 1 million euros ($1.22 million) in the first-quarter on robust sales, despite the COVID-19 pandemic.

The group, which runs around 300 Continente hypermarkets and large supermarkets and non-food stores such as Worten consumer electronics shops, Sportzone stores and other retail chains, reported a net loss of 59 million euros between January and March 2020, due to a high level of provisions as the pandemic hit the country.

Consolidated sales in the first quarter of this year rose 5.8% to 1.6 billion euros, with sales from the food retail unit Sonae MC increasing 6.6% to 1.3 billion euros, the company said.

Underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) jumped 14% to 114 million euros. The underlying EBITDA margin - an important measure of profitability - rose to 6.9% from 6.4% a year earlier.

Portugal was in lockdown for most of the quarter, from mid-January until mid-March, to contain a surge in coronavirus cases, with supermarkets and hypermarkets among the few stores open.

Worten sales jumped 17% in the first quarter due to online purchases, the company said.

“In Portugal, the beginning of 2021 was a dramatic period in terms of public health. We faced a very adverse context, with many of our stores, cinemas and shopping centers closed,” Sonae’s Chief Executive Officer Claudia Azevedo said in a statement.

She added that despite the challenging environment, offline and online sales at Sonae MC and Worten had allowed the company to offset results from business lines most affected by the closures. Sonae said capital expenditure more than doubled to 126 million euros, from a year earlier and net debt rose by 164 million euros to 1.4 billion euros at the end of March from a year ago. ($1 = 0.8187 euros) (By Patrícia Vicente Rua; Editing by Catarina Demony, Kirsten Donovan)