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Portugal's Sonae swings to $74 million net profit, CEO is optimistic

July 29 (Reuters) - Portugal’s Sonae, which owns the country’s largest food retailer, swung to a profit in the second quarter of the year thanks to a solid increase in sales after the gradual easing of the COVID-19 restrictions, it said on Thursday.

Sonae posted a net profit of 62 million euros ($73.73 million) in April-June, when Portugal started easing the restrictions to control the pandemic, compared with a 41 million euro net loss in the same period a year ago, it said.

The group, which runs around 300 Continente hypermarkets and large supermarkets and other retail chains, said its consolidated sales rose 5.1% to 1.6 billion euros in the quarter. The sales of its food retail unit Sonae MC increased 4.4% to 1.26 billion euros.

Chief Executive Officer Claudia Azevedo said the second quarter was “a positive and reassuring period for Sonae despite the challenges”, as the company has proven “its competitiveness and robustness ... and sees good signs of recovery.”

“I believe we are approaching a new normal and I remain confident that we are well prepared to take advantage of the opportunities that will arise,” she said in a statement.

Underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) increased 9.9% to 136 million euros in the quarter. The EBITDA margin - an important measure of profitability - improved to 8.4% from 8.1% a year earlier.

As of mid-April, Sonae began to benefit from the full reopening of all stores and in May of its shopping centres, albeit with capacity limits and restrictions on opening hours.

Sonae said that despite the pandemic the capital expenditure rose 65.4% to 186 million euros in the first half of the year, after acquisitions and organic expansion.

Portuguese rival Jeronimo Martins on Wednesday reported a 85% jump in second-quarter net profit.

$1 = 0.8409 euros Reporting by Sergio Goncalves; editing by Diane Craft

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