BELGIUM: Colruyt H1 earnings miss analyst forecasts
- EBITDA up but below analyst forecasts
- Colruyt reveals fall in gross margin
- Revenue and market share higher
Colruyt said its market share increased
Shares in Belgian retailer Colruyt fell today (3 December) after the company's half-year core profits missed analyst forecasts.
Colruyt booked EBITDA of EUR322.2m (US$420.9m) for the six months to the end of September on Friday, up 1.6% on the year but below analysts' predictions. According to a Reuters poll, analysts forecast EBITDA of EUR330m.
EBIT was up 1% and net profit increased 1.2% but Colruyt said its gross margins fell as it only partially passed on higher costs to consumers.
Colruyt said it "resolutely" maintained its policy of low prices and added: "The uncertain economic climate and the persistent weak consumer confidence in the euro area makes customers even more price-conscious, which means they change their purchasing behaviour and are more inclined to buy cheaper products."
The retailer reported a 6.5% increase in underlying sales and said it had increased its market share.
Colruyt maintained its forecast for annual net profit to match last year. "Due to the persistently unfavourable consumer climate but also due to the impact of Belgian governmental budgeting measures, the next reporting period will remain a challenge for us as well as for all retailers."
Shares in Colruyt closed down 1.91% at EUR34.71.
During the first six months of 2012/13 the Colruyt Group consolidated revenue increased by 6,2% from EUR 3.828,1 million to EUR 4.066,5 million. Taking the divestment of Intrion into account, the comparable revenue increased by 6,5%.
Despite the less favourable summer months in combination with a further intensifying competition in an uncertain consumer market, Colruyt Group was able to show a good result. These sales result from new store openings and promotional support. This resulted in a further positive development of our market share throughout the group.
The group's gross profit rose by 3,4% to EUR 996,4 million, from EUR 963,6 million, which corresponds to a gross profit margin of 24,5% compared to 25,2% last year. The decrease in gross profit margin by 67 basic points was influenced by only partially passing on the increased purchase prices and by the changing consumption pattern towards cheaper products and the constant competitive price pressure throughout the reporting period.
Our DATS 24 petrol stations also suffered from the increased competition with similar pressure on the gross profit margin during this reporting period.
The operating cash flow (EBITDA) increased by 1,6% to EUR 322,2 million. The operating profit (EBIT) increased by 1,0% from EUR 228,6 million to EUR 230,8 million.
The net financial result decreased to EUR 0,8 million by the end of September 2012.
The result of associated companies evolved from EUR -2,6 million to EUR -2,3 million, mainly by start-up losses in the offshore wind farm Belwind. The farm is now operational and performs according to our expectations.
Investments in green energy allow us to keep our energy costs under control at group level.
Income tax expense increased to EUR 68,7 million or an effective tax rate of 29,7% versus 29,6% last financial year. We expect a further increase of the tax pressure because of recent enterprise-unfavourable measures taken by the government. If applied on the results closed at 30 September 2012, these measures would have led to an increase of the effective tax rate to 30,3%, despite the creation of more than 400 extra full-time jobs and new investments for an amount of EUR 115 million.
The profit of the period (Group share) improved by 1,2% to EUR 160,6 million. The earnings per share (EPS) increased from EUR 1,00 to EUR 1,03.
Original source: http://www.colruytgroup.com/colruytgroup/static/assets/financieel/PDF/PersberichtP61213FINAAL_en.pdf
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