• Net profit up 20.8%, misses estimates
  • Consolidated sales rise 8.8%
  • Gains driven by Biedronka growth in Poland

Polish chain Biedronka has boosted first-quarter profits at Jeronimo Martins but shares in the Portugal-based retailer fell as the earnings missed analyst estimates.

The company reported a 20.8% increase in net profit to EUR68m (US$90m). However, according to a Bloomberg poll, analysts were expecting net profit of EUR71.6m. Shares in Jeronimo Martins were down almost 5.7% at EUR13.97 at 16.16 CET.

However, Jeronimo Martins enjoyed sales and profit growth in the first quarter of the year thanks largely to Biedronka.

EBIT rose 9.9% at EUR96m. EBITDA was up 9.2% at EUR152m. Consolidated sales increased 8.8% to EUR2.44bn.

Jeronimo Martins, which runs over 1,900 Biedronka outlets in Poland, saw sales from the business increase 13.1% to EUR1.51bn. The chain accounts for 62% of the retailer's revenue.

The company opened 37 Biedronka stores in the quarter but also reported a 9.5% rise in like-for-like sales, a result that excludes days when outlets were closed for conversion. EBITDA from Biedronka was up 20.7%.

Jeronimo Martins' Portuguese business fared less well amid tough trading conditions in its domestic market.

The retailer's Pingo Doce division, Portugal's largest supermarket chain, saw sales increase 2.1% but thanks only to the opening of new stores. Like-for-like sales fell 0.8%, excluding fuel.

However, Jeronimo Martins' cash-and-carry division Recheio booked a 4% rise in sales on the back of a 2.6% increase in like-for-like sales.

Nevertheless, EBITDA from the retailer's food distribution business in Portugal fell 5.1% amid higher energy costs.

"Biedronka, our main priority, continues to execute its investment plan which is essential for the company's leadership in the Polish market," CEO Pedro Soares dos Santos said. "For the Portuguese economy, we anticipate 2012 being a very tough year. To protect the sustainability of our supply chain in fresh food, and to protect our medium and long-term competitiveness and differentiation we took the decision to accelerate payments to around half of our fresh products suppliers."

However, he added: "The strong performance in Poland confirms the group's positive outlook regarding the growth in sales and earnings for 2012."

Click here for the full earnings release.