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October 28, 2013

SPAIN: Emerging market growth boosts Dia Q3

Strong sales growth in emerging markets and the sale of a business in Turkey helped boost earnings for Spanish discounter Dia in the third quarter.

Strong sales growth in emerging markets and the sale of a business in Turkey helped boost earnings for Spanish discounter Dia in the third quarter.

In the three months to the end of September, earnings climbed 4.5% to EUR58.3m (US$80.4m). The increase was helped by profits related to discontinued operations, namely Turkey. In April, Dia and local conglomerate Sabanci Holding sold their business in Turkey to food giant Yildiz Holding.

The retailer also benefited from strong like-for-like sales growth in emerging markets of 14.7%. That compared to a 2.7% drop in like-for-likes in Iberia. Overall, however, like-for-like sales were up 0.8%.

Revenues edged up slightly to EUR2.49bn from EUR2.45bn last year.

“We remain confident in our ability to achieve our targets for 2013, and the hard day-to-day work of our teams allows us to be optimistic about our potential in the mid-term,” said CEO Ricardo Curras.

At the end of September, Dia operated 7,182 stores, totalling 112 net openings in the quarter.

Kepler Cheuvreux analyst Inigo Egusquiza said the sales results from emerging markets was a “positive surprise” even after local currency devaluations that had driven inflation.

Egusquiza said sales in Iberia were below expectations and claimed Dia could look at domestic acquisitions. The integration of the stores acquired from German retailer Schlecker helped margins in Iberia, Egusquiza added.

Click here to view the full earnings release.

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