March 29, 2023

Sonae’s earnings grow 28% in 2022, but margin shrinks. It is proposing a dividend of 5.37 cents

Sonae announces a net profit of 342 million euros in 2022. In a period of rising food prices and public pressure on supermarkets, the group highlights that, despite a 10.9% increase in sales, the operating profit margin has decreased.

Sonae closed last year’s accounts with profits of 342 million euros, 27.7% higher than the previous year. However, according to accounts presented this Thursday by the retailer, net profit attributable to shareholders excluding non-recurring items fell by almost 17% to €179m.

The company led by Cláudia Azevedo says that this drop in results is due to “the effort to be on the side of families absorbing part of the inflation, the significant increase in costs and the indirect result below 43 million euros, after the impairments in fashion retail industry, the impairment of Sierra’s assets and the impact of currency on the value of Bright Pixel’s assets.”

“During the year, inflation rose to levels the world had not seen this century, largely due to sharp increases in energy costs and supply chain disruptions that affected the entire economy. The high level of inflation, combined with the increase in interest rates, has put pressure on the disposable income of families and, consequently, changed their consumption patterns,” begins quoting Cláudia Azevedo in the message accompanying the results.

“At Sonae, we are quick to realize the potential impacts on our communities and act accordingly to mitigate them. To avoid putting more pressure on family budgets, our retail businesses have borne some of the inflationary pressure, at the expense of their own profitability,” he asserts, as the government has tightened controls on food prices.

Sonae accounts for a 10.9% increase in turnover to over €7.7bn as a result of market share gains from its operations, but also a 41 basis point drop in underlying EBITDA (operating profit margin) from 8.6% to 8.2%, “with businesses bearing some of the inflationary pressure and the significant increase in costs, i.e. energy, and investing to ensure the competitiveness of your offers”.

This momentum is reflected in all the group’s divisions, but particularly in the group’s food retailing through Sonae MC (which includes the supermarket chain Continente), which despite posting an 11.5% increase in turnover to around 6 billion .euro and a rise of 4.9%. on underlying EBITDA at €563m, the operating margin fell to 9.4% from 10% in 2021.

After completing the final year of her current term as CEO of Sonae in 2022, Cláudia Azevedo also says in a statement that Sonae maintained a “high level of investment” last year, highlighting that the group invested €357 million, 28% more than in 2021 , and was able to reduce net debt “to a historically low value” to 540 million euros.

Sonae’s run in 2022 is also marked by the sale of several stakes, notably the sale of cyber security firm Maxive and the sale of insurance group MDS, which generated capital gains of €146 million.

In the statement sent this Thursday to CMVM, Sonae also reveals that the group’s board of directors will propose to the annual general meeting of shareholders, to be held on April 28, the payment of a dividend of 5.37 cents per share, which gives the securities with a dividend yield of 5.2% compared to the value of the closing price this Wednesday.

Note: Title changed at 08:45 to remain the original Eco e-newspaper

Leave a Reply

Your email address will not be published. Required fields are marked *