Ljubljana, 25 August (STA) - The management of Slovenia's top grocer, Mercator, which reported a net profit of EUR 17.7m for the first half of this year, spoke on Wednesday about future plans, which include further growth abroad as well the offloading of some of the retailer's real estate holdings.
Mercator CEO Ziga Debeljak told the press that the EUR 17.7m profit, a 60% improvement year-on-year, means that the company is already at 80% of the target for this year.
The group generated EUR 1.335bn in sales revenues in the first half of the year, which is 3.2% up year on year.
Debeljak said that Mercator had secured three strategic tie-ups abroad this year - with Croatia's Getro, Montenegro's Panto and Serbia's Coka - and was continuing to look for opportunities for growth an development.
This is possible as result of the financial strength and stability of the group which now employs 22,400 people, he added.
Mercator is currently the biggest retailer in Slovenia as well as in Montenegro as result of this-year's deal with Panto. It is no. 2 in Serbia and Croatia, while holding the third-biggest market share in Bosnia-Herzegovina.
Debeljak said that the company earmarked EUR 45m for investments in the first six months, with the figure expected to rise to EUR 120m or possibly more by the end of the year.
"Mercator is also growing in times of crisis. We generate around 37% of revenues outside of Slovenia, which means that were are increasingly an international company."
Prompted by unexpected developments this year - such as a drop in real estate prices, exchange rate changes - Mercator has updated its 2010 result forecast. It expects EUR 2.8bn in revenues, which means 5% growth, and an operating profit of EUR 30m. Its workforce is expected to grow to nearly 30,000.
Meanwhile, Debeljak said that Mercator was preparing to launch a process of offloading some of its vast real estate holdings. The company controls 1.5m sq. metres of real estate. The fair value of these assets is EUR 1.7bn, while Mercator's financial debt stands at EUR 1bn net, Debeljak said.
According to him, Mercator is waiting to see which model of monetisation would suit it best and for favourable conditions on the property market. It plans to raise at least EUR 500m in the first phase, using the money for possible development opportunities and for reducing debt.