Lisbon, Oct 30 - Portuguese retailer Jeronimo Martins reported a higher-than-expected 22.4 percent rise in third-quarter net profit, boosted by strong sales at its Biedronka discount chain in Poland.
Net profit reached 56.55 million euros ($72.08 million), while earnings before interest, taxes, depreciation and amortisation (EBITDA) rose 32.3 percent to 132.6 million euros. Revenues rose 33.6 percent to 1.854 billion euros.
In the first nine months of the year, net profit rose 38 percent to 121.4 million euros.
Eight analysts polled by Reuters had forecast, on average, third-quarter net profit of 46.5 million euros and revenues of 1.809 billion euros.
The company said in a statement its outlook for the fourth quarter was positive and it maintained this year's targets.
"Despite a strong competition environment in Portugal as well as in Poland and the overall macroeconomic setting, the group maintains its positive vision about the evolution of sales and results in the fourth quarter," it said.
Jeronimo stocks, which had been hammered of late on concerns that Poland's fast-depreciating currency would hit its sales in the fourth quarter, jumped 7.5 percent to 3.9 euros in early trade, while the broader market in Lisbon was up 1.5 percent.
"This is a good set of results, above expectations including for sales in Poland, and given that the stock suffered quite a lot in the past few weeks, a relief rally is possible," said Pedro Morais of Espirito Santo Research. While most of the sales growth was in Poland, Jeronimo Martins' main local chain, Pingo Doce, had a 12.5 percent growth in like-for-like sales. The company expected further improvements in like-for-like sales, while it is also expects to add 15 new supermarkets before the end of the year.
Biedronka sales in euros, which account for half of the total revenues, soared 55.7 percent to 939.8 million in the quarter. When expressed in Poland's zloty currency, which had been on the rise before reversing course this month due to the global crisis, sales increased 35.9 percent in the quarter.
Biedronka is Poland's biggest chain of discount stores.
Total nine-month sales rose 32 percent to 5.03 billion euros. The company targets total sales above 7 billion for the whole fo 2008.
Operating costs increased 33.6 percent in the quarter to 291.1 million euros, reaching 810 million euros in the January-September period, while net debt at the end of September rose about 4 percent from a year earlier to 702.8 million euros.
Jeronimo purchased the Plus network of stores in Portugal and Poland at the end of last year from Germany's Tengelmann for 320 million euros and has been integrating the new stores into its chains, which brought additional costs.