Fortenova Group has published detailed business results for the first nine months of this year, according to which it achieved a profit from continuing operations of 534 million kuna, compared to a loss of 384 million kuna in the same period last year.
The statement emphasizes that Fortenova Group presented detailed results for the nine months of 2022 to the holders of depositary receipts, confirming the continuation of excellent business trends across all its key activities.
In comparison to the preliminary results presented last week for the three quarters of this year, the same key indicators were presented with more details, it adds.
The greatest positive impact on the growth of all Group business indicators was due to an excellent tourist season, significant operational improvements, as well as inflation.
During this period, Fortenova Group achieved a total consolidated revenue from continuing operations of 30.3 billion kuna or four billion euros, representing a 38 percent increase compared to the realization in the same period of 2021, the company’s statement notes.
Excluding the impact of the integration of Mercator, total revenue from continuing operations increased by 15 percent compared to the comparable period in 2021, it adds.
At the same time, the consolidated adjusted EBITDA for the period increased by 22 percent, to 2.1 billion kuna or 275 million euros.
Despite high debt costs and increased energy and labor costs, Fortenova Group achieved a profit from continuing operations of 534 million kuna in the first nine months of 2022, an improvement of 918 million compared to the loss of 384 million kuna last year, the statement emphasizes.
By the end of September, Fortenova Group had nearly two billion kuna in its accounts. At the same time, it continued the deleveraging process, and the ratio of net debt to adjusted EBITDA, according to creditor definitions, was 3.58 times at the end of the period, which is half of the 7.2 times that ratio at the time of Fortenova Group’s establishment.
Compared to the unconsolidated results at the end of the third quarter of 2021, 18 companies from the core activities – retail and wholesale, food, and agriculture, achieved a total revenue 12 percent higher, while the unconsolidated EBITDA of the core business was 11 percent higher, the statement notes.
Thus, in Retail and Wholesale, revenues were 9 percent higher and EBITDA was 9 percent higher.
As explained by Fortenova Group, this growth in the revenue segment was supported by numerous company activities related to price optimization and network expansion, partly due to high inflation, while the focus on optimizing sales points, synergies, and energy-saving measures resulted in higher EBITDA. The wholesale segment owes its 18 percent better result primarily to the complete recovery of the HoReCa channel.
Among the retail companies of Fortenova Group, the best results were achieved by Konzum Croatia, Mercator BiH, and Mercator Serbia, which recorded revenue growth of over 10 percent. Generally, inflation had the greatest negative impact on retail results as it raised product and service prices as well as labor costs.
They also note that companies in the food business area were heavily impacted by higher logistics costs due to rising fuel prices as well as rising raw material prices. Nevertheless, the overall food sector in Fortenova Group had a revenue increase of as much as 24 percent, driven by higher sales but also inflation, with companies recording double-digit revenue growth compared to the comparable period last year. The higher EBITDA growth was neutralized by the aforementioned higher raw material prices, inflation of input costs, and wage increases, resulting in a 2 percent increase compared to the nine months of last year.
Revenue in the agriculture business area grew by 7 percent, primarily driven by pig farming, livestock, and milk production, while EBITDA increased by 60 percent, mainly due to rising prices of agricultural commodities, as well as strong control of operational costs, the statement concludes.
