In The Year Of The Pandemic, Dia Halved The Loss

2021-02-25   |   by CusiGO

The sales volume of dia supermarket chain improved slightly in the year of pandemic, reaching 6882.4 million euros, an increase of 0.2% over the previous year. Although the Brazilian real and Argentine Peso have fallen sharply, it is not enough to keep the accounts green. According to the national securities and Exchange Commission, the company lost $363.8 million, less than half of what it was a year ago. The chain, owned by the Luxembourg fund letterone, quadrupled its business to $301.9 million.

During the year, DIA’s sales improved only slightly by 0.2% to $6882.4 million due to the closure of the hotel and a substantial increase in distribution revenue. However, the company stressed that after continuing to implement the network optimization plan, comparable sales increased by 7.6% and decreased by 457 stores at the end of the year. The company pointed out that sales were affected by the devaluation of the Brazilian real by 24.1% and the Argentine Peso by 33.7%, and the absence of tourism in Spain and Portugal. The restrictions caused by the pandemic reduced the number of visits to stores, but strongly promoted the size of shopping baskets, which grew by 24.6%.

Due to the increase in sales and business improvement of the processing plan, the gross profit margin increased by 21.8%, 2.6 percentage points higher than that of the previous year, accounting for 21.8% (US $1498.5 million) of the sales. Although employees were rewarded for their work while in prison, staff costs were slightly reduced due to the closure of stores. Other cost cuts reduced EBITDA (operating profit) to $301.9 million from $6.5 billion in the previous year. However, the redemption cost of closing the store was $426.5 million and the loss was $363.8 million. Although it is huge, it is 54% lower than the loss of $790.5 million last year. The devaluation of Brazil and Argentina had an impact on profits of US $84.7 million.

Stephan duchame, business president of DIA, welcomed the results, noting that they “show the day-to-day progress of dia in achieving its multi-year roadmap.”. It attributed the performance to “operational and commercial improvements (variety improvements, especially fresh and white brands) in the four countries we operate in, Under the leadership of “national level management team” and “long-term stable capital structure”, a “refinancing and recapitalization agreement” was signed with creditors and bonus holders, enabling the management team to fully focus on customer and business management. Even so, DIA still holds 1.276 billion euro of financial liabilities, which is 46 Euro less than the previous year. When letterone announces the capitalization of 500 euro debt after two bond issues, the debt will be greatly reduced. Its liquidity is $397 million.

In 2020, the epidemic will lead to the final take-off of Internet purchase of high-end consumer goods, and dia will focus on this channel. He hired 1000 people to prepare orders and turned 14 stores into online stores (black shops, black shops). In addition, it has signed agreements with glovo and Amazon to support such sales, which have been provided in 440 stores in Spain, covering 90% of the population of more than 50000 resident cities. In Portugal, it’s in the metropolitan areas of Lisbon and Porto.

In terms of physical network, DIA canceled 457 stores and retained 6169 stores by the end of the year, including 3918 in Spain, 565 in Portugal, 779 in Brazil and 907 in Argentina. Particularly punished is the daily form (small supermarket, which has a strong presence in rural areas), which has lost 95 units, while Claire’s perfume store – which has been on sale for some time – has only 123 places left.