Sonae Plans Expansion Outside Portugal After Profit Declines
Sonae SGPS SA (SON), a Portuguese holding company with interests ranging from telecommunications to retailing, said it will expand abroad after full-year profit declined 38 percent on lower demand in its home market and higher borrowing costs.
Net income fell to 103 million euros ($134 million) in 2011 from 168 million euros a year earlier, Sonae said in a statement today. Revenue dropped 1.8 percent to 5.74 billion euros, in line with the average 5.74 billion-euro estimate of seven analysts surveyed by Bloomberg. Net debt declined to 2.71 billion euros from 2.85 billion euros.
“2011 was strongly impacted by an important reduction in private consumption in Iberia and a Portuguese banking system under pressure,” the Maia, Portugal-based company said. “To face this we were forced to turn our attention more towards protecting profitability and debt reduction.”
Sonae plans to expand abroad to counter a deepening recession in Portugal as austerity measures aimed at complying with a 78 billion-euro bailout package from the European Union and the International Monetary Fund continue to weigh on private consumption this year.
The company’s shares climbed 1.1 percent to 0.46 euros as of 9:14 a.m. in Lisbon.
“Sonae will continue to pursue its strategic medium- to long-term objectives” including international growth, the company said.
Sonae announced last year that it would expand its retail operations to the former Portuguese African colony of Angola through a joint venture with local company Condis. It plans to open its first retail unit in Angola during 2013, it said.
The company’s board will propose a dividend of 3.31 euro cents a share.
To contact the reporter on this story: Henrique Almeida in Lisbon at firstname.lastname@example.org
To contact the editor responsible for this story: Anabela Reis at email@example.com
Bloomberg moderates all comments. Comments that are abusive or off-topic will not be posted to the site. Excessively long comments may be moderated as well. Bloomberg cannot facilitate requests to remove comments or explain individual moderation decisions.