- Sonae held 2.14% stake in NOS, whose stock fell 25% in the 1H
- Sonae plans to continue to bet on promotions to bolster sales
Portugal’s largest retailer Sonae SGPS SA remains totally committed to its investment in NOS SGPS SA, Chief Corporate Center Officer Luis Reis said, after a depreciation of the company’s stake in the telecommunications firm weighed on profitability.
Sonae, a holding company that controls Continente hypermarkets, said on Thursday that first-half profit fell 21 percent to 77 million euros ($87 million). The decline was partly influenced by the negative mark-to-market value of Sonae’s 2.14 percent stake in NOS, said Reis. NOS shares fell 25 percent in the first six months of the year compared to a 16 percent drop in Portugal’s PSI 20 Index, according to data compiled by Bloomberg.
“We are very very happy with NOS’s performance,” Reis said in an interview on Thursday, adding that the drop in the company’s share price was influenced by the overall performance of the stock market. “NOS is an investment that we really like, an investment that we care for and we believe that NOS’s management is doing a superb job.”
NOS, the country’s largest cable operator, was formed after the 2013 merger of Sonae’s telecommunications unit Sonaecom with TV provider ZON. Sonaecom on June 16 said it sold its 2.14 stake in NOS to Zopt, which now owns 52.15 percent of NOS. Zopt is owned by Sonae and Isabel dos Santos, the daughter of Angola’s president Jose Eduardo dos Santos.
Reis said Sonae plans to open new food and non-food stores and renovate its existing outlets as it bets on discounts and promotions to increase sales. Sonae’s first-half sales rose 4.4 percent to 2.4 billion euros from the previous year.
“The most relevant line is top-line,” said Reis. “Gaining market share and defending our leadership position is clearly our top strategic priority.”