Grocery chain’s profit beats estimate

ISTANBUL- Reuters

Migros, Turkey’s second-biggest grocer, said third-quarter profit was 91.3 million liras ($51 million), exceeding estimates, as the company aims to add 100 stores a year in the medium-term.

Net income compared with a loss of 30.2 million liras in the same period of 2010, Migros said in a statement to the Istanbul Stock Exchange after the market closed on Nov 10. The company was expected to earn 21 million liras, according to the average of nine analyst estimates compiled by Bloomberg.

Migros, owned by a private equity group led by BC Partners, foresees a double digit sales growth in 2011 and beyond and a gross profit margin of 25.5 percent to 26 percent this year, it said in a presentation on its website. The company’s third-quarter sales rose 10 percent to 1.61 billion liras, with last year’s data adjusted to exclude sales from Sok Marketler, a discount store chain Migros sold to Yıldız Holding of Turkey for 600 million liras in June, it said. The transaction was completed in August.

The company revised upward its forecast for the ratio of earnings before interest, tax, depreciation and amortization to sales, or Ebitda margin, to between 6.3 percent and 6.5 percent from 6 percent to 6.5 percent, it said in the presentation.

The grocer, which had 731 stores as of end-September, will have opened about 70 stores by the end of this year and gave a guidance of adding 100 stores a year in the medium-term, according to the presentation.

Net debt is expected to be around 1.6 billion liras at the end of this year, assuming a rate of 2.45 liras per euro, Migros said.

Moonlight Capital, a BC Partners-led group of investors, bought 97.8 percent of Migros in October 2008 for about $3.25 billion in Turkey’s biggest-ever private equity investment.