May 12, 2020 / 5:43 AM / 15 days ago

DIA reports smaller net loss for first quarter

MADRID (Reuters) - Spanish retailer DIA (DIDA.MC) said on Tuesday its net loss narrowed to 143 million euros ($154.48 million) in the first quarter, from a loss of 151 million a year earlier, helped by lower costs.

The company, which was on the brink of insolvency last year before being rescued by Russian tycoon Mikhail Fridman, said core profit jumped to 61 million euros, from 17 million euros, as restructuring costs plunged 92%.

Net sales fell 2.1% to 1.70 billion euros, confirming the figure stated by the low-cost supermarket chain retailer in April, as the number of open stores declined and it suffered some negative forex impact in Brazil.

The novel coronavirus pandemic that severely hit Spain, DIA’s main market, contributed to an increase in sales, its executive chairman Stephan DuCharme told reporters on Tuesday.

The retailer benefited from a phase of “panic buying” in early March, he said, when consumers rushed to supermarkets to buy items such as pasta, rice and toilet paper.

Later, when one of the world’s strictest lockdown was imposed on the country, sales in neighbourhood grocery stores, which account for most of DIA’s shops, rose, he said.

“Traffic has increased as customers are shopping for more fresh products such as meat, chicken and vegetables,” he said.

The company did not say whether the higher revenue during the pandemic had offset cost increases associated with it, such as bonuses paid to employees and protective gear for them.

DIA said it expects net sales of 7.0-7.5 billion euros in 2021 and 8.7-9.3 billion euros in 2022.

Reporting by Jose Elías Rodríguez, Editing by Inti Landauro & Aditya Soni & Kirsten Donovan

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