El Corte Ingles posts 0.4% rise in sales to €7.58bn

El Corte Ingles saw a 0.4% increase in sales for the first half of its 2018 financial year, ended 31 August, reaching €7.58bn, the Spanish retail giant announced.

The Spanish group, which released its half-yearly financial results for the first time in its history after issuing international bonds for €600m in Ireland, describe the performance as positive and emphasised that most companies in the retail sector generate the majority of their revenue in the second half of the year.

The company’s EBITDA was €355m, up 4.4% on the previous year, boosted by an improvement in margins across all group areas thanks to a new management team and the strategic measures it is undertaking. The gross margin increased by 20 basis points, representing a 1.2% improvement.

Meanwhile, net debt and expenses also improved during the period as a result of the improved performance of the business and a number of divestments in non-strategic properties worth €212m.

During the six-month period, net financial debt narrowed by €347m, reaching €3.65bn. Additionally, a refinancing exercise carried out in the prior months helped it decrease its financial expenses by €18m, reaching €68m between March and August. All this allowed the company to improve the net debt to EBITDA ratio from 3.3 to 3.1.

FASHION SALES FALL 1.5%

In terms of categories, retail sales stood at €6bn, down 0.6% on the same period last year, mainly due to the adverse effect of unseasonal weather conditions. EBITDA grew 2.2% to €235m.

Fashion sales at El Corte Ingles fell 1.5% between January and August, above the national average of 3.6% according to data from Acotex. The company was keen to remind investors that the majority of its fashion revenue is generated in the second half of the year.

Within the retail category, there was growth in the homeware and leisure departments, as well as positive progress in the Supercore brand of supermarkets and in the company’s department stores in Portugal.