Asset Sale Helps Tesco Avoid Serious Loss in Hungary
- 31 Jul 2023 3:30 PM
- Hungary Around the Clock
British-owned retailer Tesco realised Ft 723.3 billion in revenue last year, up 15.8%, as post-tax profit grew from Ft 12.9 billion to Ft 19.6 billion, lifted by the sale of assets, Portfolio writes.
Tesco-Global Áruházak, like sector peers, endured a challenging year with rising tax burdens and other government measures such as food price caps that hampered its operation, Portfolio notes.
Excluding the sale of 14 commercial properties to real estate investment manager Adventum in 2022, the company would have incurred a loss, as the windfall tax rose to Ft 22.7 billion from Ft 12.9 billion a year earlier.
The rise in sales revenue was below the rate of inflation during the period, which means that sales volume fell 10% as customers facing a decline in real wages cut back spending, or switched to cheaper brands, Portfolio notes.
The cost of goods sold rose at the same pace as revenues, implying that the retailer’s margin remained unchanged, as the company only passed on higher input costs to retail prices, the website adds.
Tesco said the mandatory discount prices that were available only to Tesco club cardholders, will be extended to all customers.
The company estimated the loss due to price caps, to be phased out from August 1, totalled Ft 10 billion in the financial year.
From next month, these products will also be subject to the new 15% mandatory discount rules.
MTI Photo: Csaba Krizsán
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