February 23, 2017 / 7:41 AM / in 9 months

BRIEF-Eurocash Q4 net profit down at 66.9 mln zlotys, below expectations

Feb 23(Reuters) -

* Eurocash SA Q4 net profit slumped by 31 pct to 66.9 million zlotys ($16.42 million), analysts polled by Reuters expected Q4 net profit of 94 million zlotys

* Q4 EBITDA was 159.7 million zlotys zlotys, down by 13.6 pct, versus 179 million zlotys expected in Reuters poll

* Reported lower EBITDA mainly due to an increase of spending on strategic investments to strengthen position of independent retailers such as extension of the offer for Delikatesy Centrum stores by fresh products

* Profitability of the group was negatively impacted by effect of wholesale price deflation with increased costs of wages and lower than planned cost effectiveness of Cash&Carry stores opened in last two years

* Q4 revenue ​of 5.34 billion zlotys ($1.31 billion) versus 5.29 billion​ zlotys seen in a Reuters poll

* Sales growth was driven mainly by sales of goods to clients integrated in partnership and franchise chains

* Eurocash Cash&Carry stores structure will be under revision, plans to close 3 Cash&Carry wholesale warehouses in Q1

* Later on, the management will consider further Cash&Carry restructuring

* The number of Delikatesy Centrum franchise stores to increase by about 80 stores in 2017

* In the opinion of the board, full synergies associated with the acqusitions of EKO Holding S.A., FHC-2 Sp.z o.o., Madas Sp. z o.o. and Polska Dystrybucja Alkoholi Sp. z o.o. will be possible to reach within 3 years after the acquisition of control over these companies Source text for Eikon: Further company coverage: ($1 = 4.0646 zlotys) ($1 = 4.0746 zlotys)

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