Heavy investments in Dagrofa – 318 million loss

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Danish grocery giant Dagrofa, now under Norgesgruppen’s control had an expensive year.

While earnings before taxes are still on the positive side, the Group result landed at a negative 318 million DKK.

Last year revenue dropped slightly by 300 million DKK . kr. to 19.6 billion kr., while earnings before depreciation and taxes (EBITDA) in 2014 landed 117 million. kr. at 111 million. kr. last year.

The annual result for 2014 reveals continuing substantial investments for a major strategic development for the entire business and in particular the retail business. And it’s the last year to make any provisions for future closures of unprofitable stores.

Dagrofa Group’s profit before goodwill amortization in 2014 was therefore a deficit of 255 million DKK (-200 million 2013). Profit before tax and minority interests in 2014 landed att -318 million DKK (-272 million)

“For our retail business 2014 was a year of intense price competition. But even though the market has had zero growth, we have managed to strengthen and grow our discount offering with KIWI, which last year became the fastest growing supermarket chain. We have as planned continued to invest in the business and streamline and optimize our organization. In addition, we launched a new growth strategy and a new retail strategy to be implemented this year. These things together contribute to that we come out of the year with a result in line with last year, ” comments Dagrofa CEO Per Thau.

One part of the new plan is the establishment of supermarket concept Meny by converting chains SuperBest and Eurospar. The first stores will open in 2015.

The largest shareholders of Dagrofa – NorgesGruppen and KFI Traders Fund – granted in December 2014 a subordinated loan to Dagrofa totaling 185 million DKK to finance growth plans for 2015.