Eurocash with PLN 62.9 mln net loss, due to reserve on potential VAT liability

WSE-listed retailer Eurocash had a PLN 62.9 million net loss in Q2, compared to a PLN 52.48 million profit the year earlier. According to the company’s management, Eurocash results was affected by external parties which used the company in VAT fraud mechanism, for that reason, Eurocash set aside PLN 121.5 million in a reserve to cover potential back taxes. In August this year. Eurocash has completed a comprehensive and detailed study on VAT settlements in 2013-2017. The analysis carried out by the management board indicates that the company was used in the mechanism of expropriation of VAT by a group of external entities in transactions involving intra-community supply of goods. Excluding the impact of the reserve, Eurocash would have posted a PLN 52.6 million net profit. Revenues amounted to PLN 6.08 billion in Q2 2017 compared to PLN 5.34 billion a year earlier.