Mercator chairman Toni Balažič told the press that along with the write-offs, the retailer faced stronger downward pressure on prices, lower turnover and the absence of one-off events such as Mercator saw in the final quarter of 2011.

The company, whose operating result was positive, on the other hand had stable revenues, as the group generated EUR 2.3bn in revenue last year, a slight increase over 2011.

Balažič explained that write-offs and impairments accounted for three quarters of the loss. He mentioned "impairments of real estate assets and the costs of a withdrawal from the Bulgarian and Albanian markets".

While operations in strategic markets such as SE Europe remain positive, non-central markets and activities contributed EUR 40m to the loss, he said. A drop was also recorded in the Slovenian market.

The market share was stabilised in Slovenia and Croatia, while it increased in Serbia, Bosnia and Montenegro.

The group managed to reduce its debt by EUR 90m to finish 2012 with a debt of about EUR 1bn. Also, Mercator has come to an agreement with banks on the search for a new long-term structure of sources of financing until mid-2013.

A total of EUR 67m was spent on investments last year, although divestment was sped up in the second half. "We invested 25% less than planned, while carrying out divestment worth EUR 6.8m," Balažič said.

The results are meanwhile a clear sign that Mercator needs to restructure its operations - reorganise business processes, optimise administrative staff numbers, centralise support functions, optimise the entire supply chain in logistics and focus on basic operations and key markets.

Balažič warned that the effects of restructuring would not be visible immediately. "But at the end of 2013 we wish to show that we reversed the negative trends."

Asked how the negative result could affect a potential sale of Mercator, Balažič said that potential investors probably understand that the bulk of the loss was caused by a one-off event.

He believes potential investors will focus more on Mercator's market power, which is a strong basis for a restoration of profitability.