Jeronimo Martins — Interim / Quarterly Report 2010

May 21, 2010

Consolidated 1st Quarter Report2010

Non Audited

I - Consolidated Management Report

1. Introduction	3
2. Sales	4
3. Results Analysis	5
4. Balance Sheet	6
5. Outlook	6

II – Consolidated Management Report Appendix

1. Store Network	7
2. Definitions	7
3. Information Regarding Individual Financial Statements	7

III – Consolidated Financial Statements

	1. Financial Statements	9
	2. Notes to the Consolidated Financial Statements	13

I. CONSOLIDATED MANAGEMENT REPORT

1. Introduction

A quarter with remarkable growth which led Group's LFL sales to increase by 9.7% due to the strong performances, on the same stores base, of Pingo Doce (+9.7%), Recheio (+2.2%), both offsetting the significant deflation registered in these formats, and also of Biedronka (+13.3%).

Consolidated sales grew 21.8% (+14.1% at a constant exchange rate), reaching Euro1,955.1 mn as a result of the increasing competitiveness of the Group's business models.

Consolidated EBITDA grew 17.5% (+9.4% at a constant exchange rate), reaching Euro118.3 mn and a margin of 6.0%.

Net profit, boosted by the sales, increased by 30.1%, reaching Euro42.3 mn.

In the first quarter, the performance of the Group's main formats was the result of the priority set to increase market share through an outperforming LFL growth, based on the strong commercial propositions. The Group therefore confirms its expectations for a solid evolution of sales and earnings in 2010.

2. Sales

NET SALES AND SERVICES
	Q1 10			Q1 09	Δ %
	Eur Tho.	% total	Eur Tho.	% total	Pln	Euro
Retail Mainland	670.216	34,3%	612.167	38,1%		9,5%
Cash & Carry Mainland	156.888	8,0%	153.637	9,6%		2,1%
Madeira	29.893	1,5%	28.522	1,8%		4,8%
Poland - Biedronka	1.087.776	55,6%	795.657	49,6%	21,2%	36,7%
Manufacturing	53.422	2,7%	54.195	3,4%		-1,4%
Mkt. Repr. and Rest. Serv.	19.458	1,0%	18.714	1,2%		4,0%
Consolidation Adjustments	-62.524	-3,2%	-57.761	-3,6%		8,2%
Total JM	1.955.130 100,0%		1.605.131 100,0%			21,8%
p.m. Retail Mainland	619.962		566.573			9,4%

(store sales)

The Group's formats continue to benefit from a clear strategy that makes them very price-competitive, with a totally consumer-orientated assortment, sustainable differentiation factors and the strongest awareness in the market.

Consolidated sales reached Euro1,955.1 mn, a growth of 21.8%, made up of i) +9.3p.p. from the growth in the Group's LFL sales, ii) +4.8p.p. from the growth in sales related to new and refurbished stores and iii) +7.7p.p. from the appreciation of the Zloty against the euro.

The LFL growth was the most relevant part of the performance posted this quarter, not only due to it prominence, but mainly as it confirms the success of the strategies that were implemented in Pingo Doce, Recheio and Biedronka.

It should be noted that in Portugal, although prices are starting to show signs of stabilizing throughout 2010, when compared with the same period in the previous year, there is still a negative inflation, which for the average Pingo Doce basket, reached -4.9% in this first quarter, in line with the country's food inflation index.

Pingo Doce's LFL growth of 9.7% reflects a very strong volume evolution of 15%, continuing the Company's strong sales dynamics from the previous quarters. This increase also includes a significant growth in the number of costumers. Pingo Doce is capitalizing on the adjustments made in 2009, namely price adjustments on key products, reinforcement of the perishables assortment and a new advertising campaign. It should be noted that the first quarter this year is the period with a less demanding sales comparison.

Recheio also continued to by-pass the adverse macroeconomic environment that is affecting both the HoReCa channel and Traditional Retail and posted a 2.2% growth in LFL sales, an increase of around 4% of volumes sold.

Biedronka maintained its dynamic LFL performance, already seen in the last quarter of 2009, reaching 13.3% in the first three months of the year, with a special mention to the remarkable 15.9% growth in the food categories, whilst the performance of the non-food categories simply reflected the repositioning (assortment reduction) which they underwent throughout the first half of 2009. Prices remained stable in comparison to the same period in the previous year.

The Company's sales in Poland grew 21.2% in local currency (+36.7% in Euros) boosted by the LFL and by the store opening plan, which included 42 new locations this quarter.

In Manufacturing, sales in volume had a positive performance, especially the olive oil and iced tea. In value terms, this business area's sales posted a fall of 1.4%, a reflection of the prices decline in the market.

In Marketing, Representations and Restaurant Services, the LFL sales performance (-2.0%) reflected the pressure on some categories following the growth in retailers private brands. The new represented brands that joined the Company's portfolio in 2009 contributed towards the total sales performance (+4.0%).

3. Results Analysis

CONSOLIDATED RESULTS
		Q1 10 Q1 09
	Tho. Euro	%	Tho. Euro	%	Δ%
Net Sales & Services	1.955.130		1.605.131		21,8%
Total Margin	446.816	22,9%	375.966 23,4%		18,8%
Operating Costs	-328.554	-16,8%	-275.278 -17,1%		19,4%
EBITDA	118.262	6,0%	100.688	6,3%	17,5%
Depreciation	-45.705	-2,3%	-40.948	-2,6%	11,6%
EBIT	72.557	3,7%	59.740	3,7%	21,5%
Net Financial Results	-17.014	-0,9%	-17.512	-1,1%	-2,8%
Non Recurrent Items	-1.732	-0,1%	783	0,0%
EBT	53.812	2,8%	43.011	2,7%	25,1%
Taxes	-10.402	-0,5%	-7.256	-0,5%	43,4%
Net Profit	43.410	2,2%	35.755	2,2%	21,4%
Minority Interests	-1.119	-0,1%	-3.238	-0,2%	-65,4%
Net Profit attr. to JM	42.291	2,2%	32.517	2,0%	30,1%
EPS (euro)	0,07		0,05		30,1%
Cash Flow per share (euro)	0,15		0,12		17,9%

Consolidated EBITDA grew 17.5%, reaching Euro118.3 mn in the first quarter of 2010. The respective margin went from 6.3% (1Q09) to 6.0% (1Q10)

It should be noted that in this first quarter, EBITDA includes costs that are one-off in the year, which in 2009 were reflected in the second quarter. If we exclude this effect, the consolidated margin would remain stable.

The increased weight of the advertising costs related to the Pingo Doce advertising campaign, which began in the fourth quarter of 2009, should also be highlighted, which are not fully diluted in the first three months' sales, which according to business' normal seasonal conditions, represent the quarter with the lowest sales.

The EBITDA generated by Biedronka grew 26.8% in local currency (+43.1% in euros) due to the growth in sales and the increase in the margin of 30b.p. to 6.5% of sales.

Financial charges reached Euro17.0 mn, a drop of 18.9% if we exclude the profits recorded in 2009 related to hedging operations. This evolution followed the reduction in debt and in the average interest rate.

Net profit attributable to Jerónimo Martins grew 30.1%, reaching Euro42.3 mn, a substantial 34.5% if we exclude the non-recurring items.

4. Balance Sheet

BALANCE SHEET
(Thousand Euro)	Q1 10	2009 YE	Q1 09
Net Goodw ill	755.795	736.633	698.499
Net Fixed Assets	2.177.511	2.101.566	1.888.071
Net Working Capital	-1.185.643	-1.201.479	-870.293
Others	112.345	120.976	136.263
Invested Capital	1.860.009	1.757.696	1.852.541
Financial Debt	823.726	796.296	910.058
Leasings	84.237	84.560	94.714
Accrued interest	38.030	30.914	5.421
Marketable sec. & Bank deposits	-210.754	-219.769	-73.542
Net Debt	735.239	692.000	936.650
Minority Interests	285.430	287.637	271.533
Share Capital	629.293	629.293	629.293
Reserves and Retained Earnings	210.046	148.765	15.064
Shareholders Funds	1.124.770	1.065.695	915.890
Gearing	65,4%	64,9%	102,3%

Consolidated net debt was Euro735.2 mn, a reduction of Euro201.4 mn compared to the first quarter of the previous year.

5. Outlook 2010

The performance of the various business models in the first three months of the year was in line with the objectives set by the Group and reflected their position as market leaders. The Group confirms its positive expectations regarding a solid sales and earnings evolution for the year.

The Group is maintaining market share growth through LFL as one of its top priorities, estimating that EBITDA will at least grow in line with sales.

The estimated Capex for the year is around Euro400 mn, focused on store openings in Poland and on store refurbishings in Portugal.

Lisbon, 27th April, 2010

The Board of Directors

II. CONSOLIDATED MANAGEMENT REPORT APPENDIX

1. Store Network

NUMBER OF STORES

		Openings	Closings	Network
	09 YE	Q1 10	Q1 10	Q1 10	Q1 09
JMR	343	1	1	343	344
Supermarkets	334	1	1	334	335
Hypers	9	0	0	9	9
Recheio	35	0	0	35	35
Madeira	15	0	0	15	15
Biedronka	1.466	42	4	1.504	1.372

SALES AREA (sqm)

		Openings	Closings*	Network
	09 YE	Q1 10	Q1 10	Q1 10	Q1 09
JMR	434.744	1.605	3.995	432.354	432.509
Supermarkets	352.276	1.605	805	353.076	350.041
Hypers	82.468	0	3.190	79.278	82.468
Recheio	114.410	0	-271	114.681	115.724
Madeira	14.300	0	47	14.253	14.300
Biedronka	814.493	26.951	1.377	840.068	764.502

* including changes of sales area due to remodellings

2. Definitions

Like For Like (LFL) sales: sales made by stores that operated under the same conditions in the two periods. Excludes stores opened or closed in one of the two periods. Sales of stores that underwent profound remodelling are excluded for the remodelling period (store closure).

Cash Flow per share: (Net Profit + Depreciation – Deferred tax – Non-recurrent items) / Number of Shares.

Gearing: Net Debt / Shareholder Funds.

3. Information Regarding Individual Financial Statements

In accordance with number 3 of article 10 of the Regulation number 5/2008 of the Portuguese Securities Market Commission (CMVM), the 1st Quarter Individual Financial Statements of Jerónimo Martins SGPS, S.A. will not be disclosed as they do not include significant information.

III. CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED INCOME STATEMENT BY FUNCTIONS FOR THE QUARTERS ENDED AT 31 MARCH 2010 AND 2009

			Euro thousand
	Notes	2010	2009
Sales and services rendered	3	1,955,130	1,605,131
Cost of sales		(1,588,062)	(1,300,420)
Supplementary income and costs		79,748	71,255
Gross profit		446,816	375,966
Distribution costs	4	(329,213)	(280,719)
Administrative costs	4	(45,045)	(35,507)
Exceptional operating profits/losses	7.1	(1,517)	1,167
Operating profit		71,041	60,907
Net financial costs	5	(17,058)	(17,541)
Profit in associated companies		43	29
Gains/Losses in other investments	7.2	(214)	(384)
Profit before taxes		53,812	43,011
Income taxes	6	(10,402)	(7,256)
Profit before minority interests		43,410	35,755
Attributable to:
Minority interests		1,119	3,238
Jerónimo Martins Shareholders		42,291	32,517
Basic and diluted earnings per share- Euros	13	0.0673	0.0517

JERÓNIMO MARTINS, SGPS, S.A.

CONSOLIDATED BALANCE SHEET AT 31 MARCH 2010 AND DECEMBER 2009

			Euro thousand
	Notes	2010	2009
Assets
Tangible assets	8	2,069,291	2,002,831
Investment properties	8	55,778	63,283
Intangible assets	8	864,015	835,368
Investments in associated Companies		1,162	1,118
Available-for-sale financial investments	10		7,528
Trade debtors and deferred costs		7,486	72,305
Derivative financial instruments	9	72,650 -	351
Deferred tax assets		73,562	69,021
Total non-current assets		3,143,944	3,051,805
Inventories		372,184	334,478
Taxes receivable		31,383	22,335
Trade debtors, accrued income and deferred costs		210,461	190,793
Derivative financial instruments	9	-	1,515
Cash and cash equivalents	11	213,713	223,501
Total current assets		827,741	772,622
Total assets		3,971,685	3,824,427
Shareholders' equity and liabilities
Share capital		629,293	629,293
Share premium		22,452	22,452
Own shares		(6,060)	(6,060)
Fair value and other reserves	12.1	74,175	55,184
Retained earnings		119,480	77,189
		839,340	778,058
Minority interests		285,430	287,636
Total Shareholders' equity		1,124,770	1,065,694
Borrowings	14	772,067	756,361
Derivative financial instruments	9	27,094	30,137
Employee benefits		27,952	27,738
Deferred profits- state grants		953	959
Provisions for risks and contingencies	15	18,417	18,480
Deferred tax liabilities		91,767	88,892
Total non-current liabilities		938,250	922,567
Trade creditors, accrued costs and deferred income		1,690,849	1,647,490
Derivative financial instruments	9	9,371	3,084
Borrowings	14	135,896	124,495
Taxes payable		72,474	61,021
Deferred profits- state grants		75	76
Total current liabilities		1,908,665	1,836,166
Total Shareholders' equity and liabilities		3,971,685	3,824,427

JERÓNIMO MARTINS, SGPS, S.A.

CONSOLIDATED STATEMENT OF GAINS AND LOSSES RECOGNISED IN EQUITY

		Euro thousand
	March 2010	March 2009
Currency translation differences	29,688	(41,345)
Fair value of cash flow hedging	(5,793)	(4,978)
Fair value of hedging instruments on foreign operations	(6,558)	6,710
Fair value of available-for-sale financial investments	(41)	-
Gains/losses directly recognised in equity	17,296	(39,613)
Net profit	43,410	35,755
Total gains/losses recognised in 1st Quarter	60,706	(3,858)
Attributable to:
Minority interests	(576)	1,603
Jerónimo Martins Shareholders	61,282	(5,461)

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

									Euro thousand
					Shareholders' equity attributable to Shareholders of Jerónimo Martins, SGPS, S.A.
	Notes	Share Capital	Share Premium	Own Shares	Fair value and other reserves	Retained Earnings	Total	Minority Interests	Shareholders' Equity
Balance Sheet at 31 December 2008		629,293	22,452	(6,060)	58,295	(54,162)	649,818	281,307	931,125
Equity changes in 2009
Currency translation differences in the 1st Quarter of 2009	12.1				(41,345)		(41,345)		(41,345)
Fair value of cash flow hedging	12.1				(3,343)		(3,343)	(1,635)	(4,978)
Fair value of hedging instruments on foreign operations	12.1				6,710		6,710		6,710
Gains/losses directly recognised in equity		-	-	-	(37,978)	-	(37,978)	(1,635)	(39,613)
Net profit in 1st Quarter of 2009		-	-	-	-	32,517	32,517	3,238	35,755
Total gains/losses recognised during the year		-	-	-	(37,978)	32,517	(5,461)	1,603	(3,858)
Dividends								(11,377)	(11,377)
Balance Sheet at 31 March 2009		629,293	22,452	(6,060)	20,317	(21,645)	644,357	271,533	915,890

Balance Sheet at 31 December 2009		629,293	22,452	(6,060)	55,184	77,189	778,058	287,636	1,065,694
Equity changes in 2010
Currency translation differences in the 1st Quarter of 2010	12.1				29,688		29,688		29,688
Fair value of cash flow hedging	12.1				(4,098)		(4,098)	(1,695)	(5,793)
Fair value of hedging instruments on foreign operations	12.1				(6,558)		(6,558)		(6,558)
Fair value of available-for-sale financial investments	12.1				(41)		(41)		(41)
Gains/losses directly recognised in equity		-	-	-	18,991	-	18,991	(1,695)	17,296
Net profit in 1st Quarter of 2010		-	-	-	-	42,291	42,291	1,119	43,410
Total gains/losses recognised during the year		-	-	-	18,991	42,291	61,282	(576)	60,706
Dividends	12.2							(1,630)	(1,630)
Balance Sheet at 31 March 2010		629,293	22,452	(6,060)	74,175	119,480	839,340	285,430	1,124,770

CONSOLIDATED CASH FLOW STATEMENT FOR THE QUARTERS ENDED AT 31 MARCH 2010 AND 2009

			Euro thousand
	Notes	2010	2009
Operating Activities
Cash generated from operations		76,038	25,118
Interest paid		(17,328)	(24,842)
Income taxes paid		(6,099)	(4,890)
Cash Flow from operating activities		52,611	(4,614)
Cash flow from investment activities		(80,240)	(105,998)
Cash Flow from financing activities		8,857	(29,865)
Net changes in cash and cash equivalents		(18,772)	(140,477)
Cash and cash equivalents changes
Cash and cash equivalents at the beginning of 1st Quarter		223,501	227,132
Net changes in cash and cash equivalents		(18,772)	(140,477)
Effect of available-for-sale financial assets revaluation		-	220
Effect of currency translation differences		8,984	(10,039)
Cash and cash equivalents at the end of 1st Quarter	11	213,713	76,836

	Index to the Notes to the Consolidated Financial Statements
1	Activity 14
2	Accounting policies 14
3	Segments reporting 14
4	Distribution and administrative costs 15
5	Net financial costs 16
6	Income tax recognised in the income statement16
7	Exceptional operating profits/losses and gains/losses in other investments16
8	Fixed assets and investment property 17
9	Derivative financial instruments 17
10	Available-for-sale financial investments 18
11	Cash and cash equivalents 18
12	Capital and reserves 18
13	Earnings per share 19
14	Borrowings 19
15	Provisions and adjustments to the net realisable value19
16	Contingencies 20
17	Related parties 20

1 Activity

Jerónimo Martins, SGPS, S.A. (JMH), is the parent Company of Jerónimo Martins Group (Group) and has its head office in Lisbon.

Jerónimo Martins Group is essentially devoted to the production, distribution and sale of food and other fast moving consumer goods products. The Group operates in Portugal and Poland.

Head Office: Rua Tierno Galvan, Torre 3, 9º, J- 1099-008 Lisbon

Share Capital: 629,293,220 euros

Registered at the Commercial Registry Office of Lisbon and Tax Number: 500 100 144

JMH has been listed on Euronext Lisbon (ex-Lisbon and Porto Stock Exchange) since 1989.

The Board of Directors approved these consolidated financial statements on 27th April 2010.

2 Accounting policies

The JMH consolidated financial statements were prepared in accordance with the interim financial reporting standard (IAS 34), and all other International Financial Reporting Standards (IFRS) issued by International Accounting Standards Board (IASB) and with the interpretations of the International Financial Reporting Interpretations Committee (IFRIC).

The consolidated financial statements were prepared in accordance with the International Financial Reporting Standards (IFRS) as adopted by the European Union, and with the same standards and accounting policies adopted by the Group on the elaboration of the annual financial statements, including mainly an explanation of the events and relevant changes for the understanding of variations in the financial position and Group performance since the last annual report. Thus, some of the notes from the 2009 annual report are omitted because no changes occurred or they are not materially relevant for the understanding of the interim financial statements.

In relation to 2009, the European Union issued the Regulation no. 243/2010, which adopted some improvements to IFRS 2, IFRS 5 IFRS 8, IAS 1, IAS 7, IAS 17, IAS 18, IAS 36, IAS 38, IAS 39, IFRIC 9 and IFRIC 16 and Regulation no. 244/2010 which adopted amendments to IFRS 2 - Share-based Payment, clarifying the accounting treatment for group cash-settled share-based payment transactions in the individual financial statements of the entity receiving the goods or services when the entity has no obligation to settle the sharebased payment transaction. With regard to both, its implementation is mandatory for financial years beginning after December 31, 2009, having no impact on the Group's Financial Statements.

All amounts are shown in thousand euros (EUR thousand) unless otherwise stated.

2.1. Transactions in foreign currencies

Transactions in foreign currencies are translated into Euros at the exchange rate prevailing on the transaction date.

On the balance sheet date, monetary assets and liabilities expressed in foreign currencies are translated at the exchange rate prevailing on that date and exchange differences arising from this conversion are recognised in the income statement. When qualifying as hedges on investments in foreign subsidiaries the exchange differences are deferred in equity.

The main exchange rates applied on the balance sheet date are those listed below:

	Rate on 31 March 2010	Average rate for the 1st Quarter
Polish Zloty (PLN)	€ 0.2586	€ 0.2510
US Dollar (USD)	€ 0.7401	-

3 Segments reporting

Management monitors the performance of the business based on a geographical and business nature perspective. Due to the fact that the business units in the Distribution area in Portugal share a set of competences, the Group analyses, on a quarterly basis, its segments in an aggregate performance perspective. In addition, the Group also separates the Retail business unit in Poland. Apart from these, there are also other businesses, but due to their reduced materiality are not reported separately.

Business segments:

• Portugal Distribution: comprises the business units of JMR (Pingo Doce supermarkets and Feira Nova hypermarkets), the wholesale business unit Recheio and Madeira business unit (Pingo Doce supermarkets and Recheio Cash & Carry);
• Poland Distribution: the business unit using the brand Biedronka;

• Others, eliminations and adjustments: includes i) the business units with reduced materiality (Unilever Jerónimo Martins, Gallo Worldwide, Marketing Services and Representations, Restaurants and pharmacies in Poland), ii) the Holding companies and iii) the Group's consolidation adjustments.

Management evaluates the performance of segments based on the Earnings Before Interest and Taxes (EBIT). This indicator excludes the effects of non-recurrent results.

		Portugal Distribution		Poland		Others, eliminations		Total JM
			Distribution		and adjustments		Consolidated
	2010	2009	2010	2009	2010	2009	2010	2009
Net Sales and Services	807,940	749,948	1,087,776	795,657	59,414		59,526 1,955,130 1,605,131
Inter-segments	85	42	136	90	(128)	(56)	93	76
External Customers	807,855	749,906	1,087,640	795,567	59,542	59,582	1,955,037	1,605,055
Operational Cash-Flow (EBITDA)	45,335	43,977	70,214	49,081	2,713	7,630	118,262	100,688
Depreciations and Amortisations	(24,067)	(23,041)	(20,372)	(16,429)	(1,266)	(1,478)	(45,705)	(40,948)
Operational Result (EBIT)	21,268	20,936	49,842	32,652	1,448	6,152	72,558	59,740
Financial Results							(17,229)	(17,896)
Net Result Attributable to JM							42,291	32,517
TOTAL ASSETS (1)		2,159,450 2,173,663	1,573,194	1,428,051	239,041		222,713 3,971,685 3,824,427
TOTAL LIABILITIES (1)		1,518,976 1,534,514	1,019,110	932,252	308,829		291,967 2,846,915 2,758,733
Investments in Fixed Assets	21,186	15,673	52,413	18,254	994	329	74,593	34,256

Detailed Information by Segment at March 2010 and 2009

(1) The comparable amounts of total assets and liabilities are reported to 31 December 2009.

Reconciliation between EBIT and the Operational Result of the Income Statement by Functions

	March 2010	March 2009
EBIT	72,558	59,740
Non recurrent results	(1,517)	1,167
Operational Result	71,041	60,907

Information by Geographical Segments at March 2010 and 2009

	Net Sales and Services
	2010 2009
Portugal	865,832	808,381
Poland	1,089,298	796,750
Total	1,955,130	1,605,131

4 Distribution and administrative costs

	March 2010	March 2009
Supplies and services	78,845	66,615
Advertising costs	17,902	13,837
Rents	44,139	39,187
Staff costs	161,059	136,174
Depreciations, amortisations and assets profit/loss	45,638	40,297
Transportation costs	25,355	20,396
Other operational profit/loss	1,320	(280)
	374,258	316,226

5 Net financial costs

	March 2010	March 2009
Interest expense	(16,598)	(18,959)
Interest received	669	517
Dividends	-	33
Net foreign exchange	669	(1,298)
Investment property:
Changes to fair value	(5)	(5)
Other financial costs and gains	(1,654)	(1,115)
Fair value of financial investments held for trade:
Derivative instruments	(139)	3,066
Treasury bonds	-	220
	(17,058)	(17,541)

The interest expense heading includes the interests regarding loans measured at amortized cost, as well as interests on fair value and cash flow hedging instruments (note 9). Other financial costs and gains include costs with debt issued by the Group.

6 Income tax recognised in the income statement

	March 2010	March 2009
Current income tax
Current tax of the year	(9,801)	(5,699)
Adjustment to prior year estimation	(100)	-
	(9,901)	(5,699)
Deferred tax
Temporary differences created and reversed	(1,749)	(2,989)
Change to the recoverable amount of tax losses and temporary differences from previous years	1,248	1,432
	(501)	(1,557)
Total income taxes	(10,402)	(7,256)

7 Exceptional operating profits/losses and gains/losses in other investments

7.1 Exceptional operating profits/losses

	March 2010	March 2009
Gains/Losses with businesses disposals and acquisitions	(1,114)	1,185
Gains/Losses related to natural disaster in Madeira	(1,074)	-
Reimbursement of notary fees resulting from court decision	798	-
Others	(127)	(18)
	(1,517)	1,167

7.2 Gains/Losses in other investments

	March 2010	March 2009
Losses in the fair value of available-for-sale financial investments	(214)	(384)
	(214)	(384)

8 Fixed assets and investment property

	Tangible assets	Investment property	Intangible assets	Total
Net value at 31 December 2009	2,002,831	63,283	835,368	2,901,482
Foreign exchange differences	42,766	-	23,179	65,945
Increases	68,591	-	6,002	74,593
Disposals and write-offs	(2,010)	-	(272)	(2,282)
Transfers	(29)	-	1,540	1,511
Depreciation and impairment losses	(46,144)	-	(1,802)	(47,946)
Transfers to/from investment properties	3,286	(3,286)	0	0
Fair value changes	-	(4,219)	-	(4,219)
Net value at 31 March 2010	2,069,291	55,778	864,015	2,989,084

As a consequence of the currency translation adjustment of the assets in the Group's business in Poland, the Goodwill related to this business, totalling PLN 1,282,278 thousand, was updated positively in EUR 19,161 thousand.

No valuations were made on the land allocated to operational activities, which are recognised at their market value.

From the disposals and write-offs made in the 1st Quarter 2010, an amount of EUR 3,028 thousand were recognised as a loss in the profit and loss.

9 Derivative financial instruments

				March 2010			December 2009
	Notional		Assets		Liabilities	Notional		Assets		Liabilities
		Current	Non Current	Current	Non Current		Current	Non Current	Current	Non Current
Derivatives held for trading
Interest rate swap	10 millions EUR	-	-	-	573	10 millions EUR	-	-	-	564
Currency Forwards (PLN)	-	-	-	-		- 14.1 millions PLN	115	-	-	-
Currency Forwards (USD)	-	-	-	-		- 0.6 millions USD	15	-	-	-
Fair value hedging derivatives
USD loan hedging	180 millions USD	-	-	-		6,724 180 millions USD	-	-	-	16,766
Cash flow hedging derivatives
Interest rate swap (EUR)	526.8 millions EUR	-	-	-	19,394	527.7 millions EUR	-	-	-	12,807
Interest rate swap (PLN)	213.8 millions PLN	-	-	-		403 171 millions PLN	-	351	-	-
Foreign operation investments hedging derivatives
Currency swap (PLN)	400 millions PLN	-	-	4,208		- 400 millions PLN	1,385	-	-	-
Currency Forwards (PLN)	229.5 millions PLN	-	-	5,163		- 197 millions PLN	-	-	3,084	-
Total derivatives held for trading		-	-	-	573		130	-	-	564
Total hedging derivatives		-	-	9,371	26,521		1,385	351	3,084	29,573
Total assets/liabilities derivatives		-	-	9,371	27,094		1,515	351	3,084	30,137

In March 2010 the values shown include interest receivable or payable related with these financial instruments that are due. The net payable amount is EUR 3,187 thousand.

10 Available-for-sale financial investments

Regarding the financial assets available-for-sale, the reduction of EUR 41 thousand respects to an impairment loss related to equity holdings listed, which were recognised at its fair value at the reporting date of these financial statements.

11 Cash and cash equivalents

	March 2010	December 2009
Bank deposits	179,381	187,497
Short-term investments	31,373	32,272
Cash and cash equivalents	2,959	3,732
	213,713	223,501

12 Capital and reserves

12.1 Fair value and other reserves

	Land and buildings	Cash-flow Hedging	Available for-sale financial investments	Currency translation reserve	Total
Balance as at 1 January 2010	84,931	(4,985)	58	(24,820)	55,184
Fair value adjustment of financial investments: - Gross value - Tax - Minority interests		(7,395) 1,602 1,695		(8,874) 2,316	(16,269) 3,918 1,695
Fair value adjustment of available-for-sale financial investments: - Gross value			(41)		(41)
Currency translation differences:
- In the year - Deferred tax	1,368 (260)	(27)		30,358 (1,751)	31,699 (2,011)
Balance as at 31 March 2010	86,039	(9,110)	17	(2,771)	74,175

	Land and buildings	Cash-flow Hedging	Available for-sale financial investments	Currency translation reserve	Total
Balance as at 1 January 2009	93,783	(1,082)	-	(34,406)	58,295
Fair value adjustment of financial investments: - Gross value - Deferred tax - Minority interests		(6,527) 1,549 1,635		9,129 (2,419)	2,602 (870) 1,635
Currency translation differences: - In the year - Deferred tax				(40,619) (726)	(40,619) (726)
Balance as at 31 March 2009	93,783	(4,425)	-	(69,041)	20,317

12.2 Dividends

Dividends distributed in 2010 in the amount of EUR 1,630 thousand, of which only EUR 1,329 thousand were paid to minority interest in the Group companies.

13 Earnings per share

13.1 Basic and diluted earnings per share

	March 2010	March 2009
Ordinary shares issued at the beginning of the year	629,293,220	629,293,220
Own shares at the beginning of the year	859,000	859,000
Shares issued during the year	-	-
Weighted average number of ordinary shares	628,434,220	628,434,220
Diluted net result attributable to ordinary shares	42,291	32,517
Basic and diluted earnings per share – Euros	0.0673	0.0517

14 Borrowings

14.1 Current and non-current loans

	March 2010	December 2009
Non-current loans
Bank loans	204,593	198,487
Bond loans	517,900	509,127
Financial lease liabilities	49,574	48,747
	772,067	756,361
Current loans
Bank overdrafts	22,285	21,563
Bank loans	78,948	67,119
Financial lease liabilities	34,663	35,813
	135,896	124,495

14.2 Financial debt

Since the Group entered several foreign exchange rate risk and interest risk hedging operations, as well as shortterm investments, the net consolidated financial debt at the balance sheet date is as follows:

	March 2010	December 2009
Non-current loans (note 14.1)	772,067	756,361
Current loans (note 14.1)	135,896	124,495
Derivative financial instruments (note 9)	36,465	31,355
Interest on accruals and deferrals	1,565	(442)
Bank deposits (note 11)	(179,381)	(187,497)
Short-term investments (note 11)	(31,373)	(32,272)
	735,239	692,000

15 Provisions and adjustments to the net realisable value

	Opening balance	Set up and reinforced	Used and reversed	Foreign exchange difference	Closing balance
Doubtful debtors	22,342	248	(449)	219	22,360
Inventories	12,127	456	(890)	472	12,165
Financial Investments	2,058	41	-	-	2,099
Short terms investments	57	-	-	-	57
Total fair value adjustments	36,584	745	(1,339)	691	36,681
Provisions for risks and contingencies	18,480	394	(721)	264	18,417
Total of provisions	18,480	394	(721)	264	18,417

16 Contingencies

Following the contingencies mentioned in the 2009 Annual Report, only the process that opposes Tengelmann KG and the companies Jerónimo Martins, SGPS, S.A. and Pingo Doce - Distribuição de Produtos Alimentares, S.A., has changed. Regarding this procedure, the parties reached an agreement on the first week of March, which also encompassed other issues that were discussed between the two Groups. This agreement was ratified by the Arbitration Court on March 12.

The amount paid by Jerónimo Martins Group is not material if compared with the value of the claim and, as mentioned, includes the settlement of other outstanding issues between the two Groups, like the pipeline stores in Portugal.

17 Related parties

56.11% of the Group is owned by the Sociedade Francisco Manuel dos Santos and no transactions occurred between this Company and any company of the Group in the 1st Quarter of 2010, neither were there any amounts payable or receivable between them on March 31st, 2010.

Balances and transactions of Group companies with related parties are as follows:

		Sales and services rendered		Stocks purchased and services supplied
	March 2010	March 2009	March 2010	March 2009
Joint-Ventures	180	145	21,517	21,023
Associated companies	40	165	188	84

	Accounts payable			Accounts receivable
	March 2010	December 2009		December 2009
Joint-Ventures	379	607	10,805	8,900
Associated companies	1	1	669	678

Balances and transactions with related parties not eliminated in the consolidation process, were as follows:

	Sales and services rendered			Stocks purchased and services supplied
	March 2009	March 2009	March 2010	March 2009
Joint-Ventures	93	76	11,834	11,562
Associated companies	40	165	188	84

	Accounts payable			Accounts receivable
	March 2010	December 2009	March 2010	December 2009
Joint-Ventures	192	319	5,942	4,894
Associated companies	1	1	669	678

All the transactions with the jointly controlled companies (joint ventures) and associate companies were made under normal market conditions, i.e., the transaction value corresponds to prices that would be applicable between non related parties.

Outstanding balances between Group companies and related parties, being a result of a trade agreement, are settled in cash, and are subject to the same payment terms as those applicable to other agreements celebrated between Group companies and their suppliers.

The amounts receivable are not covered by insurance and no guarantees are given or received, as the Group holds a relevant influence over these companies.

There are no provisions for doubtful debts and no costs were recognised during the year related with bad debts or doubtful debts with these related parties.

18 Events after the balance sheet date

On the 9th of April 2010 was held the Annual Shareholders Meeting of Jerónimo Martins, SGPS, S.A., in which was approved the Results Appropriation Proposal presented by the Board of Directors. Of this proposal results a gross dividend payment of 14.3 cents per share, excluding own shares in the portfolio, which represents a payment of an amount of 89,866,093.46 euros that will take place on 7th May 2010.

It was also elected, in the Annual Shareholders Meeting, the list proposed by the shareholder Sociedade Francisco Manuel dos Santos, SGPS, S.A. for the Company's Board of Directors and Supervisory Bodies. Subsequently, there was a meeting of the Board of Directors, where it was decided a new internal organization for the three years period (2010-2012).

Lisbon, 27^h April, 2010

The Certified Accountant The Board of directors