A symbol of Slovenia failed regional ambitions and growing financial problems, the country's largest food retailer Mercator, on Tuesday reported a net loss of EUR103.6m in 2012, versus a profit of 23.5m in the previous year.

The supermarket chain, which operates stores in Slovenia, Serbia, Croatia, Bosnia and Montenegro, while this year planning to sell its units in Albania and Bulgaria, blamed the loss on a fall in the value of some of its assets, including real estate, plus tougher competition and a worsening economic situation. Profits were also hit by the depreciation of the Serbian dinar and by an increase of VAT in Croatia.

"The competition in the region is getting tougher which is reducing our profit margins," Mercator's chief executive Toni Balazic told reporters at a news conference, Reuters reported.

Mercator is also still struggling with ownership issues, which symbolizes the problems that the country's companies are having as investors avoid the one-time darling of the new EU members states, but whose statism is now seen as a big part of the problem. In December, Mercator's owners resumed an attempt to sell their joint 53.18% stake in the company after an earlier attempt was not successful.

The economy has been back in recession since 2011 and the country's mostly state banks are crumbling under bad loans worth about 19% of annual GDP. Added to this is a political crisis as pressure mounts for Premier Janez Jansa to resign over corruption allegations.

Source: bne