Dutch retailer Ahold, which was hit by a massive accounting scandal just over one year ago, has substantially narrowed its full-year net loss and reduced its net debt.

The company posted a net loss of €1m (US$1.2m) for 2003, compared to a net loss of €1.2bn in 2002. Under US GAAP rules, the net loss was €747m, compared to a loss of €4.3bn in the previous year. Operating income for 2003 was €718m, compared to €239m for 2002. Net debt came in at €7.5bn, versus €12.3bn in 2002.

Back in February 2003, the company revealed that accounting irregularities at its US Foodservice unit had led to massive overstatements of earnings. The company's CEO Cees van der Hoeven and CFO Michael Meurs stepped down as a result of the scandal.

"Months of ongoing effort resulted in a number of achievements, specifically defining a new strategy and creating the financial platform to move forward. At the end of last year we indicated that 2003 in many respects had been a lost year, but today's announcement also shows that Ahold is on track with its 'Road to Recovery' program," said Ahold's current CEO Anders Moberg.

Net sales were €56.1bn for 2003, a fall of 10.6% compared to 2002, but sales rose 2.7% excluding foreign currency effects.

The company said its main retail trade operations, with the exception of Albert Heijn, showed net sales increases in local currencies, as well as US Foodservice. Ahold said the weak US dollar had impacted its reported net sales numbers in Euros. Divestments that took place in 2003 only had a slight impact on net sales.

Ahold said its retail trade performance was driven by Stop & Shop and Giant-Carlisle.
Net sales in its US retail trade operations in 2003 increased by 2.7% in US dollars compared to 2002. Stop & Shop and Giant-Carlisle showed strong US dollar net sales, resulting from comparable store gains, as well as from the opening of stores. Net sales in 2003 were impacted by heightened competition and competitive store openings, particularly in the southeastern United States.

In Europe, Ahold said there had been competitive pressure in most markets. Net sales in its Europe retail operations increased 0.9% compared to 2002. Excluding currency impact in Central Europe, the increase would have been 1.7%.

At the company's US Foodservice unit, net sales rose 2.3% in 2003, boosted by acquisitions, but the unit's profitability declined. Ahold said the unit had incurred an operating loss before impairment and amortisation of goodwill and exceptional items of US$74m in 2003 compared to income of US$292m in 2002.

"This was primarily due to US Foodservice experiencing a weakening of its procurement leverage as vendors raised prices and shortened payment terms, largely related to irregularities announced and investigations conducted in 2003," Ahold said.

The retailer said 2004 will be a year focused on continued efforts to strengthen the group, and restructure and integrate the businesses in order to build a solid platform for future growth and profitability.