Dutch retail giant Ahold has reported a rise in second-quarter profit that failed to meet analysts' expectations and the company also announced the resignation of its chairman.

Ahold posted net income of €32m (US$38.7m) for the second quarter of 2004, compared to €3m a year earlier. Analysts had, on average, been expecting Ahold to report net income of €72.8m, according to a Reuters poll. The company said the improvement in net income was primarily caused by lower net interest expenses related to the early repayment of debt in the second quarter and during 2003.

Ahold said its second-quarter net sales were down 4.9% to €12.3bn, while net sales growth was 3.0% excluding currency impact and impact of divestments. Operating income slid to €169m from €222m a year earlier.

"Many of our main operating companies showed improved performance against the same quarter of last year," said Anders Moberg, Ahold's president and CEO.

"The recovery of US Foodservice is well underway and we are pleased to show a positive operating income this quarter. In Europe, the ongoing repositioning of Albert Heijn is strengthening the company's market leadership while cost reductions have led to higher operating income," he added.

However, Ahold said the results from its US retail operations continue to be impacted by strong competition. Net sales at its US retail trade operations in the second quarter of 2004 increased 0.5% in US dollars compared to the same period last year. Identical sales growth in US dollars was 0.3% and comparable sales growth was 0.9%.

Ahold also said its divestment program is on track and that based on the current state of the situation, the company expects to close the divestments of its operations in Spain and at BI-LO/Bruno's later this year.

Meanwhile Ahold also announced that Karel Vuursteen has decided to resign as chairman of the group's supervisory board because of personal circumstances. He will remain a member of the board until the next annual general meeting of shareholders to be held on 18 May 2005, but René Dahan will temporarily act as chairman of the board.