Troubled Dutch retail giant Ahold has warned that its 2003 results will be negatively affected by the aftermath of a massive accounting scandal.
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“The distractions caused by the events surrounding the announcement on February 24, 2003 and the related investigations are expected to have had a negative impact on our business,” the company said, after reporting a €4.33bn (US$5.01bn) 2002 net loss under US GAAP accounting standards.
At the beginning of October, Ahold reported its much-delayed 2002 results, revealing a €1.2bn net loss under Dutch accounting standards.
In February, the retailer revealed massive accounting irregularities at its US Foodservice unit. As a result Ahold’s CEO and CFO resigned and the retailer carried out a company-wide internal investigation that revealed accounting irregularities of over US$1bn.
Issuing its outlook today [Friday], Ahold said it expects that 2003 consolidated net sales will be negatively affected by the weak global economy and strong competition in the markets where it operates, and that its 2003 net sales will also be reduced by the divestment of some businesses.
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By GlobalDataAhold said it expects both operating expenses and net financial expenses to be higher in 2003 than in 2002.
The retailer added that it expects that professional fees for lawyers and accountants, together with refinancing costs, will have a significant impact on 2003 income.
