Belgian retail group Delhaize has reported a 3.8% increase in operating profit at identical exchange rates for the first quarter of 2005.
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However, because of the weaker US dollar, net profit from continuing operations decreased by 1.1% to €83.0m (US$105.5m). At identical exchange rates, net profit from continuing operations would have increased by 2.2%. Discontinued operations include 34 Kash n’ Karry stores closed in Florida in the first quarter of 2004, the loss-making Thai operations (divested in the third quarter of 2004) and the Slovak operations (pending sale).
Delhaize, which does most of its business in the US, posted organic sales growth of 1.5% for the first quarter. Net sales and other revenues decreased by 0.2% to €4.3bn, impacted by the weakening of the US dollar. At identical exchange rates, net sales and other revenues increased by 3.1%, helped by the 4.3% increase in US sales, supported by the integration of Victory and comparable store sales growth of 0.5%. Delhaize
“In the first quarter of 2005, Delhaize Group posted higher profit at identical exchange rate in spite of a more competitive environment in our key markets,” said Pierre-Olivier Beckers, president and CEO. “Better margin management, particularly at Food Lion and Delhaize Belgium, allowed us to compensate for higher expenses incurred, particularly expenses related to the integration of Victory and the launch of Sweetbay Supermarket ahead of related sales benefits.”
Delhaize said that in 2005, it expects to increase its sales network by approximately 102 stores to a total of 2,667 stores (including the acquisition of Cash Fresh and the sale of 11 Delvita stores in Slovakia). Net sales and other revenue is expected to increase by between 3.5% and 4.5%. Net profit growth is expected to be between 15% and 20%.
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