The chief executive of Belgium-based retailer Delhaize said this morning (5 August) that its first-half results had met the company’s expectations despite a fall in profits.
President and CEO Pierre-Olivier Beckers said the figures were “in line with our plans” after Delhaize reported a dip in half-year earnings.
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Shares in the company, which runs stores in Belgium, south-eastern Europe, the US and Indonesia, fell over 3% after the saw its net profit dip 0.6% to EUR243m (US$344m) in the first six months of 2011.
Operating profit fell 8.6% to EUR427m on the back of lower gross margins as Delhaize hopes of seeing savings from moves to its improve its category management and supply chain in the US were delayed.
The weakness of the US dollar did affect profits at Delhaize, which runs chains including Food Lion and Hannaford in the US.
The depreciation of the dollar versus the euro accelerated during the second quarter and, when the impact of foreign exchange was removed from the results, the retailer saw its net profit rise 2.9%. Its operating profit was still down on a constant-currency basis, falling 4.9%.
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By GlobalDataHowever, Delhaize emphasised the “strong” acceleration in its sales growth during the second quarter of 2011.
Delhaize’s second-quarter revenue dropped 4.2% to EUR5.11bn, although, on a constant-currency basis, sales climbed 3.9%.
Over the first six months of 2011, revenue fell 1.4% to EUR10.15bn. When the impact of currency fluctuation was excluded from the results, revenue increased 2.4%.
“At the end of the first half of 2011, our results are in line with our plans. Despite the slight delay we are experiencing in the US category management and supply chain savings, we are confident that the second half of the year will show an acceleration of our revenue and profit momentum,” Delhaize president and CEO Pierre-Olivier Beckers said.
Shares in Delhaize were down 3.75% at EUR45.27 at 09:24 CET.
Click here for the complete statement from Delhaize and check back later for coverage of the company’s conference call with analysts.
