Finnish retailer Kesko has booked an increase in full-year profits from its food business, boosted by strong sales.
The performance from Kesko’s grocery division, which takes in three formats in Finland, bucked falling company earnings, due to lower profits elsewhere in the business.
Kesko said the underlying operating profit from its grocery division climbed 12.1% in 2011 to EUR172.2m (US$227.7m). Sales grew 7.3% to EUR4.18bn.
For the fourth quarter of the year, Kesko’s food operating profit amounted to EUR38.6m, a 1.8% increase on the prior-year period. Sales climbed 8.4% to EUR1.11bn.
Group annual net profit fell 8.7% to EUR197m. Operating profit dropped 8.5% to EUR281m as earnings from Kesko’s home and speciality trade division fell. Company net sales were up 7.8% at EUR9.46bn.
Looking ahead, the company warned that underlying profits would be lower despite better sales.
“The Kesko group’s net sales are expected to grow during the next twelve months. Owing to the uncertainty about economic development and consumer demand, and the costs involved in the expansion of the store site network as well as expansion of business operations in Russia, we are prepared for the 2012 operating profit excluding non-recurring items to be lower than the 2011 operating profit excluding non-recurring items,” it said.