Finnish retailer Kesko said today (28 April) the near future remains “dim” as it posted a drop in first-quarter net profit due to weak demand.
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For the period ended 31 March, group net profit dropped to EUR11.5m (US$15m) from EUR120m in the corresponding period of 2008.
Group net sales also experienced a drop, to EUR2bn from EUR2.3bn in 2008. Net sales decreased by 6.4% in Finland and by 31.3% abroad.
The group’s net sales performance was affected by a decline in the construction markets, especially in the Nordic and the Baltic countries, and by a decrease in the sales of the car and machinery trade. A steady growth continued in the grocery trade.
Operating profit dropped to EUR23m from EUR150m in the comparable period of the previous year.
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By GlobalDataHowever, net sales from the company’s food division reached EUR888m (EUR853m), up 4%. The retail sales of K-food stores totalled EUR1.14bn, representing a growth of 4.9%. The group’s K-food stores’ grocery sales increased by 5.3%.
“The development of the group’s operating activities is affected by the economic outlook in its different market areas and especially by the growth rate of private consumption. As a result of the problems in the financial market and the contraction of the real economy, the outlook for the near future remains dim,” Kesko said.
