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.
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.
However, 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.