Globalisation brings with it attendant risks in exposure to volatile economies, as Dutch retail giant Ahold has just found out.
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The group revealed yesterday [Thursday] that its profits for 2001 remained flat, depressed by the charge it took for the devaluation of the Argentine peso.
Ahold said it had to take a €214m (US$188m) exceptional charge for the peso devaluation, which could yet lead to further exceptional charges. Net profits were €1.11bn, down 0.9% from €1.12bn in 2000.
Nevertheless, the group was able to reconfirm its outlook for this year, forecasting 15% growth in earnings per share. As well as the peso devaluation, Ahold also took a restructuring charge of €106.4m related to the integration of its Alliant Foodservice acquisition into its US operations.
Analysts were upbeat about the results, saying the only unexpected factor was the size of the charge relating to devaluation in Argentina.
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By GlobalDataCEO Cees van der Hoeven indicated forecast sales in 2002 will be above €75bn, compared with the €66.6bn generated in 2001.
