Dutch retail giant Ahold has reported third-quarter net profit of €257.6m (US$260.7m), compared to €304.2m for the same period last year.
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The company said the lower earnings were primarily due to higher goodwill amortisation, higher financial expenses, higher income taxes and unfavourable currency differences.
Ahold, the world’s third-largest food retailer, also warned that it had lowered its outlook for full-year earnings per share growth, excluding goodwill amortisation, exceptional items and currency impact, from plus 5-8% to negative 6-8%. The company said the revised outlook was due to continuing difficult trading conditions in most markets, particularly South America, as well as higher financial expenses and an increased average tax rate.
Ahold has also announced plans to improve the company’s competitiveness and financial performance with the launch of an aggressive company-wide initiative focused on organic growth, cost reduction, capital efficiency and portfolio review for the 2003-2005 period. The company, which ranks behind Wal-Mart and Carrefour in sales, said the initiative was aimed at generating free cash flow and reducing debt.
