Dutch retail giant Ahold has reported operating income before goodwill and exceptionals of €677m (US$722.8m) for the first half of 2003, down 48.4% from the year-ago period.

Operating income before goodwill and exceptional items excluding currency impact fell 38.6% mainly as a result of lower earnings at its US Foodservice unit and certain European retail units, as well as higher audit, legal and consultancy fees, Ahold said.

Net income was €60m, compared to a loss of €142m a year earlier.

Net sales were €30.3bn for the first half, down 11.8% compared to the same period last year, although net sales excluding currency impact increased by 3.6%.

“The results in the first half-year of 2003 were disappointing and impacted by the diversion of our management as a result of the events surrounding the announcements on February 24, 2003, and the related investigations,” said Ahold CFO Hannu Ryöppönen.

“I am confident, however, that the new strategy…will help us to ‘turn the corner’ and restore the profitability of the group in future years,” he added.

Ahold is struggling to recover from an accounting scandal that emerged in February this year. The scandal led to the resignations of several group executives, including chief executive Cees van der Hoeven, who was later replaced by Anders Moberg.