Dutch retailer Ahold today (1 March) reported higher annual profits on the back of increased sales and a tax benefit.
The company, which runs the Albert Heijn chain in the Netherlands and has banners including Giant Food Stores in the US, posted a 19.2% increase in net income to EUR1.02bn.
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Income from continuing operations rose 19.6% in 2011 to EUR1.03bn, which Ahold said was due to improved operating profit, an increase in its income from joint venture like ICA and an income tax benefit of EUR109m.
Operating income inched up 0.8% to EUR1.35bn while underlying retail operating income, which excludes impairment, restructuring and M&A costs, increased 0.4% to EUR1.46bn.
Ahold said operating income from its US business was up 8% at EUR1bn after a 6.6% increase in sales in the market to $25.1bn. Identical-store sales increased 4.9%.
The operating income from Ahold’s Dutch business fell 1.9% to EUR675m despite a 4.2% increase in sales to EUR2.5bn. Identical-store sales were up 2.8%. In 2010, the retailer had a higher benefit from one-off items, which boosted local profits.
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By GlobalDataProfits from Ahold’s operations in the Czech Republic and Slovakia improved, with operating income of EUR18m, compared to EUR10m last year. Net sales increased 4.8% to EUR1.7bn. Identical-store sales rose 2.2%.
Meanwhile, Ahold’s share of income from joint ventures increased from EUR84m in 2010 to EUR141m in 2011. Two weeks ago, ICA, the Sweden-based retailer in which Ahold owns a 60% stake, reported that its net income more than doubled in 2011 as it lapped a year in which it incurred a hefty tax charge.
Ahold reiterated the sales results it filed in January. Net sales increased 2.5% to EUR30.27bn. Excluding the impact of currency translation, sales rose 5.5%.
CEO Dick Boer said 2011 was a “successful” year for Ahold but he had a note of caution for 2012.
“We expect 2012 to be another challenging year for the food retail industry, the macro-economic environment means that consumers still continue to look for value and competition will remain intense. Our strong brands are well positioned to make progress in our major markets, however, we anticipate sales growth in the first quarter will reflect the difficult economic conditions, as well as the timing of Easter,” he said.
More to follow….
