Sligro Food Group booked an increase in full-year earnings today (28 January) but said its profit margins will continue to be “squeezed” by the general state of the economy.
Net profit for the year amounted to EUR74.3m (US$104.2m), a 4.2% increase on the previous year.
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Sligro said it had managed to turn a first-half operating loss in its food retail arm into an annual profit of EUR5m.
Operating profit in the firm’s foodservice division, however, declined by EUR2m to almost EUR93m. The effect of market pressures on prices was countered by cost savings, the firm said.
Nevertheless, CEO Koen Slippens said: “In challenging market conditions, Sligro Food Group outstripped market growth in both segments, topping that achievement by posting the highest net profit ever.”
The firm said it expects to see “very modest growth” in the supermarket segment and a “static” foodservice market.
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By GlobalData“We expect to do better than the market as a whole in both parts areas. The gross profit margins will continue to be squeezed by the general state of the economy and the changes taking place in the market. On the cost side, we expect to see a limited increase in 2010,” the company said.
“Overall, however, we feel there is too much uncertainty with the market in its current state to make any definite pronouncements concerning expected results,” it added.
As reported on 6 January, sales in 2009 totalled EUR2.26bn, an increase of 4.2% on 2008. Organic growth in sales was 5.1%.
