Ahold’s Swedish subsidiary ICA has today (9 November) seen a drop in profits, on the back of a goodwill impairment and higher logistic costs.
The company posted a net loss of SEK2m (US$300,000) for the three months ended 30 September, compared to a net income of SEK644m in the same period last year. ICA said an impairment of goodwill was made in ICA Norway based on the company’s new business plan.
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In August, ICA decided to sell the ICA Maxi hypermarket channel in Norway and started a sales process for the 24 stores.
Operating income was down 64.9% during the third-quarter to SEK330m because of lower margins resulting from price reductions and partly due to temporarily higher logistics costs, the company said.
However, net sales climbed 2.1% to SEK24bn due to higher sales in the domestic market. ICA said sales in Sweden rose mainly because of the company’s strategic price cuts.
President and CEO Kenneth Bengtsson remained positive about the results and said: “We strengthened our position in Sweden during the third quarter in a weak food retail market where customers remain price conscious.”
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By GlobalDataFor the nine months ended 30 September, ICA posted net income of SEK684m, down 2.1% on the same period last year. Operating income was down 29.4% to SEK1.56bn while net sales reached SEK70.26bn, up 1.3% on the same period last year.
Bengtsson said the company’s priorities for the fourth quarter are to “continue the improvements in ICA Norway, long-term price cuts, modernisation of the retail network and improved customer offerings in all our markets and to maintain cost controls”.
