Swedish supermarket chain ICA posted an improvement in operating income for the first half as a result of higher margins and improved store sales in Sweden and the Baltic.
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Operating income, excluding capital gains on property sales, rose to SEK748m (US$122.6m), from SEK608m for the previous year.
Net income for the period to 30 June 2008 amounted to SEK748m, a decrease of 10.1% as a result of lower capital gains from real estate sales and a higher tax expense.
Net sales for the first half amounted to SEK44.06m from SEK39.5m, an increase of 11.6%.
The company said its ICA Norge chain continues to affect the group’s earnings, its low result due to expenses for the price repositioning introduced in May and high shrinkage.
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By GlobalDataDuring the second quarter, we continued our intensive work with ICA Norge on a turnaround process initiated earlier in the year,” said Kenneth Bengtsson, president and CEO. “The changes in Norway in recent years have focused on modernising the store network. Now we are placing even greater focus on our customers and on sales, and our price repositioning is an important step.”
The company said price cuts implemented in May for its ICA Norge stores will be financed through “cost reductions and supplier negotiations”.
