Dutch supermarket chain Koninklijke Ahold NV (AHODF.PK,AHONY.PK) Thursday reported a sharp decline in its fourth-quarter profit, reflecting one-time pension costs and higher impairment charges. Net sales grew about 8 percent from last year. The company remains cautious about its full-year 2013 outlook.
Dick Boer, CEO of the company said, "Our businesses continued to perform well in the fourth quarter. We grew sales and gained market share in all our markets. Underlying operating income increased, excluding €199 million of impairments and non-recurring items related to pensions and restructuring charges."
In the fourth quarter, net income attributable to common shareholders declined to 158 million euros or 0.15 euros per share from 270 million euros or 0.24 euros per share in the prior-year quarter.
Operating income fell to 156 million euros from 328 million euros a year ago. This included a net 88 million euros of pension costs, and 26 million euros of impairment costs. In the prior-year quarter, impairments totaled 14 million euros.
Underlying operating income for the period totaled 355 million euros, an increase of 4.1 percent from a year ago. Underlying operating margin was 4.5 percent, while it was 4.7 percent last year.
Net sales for the quarter grew 7.5 percent to 7.84 billion euros. Sales were up 5.1 percent at constant exchange rates. Online retail operations, both in the U.S., and the Netherlands, continued on a double digit sales growth trend, the company said.
Ahold USA sales improved 4.3 percent, measured in US dollars, and in the Netherlands sales climbed 7.7 percent. Meanwhile, sales in other Europe, comprising Czech Republic and Slovakia combined, decreased 3 percent at constant exchange rates.
It also raised its target for 2012-2014 cost reduction program to 600 million euros from 350 million euros.
On February 11, the firm had agreed with Hakon Invest to sell its 60 percent stake in Scandinavian retailer ICA for 21.2 billion Swedish kronor ($3.3 billion) in cash. This includes ICA's 2012 dividend of 1.2 billion kronor.
The company is of the belief that its strong liquidity enables it to launch a new 500 million euros share buyback program for the next 12 months.
In Amsterdam, the shares closed Wednesday's regular trading at 10.88 euros.
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by RTT Staff Writer
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