Ahold posts second quarter loss
South American problems hit supermarket giant
September 1 2002
Royal Ahold has posted a second quarter loss of 197.5m euros.
The Dutch supermarket operator’s first loss in many years compares to a profit of 323.8m euros in the same quarter last year. The bulk of the loss relates to the 410m euro cost of the default of Velox Retail Holdings, Ahold’s former joint venture partner in Latin America, with an 80m euro goodwill impairment for Argentina.
Cees van der Hoeven, Ahold President & CEO, said: “This quarter Ahold reports its first loss in many years. That hurts because we are a proud company, always striving for excellence towards all stakeholders. Fortunately the cause is incidental and not structural. As communicated earlier, we had to take an exceptional charge as well as goodwill impairment for our Argentine operations. We think we have finally put this behind us and we can concentrate on reinforcing Disco’s position as the best company in its market.”
Disco Ahold, the company’s South American subsidiary, operates in Chile, Peru, Paraguay and Argentina. Ahold also owns the Bompreco chain in Brazil.
Van der Hoeven added: “Almost everywhere in the world, the trading environment is challenging. It is difficult to grow sales and the outlook is not as yet improving. In these circumstances our performance is very solid, as we are able to grow market share and operating margins at the same time. It is the real strength of Ahold that collectively our companies are stronger than individually by realizing many synergies and cost reductions behind the scenes. Once again we thank our people because it is their motivation and dedication that makes it happen.”
In the United States, Ahold’s retail sales rose both organically and as a result of the purchase of Bruno’s Supermarkets from December 2001. Organic US retail sales growth was 5.6 per cent, and like-for-like growth was 2.1 per cent
In Europe, organic sales growth was to 3.2 per cent. Operations in the Netherlands, Scandinavia, Spain and Central Europe contributed to the rise, with sales in Portugal lower as a result of the exit from unprofitable product ranges.
