Reuters
Nov 11, 2015
Ahold profit pleases ahead of Delhaize deal completion
Reuters
Nov 11, 2015
Dutch supermarket group Ahold beat quarterly operating profit forecasts, leaving it in good shape as its planned merger with Belgium's peer Delhaize nears fruition.
The Dutch company confirmed it was still on track to complete the Delhaize deal by mid-2016.
The two companies have similar profiles, with large U.S. operations that dwarf their European home markets in which they are nonetheless the dominant players.
Underlying operating income of 319 million euros ($342.5 million) in the third quarter was just ahead of the consensus of analysts polled for Reuters, who had expected it to come in at 311 million euros. Net sales of 8.4 billion euros were in line.
"We see estimates moving up 1 to 2%," said ING analyst Matthias Maenhaut in a note following the results on Wednesday.
Full-year performance was likely to be in line with targets, with free cash flow slightly ahead of last year, the company said.
Ahold benefited from currency effects as well as better margins.
While sales in the dominant U.S. part of the group were almost flat at constant exchange rates, partly as a result of lower gas sales at its various North American brands, in euro terms they were up 16% at 5.2 billion.
The company achieved strong sales growth of 7.4% in the Netherlands, bringing in 2.8 billion euros.
Investment in its online operations, which achieved net consumer sales growth of 30%, weighed slightly on Dutch retail margins. Pension costs also rose slightly in the Netherlands.
"When we take these two effects out, our underlying (operating income) increased this year," said Chief Executive Dick Boer in a media call.
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