Ahold Net Income up 76%
Operating income increased by €109 million (31.5%) to €455 million (including gains on the sale of property, plant and equipment of €66 million and impairments of non-current assets of €17 million).
21/06/06 Ahold has reported net sales of €14.1 billion for the first quarter of 2006, an increase of 8.6% compared with Q1 2005. Net sales, excluding currency impact, increased by 2.1%.
Operating income increased by €109 million (31.5%) to €455 million (including gains on the sale of property, plant and equipment of €66 million and impairments of non-current assets of €17 million). Retail operating income was up €44 million (11.6%) to €424 million, an operating margin of 4.6%. U.S. Foodservice operating income was up €50 million to €66 million, an operating margin of 1.4%, and Group Support Office costs fell by €15 million to €35 million.
Income before tax increased by €156 million to €316 million, reflecting increased net sales, improved operating income, reduced financing costs, and improved net income from joint ventures and associates. Net income attributable to common shareholders increased by €102 million (76.1%) to €236 million.
Net debt increased in the quarter by €170 million to €5.7 billion as the reduction in cash balances more than offset gross debt reductions of €200 million. The cash balance reduction of €370 million was primarily due to the first payment of €536 million relating to the class action settlement (final cash payment due in December).
Anders Moberg, President and CEO of Ahold, said: "In the first quarter, retail performance was mixed. We saw encouraging retail performance from Albert Heijn, Giant-Carlisle and ICA. The competitive environment continued to be challenging for Stop & Shop / Giant-Landover and conditions remained difficult in Central Europe and at Tops, especially in North East Ohio. U.S. Foodservice performed well as the new strategy takes effect. At the Stop & Shop / Giant-Landover Arena, work continued towards the progressive implementation of its value improvement program later this year. At a group level, the review of underperforming assets and the strategic review to drive and fund identical sales volume growth across our global retail businesses have started and will be completed in the fall."
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