Ahold profits 42% lower due to America

Ahold profits 42% lower due to America

The Dutch retail group Ahold only made a profit of 158 million euro in the fourth quarter of 2012, a drop by no less than 42% compared to 2011. This massive downturn is mainly because of added pension expenses in the US and write-offs on American and Slovakian operations.

American pensions make profits plummet

In the last quarter of 2012 Ahold had to invest an extra 121 million euro for its pension fund in the US, where the company uses a defined benefit pension plan for its employees. The amount was however partly countered by an unexpected bonus of 33 million euro on the retirement account in the Netherlands.

 

Moreover, Ahold had to enter some extra write-offs into its accounts: one on software in the US cost the concern 88 million euro and a depreciation of mainly Slovakian activities amounted to a loss of another 26 million euro.

 

Sales volume rises (almost) everywhere

Operationally Ahold did perform well in the fourth quarter: the quarterly turnover rose by 7.5% to 7.835 billion euro. “Sales rose and we gained market share in all our markets”, exulted CEO Dick Boer.

 

In the Netherlands (which includes Belgium within Ahold) sales rose by 7.7% in the fourth quarter to 2.7 billion euro, but comparable growth was a mere 0.2%. The results of Bol.com accounted for three quarters of that growth, but the first fifteen of the 82 Jumbo stores bought by Ahold contributed their fair share. The sales growth of Albert Heijn was countered by negative developments at Etos.

 

In the United States sales rose by 4.3% to 6.1 billion dollar, mainly thanks to successful promotions during the holidays. In the Czech Republic and Slovakia sales dropped by 3.0% because of a rise in VAT in the Czech Republic.

 

Satisfied by 2012, cautious about 2013

Over the whole of 2012 the turnover of Ahold came to 32.841 billion euro, a rise by 8.5%. This amounted to a net profit of 827 million euro, 19% less than the year before, mainly due to the American setback on pensions.

 

When talking about 2013 Boer remains cautious. “Our focus remains on simplifying our activities to cut costs. (…) We believe that our companies are well positioned for the future and we continue to strive towards a better shopping experience for our customers, in our stores as well as online.”

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