Koninklijke Ahold Q2 Profit Slips, But Sales Improve; Affirms Annual Earnings View

Koninklijke Ahold Delhaize N.V. (ADRND.PK,AHODF.PK), a Dutch retail and wholesale holding company, on Wednesday posted a decline in earnings for the second-quarter, particularly reflecting transformation charges and restructuring costs. However, the retailer reported a rise in sales supported by strong demand.

In addition, the company has reaffirmed its full-year earnings outlook.

For the three-month period, the Group registered a net profit of 468 million euros or 0.48 euro per share, lesser than 603 million euros or 0.60 euro per share last year.

Underlying income per share rose to 0.62 euro from 0.59 euro per share of 2022.

Pre-tax income stood at 572 million euros as against previous year’s 750 million euros.

Operating income declined to 724 million euros from 895 million euros of 2022. The decline was mainly due to the charges related to the transformation in Belgium and other initiatives. This includes 108 million euros of impairment charges for store assets in Belgium and 40 million euros for the Jersey City fulfillment center. In addition, there were 40 million euros in restructuring and related costs pertaining to these initiatives.

Underlying operating income was at 904 million euros, higher than 880 million euros a year ago.

Underlying EBITDA stood at 1.764 billion euros as against previous year’s 1.728 billion euros.

Sales improved to 22.068 billion euros from last year’s 21.445 billion euros.

Koninklijke Ahold will pay an interim dividend of 0.49 euro per share, higher than last year’s interim dividend of 0.46 euro per share. The interim dividend will be paid on August 31.

Looking ahead, for full year 2023, the retailer still expects to post underlying operating margin of at least 4 percent, with underlying income per share at around 2022 levels. For full year 2022, the company had posted underlying income per share from continuing operations of 2.55 euros per share.

In addition, the company continues to project capital expenditure of around 2.5 billion euros.

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