AMSTERDAM (dpa-AFX) - Koninklijke Ahold NV (AHODF.PK, AHONY.PK) on Thursday reported a 75 percent climb in fourth-quarter profit, but cautioned that difficult economic conditions and Easter timing would dampen its first-quarter sales growth. Expressing confidence in its new strategy and cash generation ability, the Dutch supermarket chain proposed a 38 percent increase in 2011 dividend.
Chief Executive Officer Dick Boer said the company is pleased with its performance in the fourth quarter, 'delivering solid results in the United States and the Netherlands. 2011 was a successful year for Ahold where we grew sales by 5.5 percent at constant exchange rates and net income by 19 percent under challenging economic circumstances.'
In the fourth quarter, Ahold's net income attributable to common shareholders surged 75.3 percent to 270 million euros or 0.24 euros per share from last year's 154 million euros or 0.13 euros per share. Quarterly net sales increased 4.5 percent to 7.29 billion euros and sales were up 4.3 percent at constant exchange rates.
Total EBITDA, a key earnings metric, climbed 20.2 percent with strong earnings results from the U.S. and the Netherlands, partly offset by a decline in other European regions. The results also were boosted by Ahold's share in income of unconsolidated joint ventures, which improved from last year's loss.
Geographically, Ahold USA's quarterly sales increased 5 percent in US dollar terms and 5.5 percent in euro terms, with a 3.9 percent increase in identical sales, i.e., net sales from exactly the same stores in local currency.
Excluding gasoline, identical sales were up 2.9 percent. Comparable sales, i.e. identical sales plus net sales from replacement stores in local currency increased 4.2 percent in the U.S.
Ahold Europe's sales increased from last year helped by improvement in the Netherlands' results, partly offset by a 3.5 percent drop in sales of other Europe (Czech Republic and Slovakia). Identical sales of the Netherlands increased, while that of Other Europe region declined.
The company added that it achieved cost reduction targets a year ahead of time and also announced a new 350 million euro cost savings program for the next three years.
Looking ahead, Ahold expects 2012 to be another challenging year for the food retail industry, with consumers continuing to look for value and competition intensifying.
'During 2012, we will take further steps to make our capital structure more efficient by investing in growth, reducing debt and returning cash to shareholders while remaining committed to an investment grade credit rating,' the company said in a statement.
In Amsterdam, Ahold shares closed Wednesday's trading at 10.38 euros, down 0.08 euros or 0.71 percent.
Copyright RTT News/dpa-AFX
© 2012 AFX News
