Ahold, the international food retailer and foodservice operator, today announced a second quarter 20021 net loss of Euro 197.5 million (2001: net profit of Euro 323.8 million). The second quarter 2002 results include exceptional charges of Euro 490 million, of which Euro 410 million relates to the default of Velox Retail Holdings (VRH), Ahold¡¦s former joint venture partner in Latin America, and Euro 80 million relates to goodwill impairment for Argentina.
Highlights
„h Second quarter 2002 results include exceptional charges of Euro 490 million, of which Euro 410 million relates to the default of Velox Retail Holdings, Ahold¡¦s former joint venture partner in Latin America, and Euro 80 million relates to goodwill impairment for Argentina
„h Sales rise 7.3% to Euro 17.3 billion (+16.0% excluding currency impact)
„h Operating earnings increase 11.9% to Euro 777.8 million (+20.9% excluding currency impact)
„h Earnings per common share, excluding goodwill amortization, exceptional items and currency impact, amount to Euro 0.39, unchanged from last year
„h Outlook for full-year 2002 reconfirmed
„h Interim dividend constant at Euro 0.22 per common share.
,b>Ahold 2nd quarter 2002 results
Sales and earnings for the second quarter were negatively impacted by lower average exchange rates of mainly the U.S. Dollar (USD 1 = Euro 1.06 vs. USD 1 = Euro 1.16 last year), the Brazilian Real (BRL 1 = Euro 0.41 vs. BRL 1 = Euro 0.49 last year) and the Argentine Peso (ARS 1 = Euro 0.31 vs. ARS 1 = Euro 1.16 last year).
Consolidated sales rose 7.3% to Euro 17.3 billion (+16.0% excluding currency impact). Excluding currency fluctuations, organic sales growth amounted to 2.9%. Operating earnings were Euro 777.8 million, representing an increase of 11.9% (+20.9% excluding currency impact).
Net earnings showed a loss of Euro 197.5 million and were substantially below last year for the following reasons:
„h Exceptional charges of Euro 490 million, mainly related to the default of VRH, Ahold¡¦s former joint venture partner in Latin America;
„h Higher amortization of goodwill as a consequence of the acquisition of Alliant and Bruno¡¦s Supermarkets in December 2001 (Euro 33.5 million);
„h Higher net financial expense (Euro 43.8 million), partly due to devaluation and inflation adjustment losses in Argentina, related to third-party U.S. Dollar and Argentine Peso debt.
The exceptional charges of Euro 490 million consist of two parts:
1. A Euro 410 million charge related to VRH as a consequence of contingent liabilities that were already disclosed in Ahold¡¦s 2001 Annual Report. As a result of VRH¡¦s default on certain indebtedness, these liabilities were no longer contingent. Ahold was therefore required to take over certain bank debts and purchase substantially all of VRH¡¦s shares in Disco Ahold International Holdings for a total amount of USD 452 million, thereby assuming full ownership of former joint venture Disco Ahold International Holdings;
2. A Euro 80 million charge related to goodwill impairment for Argentina, reflecting the devaluation of the Argentine Peso.
Cash flow from operating activities amounted to Euro 950.5 million (2001: Euro 514.4 million). Investments in tangible and intangible fixed assets amounted to Euro 568.7 million (2001: Euro 723.3 million).
Earnings common shareholders excluding goodwill amortization and exceptional items amounted to Euro 364.9 million or Euro 0.39 per average common share (+0.7% excluding currency impact). The reconciliation with earnings common shareholders was as follows:
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(source:Ahold)
