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AMSTERDAM -- Ahold yesterday released its interim financial report for the second quarter and half year 2007, revealing net sales for the quarter of 6.6 billion euros, up 2 percent from the year-ago period; and net income of 2.2 billion euros, up 2 billion euros from last year.
The company said the gains came as a result of the divestment of U.S. Foodservice and its Polish operations.
Operating income was 291 million euros, 11 million euros lower than last year, reflecting an adverse currency exchange impact.
Ahold also reported that the rollout of its Value Improvement Program (VIP) at Stop & Shop & Giant-Landover is proceeding according to plan; and that it is returning a further 1 billion euros to shareholders through a share buyback program.
For the half-year, net sales were 15.2 billion euros, an increase of 1.6 percent from the year-ago period, and net income was 2.5 billion euros, up 2 billion euros from last year, due to the aforementioned divestments.
"The results show that we are continuing to make progress with our strategy for profitable growth," said Afold c.f.o. and acting president and c.e.o. John Rishton in a statement.
Even so, the news continued to be mixed at the company's U.S. banners.
At Stop & Shop/Giant-Landover, second-quarter net sales came to $3.9 billion, a rise of 1.9 percent compared with the year-ago period last year, with identical sales up 1.1 percent at Stop & Shop (0.6 percent excluding net sales of gas) and down 1 percent at Giant-Landover. Operating income was $161 million, or 4.1 percent of net sales, a $62 million decline from last year. Margins were affected by price investments connected with the further rollout of VIP. Additionally, the quarter included restructuring charges of $26 million, partly offset by gains on the sale of assets of $13 million.
For the first half, net sales were $9 billion, an increase of 1.8 percent vs. the year-ago period, with identical sales up 0.7 percent at Stop & Shop (0.2 percent excluding net sales of gas) and down 1.1 percent at Giant-Landover. Operating income was $389 million, or 4.3 percent of net sales, a decrease of $123 million from last year.
Giant-Carlisle posted second-quarter net sales of $1 billion, a 13.7 percent increase from the year-ago period, partly attributable to the acquisition of Clemens Markets in the fourth quarter of 2006. Identical sales rose 2.7 percent (2.6 percent excluding net sales of gas), and operating income grew $7 million to $56 million, or 5.6 percent of net sales. As in the second quarter last year, operating income was positively affected by seasonal holiday sales and low promotional spend.
For the first half, net sales rose $2.3 billion, up 15 percent from last year, partly because of the Clemens Markets acquisition, and identical sales went up 3.7 percent (3.3 percent excluding net sales of gas). Operating income grew $13 million, to $113 million, or 4.9 percent of net sales.
Ahold also said yesterday that it would delist its American depositary receipts (ADRs) from the New York Stock Exchange, deregister from the U.S. Securities and Exchange Commission, and terminate its reporting obligations under the U.S. Securities Exchange Act of 1934. The company's ADRs will continue to be traded on the over-the-counter market in the United States.
The decision to delist is in keeping with Ahold's strategy to boost cost-effectiveness by reducing complexity, without detracting from the integrity of its corporate governance and control processes, according to the company.
In other Ahold news, Myra Hart yesterday resigned from the company's supervisory board, citing a number of professional commitments in the United States that require her attention. A professor of entrepreneurship at Harvard Business School, Hart was on the founding team of Staples, serving as v.p. of growth and development from launch through initial public offering. Her term on the board at Ahold would have expired in 2009.