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Dutch retail giant Ahold’s net profit jumps from 50m euros to 213m euros YOY

Dutch retail giant Ahold’s net profit jumps from 50m euros to 213m euros YOY

AMSTERDAM: Dutch retail giant Ahold announced a more than threefold jump in net profit on the back of a strong dollar as it moves to create one of the world’s largest supermarket groups. Net profit jumped from 50 million euros ($54.5 million) to 213 million euros year-on-year, as Ahold bounced back after a taking a huge tax hit in 2014 and settling a $297 million lawsuit in the United States.

Turnover climbed by 14.9 percent to 11.2 billion euros, buoyed by a strong dollar. The increase would have been just 1.4 percent at fixed rates. Operating profit however dipped by 8.9 percent, held back by the rollout of new products in the United States and increased investments in Ahold’s online businesses, the group said in a statement. More than half of Ahold’s sales were in the United States, where they jumped by 19.9 percent but were down 2.1 percent at fixed rates, the company said.

Its US-based arm continued to roll out new products – particularly of its own brand – but faced stiff competition from discount chain stores. A drop in fuel prices “had a positive impact” in the United States but was “more than offset by increased cost for snow removal, increased energy use and lower reimbursements on pharmacy products,” Ahold said.

In The Netherlands, Ahold continues to dominate the market with its Albert Heijn brand, with sales up 5.7 percent year-on-year. And 10 new Albert Heijn stores opened in Belgium last year. Ahold and Belgian supermarket giant Delhaize began talks earlier this month on a merger that would create one of the world’s biggest food retail groups.