Food retailer Koninklijke Ahold Delhaize N.V. (ADRND.PK,AHODF.PK) reported Wednesday significantly higher profit in its second quarter driven by an improvement in sales and merger synergies resulting in higher margins. Further, the company lifted its forecast for fiscal 2017 underlying operating margin.
For the quarter, net income, on IFRS basis, climbed 68.2 percent to 355 million euros from last year’s 211 million euros. Earnings per share were 0.28 euro, up 12 percent from 0.25 euro a year ago.
On a pro forma basis, earnings per share were 0.30 euro, up from 0.25 euro last year. Pro forma underlying earnings per share were 0.33 euro, compared to 0.28 euro last year.
Pro forma underlying operating income increased 11.4 percent to 626 million euros. Pro forma underlying operating margin increased 30 basis points to 3.9 percent as merger synergy savings continued to track ahead of projections.
Pro forma underlying EBITDA grew 8.4 percent to 1.08 billion euros and underlying EBITDA margin went up to 6.7 percent from 6.4 percent last year.
In the quarter, net sales increased 67.3 percent to 16.12 billion euros from 9.64 billion euros last year. Sales grew 64.6 percent at constant exchange rates. Pro forma net sales increased 3.4 percent to 16.04 billion euros.
On a regional basis, Ahold USA net sales edged up 1.1 percent to 6 billion euros and pro forma net sales grew 2.5 percent to 5.93 billion euros. In dollar terms, pro forma net sales were $6.53 billion, same as last year. The positive impact of the timing of Easter was more than offset by the timing of the Fourth of July holiday sales and last year’s competitive closures in the New York market, the company said.
Delhaize America’s net sales on a pro forma basis increased 1.2 percent to $4.39 billion.
The Netherlands’ pro forma net sales grew 5.6 percent with robust sales growth in both supermarkets and eCommerce.
Further, the company said it looks toward the second half of the year with confidence and expects underlying operating margin for the full year 2017 to be broadly in line with the first half of the year, of 3.9 percent, with 220 million euros net synergies.
The company previously expected full year 2017 underlying operating margin to increase compared to 2016 of 3.7 percent.
Dick Boer, CEO of Ahold Delhaize, said, “We expect close to €3 billion of online consumer sales in 2017, putting us on track to achieve nearly €5 billion by 2020.”
A year after the merger between Ahold and Delhaize, the…