Delhaize's second quarter results showed a significant drop in profits although revenues were up. The Belgian retailer reported net profit from continuing operations of €86 million, a shrinkage of 26.7 per cent, with a decline of 65.9 per cent in the first half of the year.
While group revenues in the second quarter were up 11.5 per cent to €5,695 million, organic growth stood at 1.3 per cent. Excluding the 126 US stores closed in February, the group's revenues increased by 14.1 per cent and underlying operating profit decreased by 12 per cent.
On home territory, comparable store sales increased by 1.1 per cent, with revenues at Delhaize Belgium growing 0.4 per cent as a result. Revenue growth for the first six months of the year was 1.8 per cent in Belgium. Pierre-Olivier Beckers, president and CEO, commented on the retailer's performance at home, "We are encouraged by the positive comparable store sales growth recorded during the second quarter and believe we will see further positive impact resulting from additional price investments, new store openings and remodelings."
Revenues in Southeastern Europe and Asia grew by 64.0 per cent at identical exchange rates, mainly driven by the acquistion of Delta Maxi in March of this year. The retailer reported "excellent" evenue growth in Romania and sustained revenue growth in Greece with Alfa Beta gaining market share.
Delhaize has put its drop in profitability down to a focus on price for its customers but has said it will exceed the €500 million target of gross annual cost savings, confident that it will reach €550 million by the end of year. Beckers said, "Given the decline in our operating profit and the challenging environment, we recognize the need to redouble our efforts and sharpen our focus."
As of the end of 2011, the group employed 159,745 people in 3,408 stores. (22 Aug)
© 2012 - ESM: European Supermarket
