Swedish retailer ICA Gruppen has seen its profit for the second quarter of the year rise by 23%, to SEK 1.02 billion (€110 million), according to figures published today. This figure includes capital gains on sales of non-current assets and impairment losses totalling SEK 165 million, the company said. The sale of ICA Real Estate in Norway, its InkClub business and the integration of IKI in Lithuania all affected the company’s operating profit during the period.
Consolidated net sales for the period amounted to SEK 27.2 billion – an increase of 3.7%.
The ICA Sweden business posted sales of SEK 19.62 billion for the period (up from SEK 18.78 billion in the same period last year), while its Rimi Baltic operation posted sales of SEK 3.53 billion (up from SEK 3.319 billion).
Outside of grocery, its Apotek Hjärtat pharmacy business posted sales of SEK 3.3 billion (up from SEK 3.2 billion a year earlier).
Commenting on its performance, the chief executive of ICA Gruppen, Per Strömberg, said, “We had stable underlying earnings during the second quarter, with Apotek Hjärtat, above all, posting a good quarter. Other businesses have been affected by divestments to varying degrees, particularly the sale of properties in Norway, as well as by ongoing activities and ventures.”
Strömberg added, “[Higher costs] have resulted in a slightly lower operating margin than a year ago, but with a high level of activity it is, at the same time, natural that there will be variations from quarter to quarter that affect earnings. In the long-term perspective, we are on track to meeting our targets.”
Commenting on the retailer’s performance, Barclays European Food Retail Equity Research said, “ICA Sweden EBIT in 2Q came in at SEK 870mn, below consensus of SEK 917mn, which meant the margin fell 25bps to 4.4%, driven by considerably higher store costs and price investments.
“Volumes were positive: +1.8% during the quarter after adjusting for price and calendar effects (+1.0% on LFL basis).”
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.