Dutch food giant Ahold has released its full year results, reporting a net loss of €1million for 2003 under Dutch accounting standards. However, under the rigorous US principles, this loss increases substantially to €747m.
The company's performance results are still affected by the €1billion accounting losses from the fraud scandal of its US Foodservice distribution unit and the €250 legal and banking fees relating to it.
This US operation reported a €200m operating loss for the year ending 2003, in stark contrast to the previous year's profit result of €160m.
However, fourth quarter figures for Foodservice operations showed losses reducing and the US Foodservice chief executive Larry Benjamin is positive about future results. Benjamin expects to return an operational profit this year as the unit is making "strong, steady progress on many fronts" despite the challenge to reduce costs. Ahold management have set the US-based group a two-year deadline to improve its operating margins and profitability before it makes a decision on whether to keep or sell this business.
The food company also raised close to €700m from disinvesting over 2003 and expects an extra €500m from other sales already agreed on. Further proceeds will be available from the proceeds of selling off its Spanish operations and other US chains supermarkets, Bruno and Bi-Lo throughout 2004.
Looking ahead, the Dutch retailer is aiming to return to investment grade credit rating by 2005 and its improved net debt position to €7.5billion at the end of 2003 from €12.5billion in 2002.
A company spokesman projected that this year 's performance will be mixed, as both European and US retail sector performance are tough.
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