Ahold, the Dutch food retailer, on Thursday reported a €2.2bn ($3bn) second-quarter net profit following the sale of its US distribution unit and Polish stores and announced it would return a further €1bn to shareholders.
The share buy-back increases to €4bn the total returned to investors under a strategy launched in November. It completed a reverse stock-split and €3bn capital repayment last week.
Net income was €2bn higher than a year earlier, reflecting the $7.1bn sale of US Foodservice to a private equity consortium in July, and the divestment of the Polish operations. Without those gains, net profit rose to €182m from €171m.
Operating profit fell to €291m from €302m because of the weak dollar. Sales rose 2 per cent to €6.6bn.
Ahold shares in the Dutch company rose 4 per cent to €9.60 in afternoon trading as it reiterated its aim for a full-year operating retail margin of 4 to 4.5 per cent.
However, John Rishton, acting chief executive, cautioned that the US subprime mortgage crisis and credit market crunch, plus a high oil price that had caused food price inflation, would hit the US economy and could trickle down to affect Ahold.
Ahold generates 60 per cent of sales in the US where it has launched a programme to overhaul its flagship stores. That programme is 25 per cent completed, but further investment would continue to put pressure on margins this year, said Mr Rishton.
The company recovered from a 2003 accounting scandal by divesting non-core assets, pruning debt and overhauling supermarkets to regain an investment grade credit rating. However analysts believe it will at some point consider a merger or break-up to split its US and European supermarkets.
Mr Rishton said Ahold would name a permanent chief executive later this year, but declined to say if he was a candidate for the job vacated by Anders Moberg, the former chief executive of Ikea, the Swedish home furnishing chain, who left Ahold in July.