Ahold is looking better and better.
AMSTERDAM -- Ahold NV continued on its road to recovery during the second quarter, as the global retailer swung to a net profit of 130 million euros ($154.8 million) from a 28 million euro loss a year earlier. In addition, chief executive officer Anders Moberg predicted for the first time that the company will finish the year in the black.
Operating income rose 14.3% to 248 million euros even though net sales (excluding the impact of currency changes) edged up just 0.5% to 10.4 billion euros. Ahold also made progress in cleaning up its balance sheet, lowering its net debt during the quarter by about 400 million euros.
"Execution of our value repositioning and restructuring programs is continuing, our divestment program is almost complete, debt has been further reduced, and we have stepped up our investments in new and remodeled stores," Moberg said in a statement. "We will continue to focus on strengthening our capital structure including, but not limited to, further reducing gross debt."
Management also expects its divestment program, which originally aimed to generate about 2.5 billion euros, to garner as much as 3 billion euros this year. Ahold recently sold its 33.3% stake in Central American Retail Holdings Co. (CARHCO) to Wal-Mart Stores Inc. for an undisclosed amount. It has also finalized its sale of the Dutch food service supplier Deli XL.
In another indication of the company's revival, Moberg said in an interview with Bloomberg News that Ahold might be interested in buying parts of Albertsons Inc. He ruled out acquiring the whole company, which includes several chains across the United States. "We are very focused," said Moberg. "We will stay on the East Coast. We are not in a situation where we can go out for a huge acquisition."
Ahold has already returned to the acquisition path, having acquired 56 supermarkets from Julius Meinl in the Czech Republic. That deal, which closed earlier this month, will boost Ahold's store base in the country to about 240. The stores will be converted to Ahold's Albert banner.
On the management front, Ahold named John Rishton, former chief financial officer of British Airways, to that post, replacing Hannu Ryopponen, who resigned in August. Although Rishton lacks retail experience, the appointment was praised by analysts.