Effects of restructuring hit home
Dutch grocery giant Ahold has announced a sharp fall in profits but said a massive restructuring programme is beginning to pay off.

Ahold, which confessed to a Eu1 billion (£685 million) accounting fiasco in February 2003, yesterday said it had made a provision of Eu896 million (£613.7 million) to cover liabilities from the resulting class action. The retailer said pre-tax losses for the quarter to the end of September increased to Eu750 million (£513.7 million) from Eu163 million (£111.7 million) a year earlier.

However, underlying net income, excluding the effects of the class action, increased to Eu346 million (£237 million), compared with a loss of Eu134 million (£91.8 million) last year.

'The settlement of the securities class action allows Ahold to move forward and focus on its businesses and future strategy,' said Ahold president and chief executive Anders Moberg. 'Excluding the effect of the settlement, our performance improved this quarter, despite the fact the retail environment remains challenging.'

He said charges resulting from restructuring had begun to subside and Ahold has started to benefit from efforts to reduce debt and improve borrowing terms.

However, Ahold faced difficulties in many of its retail markets. Overall sales in the quarter increased by just 0.3 per cent to Eu10.2 billion (£6.99 billion), after currency effects had been stripped out.