Ahold Delhaize posts drop in profits after merger

Newly-formed Dutch-Belgian retail giant Ahold Delhaize said Wednesday it was pleased with its 2016 results, despite a drop in overall profits, and the integration of the two businesses was progressing well.

Presenting the first set of full results of the combined group since Ahold Delhaize was created from the merger of two former Dutch and Belgian rivals last summer, chief executive Dick Boer described the overall results as “solid.”

“2016 was not only a year where we brought together two strong food retailers. It was also a year in which our great local brands drove solid performance,” he said.

Combined group sales jumped by 30 percent to 49.6 billion euros ($52.8 billion), while net profit fell by 2.5 percent to 830 million euros, the group said.

It attributed the drop in profits to higher financial expenses and higher taxes.

In terms of region, the group’s US units both performed well.

At home in Europe, The Netherlands “had an outstanding performance… driven by both supermarkets and online” business, as an increasing number of customers shop for their groceries on line from the dominant Albert Heijn supermarket network.

Ahold Delhaize said it would pay an increased dividend of 0.57 euros per share for 2016.

Ahold Delhaize’s share price jumped by almost 4.0 percent on the Amsterdam stock exchange’s AEX index in lunchtime trade to 20.85 euros per share.

Ahold and Delhaize finalised their merger in July after being given the green light by US regulatory authorities.

Between them the firms have 6,500 stores in Europe and the United States and employ 370,000 people.

Analysts say the merger created the fifth-largest grocery chain in the fiercely-contested US market and the fourth-largest in Europe.

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