Swedish retailer ICA has posted profit for the second quarter of its financial year of SEK 520 million (€48.5 million), which is down from the SEK 935 million the group reported for the corresponding period last year.
The core reason for the drop in profits, the group said, was due to the sale of its Hemtex home textiles business to Norway's Kid ASA in May, which equated to approximately SEK 382 million worth of the losses reported.
Net Sales Growth
Consolidated net sales were up 4.3% across the group in the quarter, to SEK 30.5 billion (€2.85 billion), with cash flow from operating activities rising to SEK 3.1 billion, compared to SEK 2.75 billion in the corresponding period last year.
"I can affirm that we have had a good first half of the year – in terms of sales, earnings, and in the progress of our development projects," commented Per Strömberg, chief executive. Not everything is perfect, but a lot is very good and proceeding according to plan. The sale of Hemtex entails a further refinement of the Group structure, and we are now moving ahead by even more clearly tying together activities surrounding our core businesses."
ICA Sweden
The group said that earnings performance at its ICA Sweden business 'remains strong', with the division posting sales of SEK 21.9 billion, and operating profit of SEK 949 million.
"This performance should be viewed against the backdrop of last year's slightly weaker second quarter, but we could already see in the first quarter that we have rectified quite a few of the matters that weighed us down last year," Strömberg said of ICA Sweden's performance.
"Parallel with this, our work with change is continuing at a fast pace across a broad front," he added. "Apart from the ongoing reorganisation, a number of the projects that we have been working with for several years are being rolled out in operations and are beginning to generate effects in more precise customer offerings and more effective campaigns."
Rimi Baltic
Rimi Baltic, meanwhile, reported a 'stable performance', with sales rising to SEK 4.1 billion and profits hitting SEK 195 million, with the business posting growth "slightly weaker than the market", according to Strömberg.
Its Apotek Hjärtat business was affected by disruptions at its automated warehouse in Norrköping, but still managed to report a small increase in sales, to SEK 3.8 billion, while profits were down to SEK 142 million.
Looking ahead to the remainder of the year, Strömberg said, " There is more to do – especially coupled to the opportunities offered by digitalisation to create better customer offerings in all of our businesses and in further increasing our efficiency and impact. I look forward to the rest of 2019, which will surely bring some exciting events, but above all continued development and change."
© 2019 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.
