Finnish retail group Kesko has announced that its sales increased by 17% to €5.41 billion, at a local currency level, in the first half of the year.
Net sales 'increased significantly' due to the acquisitions completed during 2016, meaning that sales growth, excluding acquisitions and divestments, was only 1.2%.
Operating profit grew to €169.1 million, while comparable operating profit rose to €113.2 million.
Grocery Performance
Kesko's grocery business experienced a 5% growth in net sales during this period, positively affected by the acquisition of Suomen Lähikauppa and the divestment of Russian operations.
"In the grocery trade, we can be satisfied with both sales and profit development," said Kesko CEO Mikko Helander. "In particular, the K-Citymarket chain and the revamped K-Market stores have increased their sales well."
"The integration of Suomen Lähikauppa stores, acquired in April 2016, has also progressed well. A total of 409 Siwa and Valintatalo stores had been converted into K-stores by the end of May 2017, of which 99 stores had been transferred to retailers by the end of the reporting period."
Outlook
The retailer said that in comparable terms, the net sales for the next twelve months are expected to exceed the level of the previous year. However, due to divestments and restructuring, Kesko Group's net sales are expected to fall, but comparable operating profit is excepted to exceed the level of the previous twelve months.
"Kesko's cash flow improved and its financial position clearly strengthened during the reporting period," said Helander. "This provides excellent preconditions for continuing the implementation of our strategy."
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Sarah Harford. Click subscribe to sign up to ESM: The European Supermarket Magazine.
