Scandinavian retailer ICA has booked mixed third-quarter numbers, with a surge in operating income offset by a tax settlement that resulted in a net loss for the period.
The company said third-quarter operating income increased 13.1% to SEK1.04bn. (US$153.5m). Net sales were down 0.8%, but when adjusted for the closure of Maxi stores in Norwary and currency exchange sales would have grown 4%.
However, net income for the quarter fell to a loss of SEK590m, down from a loss of SEK2m in the comparable period of last year. ICA said that the bottom line was hit by a tax expense of SEK1.28bn related to a dispute for the years 2004-8.
In September, the ICA board approved a new strategic direction for the group. CEO Per Strömberg emphasised the retailer's commitment to the strategy. "The group strategy is based on six strategic themes that will set the direction for everything we do: Strengthen customer loyalty and brand position, strengthen and expand our customer offering, optimize and broaden our sales channels, simplify our business, engage and develop our people, excel in corporate responsibility."
ICA Group's interim report for the third quarter 2012
Strong operating income in third quarter
Third quarter
Net sales for the third quarter amounted to SEK 23,805 million (24,008), down 0.8 percent. Adjusted for the closed ICA Maxi stores in Norway, net sales increased by 2.6 percent, or 4.0 percent at constant exchange rates.
Operating income amounted to SEK 1,043 million (922) excluding non-recurring items of SEK 0 million (592), an increase of 13.1 percent.
Income after net financial items amounted to SEK 964 million (235).
Net income for the third quarter amounted to SEK -590 million (-2). The net income includes a tax expense of SEK 1,279 million related to a tax dispute for the years 2004 - 2008.
Nine-month period
Net sales for the nine-month period amounted to SEK 71,872 million (70,258), up 2.3 percent. Adjusted for the closed ICA Maxi stores in Norway, net sales increased by 4.1 percent, or 4.2 percent at constant exchange rates.
Operating income amounted to SEK 2,540 million (2,150) excluding non-recurring items of SEK 194 million (592), an increase of 18.1 percent.
Income after net financial items amounted to SEK 2,125 million (1,303).
Net income for the nine-month period amounted to SEK 186 million (684). The net income includes a tax expense of SEK 1,279 million related to a tax dispute for the years 2004 - 2008.
Extract from CEO comment - Per Strömberg, CEO ICA AB:
The ICA Group's positive development continued during the third quarter. Operating income amounted to SEK 1,043 million, our strongest quarterly result to date. However, net income for the period was impacted by a tax expense of about SEK 1.3 billion due to the ruling by the Administrative Court of Appeal on October 4th.
The work to define the ICA Group's future strategic direction has resulted in a new Group-wide strategy approved by the Board of Directors in September. The strategy is based on ICA's strengths - including our fundamental business model with retailer-owned stores, a strong customer base and strong brands - and accentuates the importance of capitalizing on opportunities for synergies within the Group. The Group strategy is based on six strategic themes that will set the direction for everything we do: Strengthen customer loyalty and brand position, Strengthen and expand our customer offering, Optimize and broaden our sales channels, Simplify our business, Engage and develop our people, Excel in corporate responsibility. These in turn define a number of areas and priorities which we will work with in the short and medium term and now serve as the basis of the companies' continued strategy work for 2013 and beyond.
