Expansion into Russia and store openings hit Finland-based retailer Kesko's food profit in the first nine months of the year.
Operating profit excluding non-recurring items from its food arm were down 7.6% to EUR123.4m (US$160.5m) in the January to September period. Net sales increased 3.4% to EUR3.18bn.
The retailer said costs linked to the expansion of its store site network and launching business operations in Russia put pressure on profit. Kesko plans to open four grocery stores in Russia in the next two years.
Kesko's group operating profit fell 21.5%, although sales climbed 3.6% to EUR7.23bn.
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Kesko's interim report for 1 Jan.-30 Sep. 2012
24/10/2012 9:00 AM
KESKO CORPORATION STOCK EXCHANGE RELEASE 24.10.2012 AT 09.00 1(28)
Financial performance in brief:
* The Group's net sales for January-September increased by 3.6%.
* The K-Group's (i.e. Kesko's and the chain stores') retail and B2B sales (VAT 0%) increased by 3.8% in January-September.
* The operating profit excluding non-recurring items was €162.9 million (€207.4 million).
* The Kesko Group's net sales are expected to grow during the next twelve months. As a result of measures to be taken to enhance sales and purchasing operations and cost savings to be achieved, the operating profit excluding non-recurring items for the next twelve months is expected to exceed the operating profit excluding non-recurring items for the preceding twelve months. Capital expenditure is expected to be lower compared to the capital expenditure for the preceding twelve months. The Group has amended its future outlook with regard to profitability performance. Previously, we were prepared for the operating profit excluding non-recurring items for the next twelve months to be lower than the operating profit excluding non-recurring items for the preceding twelve months.
Original source: Kesko
