Solna - August 18, 2010

Improved operating income despite lower net sales in second quarter

Second quarter

  • Net sales for the second quarter amounted to SEK 23,143 million (24,037), a decrease of 3.7 percent. At constant exchange rates net sales fell by 1.3 percent.
  • Operating income amounted to SEK 646 million (582), up 11.0 percent.
    Operating income excluding capital gains/losses on property sales of SEK -5 million (56) and impairments of SEK 37 million (58) amounted to SEK 688 million (584), up 17.8 percent.
  • Income after net financial items amounted to SEK 550 million (497), up 10.7 percent.
  • Net income for the second quarter amounted to SEK -340 million (360).
    The second quarter includes a tax charge of SEK 747 million for a tax dispute related to the period 2001–2003.

First half-year

  • Net sales for the first half-year amounted to SEK 45,862 million (46,596), a decrease of 1.6 percent. At constant exchange rates net sales fell by 0.4 percent.
  • Operating income amounted to SEK 1,266 million (848), up 49.3 percent. Operating income excluding capital gains/losses on property sales of SEK -1 million (71) and impairments of SEK 37 million (58) amounted to SEK 1,304 million (835), up 56.2 percent.
  • Income after net financial items amounted to SEK 1,087 million (661), up 64.4 percent.
  • Net income for the first half-year amounted to SEK 55 million (469), down 88.3 percent.
    The first half-year includes a tax charge of SEK 747 million for a tax dispute related to the period 2001–2003.

Extract from CEO comment – Kenneth Bengtsson, CEO and President ICA AB:
“During second quarter, the ICA Group delivered a strong operating result despite lower net sales. Net sales fell due to a generally weak food retail market and an increasingly promotional competitive environment. At the same time, operating income improved in ICA Sweden, ICA Norway and Rimi Baltic thanks in part to higher gross margins and in part due to lower costs as an effect of ICA’s ongoing cost reduction program. ICA Bank’s operating income fell in the second quarter as a result of lower net interest income, while ICA Real Estate continued its stable development. Consolidated net income for the period was charged with increased tax expenses owing to a ruling by the Swedish Administrative Court of Appeal on a tax dispute for the period 2001-2003, which ICA announced in the beginning of June. ICA has filed an appeal and request for leave to appeal to the Supreme Administrative Court.”

For the entire report, with a complete comment by the CEO and description of the financial results, please see the attached pdf-file.