DELHAIZE beats FY guidance

Delhaize has this morning reported a 12.9% rise in full year 2006 net profit on ongoing operations to EUR425.6 million (USD533.9 million), beating its own guidance of between 8% and 12%. Operating profit on ongoing operations rose by 5.9% to EUR943.6 million (USD1.1 billion). Net profit overall fell to EUR351.9 million (USD441.5 million) from EUR365.2 million (USD450.7 million) in 2005. Earlier in the year the retailer had already reported a 4.8% rise in 2006 net sales to EUR19.2 billion (USD24 billion). For the fourth quarter, net profit fell to EUR114.7 million (USD143.9 million) from EUR117.3 million (USD145.7 million), whilst operating profit fell to EUR262.4 million (USD329.2 million) from EUR264.6 million (USD328.8 million). The quarter was impacted by tough comparables on its US operations and negative currency effects. For 2007, the retailer sees net sales and other revenues rising 4.0% to 5.5%, net on ongoing operations increasing 8.0% to 12.0%, operating profit rising 6.0% to 8.0% and comparable US store sales increasing 2.5% to 3.5%. Capital expenditure for 2007 is set at EUR825 million (USD1 billion), up from EUR699.9 million (USD878.1 million) in 2006 -- primarily due to the continued Sweetbay rollout, the multi-brand market renewal program at Food Lion and a store opening programme, particularly at Hannaford and Alfa-Beta. Delhaize has also announced that it is to sell its Belgian drugstore business Di to Nationale a Portefeuille (CNP) unit Distripar's Parma Gestion for EUR33.4 million (USD44 million). The Di network consists of 90 company-operated and 42 franchised stores, which contributed EUR95.5 million (USD119.8 million) to Delhaize's 2006 sales. The group said the divestment will produce a small gain, although the profit impact will be 'minor'.