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Ahold Posts Loss for 2004, Maintains Positive Outlook

ZAANDAM, The Netherlands -- Although Ahold revealed ballooning annual losses for the forth quarter of 2004, the world's fourth largest supermarket group here said it was on track to meet all its targets in 2005.

While Ahold reported a $573 million net loss in 2004 -- primarily attributable to anticipated exceptional charges from divestments in Latin America and the resale of shares in Swedish retailer ICA -- the retailer maintained a positive outlook for 2005 and 2006.

"We have made good progress. As we anticipated, this progress did not result in performance improvement in 2004, but we will in due course reap the benefits of our efforts," said Anders Moberg, the global organization’s chief executive and author of its ongoing "Road to Recovery" plan.

Describing 2004 as a "year of transition" following the revelation in 2003 of $1 billion worth of accounting irregularities, Ahold earned 96 million euros ($114 million) in the fourth quarter, up from 12 million euros a year earlier. It also benefited from an extra week in this year's fourth quarter.

Fourth-quarter sales fell 3 percent to 12.4 billion euros ($15.98 billion), while the company reported a loss of 443 million euros ($550 million) for the full year, compared with a loss of 1 million euros in 2003. The largest single charge was 428 million euros ($531 million), taken in the first quarter of 2004 for the divestment of Brazilian supermarket chain Bompreco.

Excluding the one-time effects, Ahold said its 2004 operating income fell to 195 million euros ($242 million), as sales dipped 7.3 percent to 52 billion euros ($64.6 billion).

"We have come a long way since 2003, when we were in crisis," Moberg said, noting that Ahold's recovery strategy is bearing fruit. "2004 was our year of transition. 2005 is turning into a year of execution," he added.
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