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Ahold's Third Quarter Shows Losses During 'Transition' Year

ZAANDAM, Netherlands, - Ahold showed a net loss of 166 million euros (U.S. $218.6 million) for its third quarter last week, compared to a loss of 100 million euros in the year-ago period.

The net loss for the third quarter was affected primarily by exceptional charges related to the ICA AB share transactions of 87 million euros ($114.6 million), and long-lived asset impairments of 130 million euros ($171.2 million), as opposed to 52 million euros ($ 68.5 million) last year.

The company also showed an operating loss of 37 million euros ($48.7 million), vs. 34 million euros (U.S. $44.8 million) last year. Net sales for the quarter were 12.0 billion euros ($15.8 billion), a decline of 8.3 percent compared with the third quarter of 2003, mainly due to a weaker U.S. dollar; excluding currency impact and impact of divestments, net sales growth was 0.8 percent. Net cash flow from operating activities was 396 million euros ($521.6 million), up from 195 million euros ($256.8 million) last year.

Net sales in U.S. dollars at Ahold's U.S. retail operations were down 2.3 percent compared with the same period last year. Excluding the impact of divestments, net sales in U.S. dollars declined by 0.8 percent in the third quarter. (Net sales at the company's U.S. retail operations were $62 million lower than stated in the third-quarter trading statement published on Oct. 21, as a result of a final adjustment at Ahold's Giant-Carlisle/Tops arena.) During the first three quarters of 2004, net sales amounted to $20.5 billion, as opposed to $20.7 billion in the year-ago period. Excluding the impact from divestments, net sales growth in U.S. dollars came to 0.5 percent.

"This quarter again shows that 2004 is very much a year of transition," said Ahold president and c.e.o. Anders Moberg in a statement. "Since the start of the third quarter, we've concluded several open issues and continued to focus our business. In brief, we've recently completed the ICA AB share transactions, reached final settlement with the SEC and the Dutch Public Prosecutor, divested our Spanish operations, transferred our controlling interest in Disco to Cencosud, and started divesting our remaining 13 large Polish hypermarkets.

"Albert Heijn, Giant-Carlisle, and U.S. Foodservice showed an improved underlying performance in the third quarter," Moberg continued. "Our results at Stop & Shop and Giant-Landover continue to reflect competitive pressure and integration issues. However, we are pleased to say that the integration of Stop & Shop, Giant-Landover, and U.S. retail corporate functions into one business arena has been substantially completed.

"Overall, we've made good progress on our road to recovery in the third quarter," he said. "Management remains focused on achieving our previously announced road to recovery performance objectives by the end of 2005 and beyond."
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