As Ahold continues to take steps closer to its impending merger with Delhaize, the company has released a strong Q1 2016 financial report, surging past analysts income predictions by nearly $16 million.
“We continue to make good progress on our proposed merger with Delhaize, which we expect to complete in mid-2016,” shared Ahold CEO Dick Boer. “Working together towards this common goal reaffirms our view that the merger will create a better and more innovative retailer, capable of delivering enhanced value for our customers, associates, and shareholders.”
For its 2016 Q1 reportings, the company saw an adjusted operating income increase of 14.7% to $500.6 million (€449 million), which was higher than the $485.2 million (€434 million) average prediction that Bloomberg analysts revealed in a poll. Ahold’s said that solid store operations, a strong increase in online sales, improved profitability, and a strong free cash flow contributed to its net sales reaching $13.19 billion (€11.8 billion).
“We continue to deliver on our strategic objectives, with a good operational and financial performance in the first quarter,” Boer continued. “Our focus remains on serving our customers and delivering on our Simplicity program, in order to invest in our great local brands to ensure that we provide even more value and innovation.”
Boer continued to state that the company’s Q1 reportings have placed them right on track to complete its Delhaize merger by the middle of this year. Once the merger is complete, Ahold estimates that an approximate return of $1.11 billion (€1.0 billion) will go back to shareholders through a capital return and reverse stock split. Current shareholders of Ahold with directly, or indirectly, hold 61%. Former Delhaize shareholders will directly, or indirectly, hold around 39% of the outstanding ordinary shares in the resulting combined company.
Other highlights from the company’s Q1 2016 financial report are as follows:
As of 5:36 PM GMT on June 1, Ahold shares were up 2.5% in Amsterdam trading to reach $22.78 (€20.37), this increase rasied the company’s market cap to $18.56 billion (€16.6 billion). Delhaize shares also rose 2% in Brussels, reaching to trade at $107.42 (€96.12) for a market cap of $11.01 billion (€9.85 billion).
As mid-2016 deadline for the merger fast-approaches, keep up with DeliMarket News as we continue to report on Ahold and Delhaize.