Higher Revenues Boost Delhaize's Earnings

The international food retailer recorded 30.6% growth in its fourth quarter earnings.
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On March 12, 2009,

Delhaize Group


recorded 30.6% growth in its Q4 FY08 earnings on higher revenue. Earnings increased to EUR 149.00 million or EUR 1.46 per share from EUR 114.10 million or EUR 1.12 per share a year ago. Net income from continuing operations surged 34.8% to EUR 163.40 million or EUR 1.55 per share.

Q4 FY08 revenue grew 15.8% to EUR 5.42 billion from EUR 4.68 billion a year ago, driven by the appreciation of the U.S. dollar against the euro. An additional week in the quarter also contributed to the increase. Excluding the impact of the extra week and exchange rate movements, revenue advanced 4.4% year-over-year. Additionally, organic revenue growth was 3.9%, reflecting comparable store sales growth of 2.9% in the U.S. and 2.7% growth in Belgium. Segment-wise, sales in the U.S. and Belgium grew 21.1% and 1.7% to EUR 3.82 billion and EUR 1.16 billion, respectively. Sales in Greece and the rest of the world jumped 12.7% and 25.4% to EUR 378.40 million and EUR 56.80 million, respectively.

At the end of the quarter, DEG had a total of 2,673 stores compared to 2,545 stores during Q4 FY08. In January 2009, DEG issued $300.00 million Senior Notes at 99.667% of their principal value, with an annual interest rate of 5.875% and maturing in 2014.

Revenue for FY08 inched up 0.4% to EUR 19.02 billion from EUR 18.94 billion in the previous year, supported by one additional week and organic revenue growth, which was offset by unfavorable exchange rates. Earnings improved 13.9% to EUR 467.10 million or EUR 4.59 per share from EUR 410.10 million or EUR 4.04 per share, fueled by lower finance costs.

Looking ahead to FY09, at identical exchange rate and excluding the 53rd week in FY08, Delhaize Group expects operating profit growth of 3.5% to 6.5%. DEG plans capital expenditures of approximately EUR 600.00 million to EUR 620.00 million.