Swedish retailer ICA said it started the year on a “positive note”, despite booking a drop in first-quarter profit hit by one-off costs.
ICA, owned by Swedish investment fund Hakon Invest, booked operating profit of SEK562m (US$85.9m) in the period to the end of March, compared to SEK690m last year. The retailer blamed a non-recurring cost of SEK187m in connection with a sourcing and logistics deal with Norwegian retailer Norgesgruppen.
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In January, ICA and Norgesgruppen entered a co-operation agreement that saw the pair coordinate distribution and logistics between ICA Norway and Norgesgruppen’s wholesale company, Asko. However, earlier this month, Norway’s Competition Authority placed a temporary block on the tie-up while it examines whether the deal could lessen competition in the market.
ICA’s sales in the first quarter amounted to SEK23.08bn, a drop of 1% on the prior year. The decline was a result of the sale of ICA Maxi stores in Norway.
In its domestic market, however, operating profit was up 16.5% to SEK629m as a result of higher sales to its stores. Sales climbed 3.9% to SEK16m. During the year, ICA said it plans to launch 250 new own label products in Sweden.
In February, Hakon reached an agreement with Ahold to acquire the remaining 60% of shares in ICA in a SEK20bn deal.
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