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Ahold Annual Report 2003
Operating and Financial Review and Prospects
69
The following table shows our share in income (loss)
of joint ventures and equity investees:
(in EUR millions, except percentages)
2003
2002
2001
Euro
Change
Euro
Change
Euro
ICA, Scandinavia
132
116.4
61
(4.7)
64
JMR, Portugal
24
(31.4)
35
16.6
30
Paiz Ahold, South America
9
(10.0)
10
(23.1)
13
DAIH, South America1
(126)
57.4
(296)
Others
(4)
77.7
(18)
500.0
(3)
Total share in income (loss)
of joint ventures and
equity investees
161
532.7
(38)
80.2
(192)
Disco was consolidated since the second quarter of 2002 and Santa Isabel was
consolidated since the third quarter of 2002 until it was sold during 2003.
2003
Our share in the income (loss) of joint ventures and equity
investees in the full-year results 2003 increased to an
income of EUR 161 million, compared to a loss of EUR
38 million in the same period last year. Our share in
income in 2003 was positively affected by the share in
income of ICA, which increased considerably in 2003
compared to 2002. This share in income was partly offset
by lower results at JMR. In addition, our share in income
of ICA included in European joint ventures increased
considerably in the full-year results 2003, mainly as a
result of a gain related to the sale and leaseback of
several distribution centers. The losses in Luis Paez and
World Wide Retail Exchange included under "Others" in
the table above were EUR 4 million compared to EUR 18
million in 2002. Our share in income of JMR decreased
resulting from price repositioning at Pingo Doce and
strong competition at Feira Nova.
JMR, Portugal
In 2003, our share in the income of JMR was
EUR 24 million, compared to our share in the income
of JMR of EUR 35 million in 2002. As discussed above,
JMR's results were lower primarily as a result of lower
gross profit margins due to price repositioning at Pingo
Doce and strong competition at Feira Nova.
ICA, Scandinavia
In 2003, our share in the income of ICA, which
operates in Scandinavia and the Baltic States, was
EUR 132 million, compared to EUR 61 million in 2002.
This increase was mainly due to a EUR 119 million gain
related to the sale and leaseback of several distribution
centers. In Sweden, ICA had a strong performance in
2003, particularly at its largest Kvantum supermarkets
and its MAXI hypermarkets. In Norway, ICA's
performance was weak in 2003 compared to 2002.
Paiz Ahold, South America
In 2003, our share in the income of Paiz Ahold was
EUR 9 million, compared to our share in the income
of Paiz Ahold of EUR 10 million in 2002. The decrease
in our share in the income of Paiz Ahold was due to
the impact of currency exchange rates.
DAIH, South America
Disco and Santa Isabel were consolidated since the
second and third quarters of 2002, respectively. For a
discussion of results of operations of Disco and Santa
Isabel in 2003, please see "Retail trade: South America"
above.
2002
Our share in the losses from unconsolidated joint
ventures and equity investees in 2002 was EUR 38
million compared to EUR 192 million in 2001 primarily
as a result of losses at DAIH in 2002 and 2001 and, to
a lesser extent, losses at Luis Paez. Our share in these
losses was partially offset by our share in income from
our other joint ventures.
JMR, Portugal
Due to the economic downturn in Portugal, JMR
experienced lower net sales in 2002 compared to 2001
as a result of lower net sales in both supermarkets and
hypermarkets. As a result of higher gross profit margins
and a stable cost level, JMR's operating income in 2002
increased compared to 2001. Our share in income
of EUR 35 million from JMR in 2002 increased to
EUR 35 million compared to EUR 30 million in 2001.
ICA, Scandinavia
In 2002, ICA experienced a rise in net sales. In Sweden,
ICA had a strong performance in 2002, particularly in
its supermarkets, its large Kvantum supermarkets and
its MAXI hypermarkets. In Norway, ICA improved its
operating income despite losing market share. In 2002,
operating income was negatively affected by write-offs
of tangible and intangible assets which were caused
by events which occurred subsequent to year-end 2002.
Our share in income of EUR 61 million from ICA in
2002 decreased from our share in income of
EUR 64 million in 2001.
Paiz Ahold, South America
Our share in the losses from unconsolidated joint
ventures and equity investees in 2002 and in 2001
included income of EUR 10 million and EUR 13 million,
respectively, from Paiz Ahold. Net sales of the Paiz
Ahold joint venture increased in 2002 compared to
2001 due to the addition of CSU International and
Corporación de Compania Agroindustriales ("CCA")
following Paiz Ahold's formation of CARHCO, a new joint
venture with CSU International, in January 2002. Our
share in income from Paiz Ahold in 2002 was lower
than our share in income from the Paiz Ahold joint
venture in 2001. The lower net income in 2002 was
caused by the addition of CSU International and CCA
to the joint venture.
DAIH, South America
In 2002, our share in the loss of DAIH was EUR 126
million, compared to our share in the loss of DAIH of
EUR 296 million in 2001. The decrease in our share in
the loss of DAIH is due to the fact that DAIH ceased to
