Reuters reports this morning that Ahold’s Dutch flagship chain, is under its 2003 projections for sales and profits, which is putting even more financial pressure on the company, which continues to reel from the accounting scandal that has dropped its stock price by two-third.
The different between projections and actual sales and profits reportedly is between seven and eight percent.
In addition, Albert Heijn and Unilever are negotiating how to deal with a unilateral decision by Ahold to delay payments to the manufacturer, a delay that Ahold hoped would allow it to “conserve capital and boost liquidity.”
Reuters reports that Unilever was informed of the delay last week, and that the company is “considering which measures we can take.” In one statement, Unilever said it was “displeased.”
Published reports in the Netherlands say that Ahold also plans to delay payments by the supermarkets it owns outside the Netherlands, possibly including the United States.
Investigations are continuing into the accounting irregularities at Ahold, where a $500 million overstatement of profits by its US Foodservice division has created a firestorm of criticism and garnered a lot of regulatory examination.
The different between projections and actual sales and profits reportedly is between seven and eight percent.
In addition, Albert Heijn and Unilever are negotiating how to deal with a unilateral decision by Ahold to delay payments to the manufacturer, a delay that Ahold hoped would allow it to “conserve capital and boost liquidity.”
Reuters reports that Unilever was informed of the delay last week, and that the company is “considering which measures we can take.” In one statement, Unilever said it was “displeased.”
Published reports in the Netherlands say that Ahold also plans to delay payments by the supermarkets it owns outside the Netherlands, possibly including the United States.
Investigations are continuing into the accounting irregularities at Ahold, where a $500 million overstatement of profits by its US Foodservice division has created a firestorm of criticism and garnered a lot of regulatory examination.
- KC's View:
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If Ahold can’t pay its bills on time, it is going to create an awful lot of uncertainty among manufacturers.
If manufacturers decide to stop shipping -- or even just delay shipments -- to Ahold, it could well start having an impact on the company’s in-stock position, which will affect consumer confidence in the company.
We’ve been of the option up to this point that consumers were pretty much disconnected from Ahold’s problems, and that these were of more concern to investors and lenders than to shoppers. This new development, however, suggests that this could change.
