Asda, the British supermarket group which is 10% owned by US giant Walmart, said today it returned to a pretax profit in its 2023 financial year, even though it lost market share to rivals over the period.
Mohsin and Zuber Issa and private equity firm TDR Capital bought 90% of Asda from Walmart in a £6.8 billion deal that completed in 2021.
Earlier this month TDR agreed a deal to gain majority ownership by acquiring Zuber Issa's share.
Asda, Britain's third largest supermarket group, said it filed its annual accounts at Companies House on Friday for the year to end-December 2023, which showed a pretax profit of £180m, compared with a loss before tax of £432m in 2022.
It said the outcome reflected an increase in operating profit and a partial reversal of previous impairment provisions.
Asda had already reported in April that underlying earnings for 2023, or adjusted EBITDA after rent, had increased 24% to £1.078 billion, on total sales, excluding fuel, that rose 7.1% to £21.9 billion.
That is despite its weaker performance against rivals.
Market researcher NIQ said this week that Asda's sales fell 4.9% in the 12 weeks to June 15 year-on-year, with its market share down a whole percentage point on the year to 12.2% - as it struggles to keep up with industry leader Tesco and the UK's second biggest supermarket group Sainsbury's.
Analysts say Asda's ability to compete has been burdened by high debt levels. Interest costs rose to £225m in 2023 and Asda's net debt as of the end of March 2024 was £3.8 billion.
Asda says its focus is on growing the business for the long-term by diversifying its offering. It highlights major investment in its online business, on expanding its convenience store estate and on upgrading its bigger stores.
