By Maarten van Tartwijk 

AMSTERDAM--Dutch supermarket operator Royal Ahold NV, on the verge of completing a merger with Belgium's Delhaize Group, Wednesday reported improved first-quarter earnings, reflecting an increase in sales and cost-savings.

Net profit in the first three months of this year rose 13% from the same period a year earlier to EUR241 million ($268.3 million), while the underlying profit margin rose to 3.8% from 3.5%. Sales rose 4% to EUR11.8 billion, driven by last year's acquisition of 25 A&P stores in the New York region and strong online sales in the Netherlands.

Shares in Ahold rose nearly 3% in Amsterdam in early trade.

The results come as Ahold is about to close its all-share merger with Delhaize in a tie-up that will create one of the largest grocery chains in the U.S. and Europe, with more than 6,500 stores and 375,000 employees.

The companies, which have a combined market value of around EUR28.5 billion, hope that a combination will strengthen their buying clout and reduce costs as they are grappling with competition from discounters and upscale chains on both continents.

The tie-up still needs approval from the U.S. Federal Trade Commission, which is likely to require divestitures in some areas before the merger is completed, Ahold Chief Executive Dick Boer said in an analyst call.

"We are in close contact with several buyers," said Mr. Boer, adding he still expects to the deal to close on schedule by the middle of this year.

In the U.S., the merger will combine Ahold's Stop & Shop and Giant stores with Delhaize's Food Lion and Hannaford chains and create a major player on the East Coast. Since there is little geographical overlap, Ahold has said it expects only a limited number of required disposals.

Write to Maarten van Tartwijk at maarten.vantartwijk@wsj.com

 

(END) Dow Jones Newswires

June 01, 2016 05:21 ET (09:21 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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