Ahold, the world's third biggest retailer by sales, has slashed expectations for profit growth by as much as two-thirds, after experiencing problems in its Argentine business.

The Dutch company said it would take a 350m-450m euro (�225m-289m) charge on its accounts after its Argentine partner defaulted on its bank debts.

It said it now expected profit growth of 5-8% in 2002, down from earlier expectations of a 15% increase.

Ahold shares rose 7%, with analysts saying they were cheered the company had "cleared the air".

"The announcement will provide some relief to the market that management is finally adjusting its forecasts to reflect a more realistic growth scenario," said Schroder Salomon Smith Barney in a note to investors.