FRANCE: Carrefour cheers market despite profit drop
- Underlying H1 operating income down
- Analysts feared steeper fall
- Europe weighs on results
Carrefour today (30 August) reported a fall in half-year profits but shares in the French retail giant rose as analysts had expected a steeper decline.
The French retail giant booked recurring operating income of EUR769m (US$965.3m), down 8.2% on the first half of 2011.
However, analysts had forecast profits to fall further. The average forecast of ten analysts polled by Bloomberg was for recurring operating income of EUR705m.
Shares in Carrefour were up 7.49% at EUR16.93 at 11:20 CET this morning.
Europe was a drag on Carrefour's results. Recurring operating income from the retailer's operations in Europe, excluding France, was down 32%. Earnings in France and Asia also fell but increased in Latin America.
Sales grew fastest in Latin America, where Carrefour saw revenues increase 8.3%. Sales in Asia were up 9.5% but slid 3% in Europe. In France, sales dipped 0.5% on the back of weak non-food sales. Group sales, however, increased 0.9% to EUR38.82bn.
Carrefour's net income from continuing operations was EUR199m, compared to a net loss on the same basis of EUR879m last year.
Figures for the first half of 2011 were given on a pro-forma basis to account for Carrefour's decision to run its stores in Greece on a franchise basis and its planned exit from Singapore.
Carrefour has suffered in recent years, with lower sales at its hypermarkets eroding its market share in France. Its operations in Europe have also come under pressure.
New CEO Georges Plassat is expected to provide more detail on how he plans to turn around a business that has had a challenging few years later today.
2012 Half-Year Results
Growth in sales supported by emerging countries
Recurring Operating Income: €769m
Net income from continuing operations, Group share of €199m
Net debt reduced to €9.6bn, a decrease of €1bn vs. June 30, 2011
Key H1 2012 figures
Growth in sales of +0.9% to €38.8bn, driven by emerging markets
Recurring Operating Income of €769m, supported by Latin America but impacted by the economic environment in Southern Europe, vs €838m in H1 2011
Net income from continuing operations, Group share, of €199m, vs. a loss of €879m in H1 2011
Net income from discontinued operations, Group share, of -€230m, largely resulting from the disposal of Greece as announced in the press release dated June 15th
Net income, Group share, of -€31m, vs. a loss of €249m in H1 2011.
Click here for the full release.
Original source: Carrefour
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