Carrefour has replaced its management in Brazil

Carrefour has replaced its management in Brazil

Carrefour has lowered its profit forecast for 2010 for the second time in two months on the back of a series of one-off charges in Brazil.

The world's second-largest retailer has cut its target for "activity contribution" - or operating profit to EUR3bn (US$3.93bn), which it said, was "around EUR130m lower, on a pro-forma basis, than the previously communicated objective".

Carrefour is auditing its business in Brazil and said it would record EUR550m in one-off charges in Brazil this year, against a previous forecast of EUR180m.

"In order not to alter the predictive value of operating income and given the non-recurring and exceptional amount of these charges, they will be fully recognised as non-operating income," Carrefour said yesterday (30 November).

The charges comprise depreciation and inventory adjustments, provisions for labour and tax litigation, non-recoverable supplier rebates and depreciation of tangible assets.

Carrefour said other drivers behind the reduction in its forecast include a EUR50m charge due to its Thai stores becoming discontinued operations following the sale of the business to Casino. It also cited the "under-performance" of its hypermarkets in Brazil and "the challenging trading environment" in Europe.

Shares in Carrefour were down 8% at EUR32.07 at 11:42 CET.