Carrefour reports return to profit, shares rise

Retailer Carrefour, the world's second-biggest distribution company after US giant Walmart, reported a recovery into profit in the first half of the year on Thursday. Carrefour shares rose 4.4 percent to 23.78 euros. The group benefited from asset sales and from improved profitability in its home market, France. In the first six months of the year, the group made a net profit of 902 million euros ($1.195 billion) from a loss of 31 million euros in the same period of last year. Current operating profit was steady at 766 million euros from 769 million in the same period of last year. However, allowing for asset sales in Indonesia, Colombia, Malaysia, Singapore, Greece and Turkey, and taking account of a new standard for staff benefits, current operating profit rose by 4.9 percent, or by 7.7 percent on a basis of constant exchange rates. This was driven by strong performance in France, where it achieved better-than-expected results, and in Latin America. The asset disposals are in line with the company's new strategy plan, under which it remains committed to maintain operations in emerging markets, but only in countries where it will be ranked No. 1 or 2 in its field. Finance director Pierre-Jean Sivignon said during a telephone press conference: "In a difficult situation regarding the economic situation and competition ... Carrefour achieved a good performance in the first half." Sales amounted to 36.46 billion euros, marking a fall of 6.0 percent, but of 0.8 percent on a pro forma basis. Carrefour said, as in July, that it should be on target for expectation by analysts for an annual current operating profit of about 2.2 billion. At a press conference later Thursday, chief executive Georges Plassat said he was pleased with the results and that the company was heading in the right direction. Confident about Carrefour's future, he said however that a touch of modesty was necessary "considering the difficult economic environment in which we operate". At Bank of America Merrill Lynch, analysts commented that the figures were impressive regarding France but disappointing everywhere else.