China helps boost Carrefour first half

Posted by Josette Dunn on 1st September 2010

* Company returns net profit of EUR82m
* Operating profits up 7.6% on savings
* Sales in Asia up 8.9% at constant exchange rates

Carrefour SA has returned to profit in its first half with sales growth driven by a strong performance in emerging markets such as China.

The company said that for the six months to 30 June 30, it recorded a net profit of EUR82m (US$104m) compared to a loss of EUR58m in the year-earlier period.

From continuing operations, Carrefour reported a net profit of EUR67m, compared with a net loss of EUR48m last year.

Cost savings helped the company report an operating profit, of EUR1.1bn, up 7.6% on last year.

Sales rose 5.9% to EUR43.7bn , driven by the strength of growth markets like China and resilience in France, the world’s second largest retailer said.

Lars Olofsson, CEO of Carrefour, said: “Carrefour turned in a good performance in the first half of 2010, with solid growth in sales and activity contribution. Significant market share gains in France attest to the enhanced attractiveness of the Carrefour brand, our improved price image and the success of our banner convergence and new formats.

“Carrefour has also consolidated its positions in its priority markets through acquisitions and partnerships and taken radical operating decisions to restore profitability in underperforming markets,” he added.

In Europe, sales fell by 3.1%, excluding petrol, at a constant exchange rate. Sales were impacted by the restructuring of its Belgium activities and by the economic situation in Southern Europe.

In total, operating profits reached EUR298m, a fall of 5.3%.

Sales growth in Latin America remained strong – up 16% at constant exchange rates – boosted by solid like-for-like growth and sustained expansion throughout the region. But there was a 4.8% decline in operating profit, reflecting weaker hypermarket sales, inventory write-off and accounting adjustments in Brazil.

However, sales in Asia grew by 8.9% at constant exchange rates, driven by a sustained pace of expansion and accelerating growth in China in the second quarter.

Operating profits in the region grew by 27.5% (23.7% at constant exchange rates) to EUR144m. The increase was attributed to China and Thailand.

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