Carrefour SA, the world’s second-largest retailer, returned to profit in the first half of this year and said it’s confident of achieving its full-year objectives, boosted by cost cutting and cheaper purchasing.
Net income was 82 million euros (US$103.7 million), compared with a loss of 58 million euros a year earlier, the Paris-based company said yesterday. So-called activity contribution, a measure of operating profit, rose 7.6 percent to 1.1 billion euros, meeting the company’s forecast, Carrefour said.
Costs were reduced by 236 million euros in the period, almost half of Carrefour’s 500 million euro target for the year. The company said its market share increased in France, where it aims to win customers from rivals such as Auchan SA by cutting prices, offering more of its own products and investing in discounts.
Sales in July and last month were “satisfying,” chief financial officer Pierre Bouchut said on a conference call.
The company’s figures included one-time costs of 384 million euros tied to the closure of 16 Belgian stores and inventory write- offs in Brazil, Carrefour said.
Activity contribution for the year should rise to about 3.1 billion euros from last year’s 2.8 billion euros, the company said, repeating a forecast it made in July.
In France, first-half earnings rose 16 percent to 513 million euros. The retailer’s domestic market share rose by 0.8 percentage point in stores open at least a year.
In the rest of Europe, profit decreased 5.3 percent to 298 million euros, hurt by a 1.6 percent decline in sales, price cuts in Spain, and a 36 million-euro charge tied to job losses in Belgium, Carrefour said. Austerity measures stemming from the debt crisis are affecting Carrefour’s business in southern Europe, the company said last month.
Carrefour is shifting its international focus to markets where the company can have a leading position, such as China and Brazil.
In Latin America, activity contribution dropped 4.8 percent to 141 million euros. Profit was reduced by costs of 69 million euros for inventory write-offs and accounting adjustments in Brazil, Carrefour said.
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