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Carrefour first-half net profit increases(Associated Press WorldStream Via Acquire Media NewsEdge) PARIS_Carrefour SA, the world's second-largest retailer after Wal-Mart, said Friday it is maintaining its sales target for the full year after what CEO Jose Luis Duran called a "strong performance" in the first half. Net income rose 3.1 percent in the six months through June to ?751.8 million (US$1.1 billion) from ?729.1 million a year earlier. The company also reported a 1.2 increase in net profit from recurring operations to ?750 million (US$1.1 billion). Sales increased 8 percent over the period to ?41.94 billion (US$61.95 billion). The company did not break out separate second-quarter figures. "The group has robust fundamentals," Duran said. "In an uncertain and challenging environment, the implementation of the operational action plan we announced in July makes me confident that we will achieve our 2008 objectives." Carrefour shares, which have fallen 32 percent this year, were up 6.6 percent at ?35.93 (US$53.07) in Paris midday trade. The company said it is sticking to its full-year forecast of a 7 percent sales growth at constant exchange rates. It announced plans to cut costs by ?100 million (US$148 million), which Duran said won't involve any job cuts. Duran responded to media reports that Carrefour's board is seeking to replace him, saying he wouldn't be presenting the results if he didn't have its confidence. "There are and there will be rumors, but my priority today is to deliver on the results for 2008," Duran said. In July, shareholders voted to change the management structure, creating a new board of directors which does not include Duran. The Halley family ceded its long-standing position as Carrefour's leading shareholder to Blue Capital, the consortium controlled by French billionaire Bernard Arnault and U.S. private equity firm Colony Capital, which last year took a 9.1 percent stake in Carrefour and urged the company to unlock the value of its real estate. In the first half, Carrefour's retail estate arm became operational. Duran said the company plans to sell some of its real estate when market conditions allow, but "investors are not ready to pay the market price" at the moment. In Carrefour's home market of France, which accounts for 40 percent of Carrefour's sales, revenue in July and August was "slightly better" than the first half, when it increased 1.2 percent from a year earlier, Duran said at a news conference in Paris. To respond to consumers, who have been reining in spending as the economy slows, the company said it plans to cut prices on 300 products, combined with promotional campaigns. Results were boosted by stronger growth in the emerging markets Latin America, where sales increased over 40 percent in the first half, and Asia, which charted an increase of 8.1 percent. Duran said sales in China were "strongly negative" in April and May, after protests during the Paris leg of the Olympic torch relay prompted Chinese boycotts of French goods. Customers have since returned and the company is sticking with expansion plans, which include the opening of 20 new hypermarkets this year, he said. Copyright ? 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. |