financial
financial

Global Players Hint Worst Might Be Over

While executives remain extraordinarily cautious, there is a growing sense that things may have bottomed out across the board.

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CARREFOUR SA

Carrefour, the world’s second-largest retailer behind Wal-Mart Stores Inc., swung to a loss in the first half of 2009, hurt by one-off charges and restructuring costs.

But the company, which is overhauling its operations in a bid to stay competitive, reiterated the full-year outlook, saying it’s on track to meet 2009 objectives.

Carrefour posted a wider-than-expected loss of 58 million euros, or $77.1 million, in the January-June period, compared with a profit of 744 million euros, or $1.14 billion, in the same period a year earlier, due to an exceptional charge of 511 million euros, or $679 million. In the first half of 2009, Carrefour sales were down 1.6 percent to 41.28 billion euros, or $58.88 billion, but rose 1.9 percent at constant exchange rates, while second-quarter sales declined 1.2 percent to 23.44 billion euros, or $31.87 billion.

The charge included the write-down of the value of certain assets in Italy, where the company has closed or sold a number of stores, as well as restructuring and rebranding costs. Dollar figures are converted at average exchange rates for the period.

Although some economies have shown early signs of recovery from the recession, chief executive Lars Olofsson said markets are expected to remain challenging. But he reiterated the company is on track to meet full-year targets, including cost savings of at least 500 million euros, or $713 million.

Carrefour is targeting full-year operating profit of up to 2.8 billion euros, or $4 billion, if current sales trends continue.

Business was particularly difficult in Spain, where consumption declines brought on by the plummeting real estate market, plus lower food prices, hurt sales, Olofsson said.

Shares in Carrefour, which have risen 5.8 percent since the beginning of 2009, closed up 4.8 percent Friday at 33.13 euros, or $47.25 at current exchange.

 

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