Carrefour slashes first half loss by 88%

Carrefour, the world's second biggest retailer by sales after Walmart, posted on Thursday a sharply reduced 2012 first-half net loss, a day after a union source said it would eliminate up to 600 jobs. Carrefour said the loss declined to 31 million euros ($39 million), from a loss of 249 million euros in the first six months of 2011. Its shares leapt by more than eight percent in midday Paris trading on the news. The French group's core earnings came to 769 million euros, a drop of 8.2 percent that was nonetheless better than an average analyst forecast of 681.6 million euros compiled by Dow Jones Newswires. First-half sales gained a slight 0.9 percent to 38.83 billion euros. The figures did not include Carrefour's discontinued operations in Greece and Singapore. Carrefour said in June that it would pull out of Greece, and had that not been the case, the net loss would have come to 230 million euros, finance director Pierre-Jean Sivignon told a telephone news conference. He said he was "comfortable" with an analyst forecast of earnings before interest and taxes for the full year of between 2.03 and 2.09 billion euros, compared with the 2011 figure of 2.18 billion, which included Greek results. Business this time around was "underpinned by Latin America, in particular Brazil which confirmed its recovery," Sivignon added. In Europe however, sales were hurt "by the difficult environment in southern Europe and despite significant cost cutting in Spain," he said. In France, the company's main market, sales slipped by 0.5 percent, while in Europe overall they were off by 1.8 percent. Earnings before interest and taxes (EBIT) fell in France by 6.7 percent on a 12-month basis, and dropped across Europe by 32 percent, mainly owing to weaker results in Spain. In Latin American however, EBIT grew by 10 percent. On Wednesday, union sources said Carrefour would cut 500 to 600 office jobs in France as part of a voluntary departure programme. Carrefour is France's biggest private employer where it employs 115,000 people, including 7,000 in administrative jobs that are to be the focus of the downsizing, said Bruno Moutry of the CFDT union. Carrefour chairman and chief executive Georges Plassat told a press briefing that no additional layoff plans would be unveiled in the coming months. He added that the group would now focus on lowering financial costs, improving its cash-flow, improving the quality of fresh products and review the range of dry goods that it sells. Carrefour shares leapt by 8.38 percent to 17.07 euros in midday trades on the Paris stock exchange, while the CAC 40 index of leading shares was down by 0.15 percent overall.