Carrefour rings in 58 percent rise in annual profit

8th March 2007, Comments 0 comments

PARIS, March 8, 2007 (AFP) - French retailer Carrefour, the world's second-biggest supermarket group by sales, announced on Thursday a 58-percent increase in its net profit in 2006, boosted by disposals.

PARIS, March 8, 2007 (AFP) - French retailer Carrefour, the world's second-biggest supermarket group by sales, announced on Thursday a 58-percent increase in its net profit in 2006, boosted by disposals.

The net figure was 2.268 billion euros, but excluding the effect of divestments, principally the sale of assets in South Korea, net profit increased by a more modest 3.3 percent to 1.98 billion euros.

The group had a day of turmoil on Wednesday after France's richest man and controller of the LVMH luxury goods empire, Bernard Arnault, teamed up with US private equity group Colony Capital to buy nearly 10 percent of the company.

Later in the day, Carrefour announced that its chairman Luc Vandevelde had resigned, confirming press speculation that his departure was imminent after disagreements with the Halley family, the main shareholder.

Analysts believe it is unlikely that Arnault and Colony Capital will launch a takeover bid for the rest of the company, but they might push the group to sell some of its vast real estate portfolio.

"I've got the impression that it is a long-term strategic investment," said chief executive Jose Luis Duran during a conference call on Thursday.

He said that the value of the company's real estate portfolio was estimated at 15-20 billion euros.

"Real estate could be vector for creating wealth for shareholders," he said.

In other results published on Thursday, operating profit rose 3.4 percent to 3.258 billion euros.

The group said it would propose a dividend of 1.03 euros on 2006 results, an increase of 3.0 percent from 1.0 euro a year ago.

Carrefour also said it aimed to open new outlets totalling 1.5 million square metres (16.14 million sq feet) in 2007, with about two thirds in "growth markets" outside France, Italy, Belgium and Spain.

"We are preparing to develop new engines for growth in countries with strong growth potential such as Russia and India," it said.

Copyright AFP

Subject: French news

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