French supermarket chain Carrefour managed a 4.9% profit increase to 766 million euro over the first six months of 2013. Encouraging were the results in home country France and the upcoming markets.
Exchange rates limits turnover
The first half of 2013 gave Carrefour a global turnover of 36.464 billion euro, 0.8 % lower than the same period last year. Less favourable exchange rates were the main cause of the slight setback, because if they had remained stable, Carrefour would have pushed forward 1.4 %.
France, responsible for 40 % of Carrefour’s turnover, ‘only’ fell back 0.3 % as CEO Georges Plassat managed to get the French activities back on track, despite only becoming CEO in May 2012.
Modernizing the ageing infrastructure, simplifying the array of products andcreating competitive pricing improved Carrefour’s impression with consumers. He also cut costs, resulting in a 75 % increase of the current company profits for the French market, from 275 million euro to 482 million euro.
Plummeting turnover in southern Europe
The results got a very positive reaction from analysts keeping a close eye on the share, who are hoping that the chain can reproduce those results in southern Europe, a region where the economic crisis isn’t sparing Carrefour.
For now Carrefour had to take a 4.5 % hit in the rest of Europe, with Spain and Italy weighing heavy on the numbers. The turnover dropped to 9.176 billion euro, while current company profits plummeted 76.4 % to 36 million euro.
Excellent performance in upcoming markets
Carrefour performed well commercially in the upcoming markets, but the exchange rates once again set back the numbers. The turnover in Latin America grew 1.1 %, to 6.953 billion euro, a number which would have shown a 13.3 % increase with stable exchange rates. The Asian turnover grew 2.7 % to 3.388 billion euro.
The first half of 2013 resulted in a net profit of 902 million euro, a huge increase compared to last year when only three million euro could be chalked up as profit. The recurrent company profit went up 4.9 %, reaching 766 million euro. In the latter half of 2013, Plassat is continuing his local approach for store management and reigning in the costs.
By the end of June 2013, Carrefour had 10,102 stores, 3,418 of which were in France, its home territory.