Carrefour Net Loss Narrows as International Revenue Share Rises

The Tip Desk · June 30, 2018 · 2 min read

The retailer reported a net loss of (458) million euros for the first half of 2019.

The retailer Carrefour reported a net loss, part of the Group, of (458) million euros for the first half of 2019, compared to a loss of (861) million euros in the first half of 2018. This result follows a period where the company reclassified Carrefour China as discontinued operations under IFRS 5.

Revenue for the period reached 34.9 billion euros, representing an increase of 2.5% at constant exchange rates. The company said the share of revenue generated internationally continued to rise, reaching 54% at constant exchange rates, up from 52% in the first half of 2018.

Operating performance varied by region. Current operating result for France rose by 10 million euros compared to the first half of 2018, which the company attributed to cost reductions, organizational transformation, and investments in price competitiveness, digital services, and offer attractiveness. In contrast, the current operating result for Europe excluding France saw a strong decrease. The company said this reflected disappointing commercial performance in competitive markets and significant restart investments, particularly in Italy, which were partially offset by cost reductions.

In Asia, sales in Taiwan grew 0.8% on a comparable basis, with a return to growth in the second quarter of 3.0% LFL. The Group's total current operating result stood at 624 million euros, a 3.6% increase at constant exchange rates. This figure includes a favorable impact of 23 million euros from the first application of IFRS 16 and an unfavorable impact of (17) million euros from the application of IAS 29 in Argentina.

Financial liabilities shifted as the company applied new accounting standards. Net financial debt rose from 3,510 million euros on January 1, 2019, to 6,043 million euros on June 30, 2019. Available cash stood at 1,522 million euros on June 30, 2019, a decrease of 2,778 million euros from the 4,300 million euros reported on December 31, 2018.

To support liquidity, the company maintains a Euro Medium Term Notes program with a 12 billion euro capacity and a treasury bill program with a 5 billion euro issuance capacity. Carrefour also holds two undrawn syndicated credit lines totaling 3.9 billion euros. In June 2019, the company amended these facilities to include a Corporate Social Responsibility component, consisting of a 1.4 billion euro Club deal and a 2.5 billion euro syndicated facility.

The company signed a strategic partnership with Glovo to provide a 30-minute home delivery service. This service is scheduled to become operational by early October at the latest in France, Spain, Italy, and Argentina.