France's Carrefour more than triples its profit to $1.6 billion, mostly through asset sales

PARIS – French big box retailer Carrefour’s pullout of struggling underperforming markets and asset sales more than tripled its profits in 2012.

Europe’s largest retailer said Thursday that its net profit rose to €1.2 billion ($1.6 billion), up from €371 million in 2011.

Carrefour is trying to engineer a turnaround as Europe’s economic turmoil weighs heavily on its core markets. One tactic is to focus the group’s efforts on markets where it thinks it can be among the leading retailers. In 2012, Carrefour closed its stores in Singapore and either pulled out of or handed over its operations to partners in Greece, Colombia, Malaysia and Indonesia.

The huge jump in profit hides a more modest rise of 0.9 per cent in revenue to €76.8 billion, excluding sales tax. Much of the company’s growth is happening in Latin America, after it successfully put its Brazil operations back on track. Sales grew 4.6 per cent in the region.

Revenue in Asia increased 10.3 per cent — but much of that was due to favourable exchange rates. Carrefour is still trying to get the most of out its Chinese operations.

“Performance in 2012 was solid,” said chief financial officer Pierre-Jean Sivignon. “In 2013, we will continue our efforts in an environment that remains difficult.”

The company’s main problem is that its core market is Europe, where rising unemployment and falling growth have slammed retailers. Carrefour pulls in nearly three-quarters of its revenue in Europe.

Sales in Europe, outside of France, fell 3.1 per cent, and recurring operating income was down more than 20 per cent.

Still, its efforts in France — including improving its price perception — seemed to be starting to take root. Sales were up 0.5 per cent and recurring operating income rose 3.5 per cent.