Carrefour, the world's second-largest retailer after Wal-Mart, on Thursday said profits dropped 15.6 percent last year because of divestments of unprofitable operations, but predicted better times ahead.
PARIS — Carrefour, the world's second-largest retailer after Wal-Mart, on Thursday said profits dropped 15.6 percent last year because of divestments of unprofitable operations, but predicted better times ahead.
The company said net profit declined to 1.44 billion euros, or $1.79 billion, from 1.7 billion euros, or $2.11 billion, in 2004 as it sold non-core businesses as part of a restructuring effort. Before divestments, net profits would have increased 1.2 percent, the firm said.
Carrefour chairman Jose-Luis Duran said results would improve this year and voiced "confidence" the group would better compete at home in France, where Carrefour has suffered from low-cost competition and aggressive price wars.
French retailers have sailed choppy seas recently as consumers spend less and sour on the outlook of an economy in which unemployment is double that of the U.S.
Duran said operating income would increase this year and sales would grow faster than in 2005. He said over the next couple of years, Carrefour would reach double-digit growth in operating income and sales.
Last year, the group's sales rose 2.5 percent to 74.49 billion euros, or $92.77 billion. Currency conversions were made at average exchange rates.
Meanwhile, Duran said the firm would allocate about 10 billion euros, or $19.3 billion, in capital investments over the next two years to open stores and build the Carrefour brand.
This year, for instance, some 100 hypermarkets are earmarked to open — more than twice as many on average than over the last four years. In total, Carrefour said it would open more than 1,000 stores this year.
Carrefour stock climbed 5.1 percent to close at 42.30 euros, or $50.34, in trading on the Paris Bourse.
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