Carrefour reports 82 million in first-half profit

Carrefour SA, the world s second- largest retailer, posted first-half profit that trailed analysts estimates, hurt by weaker superstore sales in Europe and Brazil, and costs for closing outlets in Belgium.

Net income was 82 million euros ($103.7 million), compared with a loss of 58 million euros a year earlier, the Paris-based company said today in a statement. That missed the 292 million- euro average of eight analyst estimates compiled by Bloomberg. Carrefour maintained its full-year earnings target.

The figures included one-time costs of 384 million euros tied to the closure of 16 Belgian stores and inventory write- offs in Brazil, Carrefour said. So-called activity contribution, a measure of operating profit, rose 7.6 percent to 1.1 billion euros, meeting the company s forecast, Carrefour said.

Carrefour is confident of achieving its 2010 objectives, Chief Executive Officer Lars Olofsson said in the statement. Sales in July and August were satisfying, Chief Financial Officer Pierre Bouchut said on a conference call.

The retailer aims to win customers from domestic rivals such as Auchan SA by cutting prices, offering more of its own products and investing in discounts and advertising. Carrefour, which last week opened two pilot superstores in France, is also shifting its international focus to markets where the company can have a leading position, such as China and Brazil.

Activity contribution for the year should rise to about 3.1 billion euros from last year s 2.8 billion euros, the company said, repeating a forecast it made in July.

In France, first-half earnings rose 16 percent to 513 million euros. In the rest of Europe, profit decreased 5.3 percent to 298 million euros, hurt by a 1.6 percent decline in sales, price cuts in Spain, and a 36 million-euro charge tied to job losses in Belgium, Carrefour said. Austerity measures stemming from the debt crisis are affecting Carrefour s business in southern Europe, the company said last month.

In Latin America, activity contribution dropped 4.8 percent to 141 million euros. Profit was reduced by costs of 69 million euros for inventory write-offs and accounting adjustments in Brazil, Carrefour said. Activity contribution increased 28 percent to 144 million euros in Asia, led by China and Thailand.

Carrefour defines activity contribution as gross margin from current operations, minus selling, general and administrative expenses, depreciation and amortization.

Revenue gained 6 percent to 43.7 billion euros.