International supermarket group Carrefour recorded a solid rise in operating profit in 2014, but said yesterday that net profit fell as it invested in improving the shopping centres that host its stores.
The world’s number two supermarket group said operating profit from recurring business rose 6.7% to €2.38bn ($2.63bn) while net earnings slipped 1.5% to €1.24bn.
Sales data, which had been published earlier, showed a dip of 0.3% to €74.7bn, but when stripped of variations including exchange rates indicated growth of 3.9%.
Exceptional items that weighed upon the bottom line included Carrefour’s contribution to the creation of a property development company that will try to boost the value of the shopping centres in which its supermarkets are located, as well as a discount retail chain in France.
Emerging markets continued to drive gains in operating profits, rising by 14.9%.
Conditions in Europe, which had been difficult in recent years due to the eurozone crisis, have improved with France posting a 6.1% in operating profits and a 9.6% gain for the rest of Europe.
“Carrefour turned in very fine year in 2014 that confirmed that it is on the road to recovery,” said financial director Pierre-Jean Sivignon, one of two executives who has been helping chief executive Georges Plassat run the company while he recovers from surgery.
Sivignon said it was too early to make any forecasts for 2015, but that the company would continue to keep a tight leash on its finances, although a modest increase in investments was planned.
Management proposed increasing the dividend by four cents to 0.68 euros per share.
Carrefour’s shares shot up 2.5% to 30.39 while the Paris stock exchange’s CAC 40 index was up 0.39% overall.