Retailer Casino 2022 core profit falls; in exclusive talks with Teract

By Dominique Vidalon

PARIS (Reuters) -Retailer Casino on Friday aimed to reduce its debt and cut costs this year after reporting a 5.9% decline in 2022 group operating profit, reflecting a slump at its core French operations and low cash following weak fourth-quarterly sales.

Casino also announced it had signed an exclusive agreement with Teract to combine their retail activities in France within an entity controlled by the former.

Casino, which has been selling assets to cut debt, reiterated that it aimed to complete the final 400 million euros ($423.64 million) leg of its 4.5 billion euros disposal plan in France by the end of 2023.

Casino also pledged to continue selling assets in Latin America this year, having announced earlier this week that it had initiated a study on a potential new sale of part of its stake in Brazil supermarket chain Assai for about $600 million to accelerate deleveraging.

The French retailer, which ended 2022 with 434 million euros in cash and cash equivalents, said it would not pay a dividend for 2022 in order to prioritise debt reduction.

At end-2022, consolidated net debt stood at 6 billion euros against 5.9 billion euros a year earlier, due to an increase in the debt of Assai linked to its expansion plan.

Casino, which also controls Brazil’s Grupo Pao de Acucar, said group’s 2022 operating profit fell 5.9% to 1.117 billion euros. At constant-exchange rates the decline reached 12.1%.

This reflected a 9.1% fall in the core profit of the French retail business, where sales at the Geant hypermarkets dropped fell sharply in the fourth quarter of 2022 amid competitive pressure.

The company’s 2023 priorities in France include reducing inventory by 190 million euros in the first half, and a new cost-reduction plan of 250 million euros at retail banners as well an an acceleration of the expansion strategy in convenience stores.

($1 = 0.9442 euros)