PARIS (Reuters) – French supermarket retailer Casino <CASP.PA>, which is battling investor concerns over debts and its ability to generate cash, scrapped its 2020 dividend as it targeted net debts below 1.5 billion euros ( £1.4 billion) in France at the end of 2020.
Casino also confirmed its 2019 earnings and cash flow goals.
Casino, which has been selling assets to reduce its debt and which also controls Brazil’s Grupo Pao de Acucar <PCAR4.SA>, said first-half group operating profit reached 347 million euros against 337 million euros last year.
However, it posted an underlying first-half group net loss of 16 million euros compared to a 46 million euro profit last year, as expenses and high levels of tax credits in Brazil impacted its earnings.
In March, Casino had raised its goal for disposing of assets to at least 2.5 billion euros to cut debts, seeking to achieve that by the first quarter of 2020. It has so far disposed of 2.1 billion euros worth of assets.
Casino has been struggling to improve its profits amid a tough business climate in France, raising concerns over its ability to generate enough cash to also pay off the debt of its parent company Rallye <GENC.PA> through dividends.
In May, Casino Chairman and Chief Executive Jean-Charles Naouri placed Casino’s parent companies, including Rallye, under protection from creditors.
While Casino itself was not placed under bankruptcy protection, it was hit with downgrades that left its credit rating deeper in junk territory, with rating agencies Moody’s and S&P citing concerns over debts at Casino’s parent companies.
(Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta)