(Updated with stock price in §4, analyst quotes §5-6, details)
by Augustin Turpin
November 22 (Reuters) – Casino lowered its annual earnings before interest, taxes, depreciation and amortization (Ebitda) target for France on Wednesday, for the second time in a month, due to a slower-than-expected recovery in activity in its hypermarkets and the impact of its investments.
The distribution group now expects its Ebitda after rent to be in loss, in a range of 78 million to 140 million euros.
Casino had already announced a month ago a reduction in its EBITDA target after rent for France, which it then reduced to 100 million euros compared to 214 million euros previously.
On the Paris Stock Exchange, Casino shares fell
0.06
% has
0.8255
euro to
10
h
16
after losing up to 4% at the start of the session, against an increase of
0.5
% for the SBF 120 at the same time.
“With this third consecutive ‘profit warning’ since the summer, everyone realizes Casino’s lack of visibility on its commercial recovery,” observes Clément Genelot, analyst at Bryan Garnier.
“As we have already seen in the past in the food industry, price repositioning often requires 12 to 18 months to really bear fruit on volumes,” he adds.
Heavily indebted, Casino signed a “lock-up” agreement in October with its main creditors, including Czech billionaire Daniel Kretinsky, in order to avoid bankruptcy.
This restructuring, which provides for the parent company Rallye to lose control of the group, must take place by the end of the first quarter of 2024.
Casino assures on Wednesday that it does not foresee any liquidity problems between now and this date despite a depressed market context. Over the last week, Casino hypermarkets experienced a 12% drop in volumes.
The distribution group also announced that the completion of several “strategic projects” would result in an additional investment of 113 million euros over the period from 2024 to 2025.
Casino indicated that these projects would ultimately improve the group’s profitability by more than 100 million euros by 2028.
(Report by Augustin Turpin and Sudip Kar-Gupta, edited by Blandine Hénault)