French Retailer Casino Sells Stores, Ryanair Faces Rising Cost Pressures

Sarla Buch
01 Oct, 2018
New York City

Switzerland-based Aryzta said it plans to raise

[R]4:00 PM Frankfurt – Switzerland-based Aryzta said it plans to raise €800 million. Casino Guichard agreed to sell 19 stores. Kaufman Broad reported strong third-quarter results. Ryanair tumbled on rising costs and weak passenger traffic.[/R]

In London trading, FTSE 100 index decreased 15.11 or 0.2% to 7,495.33 and in Frankfurt the DAX index increased 99.32 or 0.8% to 12,346.05.

In Paris, CAC 40 index gained 18.65 or 0.3% to 5,512.35.

Aryzta AG surged 24.7% to 11.65 Swiss francs after Switzerland-based dairy products maker said revenues in the year ending in July declined 9.5% from a year ago to €3.4 billion.

Net loss in the year narrowed to €470 million from €906.1 million in the same period a year ago and diluted loss per share decreased to €0.56 from €1.06.

Aryzta said revenues in Europe dropped 1.6% to €1.7 billion and revenues in North America plunged 18.4% to €1.5 billion. The dairy products maker said lower-than-expected results was driven by weakening butter pricing, Brexit and in-sourcing in Europe and labor and distribution inflation in the U.S.

The specialty baking products maker said it is planning to sell new shares of as much as €800 million or $929 million to reduce the debt.

Aryzta forecasted fiscal 2019 operating profit growth in mid- to high-single-digit and operating margins in medium-term range of 12% to 14%.

Casino Guichard Perrachon SA gained 0.6% to €36.45 after France-based supermarkets operator agreed to sell 19 property assets in Paris region for €565 million, including the disposal of 15% of Mercialys through TRS.

Kaufman & Broad SA soared 5.1% to €42.46 after France-based home builder said revenues in the nine-month period ending in August jumped 15.7% from a year ago to €1.1 billion.

Net profit in the period surged 55.9% to €51.8 million from €33.2 million in a year ago period and diluted earnings per share increased to €2.37 from €1.59.

As of August 31, total orders received increased 5.7% to €1.2 billion and number of orders for homes edged up 1.7% to 5,981 units.

The homebuilder forecasted fiscal 2018 revenue growth to above 10% and gross margin to remain at about 19% while operating profit to increase to about 9%.

Ryanair Holdings Plc tumbled 11.9% to €11.54 after the Ireland-based low-cost airline operator lowered fiscal 2019 profit forecast to about 12% to between €1.10 billion and €1.20 billion from the earlier estimate of €1.25 billion and €1.35 billion.

The airline blamed the lower forecast on lower passenger traffic, higher oil prices and recent strikes.

Ryanair said fares in the second-quarter eased almost 3% and the airline forecasted second-half fares to decline 2% and fuel bill of €460 million.

The airline plans to trim its winter capacity by 1% after low fare, higher oil price and higher environment cost related to new regulation.