Retailer Casino scraps dividend as it pursues debt-cutting plans (updated)

Finatis SA

25/07/2019 06:54

* Cancels 2019 fiscal year dividend to be paid in 2020
    * Also scraps 2020 interim dividend
    * Dividend cuts to save around 500 mln euros by end-2020
    * New net debt target in France of less than €1.5bn 

 (Adds detail and background)
    By Dominique Vidalon and Pascale Denis
    PARIS, July 25 (Reuters) - French supermarket retailer
Casino  CASP.PA , which is battling investor concerns over debts
and its ability to generate cash, scrapped its dividend as it
targeted net debts below 1.5 billion euros ($1.7 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.
    Casino said it would be scrapping the dividend for its 2019
fiscal year, which was due to be paid out in 2020. It would also
cancel its 2020 interim dividend.
    Casino said these dividend cancellations would represent
savings of around 500 million euros at the end of 2020.
    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.  urn:newsml:reuters.com:*:nL8N24N1H1
    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.  urn:newsml:reuters.com:*:nL5N22Z67W
    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.
    ($1 = 0.8981 euros)

 (Reporting by Dominique Vidalon;
Editing by Sudip Kar-Gupta)
 ((dominique.vidalon@thomsonreuters.com; +33149495432; Reuters
Messaging: dominique.vidalon.reuters.com@reuters.net))