Carrefour, the world’s second-biggest retailer behind Walmart, announced a shock €249m (£221m) half-year loss on Wednesday and warned that the situation would get worse before it gets better.

Lars Olofsson, chief executive of Carrefour, which had already warned about profits levels four times in less than a year, said the results were “unsatisfactory” and promised “radical and decisive” action to put the French company “back on a sound footing to rebuild momentum”.

Olofsson, who vowed to make Carrefour “more agile” when he took charge in 2009, admitted he had made mistakes and “tried to do too much too quickly”. He said Carrefour was “biting the bullet in 2011 and rebuilding momentum in 2012 to deliver long-term sustainable profitable growth”.

But City analysts were unimpressed. “Yet another [profit warning] and yet another plan,” said JP Morgan Cazenove.

RBS analysts said: “Given Carrefour’s history on lack of delivery on its guidance, then a more aggressive stance could be taken by the market.”

At the time of the company’s last profits warning, in July, Olofsson said he still hoped to increase full-year operating profits. Yesterday the retailer said they would fall by about 15%.

The company, which runs more than 9,500 stores in 32 countries, said operating profits in its core French market dropped by 40% and Europe overall was down 33%.

It blamed the fall on the rising cost of raw materials and a reorganisation of its systems, which led to it failing to have the right stock on the shelves. The head of the company’s French business said the retailer would now focus on price cuts rather than expensive promotions.

However, the collapse in Europe was offset by a strong performance in emerging markets. The first-half loss was largely the result of an €884m writedown of the value of its struggling Italian business.

Carrefour’s shares, which have lost 40% of their value so far this year, closed down 1. 7% to €18.33.

via The Guardian.

New Measures

Spain’s government and the country’s top trade unions Wednesday signed a wide-ranging agreement to reform Spain’s pension benefits, extending the mandatory retirement age to 67 years from 65 years in most cases, and also including new measures to lower unemployment.

Consumer Optimism

On the New York Mercantile Exchange, crude oil checked a week-long slide and turned higher, adding $1.46 to $87.10 per barrel. Home heating oil prices gained 0.15 cents to $2.6566 per gallon. Reformulated blendstock gasoline prices rose 0.87 cents to $2.4219 per gallon. Henry Hub natural gas prices rose 2.7 cents to $4.346 per million British thermal units.

Jobless Data

Also, U.S. durable-goods orders in December failed the markets’ expectation. The Commerce Department said orders fell 2.5 percent, while economists had expected a 1-percent rise. The weekly report by the Energy Information Administration said U.S. commercial oil storage rose in the week ended Jan. 21, which also pressured the oil price.

via Press Release Mag.

The association has drafted a letter to the President of the government, which complains about the overall operation of the supply of electricity to homes, from the privatization of the network to the overpriced wholesale rate that has caused this most recent increase.

The cost to an average home has already increased by up to 50% over the past 4 years, which many believe is unfair, especially under the recent financial burden that families are facing.

With the increase that has just been implemented, it is thought that the cost of electricity to an average home will increase by over 80 euro per year. This is an additional increase that the consumer association considers to be unfair and have stated that they have a duty to represent the needs of the end consumer and will do anything in their power to protect those most vulnerable.

Each monthly bill will rise an average of 6.77 euro, taking into account the retail price increase as well as tax and IVA, which is more than double the 3.20 euro increase that was announced by the government, who decided not to publish their figures publicly.

The consumer association monitored some 50,000 electric bills to work out the average increase, which they then based on a calculation of contracted capacity of 4.4 kW and a monthly consumption of 366 kWh.

via The Leader – News, Sport, Advertising, Property, Classifieds – Costa Blanca, Costa del Sol, Costa Calida, Costa de Almeria, Spain.

This batch of cases is broken down into areas, in which 9 were issued in Asturias, 23 in Castilla-La Mancha, 52 across the Comunidad Valenciana, 15 in Extremadura, 14 in the Islas Baleares y 117 in Madrid as well as 3 in Ceuta and 1 in Melilla.

This now brings the total number of complaints filed for investigation to 376, of which 246 are bars, restaurants or hotels, 35 health centres or hospitals and 19 are other public facilities.

The consumer association had over a thousand complaints from members of the public in the first two days of the new law and has vowed to support the public in enforcing the law to its full power.

Despite the opposition of the law by a small number of businesses, the majority of the Spanish population believe it to be a good move by the current government in attempting to safeguard their health. Medical staff have also reported a huge increase in the number of people seeking support to stop smoking all together.

via The Leader – News, Sport, Advertising, Property, Classifieds – Costa Blanca, Costa del Sol, Costa Calida, Costa de Almeria, Spain.

Egypt and Spain agreed to study the establishment of a navigation line between Alexandria and Spain’s Barcelona to facilitate the trade movement between the two countries, said Trade and Industry Minister Rachid Mohamed Rachid during his talks with Spanish Minister of State for Trade Silvia Iranzo.

The line will also facilitate the access of Egyptian export to European markets to increase the products’ competitiveness,he added .

The two ministers also agreed on cooperating in several fields, including food industries, textiles, ready-made garments, medicine, leather, infrastructure and energy projects.

Despite the financial crisis, the volume of trade exchange between Egypt and Spain reached 2.3 billion euros in 2009, Rasheed said.

Rasheed and Spanish Minister of State for Trade Silvia Iranzo also opened on May 11th 2010 the Egyptian-Spanish business forum, in which 300 businessmen from both countries participated.

Iranzo praised the economic reform carried out by the Egyptian government, positively reflected on growth rates.

A huge number of Spanish companies are willing to invest in Egypt in different sectors, she added.

British Airways, American Airlines and Spain´s Iberia, members of the Oneworld alliance, want to deepen the pact to take advantage of the U.S./EU “Open Skies” agreement, which liberalises trans-Atlantic aviation.

But Branson, who last month called proposals by Oneworld members to cede a number of lucrative trans-Atlantic slots in an in effort to seal approval for the alliance “woefully inadequate”, said he strongly opposed such an alliance.

“We actually believe the Commission should just say: No way BA-AA” Branson told the Financial Times.

“The way the Commission is currently going about it is fundamentally flawed and misguided, and to be honest it´s rather a lazy approach,” he said.

Alliances are seen as a lucrative alternative to mergers and large-scale investments. The airlines want to jointly manage schedules, capacity and pricing as well as share revenues on routes between North America and Europe.

The commission opened an investigation into a planned alliance last April. But Branson said the commission should treat the proposed tie-up as a merger.

“In every other way they´ll be behaving as a single entity,” Branson said.

“So we believe that the Commission should be treating it as they would treat any merger situation.”

Last week British Airways and Spain´s Iberia signed an $8 billion merger to create the world´s third-largest airline, bringing a three-way tie-up with American Airlines a step closer.

(Reporting by Caroline Copley; Editing by Muralikumar Anantharaman)

via Branson slams EU Commission over tie-up – FT | Reuters.

The new terminal will replace Terminal 2 and the Queens building which date from the 1950s and it will have the capacity to serve 20 million passengers a year, the company said in a statement.

The contract, which includes design and construction of the new terminal building as well as the access road, a new cooling plant and aircraft stands, is Ferrovial´s largest since it entered the British market in 2003.

Alejandro de la Joya, the CEO of Ferrovial´s construction unit Ferrovial Agroman, said the contract was of “strategic” importance for the company´s international growth.

“It strengthens the outlook for presenting Ferrovial Agroman with further business opportunities in the near future in the key UK market,” he said in the statement.

Star Alliance airlines, whose 26 members include United Airlines, Air China, Singapore Airlines and Air Canada, will be based at the new terminal.

Ferrovial has operated Heathrow, Europe´s busiest hub, since it scooped up BAA in 2006 for 10.23 billion pounds.

Like other Spanish builders, Ferrovial has been seeking to boost its foreign investment to offset weakness in Spain, which has been stuck in a deep recession since the collapse of a property bubble at the end of 2008.

The company posted a net loss of 92.4 million euros last year, compared to a net loss of 812 million euros in 2008.

Copyright © 2010 AFP. All rights reserved.

via AFP: Spain’s Ferrovial to build new Heathrow terminal.

The company, which is owned by Ferrovial, of Spain, reported a pre-tax loss of £822 million for the 12 months to December 31, compared with a £324.2 million loss in the year before.

Stripping out one-off items, which include a £277.3 million loss of the £1.5 billion sale of Gatwick last year, losses narrowed from £190 million in 2008 to £156 million.

Full-year revenues grew by 8 per cent to £1.9 billion.

Colin Matthews, the chief executive of BAA, said: “Our financial performance remains resilient, especially at Heathrow, which benefits from its position as the UK´s only hub airport, higher retail spending by passengers and strong cost control.”

But he warned: “We expect 2010 to present further economic challenges for the industry as a whole, and we will remain focused on improving our efficiency and the service we offer customers.”

Mr Matthews said that he expected a “modest” recovery in passenger traffic this year, which would support similar growth in turnover and underlying earnings.

BAA is awaiting the outcome of a legal battle with the Competition Commission over whether it must sell Stansted.

The commission's initial ruling that BAA should sell both Gatwick and Stansted was overturned by the Competition Appeal Tribunal on the basis of apparent bias.

This was because a member of the commission´s inquiry panel that issued the ruling had been on the team investigating BAA.

Two weeks ago the commission said that it was seeking leave to appeal to the Court of Appeal against the tribunal´s judgment.

The date for the appeal has not been set.

Of the exceptional costs, £218 million was a provision to allow for the costs of covering the emergence of a deficit in the BAA pension scheme during 2009.

BAA said that a further £117 million charge came from “fair value losses on financial instruments” — the extra cost of servicing index linked bonds it has issued.

The group's debts fell by 9 per cent in the year to £8.58 billion.

via BAA losses reach £822 million on Gatwick sale – Times Online.

According to estimates from the sector itself, the reform could contribute to the creation of some 50,000 jobs in the coming years and will generate indirect investment of around 4,000 million euros.

The Lower House of Parliament [Congreso] has approved the reform of Act 7/1996 on Retail Trade Regulation, although this Act had already been amended many times in order to bring its content into line with the constant process of globalisation of the economy and with the need for regulation in this field to be adapted to the reality of the markets.

The new Act amends the retail trade regulation thereby adapting it to the provisions of the “Omnibus” Act [access to service businesses and their operation], responsible for the transposition of Directive 2006/123/EC, relative to services in the domestic market. The Spanish trade model is noted for a high trade density which is characteristic of the Mediterranean countries and for the particular way of structuring urban centres around shopping areas. The aim of the legislative amendment is, without losing these values, to increase the value generated by commercial distribution through liberalisation of the provision of services and the restriction of charges on companies.

The new Act respects the exclusive competence of the Autonomous Regions on matters of domestic trade, although the State is authorised to establish a national regulation to serve as a base so that the Autonomous Regions can implement the regulation appropriate to them in the exercise of their competencies. The new text, together with the provisions of the “Umbrella Act”, will constitute the reference framework for the regional regulation.

The new regulation originates from the principle of company freedom and its purpose is to facilitate the free establishment of trade distribution services through a framework where the various trading formats may freely compete.

The economic impact of the reform will be significant, as according to estimates from the sector, the anticipated indirect investment is around 4,000 million euros and could contribute to the creation of some 50,000 jobs in the short and medium term.

Most relevant amendments introduced in the Act

• The freedom to set up a business as a general principle, eliminating the compulsory trading licence. Nevertheless, an authorisation system may be established, justifying it in accordance with the principle of proportionality and objectively identifying the reasons for the establishment of the same and the estimated impact.
• The restrictive economic criteria of competition are abolished, as well as the participation of competitors in the authorisation processes. Parliamentary processing has entailed the detailed inclusion of the requirements of a financial nature that are banned in the granting of licences; this will contribute to increasing transparency in the procedures and the legal security of the operators.
• Autonomous Regions will be setting up an authorisation procedure that will incorporate all the necessary processes. This will mean bringing forward the start-up of trading activity, saving costs for operators.
• The definition of a large retail business is abolished, thereby avoiding discrimination from State legislation on the various trading formats, since no reference whatsoever is made to the square metres of the establishments. The only relevant aspect will be the environmental or urban impact, or the impact the establishment has on historical-artistic heritage, depending on the area or territory, without taking account of the area involved.
• Prior authorisation for vending machines is abolished, and only the approval of the models is required.
• The duration of permits for street trading is limited so as to guarantee the rotation of competitors due to the scarcity of road space available, in any case guaranteeing street traders the recovery of their investments. The highlights amongst the new features in the text following its parliamentary processing are the automatic renewal of licences granted prior to the Act coming into force and the competence of Autonomous Regions and Local Councils to determine the terms.
• The obligation to officially register before starting up a business is replaced by the need for a communication to the Registry for distance selling and franchisers after the start-up.
• In cases where Spain could be fined in proceedings under European law, whose origin lies in regional trade legislation, any possible fines will be transferred to the corresponding Autonomous Region.

Spanish Foreign Minister Angel Moratinos, who got together with foreign reporters Friday said, as he would not be attending the summit due to his busy schedule, he would have a private meeting with his Turkish counterpart Ahmet Davutoglu on Sunday.

Moratinos said during the meeting details about Davutoglu´s recent trip to Iran as well as efforts to resolve the Middle East problem, the Cyprus issue, and Spanish support to Tukey´s EU bid would be discussed.

Spanish Foreign Minister said they were for opening of new chapters to negotiation in EU accession talks with Turkey.

“We are waiting for the new EU Commission to start working. We will assess the position of the commission and demand new chapters to be opened,” said Moratinos.

Moratinos said as well as bilateral relations between Turkey and Spain, developments in the Middle East, Pakistan, the Balkans, and the Union for the Mediterranean, climate change and Alliance of Civilizations, global financial crisis and energy issues would be discussed during the meeting.

He said ten ministers from Turkey and six ministers from Spain would attend the summit.

Moratinos said they were hopeful about the progress in the extensive talks in Cyprus.

Commenting on the crisis between the international community and Iran, Moratinos said, they expected Iran to accept the proposal of the International Atomic Energy Agency (IAEA).

He said Turkey´s mediation in talks on Iran´s nuclear program was important and Premier Recep Tayyip Erdogan would inform them about the recent developments.

Moratinos said new diplomatic measures against Iran was on the way.

Moratinos said the Union for the Mediterranean would be finally established noting that he and foreign ministers of France and Egypt –Co-Chairs of the union– would open the General Secretariat in Barcelona on March 4

via Turkey-Spain governmental meeting to discuss several issues [ WORLD BULLETIN- TURKEY NEWS, WORLD NEWS ].