L\\\'Oreal shares slip despite record underlying profit

PARIS, Aug 01 (AFP): Stock in the leading world cosmetics group L'Oreal slipped in morning trading on the French stock market on Friday despite a 1.5-per cent rise in net profit in the first half of the year.
Shares in the French group were down 2.18 per cent to 123.65 euros. The France CAC 40 index of leading shares was down 1.29 per cent.
The global market for cosmetics is likely to continue growing at 3.5-4.0 per cent this year, chief executive Jean-Paul Agon said on Friday, presenting the results, saying he was confident the group could grow faster.
In the second half "we think that despite uncertainty over the world economy, the market will continue to grow by three-and-a half to four per cent and we will be able to achieve slightly better growth with an acceleration in the fourth quarter," he said.
Business was improving slightly in the American markets and the group was counting on an improvement in western Europe, accounting for 37.0 per cent of sales, and on the launch of new products.
The group reported late on Thursday that first-half net profit rose by 1.5 per cent from the figure at this time last year to 1.7 billion euros ($2.28 billion), pulled by its luxury products activities.
The group also raised its operating margin, a key measure of profitability by three per centage points to 18.2 per cent-a level it described as "historically" high.
Sales fell by 1.5 per cent to 11.2 billion euros, although on a strictly comparable basis they rose by 3.8 per cent.
But in the second quarter unfavourable exchange rates weighed again on sales, making them fall back 0.7 per cent to 5.5 billion euros, while rising by 4.1 per cent on a comparable basis. L'Oreal said that unfavourable exchange rates had skimmed 3.5 per cent from the value of sales expressed in euros.
Agon said in the results statement that the economic and monetary enviroment was unsteady but he was "confident" that the group could outperform the market once again in 2014.
The group stood by its targets for the year, although it was basing this now on sales calculated at constant exchange rates.