Profits boom for top French companies

France's top 40 companies saw profits soar 24 percent last year, racking up 93.4 billion euros in profits. The boom has led to a windfall for the French state, leading to pressure to spend some of the unexpected cash on social spending.

The Paris Bourse Reuters

Carmaker PSA Peugeot-Citroën hailed "historic results" and cosmetic giant L'Oréal declared it was beginning 2018 "with greater confidence than ever".

Other companies quoted on the Paris Bourse's Cac-40 were equally euphoric over 2017's results, which were an improvement on an already highly lucrative 2016.

As in the rest of Europe and the US, profits have returned to their level in 2006-07 before the global financial crash.

Pharmaceutical colossus Sanofi came top of the profits league at 8.4 billion euros, followed by the BNP Paribas bank at 7.8 billion euros and oil giant Total at 7.2 billion euros.

The insurance trade brought in 6.2 billion euros for Axa, selling luxury goods earned LVMH 5.1 billion euros and carmaker Renault clocked up 5.1 billion euros.

Le Monde's graph of French companies profists

93 400 000 000 d’euros (oui, il y a beaucoup de zéros) de profits pour le CAC 40 en 2017 | par @DenisCosnard #abo https://t.co/NsuVP1DbR4

  Le Monde (@lemondefr) 8 mars 2018

Only two companies in the Cac-40 - Cement maker LafargeHolcim and supermarket owner Carrefour - reported losses, in both cases following revisions of their accounts ordered by new bosses.

The top five French companies are valued at 50 billion euros on the Paris stock exchange.

Worldwide growth predicted for 2018

Profit rates worldwide are higher than any time since 2007, according to the Bloomberg business news outlet, with the top 5,000 groups seeing profits rise 8.3 percent on average in 2017, up from 7.6 percent in 2016.

With interest rates and commodity prices still relatively low, healthy demand and cash infusions from central banks, world GDP is expected to grow 3.9 percent in 2018, up from 3.6 percent in 2017.

French growth also picked up last year, reaching a relatively modest 1.9 percent.

Unemployment remains high, although figures released in February showed it falling below nine percent for the first time since 2009.

Tax windfall for French government

The economic upturn has meant more tax income than expected for the French state.

The 2017 budget deficit was 67.8 billion euros, lower than the 69.3 billion euros officially predicted and much lower than the figure of 74.1 billion euros that was the basis of the government's rigorous budget.

Budget Minister Gérald Darmanin last month denied the state had received a windfall and Prime Minister Edouard Philippe has insisted that extra tax income should mainly be used to reduce the state's debt.

But the parliamentary reporter on the budget, Joël Giraud, on Thursday admitted there has indeed been a windfall and hinted that some of the money could be dedicated to social spending.

In an interview with Les Echos newspaper, Giraud, who is a member of the Left Radical party that is part of the government, said that 20 percent could be spent on "emergency measures".