L'Oreal's profits not just cosmetic

L'Oreal defies the economic downturn with strong sales

The world's biggest cosmetics firm L'Oreal reported a 26.3% rise in net operating profit for the first half of 2001 on Tuesday and predicted strong growth for the rest of the year.

The French company's net operating profit came in at 587.1m euro ($532.1m, £366.5m) against 465m euro last year, beating analysts' expectations of a 17% rise.

"Despite the less favourable economic climate in the main markets, L'Oreal was able to maintain strong growth in sales and profit," said company chairman and CEO Lindsay Owen-Jones.

"While these figures cannot be extrapolated directly, they are extremely encouraging and allow us to look forward to another year of strong internal growth and improvement in margins," he added.

L'Oreal's first-half sales rose 13.5% to 6.98bn euro in July, highlighting the group's resistance to the economic downturn.

A capital gain on the sale of its 49% stake in the Marie-Claire publishing group to the Prouvost sisters gave L'Oreal a net profit of 700.7m euro.

A stronger than expected pre-exceptional profit at Sanofi-Synthelabo, the drugs firm in which L'Oreal holds a 19.55% stake, also boosted the results.