While many French people, mired in rising inflation caused by the war in Ukraine, wonder how they will fill their gas tanks and pay their electricity bills, for others, everything is fine.

Indeed, the companies of the CAC 40, the index which brings together the largest French market capitalizations from different sectors, have already accumulated nearly 73 billion in profits in the first half.

This represents an increase of 24% compared to the first half of 2021, when these same companies had made 58.8 billion in profits, while Eurofins Scientific was not yet in the CAC 40. This figure could still swell a little since only 38 companies have published their figures, with rail builder Alstom and spirits specialist Pernod Ricard having a staggered financial year.

But why such a discrepancy?

Well, because inflation hasn't affected everyone equally.

In terms of raw materials and energy, for example, soaring prices have boosted companies in the sector.

The oil and gas giant TotalEnergies more than doubled its profit in the second quarter and achieved the best net result of the CAC 40 over the half, with more than 10.4 billion euros.

It is followed by the world number two in the steel industry ArcelorMittal, which took advantage of the rise in steel prices and reached nearly 8 billion euros.

Engie, the main gas supplier in France, meanwhile more than doubled its profit, to 5 billion euros.

In luxury, money is not a problem

Another heavyweight in the CAC 40, luxury also stood out despite a slowdown in sales in China, one of its main markets, as brands were able to raise prices without losing their customers.

“They depend on a wealthy clientele that is not bothered by price increases,” says Mimoza Bogeska, managing director of management company Monocle Asset Management.

"They have also benefited from the strengthening of the dollar against the euro because their production costs are in euros and they sell a lot in dollars," she adds.

LVMH, Kering and L'Oréal thus saw their combined profits climb by more than 36% compared to the first half of 2021, with comfortable margins.

The CAC 40 not completely out of the woods

Some groups have nevertheless suffered the shock wave of the war in Ukraine, such as Renault and Société Générale which withdrew from Russia after the outbreak of the conflict.

Renault sold its stake in the manufacturer Avtovaz, which notably manufactures the Lada, and Societe Generale its stake in the Rosbank bank, causing charges of several billion euros.

"The hardest part is ahead of us," says Bénédicte Hautefort, founder of the fintech Scalens, specializing in the digitization of relations between listed companies and investors, who believes that the economic context should weigh on companies in the second half.

With inflation and the rise in key central bank rates, which increase the cost of credit and therefore make new financing more difficult, some economic players are even expecting a recession in the global economy.

Proof of investor mistrust, the CAC 40 stock market index has lost around 10% since the start of the year, despite a very positive month of July with the publication of the results.

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  • Economy

  • CAC 40

  • TotalEnergies

  • Engie

  • ArcelorMittal

  • Inflation

  • Economic crisis

  • energy