UPDATE 2-Edenred says Venezuela exchange rate move may hit profit

Fri Dec 27, 2013 6:01am EST

PARIS Dec 27 (Reuters) - Voucher specialist Edenred , which makes a big chunk of its sales in Latin America, warned on Friday that exchange rate changes in Venezuela could cut full-year operating profit by around 7.5 percent.

Venezuela set a new rate on Monday of 11.3 bolivars per dollar for tourists to use to change up to $10,000 in cash a year as part of a revamp of currency controls aimed at undermining a rampant black market.

Edenred said the new rate, which compares with the official rate of 6.3 bolivars, would have an impact of 28 million euros ($38.3 million) on 2013 earnings before interest and tax (EBIT) if it was extended to business transactions.

This would lead to full-year operating profit of between 340 million and 350 million euros, Edenred said in a statement.

The French company generated just over half of its 780 million euros of group revenue in Latin America in the first nine months of the year. The region also had the highest like-for-like growth rate, at 12 percent.

The owner of the Ticket Restaurant brand had already said in October that it expected profit to come in at the low end of its targeted range of 370 million to 390 million euros due to a bigger-than-expected fall in exchange rates for emerging market currencies.

Shares in the company fell around 2 percent in early trading, the worst performers on a 0.8 percent firmer French SBF 120 index. They have lost close to 9 percent in the last month.

The Venezuelan government - facing 54 percent annual inflation - said on Dec. 16 that it was expanding the use of a complementary currency auction system, meaning fewer transactions would be carried out at the official rate.

Both U.S. food group General Mills and Ford said last week that they expected a devaluation of the bolivar to hit profits, with the U.S. carmaker predicting a negative impact of about $350 million.

Edenred, which also offers employee benefit management services and incentive schemes, competes with caterers Sodexo and Compass, as well as credit card networks MasterCard and Visa.

Edenred said the Venezuelan exchange rate impact on year-end consolidated net debt would be around 140 million euros.

The company's first-half EBIT was 172 million euros, up 7.7 percent like-for-like.

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