* H1 group operating profit 317 mln vs 388 mln yr ago
* H1 France operating profit 85 mln euros vs loss 53 mln yr ago
* Keeps goal for 2016 French operating profit of 500 mln euros
* To pay interim dividend of 1.56 euros/shr, shares up 1.7 pct (Adds CFO comments from call, shares, analyst)
By Dominique Vidalon
PARIS, July 29 (Reuters) - Retailer Casino said on Friday that its core French operations returned to profit in the first half 2016 and told investors that it was on track to achieve its full-year goal for a rise in profit in the country.
As of a further token of confidence in the future, Casino handed investors an interim dividend of 1.56 euros ($1.73) per share for 2016 after asset sales halved net debt to 4 billion euros. Its shares rose 1.9 percent in early Friday trade.
Weakness in recession-hit Brazil, its second-largest market after France, however weighed on the overall performance and group operating profit fell 18.2 percent in the first-half.
Casino, which saw its credit rating cut to junk status by Standard & Poor's in March is under pressure to show it can durably revive profits in France at a time of slower growth in Brazil.
"The recovery in France is in line with our expectations," Finance chief Antoine Giscard d'Estaing told a call with journalists.
Casino said in a statement it was confirming its forecast for a 50 percent jump in 2016 trading profit to 500 million euros at its French operations, subject to the pursuit of consumption trends.
Casino's shares were hit hard in December when U.S. activist investor Muddy Waters said the group was "dangerously leveraged" and managed for the short-term.
The company has rejected the criticism and pledged to cut debt by selling assets while improving performance in France and simplifying the group's complex structure.
Casino has already raised 4.2 billion euros by parting with businesses in Thailand and Vietnam and said that four out of the 4.2 billion raised would be used to reduce debt.
"There will be further asset sales but of a smaller size," Giscard added.
Casino, which controls Brazil's top retailer, Grupo Pao de Acucar, said first-half group operating profit reached 317 million euros, down from a restated 388 million in the first half 2015.
In France, Casino swung back to an operating profit of 85 million euros, helped by higher sales. This compared to a loss of 53 million euros in the first-half 2015 due to price cuts, notably at its Geant Casino hypermarkets and Leaderprice stores.
"French trading profit of 85 million euros is 18 percent ahead of consensus of 72 million euros and in line with our expectations," said Bernstein analysts
In Latin America operating profit fell 11 percent, with Brazil making the bulk of the decline as commercial plans to boost sales at its Extra hypermarkets weighed. ($1 = 0.9012 euros) (Reporting by Dominique Vidalon; Editing by Richard Lough)