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Slumping consumer spending bites Metro
(China Daily)
Updated: 2009-05-06 08:12
Metro AG, Germany's largest retailer, reported a wider first-quarter loss as slumping consumer spending and weakening eastern European currencies hurt sales. The shares fell as much as 6.9 percent in Frankfurt trading. The net loss widened to 100 million euros ($133.8 million), or 31 cents a share, from 15 million euros, or 4 cents, a year earlier, the Dusseldorf-based company said in a statement handed to reporters today. That missed the average estimate of a 41 million-euro loss by three analysts surveyed by Bloomberg. Metro gets 40 percent of its revenue from Germany, where the economy will shrink 6 percent this year, according to a government forecast. The weakness of the zloty and ruble against the euro reduced the value of sales in Poland and Russia. "The figures really don't look great," said Heiko Feber, an analyst at Bankhaus Lampe in Dusseldorf. He has a "hold" rating on the stock. "The negative currency effects from eastern Europe were much stronger than expected." First-quarter sales fell 2.5 percent to 15.2 billion euros. The quarter had fewer days than a year earlier, and a later Easter meant holiday sales were delayed until the second quarter. Earnings before interest and taxes rose 5.6 percent at Metro's Media Markt/Saturn electronics stores, and dropped 31 percent at the Real hypermarket chain. Operating profit in the Cash & Carry wholesale unit, the company's biggest in terms of sales, declined to break even from 70 million euros, Metro said. The retailer has no plans for acquisitions, CEO Eckhard Cordes said in Dusseldorf. State aid for Karstadt would influence competition in the German market, Cordes said. Arcandor CEO Karl-Gerhard Eick has said he is examining possibilities of aid from government stimulus plans. Metro repeated that it can't give an outlook for this year because of the global economic crisis and maintained its forecast that operating profit in the "medium term" will rise more than 8 percent, while sales will climb at least 6 percent. Metro said it saw a "positive development of business" in April. Four-month sales were higher than a year earlier when adjusted for currency effects, Cordes said. The company said it is gaining market share in eastern Europe, where sales advanced 5.6 percent in local currencies. It will open its first Ukrainian Real hypermarket in August. In January, Metro said it will cut 15,000 jobs as part of the Shape 2012 program aimed at increasing profit by 1.5 billion euros over four years. Bloomberg News (China Daily 05/06/2009 page17) |
