Metro's Quarterly Profit Slides, Still Lifts Outlook
17.03.10, 12:53 Uhr
FRANKFURT -(Dow Jones)- German retailing group Metro AG (MEO.XE) Wednesday said fourth-quarter net profit nearly halved from a year earlier but that earnings should improve this year, prompting it to raise its full-year guidance.
Net profit for last year's final quarter fell 47.1% to EUR361 million. But an improving outlook and the success of its Shape 2012 restructuring program allowed the retailer to lift its annual growth target for adjusted earnings before interest and taxes, or EBIT, to 10% in the medium term from an annual goal of above 8%.
Germany's biggest retailer and among the biggest in the world by sales, reported adjusted earnings before interest and taxes, or EBIT, of EUR1.27 billion, 6.6% lower than the same period a year earlier. Fourth quarter sales reached EUR19.4 billion compared to EUR20.1 billion in fourth quarter 2008.
Metro's results had been scheduled for release on March 23 but the company surprised the market late Tuesday by announcing a new corporate structure and saying full-year results would be released earlier than planned.
The new structure splits wholesale retail unit Cash & Carry into two business units: Europe and Mature Markets and Asia and New Markets. Metro said at the time that the new structure will help accelerate international expansion in the medium term and integrates Cash & Carry's administrative functions with those of parent company Metro.
Analyst Heino Ruland of Ruland Research, said on the whole the company's full-year results are rather disappointing despite beating consensus estimates in terms of adjusted EBIT. He advised selling the stock as it is approaching his fair value suggestion at EUR46.60.
At 0850 GMT, shares traded 0.2% lower at EUR43 after opening 1.6% higher. The DAX traded 0.5% higher at 5998.23. So far this year, the shares have lost around 2%, underperforming the Dow Jones Euro Stoxx Retail Index which has risen around 6%.
Metro group sales were EUR19.4 billion, down from EUR20.1 billion in the fourth quarter of 2008. The company's MediaMarkt/Saturn consumer electronics unit performed better, achieving sales of EUR6.5 billion, 3.7% more than in the corresponding period.
The group's Cash & Carry unit reported sales of EUR8.4 billion in fourth quarter, compared to EUR9.2 billion in fourth quarter 2008. Discount retail unit Real's fourth quarter sales came in at EUR3.2 billion, just shy of the EUR3.3 billion reported in the same period the previous year. Kaufhof's sales were unchanged on the year at EUR1.2 billion.
Germany's biggest retailer and among the biggest in the world by sales, reported adjusted earnings before interest and taxes, or EBIT, of EUR1.27 billion, 6.6% lower than the same period a year earlier. Fourth quarter sales reached EUR19.4 billion compared to EUR20.1 billion in fourth quarter 2008.
Metro's results had been scheduled for release on March 23 but the company surprised the market late Tuesday by announcing a new corporate structure and saying full-year results would be released earlier than planned.
The new structure splits wholesale retail unit Cash & Carry into two business units: Europe and Mature Markets and Asia and New Markets. Metro said at the time that the new structure will help accelerate international expansion in the medium term and integrates Cash & Carry's administrative functions with those of parent company Metro.
Analyst Heino Ruland of Ruland Research, said on the whole the company's full-year results are rather disappointing despite beating consensus estimates in terms of adjusted EBIT. He advised selling the stock as it is approaching his fair value suggestion at EUR46.60.
At 0850 GMT, shares traded 0.2% lower at EUR43 after opening 1.6% higher. The DAX traded 0.5% higher at 5998.23. So far this year, the shares have lost around 2%, underperforming the Dow Jones Euro Stoxx Retail Index which has risen around 6%.
Metro group sales were EUR19.4 billion, down from EUR20.1 billion in the fourth quarter of 2008. The company's MediaMarkt/Saturn consumer electronics unit performed better, achieving sales of EUR6.5 billion, 3.7% more than in the corresponding period.
The group's Cash & Carry unit reported sales of EUR8.4 billion in fourth quarter, compared to EUR9.2 billion in fourth quarter 2008. Discount retail unit Real's fourth quarter sales came in at EUR3.2 billion, just shy of the EUR3.3 billion reported in the same period the previous year. Kaufhof's sales were unchanged on the year at EUR1.2 billion.
Company Web site: www.metrogroup-ag.de
DJG/sch
