By  on November 3, 2009

BERLIN – Metro Group’s net profits dropped 54.7 percent in the third quarter, impacted by discontinued operations, negative currency effects and lower interest income due to the weak capital market.

The German retail giant - which is comprised of the core Cash & Carry division, Galeria Kaufhof department stores as well as electronics chains, supermarkets and hypermarkets - reported a net profit of 97 million euros or $138.6 million for the period. Dollar figures are converted from the euro at an average exchange rate for the periods to which they refer.

Earnings before interest and taxes (EBIT) slipped 10.5 percent to 323 million euros or $461.6 million, while net sales were down 4.6 percent to 15.59 billion euros or $ 22.29 billion. In local currency, both EBIT (before special items) and net sales were almost at last year’s level, Metro pointed out.

At the 141 door Galeria Kaufhof department store division, EBIT plunged 71.4 percent to 2 million euros or $2.9 million, while sales declined 4.2 percent to 800 million euros or $1.14 billion. For the first nine months of the year, however, the division posted an operating loss before special items of 47 million or $64.2 million, a slight improvement when adjusted for currency effects over the previous year’s loss of 43 million euros or $65.5 million at 2008 exchange rates.

The Group is holding to the 2009 forecast it released in March. It calls for “a less dynamic sales and earnings development” due to weak macroeconomic conditions.

Metro said it does not anticipate significant improvement in the fourth quarter, and noted economic conditions especially in Europe will remain challenging.

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