BERLIN — It was a mixed second quarter for the Metro Group. Earnings largely improved, though an earlier Easter business negatively impacted sales for the German cash & carry, department store, hypermarket and electronics retail group.
Net profit for the quarter reached 15 million euros, or $19.6 million, compared to a loss of 26 million euros, or $33.4 million, for the same period a year previously. Dollar figures are converted at average exchange rates for the period to which they refer.
Special items, largely related to the closure of Real in Russia and Ukraine, propelled earnings before interest and taxes up 80 percent to 362 million euros, or $472.7 million. Adjusted for special items, operating earnings fell 12 percent in the quarter.
Metro said this was “due to the sales development as well plus price investments, especially at (electronics chain) Media Saturn, and adverse effects from strikes, particularly at Real (supermarkets) in Germany.”
The earlier Easter weekend in 2013 was reflected in a 3.6 percent decline in group sales, which totaled 15.3 billion euros, or $20 billion. This, and ongoing economic challenges in many markets, led to a 3 percent sales decline in the group’s core Metro Cash & Carry division, which posted sales of 7.7 billion euros, or $10 billion. EBIT before special items slipped 2.4 percent to 241 million euros, or $314.7 million.
At the group’s Galeria Kaufhof department stores, store closures in the previous year led to a 1.3 percent drop in second quarter sales, which reached 679 million euros, or $886.7 million. Like-for-like sales, however, increased 0.9 percent.
EBIT was strongly impacted by three planned store closures in Germany and their rental contracts, which do not expire before end 2014 or end 2015, and resulted in a loss of 11 million euros, or $14.4 million, compared to earnings of 1 million euros, or $1.3 million, for the same period in 2012. However, EBIT before special items jumped from 1 million euros, or $1.3 million, to 4 million euros, or $5.2 million, for the three-month period.
Despite ongoing macroeconomic challenges, Metro said it remains convinced the group will meet its sales and earnings guidance for the shortened 2013 financial year, ending Sept. 30.
The group expects moderate growth in sales (adjusted for portfolio changes) and for EBIT before special items to increase compared to the corresponding period in 2012. Metro said the projection is based on the assumption of higher income from the sale of real estate assets, but noted that due to the lack of major sporting events this year, operating earnings are expected to fall short of the level achieved in the first nine months of 2012.