Germany's Metro holds profit target after higher Q4 sales
German retail giant Metro said on Wednesday it was on track to meet its full-year profit targets after sales rose slightly in the fourth quarter.
The group also announced it was pulling the plug on its network of home electronics retail stores, Media-Saturn, in China where it would concentrate on its cash and carry operations instead.
"Despite tougher market conditions, especially in southern Europe, we succeeded in increasing sales in the fourth quarter," said chief executive Olaf Koch.
"Metro confirms its 2012 forecast for earnings before interest and taxes of around 2 billion euros ($2.6 billion)," he said.
Metro said group sales rose by 0.5 percent to 19.4 billion euros in the period from October to December, bringing the full-year total up by 1.2 percent to 66.7 billion euros.
Last year had been characterised by rising unemployment in Europe and increased austerity measures by governments to curb the sovereign debt crisis, Koch said.
"The resulting consumer reticence had a negative impact on our business development. Taking into account these factors, the sales development was satisfactory, both in the full year and in the fourth quarter," he said.
Metro also announced it had decided to discontinue its Media-Saturn business operations in China, which it operated as a joint venture with Foxconn Technology Group.
"After carefully analysing all alternatives, we have decided not to continue our business activities", said Koch.
The decision was "prompted by the experiences and forecasts deriving from the two-year test phase that expired at the end of December," he explained.
Metro would instead "concentrate on those business units and markets where we can clearly sharpen our profile and build up a strong market position. We will further intensify our successful commitment to Metro Cash & Carry in China. The country is key and a promising market with good future prospects for our wholesale busines," said CEO Koch.
© 2013 AFP