German retail giant Metro sees ‘significant increase’ in quarterly profit
German retail and distribution giant Metro said Tuesday it expects to have achieved a "significant" increase in quarterly profits, thanks to "very good" Christmas business and gains from the sale of its cash-and-carry business in Vietnam.
Metro, which runs its business year from October to September, said in a statement that “we can look back on a very good Christmas business, particularly in our domestic market, Germany.”
“We remain confident for financial year 2015-16, despite the difficult environment, and expect positive development thanks to the range of measures introduced in our sales lines. We retain our original forecast,” said chief executive Olaf Koch.
Metro said it had completed the sale of its cash-and-carry business in Vietnam successfully at the end of December.
The proceeds were expected to boost underlying or operating profit by “more than 400 million euros” ($435 million), which would be included in the first-quarter accounts.
“Therefore the reported result will increase significantly in the first quarter,” it said.
In then period from October to December, Metro booked revenues of 17.1 billion euros, down slightly from 17.3 billion euros a year earlier, it said.
But much of that decline was attributable to exchange rate effects, since Metro has a strong presence in eastern Europe, where currencies have weakened recently, particularly the Russian ruble.
Adjusted for such effects, revenues slipped by only 0.1 percent, it said.