Metro group shares surge on earnings
24 March 2004
DUSSELDORF – German retail giant Metro AG reported a higher-than-anticipated rise of nearly 14 percent in its profits for 2003 and confidently predicted double-digit growth this year, a forecast which sent company shares soaring.
Metro said its group surplus reached EUR 571 million up 13.8 percent on 2002 results, with earnings per share gaining 12 percent to EUR 1.52.
The figures were higher than what most analysts had been expecting, after Metro in January had reported that its 2003 sales volume had risen 4 percent to EUR 53.6 billion.
Despite the strong earnings gains, Metro said that it would maintain the same dividend as last year, EUR 1.02 per common stock and EUR 1.12 per preferred stock.
This did not deter investors on the Frankfurt Stock Exchange, where Metro shares by early afternoon were running 5.73 percent higher at EUR 33.60 as markets welcomed the news that at least one retailer had managed to buck the overall German retail market slump.
Metro said that it managed to do so thanks to its strong foreign operations, and predicted this trend of further earnings growth abroad would continue in 2004.
“Even in unfavourable economic conditions we are in a position to achieve good profits,” company chairman Hans-Joachim Koerber said in Dusseldorf, while noting that Metro had gotten off to a strong start in the first quarter of this year.
For 2004, Metro expects revenues to grow by at least 6 percent, with earnings to improve by around 10 percent, Koerber said, noting the company’s expansion plans into Eastern Europe coming with the enlargement of the European Union.
“Our optimism is above all based on our further expanding foreign operations,” the Metro CEO said, with the E.U. enlargement expected to fuel growth. In 2003, Metro did 15 percent of its business in Eastern Europe.
The Metro figures stand in contrast to those of other firms in the German retail sector.
On Tuesday, for example, department store and mail order group KarstadtQuelle said its first-quarter revenues were down by an estimated four to five per cent, coming after a year when revenues fell 3.4 per cent to 15.3 billion euros and net earnings plunged 33 percent to EUR 108 million.
Subject: German news