BERLIN – After a particularly challenging first quarter, Germany’s Metro Group swung to profit in the second quarter of 2009, but also flagged slowing sales for the remainder of the year.
Net profits for the group — which comprises the core Cash & Carry division, Galeria Kaufhof department stores as well as electronic chains and supermarkets — amounted to 63 million euros, or $85.8 million, for the period, compared with a loss of 428 million euros or, $669.1 million, a year previously.
All dollar figures are converted from the euro at an average exchange rate for the respective periods.
Group earnings before interest and taxes before exceptional items, primarily relating to its “Shape 2012” efficiency program, dropped 6.1 percent to 307 million euros, or $418.2 million. Excluding exceptional items, earnings before interest and taxes gained 13.7 percent to 291 million euros, or $396.4 million.
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Net sales slipped 3.8 percent to 15.34 billion euros, or $20.9 billion, though Metro noted that sales were stable in local currency.
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The 131-door Galeria Kaufhof department store division grew sales 2.6 percent to 786 million euros, or $1.07 billion, in the second quarter. Sales in Germany, where the company runs 126 stores, were up 4 percent. Easter business, which fell in the second quarter this year, helped narrow operating losses before exceptional items to 21 million euros, or $28.6 million euros, compared with a loss of 30 million euros, or $46.9 million, for the period in 2008.
Metro reiterated its interest in taking over about 60 Karstadt department stores from the insolvent Arcandor Group, noting the takeover would allow the group to “significantly enlarge its leading market position in the German department store sector.” Though the two groups had been in talks prior to Arcandor’s insolvency, Metro and Arcandor are currently not in negotiations.
For the remainder of the year, Metro said it is anticipating “a less dynamic sales and earnings development” given the global financial crisis, but added that cost-cutting measures and investment cutbacks would help buffer the impact on profits. Shape 2012 cost-savings are expected to be largely effective by 2011.