BERLIN — Special items adversely affected Metro Group’s profit performance in the first quarter of its 2016-2017 fiscal year. While stripping them out, the German cash & carry hypermarket, electronics and supermarket group reported a 1.7 percent gain in net profit for the period.
Special items, primarily related to income of 427 million euros, or $467.7 million, from the sale of the group’s Metro cash & carry business in Vietnam in the first quarter of fiscal 2015-2016, pushed net income after special items down 61.5 percent to 230 million euros, or $248.1 million, in the three months ending Dec. 31, 2016. This compared to 597 million euros, or $653.9 million, a year previously.
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Dollar figures are converted at average exchange for the period to which they refer.
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Before special items, Metro reported net profit reached 424 million euros, or $457.5 million, for the quarter, up from 417 million euros, or $456.7 million.
Earnings before interest and taxes (EBIT) after special items fell 40.9 percent to 733 million euros, or $790.8 million, compared to 1.24 billion euros, or $1.36 billion, for the same prior-year period. Before special items, the group’s EBIT was almost at the previous year’s level, reaching 821 million euros, or $885.8 million, compared to 828 million euros, or $906.9 million.
Metro reported a 0.1 percent rise in like-for-like sales. However, reported revenues dipped 0.6 percent to reach 16.99 billion euros, or $18.33 billion. Metro noted a “sustained increase” in online and delivery sales in the period.
Looking ahead, Olaf Koch, chairman of the Metro AG management board, said: “We remain confident that we will achieve our full-year sales and earnings targets for the Metro Group.”
This outlook is based on the company’s existing structure, and adjusted for currency effects, calls for “a slight rise” in overall sales and “another slight improvement” in earnings. Metro said EBIT before special items is forecast to rise slightly above the 1.56 billion euros, or $1.73 billion, achieved in fiscal 2015-2016, although this will include slightly lower income from real estate sales.
The outlook will be adjusted if the planned demerger of the group into a separate wholesale and food retail business, and a consumer electronics business, is approved as expected at the annual general meeting on Feb. 6.