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Strong euro hits German retail giant Metro

31 July 2014, 10:59 CET
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(FRANKFURT) - Metro, the German retail and distribution giant, said on Thursday that a strong euro and tough conditions in key markets weighed on its third-quarter results.

The company, which runs its business year from October to September, said its net loss for the quarter ending June 30 nearly doubled to 63 million euros ($84 million) from 33 million euros one year ago.

Metro, which counts Walmart, Tesco and Carrefour as its major international competitors, generates a large part of its revenues in eastern Europe and in Asia, making it vulnerable to exchange rate effects such as the strong euro.

Sales slipped 2.7 percent to 14.9 billion euros. Earnings before interest and taxes before one-off effects were steady at 276 million euros.

Metro said it would maintain its forecast for the fiscal year of earnings before interest and taxes of around 1.75 billion euros, about the same as the previous year.

During the last year, Metro has carried out a restructuring including selling off its Real grocery stores in eastern Europe and dumping its Real hypermarkets in Turkey to focus on its domestic business.

Chief executive Olaf Koch said during a telephone conference that the situation in Russia, where the West just imposed economic sanctions over the crisis in Ukraine, was a cause of concern.

But he added that "we still have no indication that household consumption is going to contract" there.

"It can always happen and if it does, we just have to hope it will be temporary," he said.


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