BERLIN, Dec 13 (Reuters) – German retailer Metro forecast an increase in profitability in the 2017/18 financial year, driven by both its wholesale and hypermarket businesses as their split from the consumer electronics group Ceconomy should help it focus operations.
Metro, which runs wholesale stores in 35 countries as well as Real hypermarkets in Germany, split from Ceconomy in July, hoping that independence would help improve performance and allow more acquisitions.
“With the stock exchange listing of the new Metro, we created the foundation to deliver even more focus, innovation and growth. This ultimately also improves our operative earning power,” Metro Chief Executive Olaf Koch said in a statement on Wednesday.
Metro said it expected sales growth in 2017/18 of at least the 1.1 percent achieved in 2016/17 and like-for-like sales to “slightly surpass” the 0.5 percent growth of the previous year, with the wholesale business expected to be the main driver.
It said earnings before interest, tax, depreciation and amortisation (EBITDA) excluding contributions from real estate deals should rise by around 10 percent, with both its wholesale and Real contributing to that improvement.
Analysts had forecast a 2 percent rise in sales for the 2017/18 year and a 5 percent rise in reported EBITDA.
Metro, which had already reported fourth-quarter sales, said quarterly earnings before interest and taxation (EBIT) and adjusted for special items fell to 267 million euros ($313.89 million), including 49 million from real estate deals.
Analysts polled by Reuters had on average forecast EBIT before special items of 260 million.
It also proposed a dividend of 0.70 euros per share, compared with average analyst forecasts for 0.71 euros. (Reporting by Emma Thomasson; Editing by Ludwig Burger and Louise Heavens)
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