By Natascha Divac
FRANKFURT--Metro AG (MEO.XE) on Thursday reported a decline in
third-quarter revenue, citing unfavorable currency effects in large
parts of Eastern Europe and a shift in its traditionally strong
Easter business, which this year fell in the second quarter.
The German retailer swung to a net profit of 115 million euros
($125.54 million) from a loss of EUR63 million a year earlier, but
its adjusted earnings before interest and taxes, a figure closely
watched by analysts, fell to EUR209 million from EUR253 million
after its prior-year results were boosted by income from
real-estate divestments. Sales slid 1.4% to EUR13.97 billion
against analysts' expectations of about EUR14 billion.
Separately, Metro said it acquired Classic Fine Foods, a
Singapore-based importer and food distributor, from European
private-equity firm EQT in a transaction worth $290 million, plus
an additional payment of up to $38 million, depending on the
company's earnings development in 2015 to 2017.
The acquisition of CFF is part of Metro's strategy of expanding
its wholesale Cash & Carry operations. CFF has an established
own-delivery and storage system and about 800 employees in 14
countries. It generates annual sales of more than $200 million, and
is highly profitable, according to Metro. With CFF the retailer
will grow its presence in wholesale business to 36 countries from
26.
The Wall Street Journal reported in March that EQT had been
approached by several parties interested in the company.
In June, Metro, one of Europe's largest supermarket groups
alongside U.K.'s Tesco PLC (TSCO.LN) and France's Carrefour SA
(CA.FR), agreed to sell its Kaufhof department store chain to
Hudson Bay for about EUR2.8 billion. The unit has for the first
time been classified as discontinued business this quarter, meaning
it is no longer accounted for in the retailer's adjusted EBIT
figure, but still figures in net profit.
Metro, whose fiscal year ends in September, still projects
fiscal 2015 group earnings before interest, tax and special items
to be slightly above the EUR1.53 billion posted in the previous
fiscal year, with a slight increase in sales. Due to the announced
sale of Galeria Kaufhof, the outlook is now based on continuing
operations.
-Write to Natascha Divac at natascha.divac@wsj.com
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