ROUNDUP: Metro more optimistic about fiscal year – depreciation in Russia

DÜSSELDORF (dpa-AFX) – Thanks to good business with hotels and restaurants, the wholesale group Metro (METRO (St)) is more confident about the current financial year. Thanks to a better than expected operational development in the second quarter, the company increased its forecast for 2021/22 (as of the end of September). Rising inflation plays a role here. However, Russia’s war in Ukraine is slowing down business in the regions. For example, Metro has to write off millions in Russia, which led to a higher net loss in the second quarter. The stock rose 3 percent on Friday morning.

Metro is not only benefiting from the price increases, but also from a recovery in the hotel and restaurant business after the restrictions related to the corona pandemic were largely lifted. For the 2021/22 financial year, Metro now expects sales growth of nine to 15 percent, as the wholesale group announced on Thursday evening in Düsseldorf. Previously, the management had promised a plus of three to seven percent.

Metro now expects adjusted earnings before interest, taxes, depreciation and amortization (Ebitda) to be slightly to moderately higher than in the previous year. Stagnation had previously been expected here. However, further escalation of the war as well as further sanctions could lead to additional negative business effects, especially in Ukraine and Russia. In Russia, the current sanctions are expected to lead to depressed consumer sentiment and reduced product availability in the second half of the year, Metro said.

In the East segment as well as in the West segment (excluding Germany), sales should nevertheless grow disproportionately. For Germany, on the other hand, only disproportionately low growth is expected. In Russia, the company expects a decline compared to the previous year.

In the second quarter of the business had developed better than expected, it said. In the second quarter, currency-adjusted revenues increased by 26 percent, as Metro further announced on the basis of preliminary figures. Adjusted Ebitda improved from 114 million to 157 million euros.

On the other hand, the bottom-line loss increased by EUR 200 million due to write-downs and negative currency effects, particularly in Russia. Earnings per share therefore fell from minus EUR 0.36 to minus EUR 0.78. Metro plans to publish details on May 11./nas/jcf/mis