Metro Swings to an Operating Loss Ahead of Business Split -- Update

By Ulrike Dauer

FRANKFURT--Germany's Metro AG (MEO.XE) said Wednesday it swung to an operating loss on continuing operations in the second quarter on flat sales, as it readies to split into two companies with a narrower focus.

Metro, one of Europe's biggest retail and wholesale groups, is in the process of splitting into two companies, one combining the wholesale and food retail operations, another for the consumer electronics business, which it expects to complete in mid-2017.

It kept its full-year targets of slightly higher sales, but said they now apply to continuing operations in the new group structure.

The company's main earnings yardstick--earnings before interest and taxes before special items--or adjusted EBIT, fell to a 19 million euros ($21.2 million) loss in continuing operations in the three months through March. That compares with EUR38 million profit a year earlier.

Sales from continuing operations were flat at EUR5.26 billion, on weaker sales in western Europe outside the German home market, which weren't offset by improvements in Eastern Europe and Germany and rising online sales.

Net profit, adjusted for one-offs, was EUR24 million, a swing from a net loss of EUR57 million. Without adjustments, net profit was EUR131 million. For continuing operations, the adjusted net loss was EUR13 million.

European retailers are battling competition from online sales as new, nimbler and more innovative players grab market share. Traditional players are left with high downtown rents and restricted opening hours.

-Write to Ulrike Dauer at [e-mail]

(END) Dow Jones Newswires

May 31, 2017 02:46 ET (06:46 GMT)

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