Dec 15, 2015
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Metro expects sales and earnings to rise again in 2015

Dec 15, 2015

German retailer Metro expects sales and earnings to rise again in the 2015/16 fiscal year despite the tough economic climate after reporting better-than-expected operating earnings for the fourth quarter.

Europe's fourth-biggest retailer said on Tuesday it expected to see a slight rise in overall sales and earnings before interest and tax (EBIT) before special items for the fiscal year from October, with its core cash and carry and consumer electronics businesses performing best.

Metro said that would be possible despite the "persistently challenging economic environment" as it continues to focus on strict cost management and overhauling its business models.

Metro reported fourth-quarter EBIT before special items rose 8 percent to 435 million euros ($479.9 million), ahead of average analyst forecasts for 379 million.

Metro shares, which have risen 7 percent this year, were indicated up 2.4 percent in pre-market trade.

All three of Metro's businesses - cash and carry, Media-Saturn consumer electronics and Real hypermarkets - reported a rise in quarterly EBIT, with Media-Saturn benefiting from a boom in Russia where consumers pulled forward purchases in expectation of a further devaluation of the rouble.

Metro, which is emerging from years of restructuring and disposals of businesses including the recent sale of its Kaufhof department stores, said net debt had fallen 2.2 billion euros to 2.5 billion euros, allowing it to invest in the business.

"We will further remodel and modernize many of the stores of our sales lines, take advantage of promising acquisitions and also look at new expansion targets again," Chief Executive Olaf Koch said in a statement.

Metro last month raised its annual dividend more than expected and said it would pay more of its profits every year from now on, citing the positive effects of restructuring and significantly improved net debt.

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