German retailer Metro on Wednesday reported a loss in the consumer electronics division, citing a large amount of investment ahead of the separation of this business from the food industry.
Metro plans to separate the Metro Cash & Carry wholesale trade branch along with the Real chain of hypermarkets from the consumer electronics division Media-Saturn closer to the middle of this year.
For three months ended March 31, the consumer electronics business, which will be renamed Ceconomy, suffered a loss before interest and taxes (EBIT), excluding special items of the balance, of € 19 million ($ 21.23 million). Analysts polled by Reuters, on average, predicted a profit of 24 million euro.
According to Metro, the loss is related to investments in such areas as IT-technologies and start-ups. Sales in Ceconomy fell 0.5% to 5.26 billion euro, but rose 0.3% on a comparable basis due to high demand in Germany.
Online sales jumped by more than 40%, accounting for about 12% of all group sales.
Given that this is probably the latest published results before the planned office, Metro has adjusted the forecast for the fiscal year that will end on September 30, correlating it exclusively with the performance of the consumer electronics business. The company said it expects a slight increase in both total sales and EBIT.
Quarterly sales of Metro Cash & Carry and Real's hypermarkets grew 2.4% to 8.5 billion thanks to the strengthening of the ruble and acquisitions, including the purchase of Pro a Pro in France.
As for the German stock market as whole, it ended the Wednesday session mixed due to the strengthening of public services, transport and logistics and pharmaceutical sectors and negative dynamics on the part of the food and beverage, basic resources and consumer goods sectors.
At the close of the Frankfurt Stock Exchange, DAX 30 rose 0.13%, MDAX index dropped 0.40%, and TecDAX index gained 0.21%.