Exchange rate fluctuations increased the domestic operating costs of German-based Metro group and caused a decline in EBT (earnings before taxes) of 2 million euros in the first quarter of this year, against the same period in 2007.
"Metro's EBT fell 6.6% in the first quarter of the year, and reached 28 million euros, mainly due to the effects of exchange rate variations on euro-denominated loans in Romania," reads the German group's quarterly financial report.
In the first three months of last year, the retailer posted EBT worth 30 million euros. The average exchange rate in the first quarter stood at 3.689 RON/euro, up by around 9% on the same time last year, according to NBR (National Bank of Romania) data. Last year the exchange rate was extremely volatile, which made it difficult for companies on the local market to make long term plans.
Recently, Fran?ois Oliver, general manager of Metro Cash&Carry Romania, said sales had progressed in line with the initial estimates that were made in the first three months of the year, but did not provide any further details as to the company's profit.
The group announced it would reach overall investments worth almost half a billion euros this year on the hypermarket segment, on which it has been present with the Real division since 2006.
The network is expected to expand by 6 units by the end of the year and reach 21 Real stores in Romania, in the wake of investments worth around 21 million euros for each new unit.
In addition, the retailer also plans to invest 14 to 20 million euros in Romania to modernise older cash & carry stores, and could potentially invest another 20 million euros in a new Metro Cash & Carry store by the end of 2008.
Metro representatives previously announced they would resume network expansion this year, without, however, specifying the number of new units or the locations.
Last year, Metro Group posted domestic turnover worth 1.95 billion euros, up almost 30% against 2006.
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