Russia's invasion of Ukraine has 'severely impacted' second-quarter profit performance at wholesale giant Metro AG, with the business reporting a net loss of €284 million in the period.
In the corresponding period last year, Metro reported a net loss of €131 million.
According to the retailer, the war in Ukraine had a negative impact of around €200 million, which includes goodwill impairments to its businesses in Ukraine and Russia due to imposed sanctions, as well as reduced sales and earnings expectations.
In the second quarter, total sales in local currency increased 26.3%, the group said, with Metro seeing growth across all sales channels.
Store-based sales increased to €4.9 billion (+14%), it said, with delivery sales up 73% to €1.4 billion and Metro Markets sales up 166% to €16 million.
For the first half, meanwhile, total sales in local currency were up 22.5%.
“The first half of our financial year sends a clear message: Metro is growing with its customers and is focusing on the right growth drivers in its multichannel mix," commented Dr Steffen Greubel, chief executive, Metro AG.
“At the same time, the war in Ukraine is a challenge for all of us. Our greatest concern is for our 3,400 employees there. Since the beginning of the war, we have put a huge amount of effort into maintaining operations in our wholesale markets that play a crucial role in supplying the population with food staples."
Monitoring The Situation
Greubel added that the business is continuing to monitor developments in the region "very closely", and is actively seeking to manage the indirect consequences of the war, such as high inflation and negative supply chain effects.
Looking ahead to the remainder of the year, Metro said that it expects sales growth of around 9% to 15% compared to the previous year, with EBITDA 'slightly to moderately' above the previous year.
Its East segment, which includes its Ukraine and Russia business, is expected to report declines, it added, saying, 'Any further escalation of the war and/or broader sanctions could lead to additional negative effects on the business, especially in Ukraine and Russia.'