Wednesday April 23, 11:08 AM
Arcandor issues FY profit guidance, sees adj EBITDA above 800 mln eur UPDATE
(Updates to add CEO comments on department store strategy)
DUSSELDORF, Germany (Thomson Financial) - Arcandor AG (Frankfurt: A0S867 - news)
. issued for the first time profit guidance for the current fiscal year to September, saying it expects adjusted earnings before interest, tax, depreciation and amortization to exceed 800 million euros.
In the 12 months to December 2007, the company posted 626 million euros adjusted EBITDA. The company did not publish a comparable figure for the October-September period.
Arcandor last year shifted its fiscal year to end in September rather than in December. That means that the 2007 fiscal year to end-September had only three quarters, while the current year will have four quarters.
The MDAX-listed retailer also said it was 'satisfied' with the second quarter of this year, which ended on March 31, according to a statement issued at its annual shareholders meeting. The company is scheduled to publish second-quarter results on May 15.
Mail-order division Primondo posted double-digit percentage sales growth during the three-month period, with a 'significant' increase in profit, chief executive Thomas Middelhoff said.
Next year, the division will post up to 210 million euros EBITDA, the company reiterated. Arcandor has not issued profit guidance for its divisions for this year.
The company's Karstadt department stores, which have been plagued by sluggish German consumer spending and sliding sales, in the second quarter 'recovered strongly,' with both sales and adjusted EBITDA above the year-earlier level.
The department stores will reach EBITDA of about 260 million euros next year, the company said.
'And we will not remain inactive strategically as we see great opportunities to make the department store business significantly more profitable again,' Middelhoff said.
'We are looking in many directions and may tie up with partners.'
But he warned not to reduce the company's strategy to a possible purchase of Metro AG (Xetra: 725750 - news) .'s Kaufhof chain of department stores.
Metro last month said it no longer sees Kaufhof as part of its core business, but did not say which options it is considering for the outlets.
Middelhoff at the time said Kaufhof may be interesting to the company, but said there had not yet been any talks. Metro has 126 Kaufhof department stores in Germany and an additional 15 outlets in Belgium.
While the CEO reiterated that both Karstadt and Primondo should be readied for capital markets, he emphasised that there are currently no concrete plans for an initial public offering.
The third major division, Thomas Cook Group Plc, 'still showed a good booking situation, with strong summer business,' Middelhoff said.
The business, in which Arcandor holds 52 percent of the shares, will reach 'significantly' more than 800 million euros EBITDA in the fiscal year ending in September 2010, Middelhoff said.
Arcandor also said it still sees full fiscal-year sales reaching at least 23 billion euros next year, with EBITDA of at least 1.3 billion euros.
The company will make 'final decisions on several important projects,' with a preference for earnings growth over sales growth and asset-light businesses over capital-intensive ones, Middelhoff said.
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