Shareholders of the Metro Corporation are facing financial trouble and likely will cease operations.

Shareholders of the Metro Corporation are facing financial trouble and likely will cease operations.

Metro Ditches Dividend Amid Fiscal Loss

Looks like the shareholders of the Düsseldorf-based wholesale giant, Metro, won't be receiving a dividend this year. The company announced on Tuesday that it's axing the payout for the 2023/24 fiscal year, ending September 30th, after incurring a loss of 125 million euros. The news was quite the surprise, considering CEO Steffen Greubel managed to greenlight a dividend last year, even after selling off their India business and real estate packages.

It seems last year's dividend of 55 cents per share for the 2022/23 fiscal year was a one-off, thanks to those lucrative sales. But don't fret; Greubel's not completely giving up on growth targets. In the operating business, Metro registered a 4.2% increase in local currency sales, but their adjusted operating profit (EBITDA) took a hit, dropping to around 1 billion euros (compared to 1.17 billion the previous year).

So, what's the plan moving forward? Metro anticipates foreign exchange-adjusted sales growth of 3 to 7% for the 2024/25 fiscal year, with the struggling German business expecting growth below this range. The company also expects a slight improvement in adjusted operating income.

Greubel's focus remains on the wholesale distribution channels, ranging from internet platforms to delivery, with a special emphasis on serving restaurateurs and hoteliers. He aims to beef up sales and delivery to customers and expand the share of private labels in Metro’s portfolio. The company operates in over 30 countries, including Russia, where it raked in around 2.4 billion euros in the last financial year.

It's all about preserving cash and protecting financial stability, folks. It's not uncommon for companies to waive dividends in the face of significant losses, as it helps maintain liquidity and supports ongoing operations. In Metro's case, they're probably preparing to invest in recovery or strategic initiatives without further draining their resources.

So, while it may sting for shareholders, Metro's decision to ditch the dividend might just be a smart move in the long run. As always, we'll keep our eyes on the company and update you on their progress.

In connection with Metro's fiscal loss, they have decided to discontinue the dividend payout for the 2023/24 financial year, a move that reflects a focus on preserving cash and maintaining financial stability. Looking ahead, despite the suspension of dividends, the company continues to prioritize growth in their business operations, particularly in wholesale distribution channels, with an emphasis on enhancing sales and delivery services for their customers and expanding the share of private labels in their portfolio.

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