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canadian food prices 2013

Metro Inc 2012 Results (quarterly,yearly,financials)

 2013 quarterly results available here

4Q2012 -- 13 Weeks Ending September 29, 2012                  

Quebec's leading grocer Metro Inc profited $145.1 million or $1.46 per share (up +75.9%) on retail revenues of $2.9437 billion (up +11.1%) with same-store sales up +1.1% which is marginally higher than the 1.0% recorded in 2Q2012;  1.1% beats loblaws (-0.2%) but is lower than Sobeys (+1.8%).  Adjusted net income ($123.4M +4.2%) was $21.7 million lower than unadjusted mostly due to the current period being one week longer (13 vs 12);  Excluding the extra week, quarterly profit was up 2.5%.  Adonis and Phoenecia contributed $63.3 million in sales to Metro Inc (2.4% of total).

Dividends - Metro paid out 7.2% more in dividends ($19.5 million -> $20.9 million; on the year $82.9m, up from $77.1m).  Dividend per common share now at 21.5 cents up from 19.5 cents.

EBITDA up +16.70% to $894.3M which now represents 6.7% of total sales;  Adjusted EBITDA up +10.5% to $869.3M, representing 6.9% of total sales.

Earnings Per Share (EPS) diluted - up 75.9% ($0.83 -> $1.46);  Adjusted - +27.8% ($0.97 -> $1.24)

In the 4Q the company had a non-recurring gain of $25.0M and a non-recurring loss of $20.5M.

Declining Interest in Couche Tard - In August 2012 Couche Tard issued 7.3 million shares (proceeds of $330 million) to finance part of its acquisition of Statoil Fuel & Retail ASA.  Because Metro Inc didn't purchase any of those shares, its ownership interest in Couche Tard declined from 11.6% to 11.1%.

Total Assets, Goodwill (4Q, bil CAD): 2012: $5.1504 ($1.8595)  2011: $4.8271 ($1.6491)  2010: $4.6952 ($1.6037)

Debt (4Q, millions CAD):  2012: $973.9   2011: $656.2   2010: $1004.3


2012 Fiscal Year - 53 Weeks Ending September 29, 2012

Metro Inc profited $489.3 million or $4.84 per share (up +27.7%) on retail revenues of $12.0108 billion (up +5.4%) with same-store sales up +1.2% which is higher than the 0.04% growth in fiscal 2011.  Adjusted net income ($470.6M +27.7%) was $18.7m lower than unadjusted due to a non-recurring tax expense of $3.0 million, Couche Tard dilution gain of $25.0 million (before tax) and before tax closure costs of $20.5 in 2011.  The current period being one week longer (53 vs 52).  Adonis and Phoenecia revenue contribution by quarter:  1Q $33.0m, 2Q $59.0M, 3q $81.3m, 4q  $63.3m, total for the year = $236.6 million or 1.97% of Metro Inc total group sales.

Dividends - Dividend per common share now 85 cents versus 75 cents in 2011 (+13%).

EBITDA up +16.7% to $8.943B which now represents 7.4% of total sales;  Adjusted EBITDA up +10.4% to $821.7M, representing 6.5% of total sales.

Earnings Per Share (EPS) diluted - up 27.7% ($3.79 -> $4.84);  Adjusted +18.3% ($3.93 -> $4.65) 



3Q2012 -- 16 Weeks Ending June 30, 2012 

Quebec's leading grocer Metro Inc profited $144.4m (+13.6%) or $1.43 earnings per share (+16.3%) on retail revenues of $3.7035 billion (+3.83%) with same-store sales up +1.0% which is the same as in 2Q2012; 1.0% beats both Sobeys (+0.7%) and Loblaw Co. (+0.2%).  Adjusted net income was $3.0m greater than unadjusted due to the deferment of a $3.0m corporate tax reduction in Ontario factoring into the unadjusted figure.  $81.3m of the $133.6m increase in revenue is attributable to Metro's newly acquired 55% interest in Adonis and Phoenicia (independent grocer and food distributor);  Adonis (1000 employees) was acquired October 26, 2011.

Key Notes:  Dividends were up a healthy +11.7% --> 21.5 cents / share,  inflation in the 3Q2012 was lower than it was in 2Q2012 and 1Q2012.   Metro Inc also has a 10.6% interest in Alimentation Couche Tard (paid $23.6m earlier in 2012 to maintain that percentage) which gave it $13.6m in earnings this quarter (+97.1%) and $35.5m over the last 40 weeks (+31.0%).  Couche Tard had a very good quarter ending April 29, 2012   (vs April 24, 2012 profit was +82.4% --> $117.8m). Earnings per share     greatly exceeded analyst estimates who had it pegged at $1.37/share

(adj earnings were $1.46/share).

EBITDA:  +10.3% --> $272.2m meaning that growth in the company's bottom line is outpacing growth in sales which is a

GREAT SIGN.  However gross margins didn't really change (18.2% --> 18.3%). Income taxes  $56.1m (tax rate = 28.0%) up from $51.6m (tax rate = 28.9%) however keep in mind that the tax rate goes down to 26.5% for the 3Q (26.3% for the 40 weeks) when one time charges are excluded.

Dividends:  Metro paid out $21.1m in dividends in 3Q2012 up from $19.9m in 3Q2011. In 3Q2012 Metro paid slightly more on its debt ($4.7m vs $4.3m last year) even though there was no change in debt (in contrast last year debt was up +$4.9m in the quarter).  Dividends per share came out at 21.5 cents up +11.7%

Interesting !    Couche Tard's 12 week revenue went from $4.737 b -->  $6.0632 b (April 2012) at the same time Loblaw Companies 12 week revenue barely changed from $7.278 b --> $7.375 b (June 2012).  Both companies now profit roughly the same and guess what ?  They're market cap is now roughly the same (around $9.0 billion each).   Not bad for a convenience store operator going to head to head with Canada's biggest grocery chain !

Last 3 Quarters (40 weeks)

Adonis interest added $173.3m in revenue to Metro Inc. which equates to 54.1% of the change in Metro's total sales during the 40 week period (+$320.2m:  8746.9m --> 9067.1m)

EBITDA:  +8.09% --> $648.0m;   Income taxes  $127.0m (tax rate = 27.0%) up from $121.3m (tax rate = 28.2%)

The weakest of the last 3 quarters was the 1st quarter when sales went up by only +3.4% --> $2.7117 bil (profit up only + 8.6% vs 12.1% in 2Q2012, +13.6% in 3Q2012);  ironically the 1st quarter beat the other 2 when it came to same store sales (+1.7% vs +1.0% in both others).  Over the last 52 weeks, same store sales was highest in 4Q2011 (+3.2%).

Bad News:  Lower drug prices negatively impacted results over the last 40 weeks.

Food Inflation:  According to the Consumer Price Index, last quarter food inflation was at +2.5% which though moderate, is still down from about 5.0% just six months earlier (at the time, that rate held for two straight quarters).

Debt Position:  Between 4Q2011 and 3Q2012 long term debt is up +1.29% --> $1038.7 mil however equity was up even more; +1.53% --> $2436.1 mil meaning that the company remains well capitalized.

Between 4Q2011 and 3Q2012 market value of Metro stock up 23.38% --> $55.14.  at the same time, the number of common shares was down -3.86% or 3.901 million --> 97.183 million.

Depreciation and Ammortization (the difference between operating income and EBITDA) was up +3.41% --> $57.7 million;  up +3.12% --> $142.2 million in the last three quarters.

Assets:  Even though as a company (market value / sales ) Metro is posting solid growth, asset value remains stagnant (June 2012:  $5076.2m; September 2010: $4695.2m).  A major reason for that, at least this quarter is the huge drop in cash and cash equivalents:  was $255.5 mil in September 2012 (when assets were around $4.83 billion) now only $98.4 mil.  Acquisitions are partly to blame with Couche Tard getting over $20 million from Metro earlier this year (Metro has to spend money to maintain its interest in Couche Tard, a company with a rapidly growing market capitalization) and the October acquisition of a controlling interest in Adonis group.

Sources of asset value growth (4Q2011 --> 3Q2012):  Intangible Assets +25.2% --> $372.1m,  Accounts Receivable  +113.1% --> $339.9M,  Investment In Associates  +11.64% --> $288.8m,  Inventories +2.9% --> $749.5m

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