Medion AG (MDONF.PK) on Wednesday revised downward its fiscal 2011 forecast, and said it now expects flat earnings before interest and tax and lower revenues for the fiscal year 2011, due to lower average sales prices as well as challenging conditions mainly due to ongoing European sovereign debt crisis.
The German provider of consumer electronics for the retail industry said it now expects fiscal 2011 EBIT on the level of the previous year's 28 million euros.
While announcing the first-half results in August, the company had noted that it continues to expect EBIT to increase in the order of 15 percent to 20 percent, but added that the forecast was under threat from the rise in general economic risks and the associated uncertainty among consumers regarding purchases of durable goods. These risks have increased in the last two months.
For the year, the company now said revenue would be approximately 10 percent lower than last year's 1.6 billion euros.
In August, Medion had said that it 'can no longer be assumed' that sales will be unchanged from last year and in the order of 1.64 billion euros. The company also said then that a decline between 5 percent and 10 percent in sales is also conceivable.
The company now said its poor expectation reflects the unresolved European sovereign debt crisis, plus consumers' ongoing reluctance to buy.
However, Medion's market position in Germany and Europe improved even in this difficult environment, the company added.
Medion is currently trading at 15.20 euros, up 0.05 euros or 0.33 percent on Frankfurt's Xetra.
In the U.S., MDONF.PK last traded on July 8 at $18.57.
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