May 10, 2018 / 9:22 AM / a year ago

Spain's Dia shares fall on rising domestic competition, currencies

MADRID, May 10 (Reuters) - Shares in Spanish discount supermarket chain Dia fell over 6 percent in early trading on Thursday after first quarter earnings showed core profit was hit by increased competition at home and currency devaluations in Latin America.

Dia said adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) were down over 10 percent in the first quarter from a quarter earlier to 109.8 million euros ($130.2 million), in line with Reuters forecasts.

Net sales dropped more than 10 percent to 1.8 billion euros, Dia said, below forecasts.

Store area has declined after the closure of underperforming El Arbol and Dia stores in Spain while efforts to upgrade stores - 457 shops in the quarter - and price cuts to compete with rival Mercadona also hurt sales to March.

The sharp fall in the shares, which at 0847 GMT marked the largest single-day decline, came after profit warnings in October last year and in February.

In Argentina, where Dia has 16 percent of its business in terms of sales, a currency depreciation, coupled with uncertainty over the country’s talks with the International Monetary Fund over a potential credit line, added to investor concerns. ($1 = 0.8431 euros) (Reporting by Emma Pinedo; Writing by Paul Day; Editing by Adrian Croft)

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