October 15, 2018 / 1:05 PM / a month ago

CORRECTED-Spanish supermarket chain Dia issues profit warning

(Corrects earnings year to 2018, removes analyst comparison)

MADRID, Oct 15 (Reuters) - Spanish supermarket chain Dia issued a profit warning and suspended 2019 dividend payments on Monday due to a fall in sales, and named an executive from main shareholder LetterOne as provisional chairman.

Shares in the budget chain, which faces tough competition in its home market from local heavyweight Mercadona and rivals like Lidl and Aldi, fell sharply after the warning to trade 22 percent lower at 1.48 euros by 1234 GMT.

The company expects to book 2018 earnings before interest, tax, depreciation and amortisation (EBITDA) of between 350 and 400 million euros ($463 million), it said in a statement.

Dia, in which Russian tycoon Mikhail Fridman is the biggest shareholder through his investment vehicle LetterOne, gained ground during an economic crisis which drew more customers into its stores.

But it has been struggling to find the right strategy now the country’s economy has returned to strong growth. The group appointed a new chief executive in August and is due to present a strategic plan by the end of the year.

Dia said it named LetterOne managing partner Stephan DuCharme as vice-president of the board of administration and said DuCharme would provisionally take over as chairman of the group to replace Ana Maria Llopis until a new incumbent was appointed. ($1 = 0.8634 euros) (Reporting by Sonya Dowsett, editing by Isla Binnie and Louise Heavens)

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