DÜSSELDORF, Germany, July 17 (Reuters) - German retailer Metro (MEOG.DE) sees its domestic wholesale stores generating a profit this year as the company tries to halt five years of sliding sales and earnings at the division.

By 2012, full-year earnings before interest and taxes would reach 130 million-150 million euros ($183 million-$211 million), said management board member Frans Muller in comments to reporters on Thursday 16 July for embargoed release on Friday 17 July.

"We see huge potential in Germany," Muller said. "And we think that we can win market share."

The Cash & Carry division operates stores in 29 countries and generates almost half of Metro's annual sales of 68 billion euros. The German outlets account for 17 percent of the division's overall sales.

Muller said the company had underestimated the competition in Germany in recent years and did not react to professional customers and their needs fast enough, while costs ballooned. The financial crisis also weighed on the business.

Metro does not publish earnings for Cash & Carry by country, but industry experts estimate that the German division's earnings before interest, taxes, depreciation and amortization fell to 30 million euros in 2008 from 250 million euros in 2003.

As part of a group-wide savings programme, the company now plans to reduce costs at Cash & Carry Germany by 150 million euros with measures including 1,200 job cuts and lower energy expenses.

Metro hopes to lure back operators of hotels, restaurants and gas stations by offering better customer service, more targeted advertising and lower prices.

These measures could unleash additional sales potential of 500 million to 700 million euros, the company said. (Reporting by Nikola Rotscheroth; Writing by Maria Sheahan; Editing by Elaine Hardcastle and Steve Orlofsky)