RUSSIA: Dixy grows share but profits dip
- Q4 profit drops 14%
- FY profit up 4.5%
- Q1 sales up 22%
Dixy grows sales, financial costs hit profit
Russian retailer Dixy today (26 April) said it has increased its market share and grown revenues. However, the company conceded that costs associated with the 2011 acquisition of smaller peer Victoria has eaten into profits.
In two separate filings, Dixy reported higher first quarter sales on the one hand and a sharp drop in fourth quarter profits on the other.
Dixy, Russia's third-largest grocery, said same-store sales grew by 5% in the first quarter, boosted by food inflation and higher customer traffic. Total sales were up 21.9% in the January-March period, or 24.1% when adjusted for a calendar affect.
However, a spike in financial costs associated with borrowing to fund the Victoria acquisition during the fourth-quarter hit profitability at the group. Q4 net profit was down 14% to RUB271m. This weighed on the full-year result, which saw net profit up just 4.5% - despite a 52% jump in gross profit.
Shares in the Russian retailer fell 3.02% in morning trade today.
In a recent interview with just-food, Dixy's head of investor relations Natalya Belyavskaya said the company has now turned its attention to expanding sales while keeping a lid on capex. This will be achieved by opening smaller format stores. The group is aims to double its revenues over the next three years.
Russia has been described as one of the most dynamically developing retail markets in the world. The advent of the recession, however, resulted in a slowdown in growth that Russia has not yet fully re...
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