• Net profit down 8.9%
  • Operating profit up 2.2%
  • Net sales soar 80.9%
In the first half of the year, Dixy opened 184 stores

In the first half of the year, Dixy opened 184 stores

Russian retailer Dixy has booked a mixed set of first-half results as profit fell on acquisition costs but operating profit climbed.

In the six months to the end of June, net profit slid 8.9% to RUB501m (US$15.5m), the retailer reported today (5 September).

The group saw finance costs grow year-on-year by 146% to RUR1.1bn in the first-half, due to the funds raised to finance the acquisition of Victoria Group in June last year.

Operating profit, however, edged up 2.2% to RUB2.2m as net sales soared 80.9% to RUB70.8m.

In the first half of the year, Dixy opened 184 stores and increased its selling space by 22% year-on-year. As of 30 June, the company operated 1,276 stores.

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DIXY GROUP DEMONSTRATES SOLID REVENUE GROWTH AND GROSS MARGIN IMPROVEMENT IN THE FIRST SIX MONTHS OF 2012
Moscow, September 05, 2012

DIXY Group (RTS, MICEX: DIXY) - one of Russia's leading retailers of foods and everyday products - today announced unaudited consolidated IFRS results for the first half and the second quarter of 2012.

Key Highlights for the Second Quarter and First Half of 2012

In the first half of 2012, the Company opened 184 new stores in Central, North-West and Urals Federal Districts, and increased the selling space by 22% year-on-year to 442,516 sq.m. As of June 30, 2012, the Company operated 1,276 stores.

Consolidated Revenue increased by 70.5% (53.7% in USD) year-on-year to RUR 36.1 bln (USD 1.2 bln) in the second quarter, and by 80.9% (69.0 % in USD) year-on-year to RUR 70.8 bln (USD 2.3 bln) in the first six months of 2012.

Consolidated Gross Profit grew by 83.0% (65.0% in USD) to RUR 10.3 bln (USD 331 mln) in the second quarter, and by 100.0% (86.8% in USD) year-on-year to RUR 19.9 bln (USD 649 mln) in the first six months of 2012.

Gross Margin improved by 200 bp year-on-year to 28.5% of sales in the second quarter, and by 270 bp to 28.1% of sales in the first six months of 2012.

Consolidated EBITDA increased by 37.8% (24.2% in USD) year-on-year to RUR 2.1 bln (USD 67 mln) in the second quarter, and by 67.4% (56.4% in USD) to RUR 4.2 bln (USD 137 mln) in the first six months of 2012.

In the first half of 2012, the Company boosted the organic growth and doubled the number of store openings compared to the same period last year, bringing the number of newly opened stores to 184, well above the initial targets.

During the second and the third quarters of this year, the Company made a substantial progress in the integration of Victoria's neighborhood stores, centralization of the supply chain and other key functions. As of September 1, 2012, 30 ex-Victoria stores were integrated into DIXY chain, and 114 stores were being integrated.

The Company also continued renovation of DIXY neighborhood stores, improvement of their design and optimization of the floor space. As of September 1, 2012, 37 DIXY stores were re-opened after their refurbishment, and 26 more were being refurbished.

As a part of the new marketing strategy being implemented, the assortment optimization across the neighborhood stores, the customer service enhancement, and marketing communications stayed in focus during the first half of this year.

Being started in 2011, these initiatives resulted in 4.5% like-for-like sales growth in the first half and 3.4% like-for-like sales growth in the second quarter of 2012.
Consolidated revenue in rubles increased by 81% year-on-year, while pro-forma revenue grew by 21% in the first half of 2012. Gross margin improved by 200 bp year-on-year in the second quarter and by 270 bp in the first half of 2012, due to enhanced operational efficiency.

In August 2012, the General Meeting of Shareholders approved an 18 bln rubles syndicated loan, which allowed optimizing the Company's debt portfolio. As of June 30, 2012, pro-forma Total Financial Debt to EBITDA ratio stood at the level of 2.9.

Original source: Dixy Group