Russian retailer O’Key saw its profits increase by more than 20% in 2011 thanks to increased sales and cost cuts.
Net profit climbed 20.7% to RUB4.37bn (US$149m). O’Key attributed the increase to a reduction in financing costs, but said the savings were partially offset by foreign exchange losses.
However, EBITDA also increased 5.4% to RUB7.51bn, while EBITDA margin came in above the company’s expectations at 8.1%.
Sales were up 12.7% to RUB93.13bn, driven by an increase in selling space and like-for-like revenue growth, which came in at 5.3% year-on-year.
“In an environment where a number of competitors were losing customers, we retained our customer base and maintained the strength of our brand,” said O’Key CEO Patrick Longuet.
Despite “challenges” faced in 2011, O’Key reaffirmed its long-term targets.
“We aim to expand our hypermarket network organically at an annual rate of 30%, and we are also expanding our land bank to ensure we complete our planned store openings over the next two years. Our long-term profitability target remains at over 8% on the EBITDA line and as we continue to develop our range of quality products we will ensure that our prices remain very attractive in the market,” the company said.
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