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.
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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.
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Despite “challenges” faced in 2011, O’Key reaffirmed its long-term targets.
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By GlobalData“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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