Magnit Q4 earnings up 14% to 13.5 bln rubles, above forecast
MOSCOW. Jan 27 (Interfax) - Magnit boosted net profit to International Financial Reporting Standards (IFRS) 14.35% year-on-year in Q4 2014 to 13.483 billion rubles, the retailer said in a statement.
This was below the 14.892 billion rubles that analysts predicted in a consensus forecast for Interfax.
Earnings before taxes, depreciation and amortization (EBITDA) grew 22.64% year-on-year to 24.915 billion rubles and the EBITDA margin was 11.28%, down from 12.5% a year previously. The analysts predicted EBITDA of 26.677 billion rubles and a margin of 12.1%.
"Material FX losses impacted our financial results. However, we did achieve a record high EBITDA margin. We have the lowest debt burden and a strong management team, which will allow us to continue aggressive expansion despite the instability in the marketplace. We have set ambitious store opening plans and we are confident in their fulfillment," said Sergey Galitskiy, the company's CEO.
The retailer boosted gross profit 33.81% in October-December to 65.035 billion rubles, while gross margin fell to 29.45% from 29.91% the year before.
Net sales were up 35.9% at 220.852 billion rubles.
Magnit boosted net profit 33% in 2014 to 47.375 billion rubles. EBITDA grew 32.14% to 85.522 billion rubles, while EBITDA margin increased to 11.2% from 11.16% in 2013.
Gross profit for the year was up 33.43% at 220.512 billion rubles, while gross margin increased to 28.88% from 28.51% the previous year.
Magnit had net earnings 763.527 billion rubles in 2013, up 31.71%.
Galitskiy added that the company's financial performance was negatively affected by substantial exchange rate losses. The company was still able to achieve record EBITDA margin for the year, he said.
It was previously expected that Magnit would have EBTIDA margin of 11.2%-11.4%, meaning the retailer performed at the lower end of the estimate.
Net profit fell 21.55% in dollars in Q4 to $284.3 million, but grew 10.25% for the year to $1.118 billion. EBITDA was down 15.87% in October-December at $525.36 million, but grew 9.53% for the year to $2.226 billion.
The retailer saw gross profit fall 8.21% in the fourth quarter to $1.372 billion, while revenue was down 6.77% at $4.657 billion. Magnit boosted gross profit for the year by 10.6% to $5.739 billion and revenue by 9.18% to $19.872 billion.
All formats of stores opened before December 1, 2013, boosted sales 14.47% thanks to a 9.58% increase in the average check and a 4.47% rise in passenger traffic. LfL revenue was up 17.28% in the fourth quarter thanks to a 12.41% increase in the average check and a 4.33% rise in traffic.
Magnit opened 1,618 stores in 2014 versus 1,209 in 2013 (net data, including closed stores). This included 1,144 convenience stores, down slightly from 1,154 the year before. The overall sales space grew 19.24% in 2014 to 3.59 million square meters.
Galitskiy said that the lowest tax burden in the industry and a strong team of managers allow Magnit to continue its aggressive expansion despite instability on the market. "We are setting ambitions plans to open [stores] and we are certain they'll be carried out," he said.
The company is planning to publish its audited report for 2014 in late March.
Magnit is one of Russia's largest retailers by sales and the number of stores. At the end of last year, the company had 9,711 stores including 8,344 convenience stores, 190 hypermarkets, 97 Magnit Family stores and 1,080 cosmetics stores. Galitskiy is Magnit's main owner.