O'Key plans to reopen St. Petersburg hypermarket after Jan roof collapse
MOSCOW. May 24 (Interfax) - Russian retailer O'Key plans to reopen this summer one of its hypermarkets in St. Petersburg that it was forced to close when its roof collapsed under the weight of snow in January, a VTB Capital report issued after a meeting with company management says.
The company has already paid out 5 million rubles in compensation to individuals injured in the January 25 incident, in which one person was killed and ten others hospitalized. The company shut all its hypermarkets and supermarkets the next day save those located in trade centers. Thirty of the retailer's 57 stores were in St. Petersburg at the time, and of those 13 hypermarkets and 12 supermarkets were shut down. They were reopened in early February, but store traffic has decreased, company chief Patrick Lounge said.
The collapse has had a significant impact on O'Key's like-for-like sales, Lounge said. LFL sales increased just 2.3% in the first quarter (not counting the store whose roof fell in). O'Key opened two new stores during the quarter, increasing the number of company outlets to 59 as of March 31.
O'Key plans to open eleven hypermarkets and at least eleven supermarkets this year, increasing retail space by 30%. Most of the hypermarkets will open in Q4, but the supermarkets will open throughout the year.
The chain's sales revenues will increase 29% to 106.9 billion rubles this year, VTB Capital analysts predict. Management has not offered annual earnings forecasts, but April produced a recovery of LFL sales that has continued into May.
The EBITDA margin will decrease 0.6 of a percentage point to 8%, management predicts.
It is likely that O'Key will not be paying dividends for 2011, the report says.
The retailer's net profits to International Financial Reporting Standards (IFRS) more than quadrupled (320%) last year to 3.003 billion rubles, exceeding market expectations. Sales revenues were up 21.8% at 82.666 billion rubles, driven by a 23.6% increase in sales area and a 7.7% increase in LFL sales at 24 O'Key stores. EBITDA grew 20.9% to 7.127 billion rubles last year and the EBITDA margin was 8.6%.
