8 Sep 2009 17:41

Russia's Dixy posts 99 mln rubles in net losses in H1

MOSCOW. Sept 8 (Interfax) - Russian grocery store chain Dixy posted net losses of 99 million rubles in the first half of 2009 compared to net profit of 294.91 million rubles in the same period of last year, the company said in a statement.

Sales revenue grew 15.9% to 26.753 billion rubles in the half, EBITDA (earnings before interest, taxes, depreciation and amortization) rose 14.3% to 1.464 billion rubles and the EBITDA margin remained unchanged at 5.5%.

"The slowdown in the growth rates of retail sales is attributed to a decline in consumer purchasing power as a result of the economic crisis in addition to a low level of efficiency from the company's logistics operations in this period," the statement says.

In the dollar equivalent, Dixy posted net losses of $3 million in the half, saw sales revenue decline 16.1% to $809.1 million and EBITDA decline 17.3% to $44.3 million.

The results turned out better than a consensus forecast of analysts, who predicted Dixy would see net losses of $17.5 million, sales revenue of $807 million and EBITDA of $33.1 million.

The revenue from exchange rate changes in the second quarter of 2009 was completely nullified by 840 million rubles in losses from exchange rate changes in the first quarter. Excluding the losses from exchange rate changes, Dixy had net profit of 248 million rubles in the first half of 2009.

Dixy had operating and natural losses of 498 million rubles in the half, although these losses contracted 3% in the second quarter compared to the first. "Reducing losses is one of management's main priorities today," the statement says.

Operating expenditures grew 35.9% to 6.57 billion rubles in January-June. The company's net operating cash flow declined 8.8% to 428.68 million rubles.

The company had net debt of 8.274 billion rubles ($264.4 million) at the end of the half.

Dixy President Ilya Yakubson said the company expects improvements in retail sale trends in the second half of 2009. The company's gross margin rose to 27.1% in the half from 24.4% a year earlier. Yakubson said the gross margin would range from 25%-26% at the end of 2009.

The Dixy chain was comprised of 488 stores at the end of June 2009. The group closed seven Dixy stores and fourteen VMart stores in the half.

Dixy sells everyday groceries at its network of Dixy, Megamart, Minimart and VMart stores. The company was founded by Oleg Leonov under the Uniland brand in 1992. The Mercury Group purchased a controlling stake in the Dixy Group from Leonov at the beginning of 2008. Morgan Stanley and funds under the management of Prosperity Capital Management also own large stakes in the company.

Dixy boosted sales revenue 36% to $1.94 billion in 2008.