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bne Invest
May 24, 2019 www.intellinews.com I Page 15
Shoemaker Obuv Rossii keeps improving profitability in 1Q19
Russian shoe manufacturer and retailer Obuv Rossii (Shoes of Russia) more than doubled its IFRS net profit in 1Q19, posting bottom line growth of 161% to RUB217mn (up by 126% to $3mn in US dollar terms).
The company's Ebitda was up by 77% y/y, with both net profit and earnings beating consensus expectations for the reporting quarter.
BCS Global Markets attributed net income beat to "increased gross profit (+31.6% y/y), decline in SG&A costs [costs of goods sold] as a % of rev- enue to 38.8% - driven by good performance from relocated stores, rent cost cutting and growth of LfL [like-for-like] cash loans growth by 26.3% and increase of interest income."
The company's retail turnover in 1Q19 rose by 13.1% y/y driven by 23.8% growth in DOS [Directly Operated Stores] selling space and 2.1% increase in LfL sales. Cash loan revenue was up 20.5% y/y. Company's gross margin improved to 61.2% from 52.6% for the same quarter of last year. Ebitda margin gained 8.7pp y/y to 24%.
Obuv is a classic Russian retail story. It’s offering is priced in the mid-market and focuses on the burgeoning middle class living in the regions. Russia’s footwear market is in recovery mode and has long-term growth potential as Russians own a fraction of the shoes that their western peers do, the company's CEO Anton Titov told bne IntelliNews at the time of the rare IPO in October 2017.
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Russian agro major Rusagro more than doubles earnings in 1Q19
One of Russia's largest agricultural holdings Rus- agro more than doubled both revenues and Ebitda in 1Q19 under IFRS, the company said on May
20. Previously in the fourth quarter of 2018 Rusa- gro showed positive dynamics across all sectors, but was somewhat undermined by continuing weakness in sugar prices.
In the reporting quarter the earnings have dramaticlly improved, and Ebitda "did not even include the contribution from the recently acquired Solnechnie Produkti [major vegetable oil company], which appeared below EBITDA in the interest income line," Sberbank CIB commented on May 21.
increase in profitability on the back of increased grain prices, with Ebitda improving from almost zero in 1Q18 to RUB1.4bn in 1Q19, making a 26% margin.
In the meantime the sugar division's results bounced from high sugar prices and last year's low cost base. The Ebitda increased 67% y/y to RUB1.1bn, despite 40% lower sugar sales volumes. However, the average sugar selling price has fallen by 15% since the start of the year to just RUB28.2 per kg in May, well below the RUB30.8 per kg average recorded in May 2018, Sberbank warns.
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Rusagro's agriculture division saw the biggest