Page 153 - RusRPTSept21

EBITDA margin contracting by 2.8%age points to 10.6%. Net profit of M.Video gained 19% y/y and beat the expectations due to one-off effects such as RUB3.7bn positive effect from the sale of Goods.Ru marketplace and RUB2.5bn debt write-off by VTB Bank. Not accounting for one-offs, the bottom line would contract by RUB2.2bn, BCS Global Markets estimated. While the one-off effects supported the results and allowed M.Video to make a solid dividend per share proposal (RUB35.5 per share or 5.5% dividend yield), BCS GM sees the results as mixed due to contracted EBITDA margins.
Detsky Mir has reported strong 2Q21 IFRS results. The gross margin added 1.1pp y/y to 31.9% due to product mix changes, as the share of private label and direct imports in revenues reached 48% in the key Russian market.
The core SG&A lines saw y/y growth of 90bp and 45bp in rents and salaries, respectively, as the stores which had temporarily closed in 2Q20 reopened and lease agreements were renegotiated on normalised terms. The company also gained a one-off RUB1.3bn from a forgivable Sberbank loan, which is positive in the short term, but of limited importance for the overall investment case. We view the adjusted financial indicators as being more representative and assume them to be more accurate in depicting the current state of affairs in the company.
Adjusted EBITDA increased 24% y/y (RUB4.4bn), 5% ahead of our estimates, while adjusted net income reached RUB2.8bn. Taking this into account, we do not see any reason to revise our estimates and leave them intact: annual revenue growth of 15% y/y and an adjusted EBITDA margin of 11.6%. For 2H21F, that implies top line growth of 10% y/y and an adjusted EBITDA margin of 12.6%. Together with the 12-mo dividend yield of 12.7% that we see, Detsky Mir's financials are one of the leading profiles in our retail coverage universe.
· The company has previously released 30% y/y revenue growth in 2Q21, jumping from the 15% y/y in the previous quarter. The prime reason was the low comparison base, as 2Q20 was almost flat and April turnover lost 20% y/y, with stores partially closed and low traffic in shopping malls.
· Detsky Mir has received RUB1.3bn as a one-off gain from a forgivable loan, provided by Sberbank, which was subsidised in full, along with the interest expense, under the government-sponsored crisis response support programme. We note the short-term positive effect of the respective gain, and also
153 RUSSIA Country Report September 2021 www.intellinews.com