Page 153 - RusRPTNov21

OR Group (formerly Obuv Rossii) released its 3Q21 trading results on October 30. Consolidated revenues were down 37% y/y to R2.0bn. This followed a 68% y/y surge in revenues in 2Q21 (in 2Q20, many of the company's stores were closed due to the lockdown). In 9m21, consolidated revenues decreased by 9.5% y/y (excluding quarterly base effects from 2Q20-3Q20). Third-party sales through the marketplace Westfalika.ru reached R667mn in 3Q21, up 77% y/y. Meanwhile, total retail revenues were down 21% y/y in the quarter, as sales in the categories provided by third parties failed to offset a decline in sales of OR Group's own apparel (which were less than half the 3Q20 level). Wholesale revenues decreased significantly in 3Q21, as a considerable portion of wholesale purchases last year were shifted to the third quarter. In 9m21, wholesale revenues were virtually flat y/y. Notably, revenues from the cash loan business, a high-margin segment, decreased by 32.9% y/y in 3Q21, driven by both a 10% y/y contraction in the cash loan portfolio (to R2.1bn) and a 43% y/y drop in the average cash loan size (to R15.5k). During the quarter, the company closed 11 directly operated stores (DOS) on a net basis, taking the DOS store count to 621, down from 676 a year before.
9.2.6 Agriculture corporate news
Rusagro has announced the purchase of a 25% participation interest in LLC Primorskaya Soya, fully consolidating the ownership. The facility, a soy processing plant, producing oil and meal, is located in the Far East of Russia.
Rusagro has not yet disclosed the capex for acquiring the respective stake, but we do not expect a material downside risk to the annual guidance (RUB 20bn).
The facility might be supportive for the larger Russian Far East project, which Rusagro has been implementing since 2016 and which has been launched recently. It has an eventual capacity of 75,000 tonnes of pork in live weight, which is to bring 25% more capacity by 2023.
Rusagro’s GDRs have surged 55% YTD, reflecting the company’s outstanding financial results (EBITDA up 1.8x YoY to RUB 22bn in 1H21) and the decent outlook for the new season. We keep our financial forecasts intact, as the company’s mediumterm targets correspond to our volume trajectory. We consider the new season multiple of 5.8x EV/EBITDA and 10% dividend yield as appealing in our consumer coverage.
153 RUSSIA Country Report November 2021 www.intellinews.com