Page 140 - RusRPTNov23

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The net profit of Russian grocery retailer Lenta slid by 79.9% on the year to 258mn rubles in July–September, as calculated under International Financial Reporting Standards (IFRS), the company said in a statement on October 23. Revenue grew by 7.3% on the year to 135.988bn rubles in the period. Earnings before interest, taxes, depreciation, and amortization (EBITDA) fell by 6.7% to 7.043bn rubles. In January–September, the company posted a net loss of 2.146bn rubles after a net profit of 4.643bn rubles in the same period of 2022.
The Fix Price chain of stores plans to redomicile from Cyprus to Kazakhstan. A shareholders meeting on this issue will be held on November 9. It is assumed that the company can be registered on the territory of the Astana International Financial Center in Kazakhstan (AIFC). Also, shareholders can approve a new memorandum and articles of association of the company after redomiciliation. After the change of jurisdiction, the company plans to maintain the current program of global depositary receipts and listing on the London Stock Exchange, as well as the Moscow Exchange. The Fix Price network re-registered the company from the British Virgin Islands to Cyprus in February 2022.
Lenta acquired the Monetka chain of stores in October. The transaction perimeter included 2,120 stores, 5 distribution centers with a total area of more than 116 thousand square meters. m and more than 560 cars. The company's own funds were used to finance the transaction, and additional debt financing was also raised. The cost of the acquired assets is not disclosed. According to the company, the transaction was carried out at a multiple of <4x EV/EBITDA, and Lenta's net debt to EBITDA ratio should be 3x at the end of the year.
The company reported that the Federal Antimonopoly Service of Russia granted the request to approve the transaction. Lenta was also obliged to fulfill social obligations within one year to establish a maximum level of trade margins for some retail positions in Khanty-Mansiysk.
Monetka stores operate in more than 470 cities in Russia. In 2022, Monetka’s revenue increased by 29% and amounted to 177.8 billion rubles. In 1H23, the company's revenue grew by 16.8%, and like-for-like (LFL) sales increased by 8.7%. Monetka's gross margin exceeded 27% in 2022, according to Infoline. The company does not disclose the profitability of the business, but emphasized that margins are at the level of other federal players and have shown growth over the past few years.
Lenta said that the deal is in line with the company’s goals of increasing revenue through the “Store at Home” format. After the transaction, the retail space of Lenta's small format stores will increase by 2.4 times to 902 thousand
140 RUSSIA Country Report November 2023 www.intellinews.com