Russian hypermarket operator Lenta has posted a 4.8% increase in like-for-like sales in the first half of its financial year, posting sales of RUB 193.2 billion (€2.43 billion) for the period.
The retailer said that its like-for-like average basket size rose by 3.7%, while like-for-like traffic growth was up by 1.1%.
Total sales were up 18.2%, while adjusted EBITDA rose by 9.5%, to RUB 17.1 billion. Net profit was RUB 5.2 billion, up 14.9%.
It noted that capital expenditure was RUB 10.8 billion for the period, which was up 8.4% on the same period last year, due to increased investment in supermarkets.
Challenging Environment
“We again delivered a strong set of financial results for the first half of the year, with an adjusted EBITDA margin of 8.9% and stable net income margin, despite the challenging macro and consumer environment,” commented Jan Dunning, Lenta’s chief executive.
“We were very pleased to achieve an improvement in gross margin without any loss of competitiveness, which we consider as a sign of our growing scale and improvements in our procurement processes. This didn’t fully compensate expectedly higher personnel costs and rental expenses, which were the key factors weighing on profitability,” added Dunning.
Lenta opened two new hypermarkets and 17 supermarkets during the first half of the year, meaning that the group now has a total store count of 346, as of 30 June 2018.
Total selling space increased to 1.4 million square metres – a 19.6% increase on the same period last year. It also added 22,000 square metres' worth of warehouse space.
Second Half
Looking ahead to the remainder of the year, Dunning said that he expected that gross profit development would continue to rise.
“We expect that in the second half of the year, the trajectory of the gross profit development will continue and upward pressure on SG&A will ease, as our store network matures.
“This makes us confident that Lenta will be able to sustain strong growth and market-leading profitability in 2018,” added Dunning.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.
