Russia's O'Key Group has posted an 8.5% decrease in revenue in the first half of its financial year, saying that this was triggered by the sale of its supermarket business.
Revenue at the group stood at RUB 78.2 billion, compared to RUB 85.5 billion for the same period the previous year.
Despite a 4.9% year-on-year decrease in EBITDA, the margin at the business increased by 17 basis points year-on-year, it said, 'driven by improved purchasing conditions and the increased efficiency of operations across the company'.
O'Key Group sold its supermarket operations, totalling 32 outlets, to X5 Retail Group last December.
Net Loss Decrease
Commenting on its half-year performance, O'Key Group said that its net loss decreased by 63.4%, as a result of the sale of its supermarket business, as well as increased operational efficiency.
Capital expenditure at the group marginally increased in the first half of the year, driven by investments into the development of its discounter format, Da!.
Forecast
Looking ahead to the coming year, O'Key said that it expected to increase its hypermarket operations by around two to three stores, with this division posting a 'low single digit' increase.
Its discounters operation, however, is expected to see up to 25 new openings in 2018, with a total of 150 new stores under the format by the end of 2020.
It expects net retail revenue from the discounter arm to grow by up to 50% year-on-year in dull year 2018, albeit off a smaller base.
Earlier this year, O'Key announced its intention to focus on the discount channel as its prime growth area.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.
