Russian retail group Lenta has said that its first half sales rose 16.7% to RUB 163.5 billion. Like for like sales were down 1.8%.
The group posted an adjusted EBITDA of RUB 15.6 billion for the half year ending 30 June 2017, an increase of 14.2% year on year.
Gross margin (21.7%) was down slightly, however, as improvements to supplier terms and the retailer's supply chain were offset by investment in prices, as well as new trade law expenses.
"Lenta’s results demonstrate the Company’s ability to combine strong profitability with rapid growth despite the challenging macro and consumer environment," said chief executive Jan Dunning. "We adapted well to recent regulatory changes and managed to achieve an improvement of underlying profitability and cash generation, excluding the one-off effects of the new Trade Law."
Capital expenditure stood as RUB 10.0 billion, which is a decrease of 38.3% due to lower investments in land acquisition and hypermarket construction.
Four new Lenta hypermarkets and 11 supermarkets opened during the first half of 2017. Lenta now operates a total of 254 stores, comprising 195 hypermarkets and 59 supermarkets.
Dunning added that the group has "made good progress in developing our organic pipeline and also signed an agreement to lease 14 former ‘Nash’ hypermarkets, including seven hypermarkets in Moscow.
"This will significantly strengthen our position in the strategic Moscow market and is complimentary to our expansion in other regions."
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up for ESM: The European Supermarket Magazine.