Russian retailer O’Key revenue rises 12.7% in 2011

26 April 2012 (Last Updated April 26th, 2012 02:00)

Russia-based food retailer O'Key has posted a 12.7% increase in total revenue to RUB93.13bn ($3.17bn) in the year ended 31 December 2011, compared to RUB82.66bn ($2.81bn) in the previous year.

Russia-based food retailer O'Key has posted a 12.7% increase in total revenue to RUB93.13bn ($3.17bn) in the year ended 31 December 2011, compared to RUB82.66bn ($2.81bn) in the previous year.

Revenue growth was driven by an increase in selling space and in like-for-like (LFL) revenue growth.

On an annual basis, LFL revenue advanced 5.3% in 2011, with a 5.5% gain in LFL basket being driven primarily by increased inflation.

Net profit grew 20.7% to RUB3.2bn ($109.12m), while earnings before interest, taxes, depreciation and amortization (EBITDA) jumped 5.4% to RUB7.5bn ($255.76m).

General, selling and administrative expenses rose 26.9% to RUB12.40bn ($422.86m) in 2011, mainly due to the growth in the group's operations and increased costs related to personnel, utilities and leases.

As a percentage of revenue, general, selling and administrative expenses grew 1.9 percentage points to 16.9% for the year ended 31 December 2011.

Personnel costs advanced 25.9% to RUB7.54bn ($257.12m), reflecting the increased staffing requirements required for the 14 stores O'Key opened in 2011.

Net other operating income and expenses resulted in a loss of RUB142.6m ($4.86m) in 2011, compared to a loss of RUB121.7m ($4.15m) in 2010.

O'Key chief executive Patrick Longuet said despite the challenges faced in 2011, the company reaffirms its long-term targets.

"We aim to expand our hypermarket network organically at an annual rate of 30%, and we are also expanding our land bank to ensure we complete our planned store openings over the next two years," Longuet said.

"Our long-term profitability target remains at over 8% on the EBITDA line and as we continue to develop our range of quality products we will ensure that our prices remain very attractive in the market."

As of 31 December 2011, O'Key operated 71 stores in 17 cities across Russia, comprising 42 hypermarkets and 29 supermarkets, with an aggregate trading space of 308,000m² and 38,000m² respectively.

The grocer primary retail format is the modern Western European hypermarket under the 'O'Key' brand, complemented by 'O'Key - Express' supermarkets.