M.video reports 58% increase in net profit in the first half of 2012.

29.08.2012 09:30

Moscow, August 29, 2012. OJSC “Company “M.video” (“M.video” or the “Group”), Russia's largest consumer electronics retailer (RTS-MICEX: MVID), releases today its condensed consolidated unaudited financial information prepared in accordance with International Financial Reporting Standards (IFRS) for the half year ended 30 June 2012.

M.video sales increased by 26% to 69 billion Russian rubles (RUB) with VAT in H1 2012. Growth in revenue was achieved due to the opening of the new stores as well as due to increased like-for-like stores sales of 16.3% and Internet sales growth of 71% in H1 2012.

The Group’s gross profit increased by 24% and amounted to 14.4 billion RUB. M.video’s gross profit % amounted to 24.6% in H1 2012 as compared to 25.0% in H1 2011. In 2012 the Group has changed presentation of its consolidated financial statements with respect to classification of transportation expenses associated with moving merchandise inventories from central distribution warehouses to the Group’s retail stores and presented them as part of Cost of Sales. In prior periods the Group reported these expenses within Selling, General and Administrative expenses.

M.video’s operating profit (EBIT) reached 1.5 billion RUB in H1 2012 (1.14 billion in H1 2011) with the EBIT margin amounted to 2.6% (2.5% in H1 2011).

The Group’s EBITDA improved to 2.5 billion RUB versus 1.9 billion in H1 2011 while an EBITDA margin increased to 4.3% in H1 2012 (H1 2011 – 4.1%).

M.video net profit for H1 2012 increased by 58% to 1.2 billion RUB as compared to 766 million RUB in H1 2011.

Alexander Tynkovan, President and CEO of OJSC “Company “M.video”, commented: “M.video demonstrated excellent financial performance. We again achieved great sales results and managed to obtain higher efficiency of operations reaching significant growth of our  profitability”.

He added: “We are also pleased to reiterate our ambitious expansion targets for this year and to continue with our regional based Internet sites opening as well as at least 35 new retail stores by the year end 2012”.

 

M.video key financial results for the H1 2012 based on condensed consolidated financial information*:

In millions of Russian rubles

H1 2012

H1 2011

y-o-y, %

Sales (with VAT)

69,140

54,872

26%

 

Net revenue

58,593

46,502

26%

Gross profit**

14,434

11,627

24%

As % of net revenue

24.6

25

(0.4)%

Operating expenses(1)

12,926

10,486

23%

As % of net revenue

22

22.5

(0.5)%

Operating profit (EBIT)

1,508

1,141

32%

As % of net revenue

2.6

2.5

0.1%

EBITDA

2,517

1,906

32%

As % of net revenue

4.3

4.1

0.2%

Net profit

1,208

766

58%

As % of net revenue

2

1.6

0.4%

* All key financial indicators are calculated without 18% VAT (value added tax) unless mentioned otherwise.

** In 2012 the Group has changed presentation of its consolidated financial statements with respect to classification of transportation expenses associated with moving merchandise inventories from central distribution warehouses to the Group’s retail stores and presented them as part of Cost of Sales. In prior periods the Group reported these expenses within Selling, General and Administrative expenses.


(1)The operating expenses include selling, general and administrative expenses (SGA), other operating income and other operating expenses.