Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Pizza company DP Eurasia to stay in Russia, cannot give 2022 outlook

Published 04/05/2022, 05:06 AM
Updated 04/05/2022, 06:56 AM
© Reuters. FILE PHOTO: A staff member prepares pizzas at a Domino's Pizza restaurant in Moscow, Russia, July 14, 2017. REUTERS/Sergei Karpukhin

© Reuters. FILE PHOTO: A staff member prepares pizzas at a Domino's Pizza restaurant in Moscow, Russia, July 14, 2017. REUTERS/Sergei Karpukhin

By Anna Pruchnicka

(Reuters) - DP Eurasia, which runs the Domino's Pizza (NYSE:DPZ) brand in Turkey and Russia, said it plans to stay in Russia, but could not give an outlook for the full year because of uncertainties linked to the war in Ukraine and inflation.

As many international companies limit their exposure to Russia following the launch of what it describes as a "special military operation" on Feb. 24, DP Eurasia said last month it would limit further investment in the country.

However, CEO Aslan Saranga told Reuters on Tuesday the company planned to continue to operate in Russia and that it had a responsibility to stakeholders.

"We have franchisees over there, half of the stores, even if you want to close these stores, we cannot," he said.

The company said it could not give an outlook for 2022, citing uncertainties over the impact of the Ukraine conflict and high inflation in Turkey.

DP Eurasia, the largest pizza delivery company in Turkey and the third largest in Russia, has 188 stores in Russia and Saranga said it had not seen any major change in consumer demand since the start of the war in Ukraine.

It has about 3,000 employees in the country, compared to about 10,000 in Turkey, Saranga said.

The company's full-year adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) rose 58.5% to 208.4 million Turkish lira ($14.19 million), driven by a strong performance in Turkey and recovery in Russia.

It returned to a positive like-for-like growth rate of 9.6%, helping it to improve adjusted EBITDA by 907% in Russia.

Russia is its second-biggest market, representing 26% of its system sales, which comprise sales both from its own and franchised stores.

DP Eurasia, which also operates in Azerbaijan and Georgia, announced the launch of a new coffee shop and product brand, COFFY and has opened 11 stores in Turkey.

© Reuters. FILE PHOTO: A staff member prepares pizzas at a Domino's Pizza restaurant in Moscow, Russia, July 14, 2017. REUTERS/Sergei Karpukhin

Saranga said the company tested the format during the pandemic and added the coffee is 30%-40% cheaper than its competition.

"The launch of a new coffee shop brand, COFFY, in Turkey is an exciting development and allows DPEU to leverage its existing infrastructure," Liberum analysts wrote in a note.

Latest comments

Brave company that stays put and serves people food, despite the politics.
Let me tell you express my true feelings domino's and every business bees to just leave Russia now
Cancel Domino's
True
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.