Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Russian retailer X5 expands in Siberia as investment drive continues

Stock Markets Aug 02, 2022 08:15AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: Igor Shekhterman, Chief Executive Officer of Х5 Retail Group, delivers a speech during a ceremony as Х5 Retail Group starts trading on Moscow Exchange in the city of Moscow, Russia February 1, 2018. REUTERS/Sergei Karpukhin/

MOSCOW (Reuters) -Russian retailer X5 Group is stepping up an investment drive with plans to buy controlling stakes in two Siberian companies, open hundreds of new stores of its discount chain Chizhik and cut the price of many food staples.

Russia's leading food retailer said on Tuesday it had launched strategic partnerships with retailers Krasny Yar and Slata in eastern Siberia, significantly expanding its footprint in the region. The deal, subject to regulatory approval, would see X5 acquire 70% in each firm.

It gave no indication of what it was paying for the purchases but said it would continue looking for acquisition opportunities.

X5 chief Igor Shekhterman said the company had made price investments into basic staples to offset inflation, which soared after Russia sent tens of thousands of troops into Ukraine on Feb. 24.

Last month the retailer said Russian shoppers were switching to cheaper food items because of a drop in real disposable income, with its discount chain Chizhik seeing significant growth in sales.

Shekhterman earmarked Chizhik as a particular target for development, planning more than 400 new store openings this year, and said he wanted the network to become accessible to many Russians as soon as possible, after a 30-fold increase in Chizhik's first-half revenue year-on-year.

"(Chizhik) performs a social function that is relevant for today - raising the quality of life for the population through providing affordable, quality food at low prices," he said in a statement.

X5 also reported a near 80% jump in second-quarter net profit to 26.8 billion roubles ($447 million) on revenue up 18.6% year-on-year to 648.0 billion roubles.

Adjusted earnings before interest, tax, depreciation and amortisation increased 26.9% to 91 billion roubles.

The company anticipated margins stabilising at lower levels in the second half of the year, helped by strong profitability this quarter and as the group develops its private labels and diversifies its supplier base.

Western sanctions against Moscow over its actions in Ukraine have hit the Russian economy, particularly its financial sector and imports, which have slowed markedly.

"The group is not subject to any sanctions or restrictions at the moment, but is likely to encounter challenges due to sanctions on (the) financial system and certain imports into Russia," X5 said.

The company's Moscow-listed depositary receipts were 0.3% lower as of 1113 GMT, outperforming the wider market.

($1 = 60.0000 roubles)

Russian retailer X5 expands in Siberia as investment drive continues
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email