Magnit Company News - 1Q 20 revenue growth of 18.5% yoy above all expectations
Yesterday, Magnit reported strong 1Q 20 unaudited IFRS results that were ahead our expectations on revenue and EBITDA margin, while there was a small miss on the net income margin. The positive surprise in revenue growth was largely driven by strong LFL sales growth, which suggests that customers increasingly appreciate the companys new customer value proposition. The EBITDA margin was helped by the positive operating leverage effect and, to a certain extent, the companys initiatives to improve efficiency. The small net income margin miss was caused by higher than expected FX loss and an elevated effective tax rate. Magnit announced its plans to reduce the number of store openings and refurbishments planned for this year due to the COVID-19 situation without providing further details given the current uncertainties.Magnit is a holding company. Through its subsidiaries, Co. operates in the retail and distribution of consumer goods under the Magnit name. Co.'s retail operations are operated through convenience stores, cosmetic stores, hypermarkets and other. Most of its stores are located in the Southern, Central and Volga regions. Co. also operates stores in the North-Western, North-Caucasian, Urals and Siberian regions. As of Dec. 31 2014, Co.'s stores chain consisted of 9,711 stores: 8,344 convenience stores, 190 hypermarkets, 97 Magnit Family stores and 1,080 drogerie stores in 2,108 cities and towns throughout the Russian Federation.
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