Magnit Company News - Profitability ahead of expectations
Today, Magnit reported 2Q 20 unaudited IFRS results that showed noticeable yoy growth in profitability, which was only partially expected by us and the Interfax consensus, mainly as the actual gross margin was ahead of expectations. Still, we consider the results to be only slightly positive as we question the sustainability of margins seen in 2Q 20 going forward and see some areas like working capital management as yet having a lot of room to improve. The company has reduced its 2020e store openings and capex guidance.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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