OAO Magnit (MGNT), Russia’s largest food retailer by market value, may open more stores than previously intended in 2012 after reviewing summer revenue figures and said it plans as much as $1.8 billion in capital spending next year.
Magnit will probably spend $1.6 billion to $1.7 billion to open as many as 1,555 outlets this year, the retailer said today in a statement. That’s more than the $1.4 billion top end of a target the company reiterated in a presentation last month. Magnit said it boosted spending plans after analyzing results for July through the first half of September.
Billionaire Sergey Galitskiy’s retailer may open a net 1,000 convenience stores this year versus previous guidance of 800 stores, while the target for new cosmetics outlets was reduced to 500 from 550, the company said. Magnit said it plans to open 50 to 55 hypermarkets and Magnit Family stores in 2012, with as many as 60 next year. Capital expenditure in 2013 may be $1.6 billion to $1.8 billion.
“The company became more optimistic on convenience stores, sales growth and margin on earnings before interest, taxes, depreciation and amortization,” said Mikhail Terentiev, an analyst at Otkritie Capital in Moscow.
Sales may rise 30 to 32 percent this year, with an Ebitda margin of 9 percent to 9.5 percent, Magnit said today. The company had previously told analysts that sales would rise as much as 30 percent, with a margin of 8.5 percent to 9 percent, according to Terentiev.
Next year, the retailer plans to open a net 800 to 1,000 convenience stores, 55 to 60 hypermarkets and 500 cosmetics stores, according to the statement. The company said it may update its 2013 guidance in October or November after releasing third-quarter results.
Magnit had 5,309 stores at the end of last year, it said last month.
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