OAO Magnit (MGNT), Russia’s largest retailer, increased its 2013 profitability target and said sales growth will be at the top end of a forecast range.
Earnings before interest, taxes, depreciation and amortization as a percentage of sales will be “in line” with the previous year’s 10.6 percent, Krasnodar, southern Russia-based Magnit said today in a statement. The retailer had previously forecast a margin of 9.7 percent to 10 percent.
Magnit, run and owned by billionaire Sergey Galitskiy, has the highest Ebitda margin among publicly traded peers globally, according to Sberbank CIB. The margin in the first half of 2013 was 10.1 percent of sales.
“The new guidance shows management’s confidence that the company will continue its strong performance and accelerate it in the fourth quarter,” Natalia Kolupaeva, an analyst at ZAO Raiffeisenbank in Moscow, said by phone.
Sales this year will rise 29 percent to 30 percent, Magnit said today, compared with previous guidance of 27 percent to 30 percent. For 2014, the retailer forecast revenue growth of 25 percent, in line with analysts’ estimates compiled by Bloomberg.
Magnit also said it plans capital spending of $1.7 billion to $1.8 billion next year, at least as much as in 2013. It plans to open 1,000 convenience stores, 80 hypermarkets and 350 cosmetics outlets next year.
Magnit fell 1.4 percent to $62 at 9:51 a.m. in London, where the stock is traded. The company overtook X5 Retail Group NV (FIVE) in March as Russia’s largest retailer by sales. Its market value has increased by 54 percent this year to $29.3 billion.
To contact the reporter on this story: Ilya Khrennikov in Moscow at email@example.com