X5 Retail Group NV, Russia’s second-largest retailer, posted a 34 percent gain in first-quarter profit as the country’s biggest grocers use their scale to keep prices down and win shoppers struggling to cope with soaring inflation.
Earnings before interest, taxes, depreciation and amortization rose to 13.1 billion rubles ($243 million), the Moscow-based company said Tuesday, compared with the 13 billion-ruble average estimate of four analysts compiled by Bloomberg.
Russia’s largest food retailers, including PJSC Magnit, X5 and OAO Dixy Group, each boosted first-quarter sales more than 25 percent as their size enabled them to negotiate better deals with suppliers than smaller chains and open markets. Job losses and the fastest inflation in 13 years are choking off consumption, which accounts for about half the economy.
X5, controlled by billionaire Mikhail Fridman and his partners, has risen more than 50 percent in London trading this year, recovering from January’s six-year low as the Russian ruble rebounded versus the dollar and euro. The stock was little changed at $18.25 as of 9:31 a.m.
X5’s Ebitda margin widened to 7.2 percent of sales in the first quarter from 6.8 percent a year earlier, the company said. Net income rose 67 percent to 4.1 billion rubles.