Discount retailer Fix Price's revenue surges as Russians rein in spending

Fix Price

27/02/2023 08:24

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      This content was produced in Russia where the law
restricts
coverage of Russian military operations in Ukraine
    

  
       MOSCOW, Feb 27 (Reuters) - Russian budget retailer Fix
Price  FIXPDR.MM  reported a surge in revenue and profit in 2022
as consumers across the country switched to discount stores amid
sharply higher inflation and falling wages.
    Inflation soared in Russia after Moscow sent troops into
Ukraine last year and real wages fell as the economy suffered
under heavy Western sanctions and the broader fallout of what
the Kremlin calls its "special military operation" in Ukraine.
    As their spending power declined, Russians have turned to
discount stores and leading retailers X5 Group  FIVEDR.MM  and
Magnit  MGNT.MM  expect to open hundreds more of their own
low-cost shops in 2023.
    Fix Price, which sells household and personal care products,
said full-year revenue increased 20.5% year-on-year to 277.6
billion roubles ($3.68 billion), with operating profit climbing
27% to 41.1 billion roubles. 
    The company said its earnings before interest, tax,
depreciation and amortisation (EBITDA) rose 22.7% to 54.2
billion roubles. 
    Fix Price, which raised around $2 billion in an initial
public offering (IPO) in 2021, said its results showed it was
capable of operating in challenging economic conditions. 
    It said its EBITDA margin of 19.5% was a record high that
outperformed its IPO guidance. 
    "Although the macroeconomic environment remains tough in
2023, we are positive about what lies ahead," CEO Dmitry
Kirsanov said in a statement.  
    In 2022, capital expenditure grew as a percentage of revenue
as Fix Price "pushed forward expansion of distribution centres'
space to capture better construction terms and benefit from the
current market environment."
        
($1 = 75.5000 roubles)

 (Reporting by Alexander Marrow and Olga Popova
Editing by David Goodman and Susan Fenton)
 ((alexander.marrow@thomsonreuters.com))