OREANDA-NEWS. On 15 April 2008 JSC “The Seventh Continent” announced 2007 audited financial results prepared in accordance with International Financial Reporting Standards (IFRS).

For the year 2007 net income of the Company increased 47% YoY and reached USD 99.2 mn., net income margin grew to 7.8%. EBITDA increased 36% and reached USD 145.1 mn., with EBITDA margin of 11.4%. Net sales grew 33% YoY and amounted USD 1 272.9 mn.

The Company’s net sales increased from USD 957.7 mn. in 2006 to USD 1 272.9 mn. Food and non-food sales accounted for 94% of total revenues, marketing rental and other revenues comprised 6% of total revenues. 33% growth in revenues was driven by the expansion of the Company’s store base and 17,8% LFL growth (in dollar terms).

Gross profit has increased 34% and reached USD 398.2 mn. Gross profit margin totaled 31.3% and improved compared to 31.1% in 2006. Improvement of the gross profit margin was achieved from increased scale of operations and better purchase conditions.

Selling, general and administrative expenses amounted USD 283.3 mn. and grew 31% compared to USD 216 mn. in 2006. S,G&A margin reached 22,3% and improved from 22,6% in 2006. The largest expense items are labour costs and operational leases.

Operating and financial income from banking activities stood for USD 82.3 mn., while operating and financial expenses from banking activities amounted USD 82.5 mn.[1]

The Company’s operating profit reached USD 113.5 mn. and increased 39%, operating profit margin improving from 8.5% in 2006 to 8.9% in 2007. EBITDA increased 36% and reached USD 145.1 mn. with the EBITDA margin increasing from 11.2% in 2006 to 11.4% in 2007.

Net income for 2007 grew to USD 99.2 mn. with net income margin reaching 7.8%.

Galina Ilyashenko, CEO of the Company:

“We are very positive on the last year results and the Company’s prospects. Once again the Company has achieved the highest results on profitability and efficiency among the leading Russian food retail players. Successful project of the 5-year bond issue in the amount of 7 bn. roubles has become the largest capital raise in the history of the Company.

Last year we have entered the Urals market, established strong base for further development on the key Moscow market as well as in the Russian regions. Enhancement of the hypermarket portfolio ensures our dynamic development as one of the leaders of this perspective format. During 2007 we continued our efforts on improving service, modernization of our premium supermarkets, development of the hypermarket format, optimization of the business processes through the implementation of modern operational technologies.

The announced financial results adequately present the positive dynamics of the Company’s development and support the efficiency of its business model.”

Net income of the JSC “The Seventh Continent” increased 47%, EBITDA increased 36% in 2007.