OREANDA-NEWS. February 10, 2010. Magnit operating results for January 2010 show y-o-y growth in net retail revenue of over 25%. We link revenue growth to the company’s policy for business expansion in the promising next door convenience store segment. We are upbeat on the company’s January report and prospects for its development this year.

Retail chain Magnit disclosed its operating results for January 2010 in a press release today. Net retail revenue advanced 25.4% y-o-y to RUB 15.5 billion in ruble terms, with growth mainly driven by expansion of the company’s retail network: 19 stores were added in January. Before the start of February, Magnit operated 3,247 stores in total, including 24 hypermarkets, with the remainder being convenience stores. Total retail space reached 1.1 million sq m in the month, up 29% from the year earlier figure.

In our view, the posted growth in net retail revenue is not so important, as it is linked mainly to the increment in the company’s retail space. Although Magnit does not disclose LFL sales dynamics, we believe that they could show an extension of the downturn which started in 2009, primarily due to unsteady consumer demand and, in part, because of the aggressive new store openings by the retailer. That said, we are positive on the posted results and regard the company’s position in the segment for next door convenience shops as fairly strong. The retailer seeks to reinforce its market position further, having targeted investments of USD 1 billion for new store openings in 2010. We look upon the company’s development prospects this year with optimism.