OREANDA-NEWS. June 06, 2011. OJSC Rosinter Restaurants Holding (Rosinter), the leading casual dining restaurants chain in Russia and CIS (RTS and MICEX ticker: ROST), announces its unaudited interim, reported the press-centre of Rosinter Restaurants.

1Q 2011 HIGHLIGHTS
Consolidated Net Revenue increased by 9.8% vs. 1Q 2010 to RUB 2,489 mln

Gross profit amounted to RUB 428.3 mln, for a gross margin of 17.2% vs. 23.4% in 1Q 2010

Operating losses amounted to RUB 95.4 mln vs. operating profit of RUB 156.5 mln in 1Q 2010

EBITDAamounted to RUB 7.2 mln vs. RUB 254.9 mln in 1Q 2010

Net loss (including impairments) amounted to RUB 146.4 mln vs. Net profit of RUB 22.3 mln in 1Q 2010

Net debt decreased by 1.0% to RUB 1,134 mln with Net debt/EBITDA of 1.4x

 Sergey Beshev, President and CEO, commented:
“The first quarter of 2011 was unusually challenging for Rosinter. With only 90 days of trading our operating performance was negatively affected by higher than expected food inflation, labor inflation and changes in social taxes, and utilities rates.

In 1Q 2011 our consolidated revenue increased by 9.8% as compared to the same period of 2010 and reached 2,489 million rubles. Sales in comparable stores increased by 6.4% driven by 4.9% traffic recovery and 1.5% average check growth. In the final months of 2010, we began to implement step-by-step price revisions which will allow us to support our sales and margins through passing the cost inflation on to the consumers. We are conducting this process very carefully to mitigate adverse effects on the traffic flow. To improve guests experience and the value-for-money perception we also continued to invest in quality of dishes and ingredients. The result of this approach has been shot-term margin compression, but we believe that this strategy would yield better market position and corporate performance in the long-run. In 1Q 2011 our gross profit margin decreased to 17.2% from 23.4% in 1Q 2010 due to increase of food and beverage cost and payroll and related taxes expenses which we could not pass to consumers in full. Gross profit reduction and increased start-up expenses, driven by the time-schedule of new corporate openings, had direct influence on our bottom-line results and in 1Q 2011 we posted net losses of 146.4 million rubles and EBITDA of 7.2 million rubles.

Our development program is on track. In the first quarter of 2011, on gross basis, we opened 16 new restaurants, including 6 corporate and 10 franchise outlets. Accounting for planned closures in January, our restaurant count grew from 362 to 374 outlets in the first quarter. In March, we opened two franchise outlets in Azerbaijan and widened our geographical coverage to 42 cities in 10 countries. In 2011 our development strategy focuses on selecting top-quality locations for the corporate network while keeping up our high pace of franchise expansion with wide geographical coverage. Currently, we have a full pipeline of corporate and franchise openings scheduled for this year at advanced stages of development.

Finally, we are pleased to report that in April and May we have seen an improvement of both operating margin and net profit as the measures taken at the end of 2010 and in first quarter of 2011 have began to show their desired effects. We maintain confidence in our brands, our great team and in the countries we operate in. We will use the market opportunities to implement our development strategy and further consolidate our competitive position.”