Dixy posts 1Q 2009 Net Loss of 789 million Roubles

Russian grocery retailer, Dixy, has posted a 1Q 2009 Net Loss of 789 million Roubles under IFRS.

The bottom line compares with a Net Profit of 166 million Roubles for 1Q 2008, with EBITDA falling 23% year on year to 472 million Roubles, on the back of 13.2 billion Roubles, up 19% year on year.

The result reflected the sharp downturn in the Russian economy over 4Q 2008 and 1Q 2009, with expenses rising 45% in Rouble terms, and an 840 million Rouble foreign exchange hit reflecting the decline of the Rouble against the U.S. dollar. With the company also increasing the number of stores by 26% to 495 in 1Q 2009, leasing costs – up by 47% year on year also played their part in the Loss.

Company President Ilya Yakubson also noted the 60% increase in distribution and administrative costs, as being an added factor, while looking for a turnaround in 3Q 2009.

“The result of the Q1 2009 operations is mainly due to the decreasing efficiency of the logistics function in Central Region, which, in combination, with a natural negative propensity of the purchasing power, has led to unsatisfactory levels of retail sales for the reporting period. Optimization of the logistics function, unification of the IT platforms and reduction in shrinkage, are our main priorities today. We expect to see an increase in store service levels and a reversal in sales growth dynamic starting from the third quarter of 2009.”