Rosinter Restaurants goes into red, posting 1H 2011 net loss of 321.5 million roubles
The bottom line nosedived from a 111-million-rouble net profit in 1H 2010, with 1H EBITDA also going down to minus 57.2 million roubles from 490.9 million roubles posted a year earlier, despite revenues increasing 8% year-on-year to 5.1 billion roubles.
Hugh Carroll, acting president and CEO at Rosinter was, however, quite optimistic about the results, saying international reporting standards to create reserves for impairment was the major reason for the negative net result and EBITDA.
“In first half of 2011 consolidated revenue of Rosinter increased by 8.0% as compared to the same period of prior year and amounted to 5,069 million roubles. This was driven by 4.3% growth of sales in comparable stores and an increased contribution of recently opened restaurants. Some store sales growth was influenced by price increases. Our new pricing policy and cost control actions resulted in a reduction of food and beverage, payroll and SG&A expenses in 2Q 2011 as compared to the first quarter of the year. Gross profit margin increased to 18.6% in the second quarter as compared to 17.2% in the first quarter of 2011. At the same time a number of restaurants were still performing below expectations and, in accordance with IFRS regulations, we accrued a one-off provision for impairment of their assets in the amount of 191 million roubles. This resulted in EBITDA contraction and net losses of 321 million roubles in the first half of the year.”
Carroll also noted Rosinter´s increased presence across Russia, saying the Company will be expanding further in the future, and promised to introduce new options for its clients in 2011, which are expected to help the company recover its performance.
“During first half of 2011 we opened 25 new restaurants, including 11 corporate and 14 franchised. Total restaurant count increased to 378 from 362 stores reflecting planned closure of nine outlets. In 2011, we also expanded our geographical coverage to Azerbaijan and Irkutsk, and Rosinter restaurants now operate in 43 cities in 10 countries. Going forward we will continue our strategy of selecting top-quality locations for the corporate network while keeping up our pace of franchise expansion with wide geographical coverage.“Our efforts will focus on core brands revitalization, optimizing organizational processes and delivering high quality guest experiences. By year end we will introduce new seasonal promo menus with active advertising campaigns that would support traffic recovery and allow us to benefit on market opportunities,”