MOSCOW (Reuters) – Russian budget retailer Fix Price reported a surge in revenue and profit in 2022 as consumers across the country switched to discount stores amid sharply higher inflation and falling wages.
Inflation soared in Russia after Moscow sent troops into Ukraine last year and real wages fell as the economy suffered under heavy Western sanctions and the broader fallout of what the Kremlin calls its “special military operation” in Ukraine.
As their spending power declined, Russians have turned to discount stores and leading retailers X5 Group and Magnit expect to open hundreds more of their own low-cost shops in 2023.
Fix Price, which sells household and personal care products, said full-year revenue increased 20.5% year-on-year to 277.6 billion roubles ($3.68 billion), with operating profit climbing 27% to 41.1 billion roubles.
The company said its earnings before interest, tax, depreciation and amortisation (EBITDA) rose 22.7% to 54.2 billion roubles.
Fix Price, which raised around $2 billion in an initial public offering (IPO) in 2021, said its results showed it was capable of operating in challenging economic conditions.
It said its EBITDA margin of 19.5% was a record high that outperformed its IPO guidance.
“Although the macroeconomic environment remains tough in 2023, we are positive about what lies ahead,” CEO Dmitry Kirsanov said in a statement.
In 2022, capital expenditure grew as a percentage of revenue as Fix Price “pushed forward expansion of distribution centres’ space to capture better construction terms and benefit from the current market environment.”
($1 = 75.5000 roubles)
(Reporting by Alexander Marrow and Olga Popova; Editing by David Goodman and Susan Fenton)
