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DA! could list once it turns profitable: ceo
Posted on Tuesday, 15 May 2018 09:10
Russian food retailer O’Key Group may take DA! public once the discount arm turns a profit, chief executive (ceo) Miodrag Borojevic told Reuters in an interview.
Borojevic hinted expansion and investment is the name of the game for the overall group, which has been unwinding its supermarkets business in order to focus on its other operations.
The ceo told Reuters the moment Da! Records black ink at its bottom line is the point where O’Key would consider an initial public offering.
Borojevic stressed the company will first see what options would be the best way to go forward but “in one or other way we will not stop with the expansion” of discount chain.
He added the format is close to breaking even and is expected to record profit in the next 12 to 18 months.
No further information regarding the potential listing was mentioned in the article by Reuters.
O’Key claims to be the seventh-largest food retailer in Russia by revenue, with its compact hypermarkets arm operating under the O’Key brand, which first opened doors in 2002.
The group had a total of 145 stores, comprising 73 hypermarkets and 67 discounted sites, and four distribution centres at the end of December 2017, down from 164 locations in 2016.
Last year O’Key sold its supermarket arm, consisting of 32 outlets, to X5 Retail as part of a transformation to revamp its focus on the other two segments to realise growth.
The group is in the process of refurbishing the remaining five sites not included in the deal into compact hypermarkets.
In the annual report for 2017, O’Key said: “In 2018, we intend to continue with the accelerated expansion of discounters in Moscow and surrounding regions and plan to open up to 30 DA! stores.”
This move, which brings with it increased volumes, will allow the company to negotiate better prices from suppliers and in turn improve commercial margins.
DA! had net revenue of RUB 10.28 billion (USD 166.01 million) in the financial year ended 31st December 2017, compared to RUB 5.67 billion in FY 2016.
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