Report on Review of Interim Financial Information
PJSC Magnit and its subsidiaries
for the six-month period ended 30 June 2024
August 2024
Report on Review of Interim Financial Information of
PJSC Magnit and its subsidiaries
Contents | Page |
Report on Review of Interim Financial Information | 3 |
Appendices | |
Statement of management's responsibilities for the preparation and | |
approval of the interim condensed consolidated financial statements | |
for the six-month period ended 30 June 2024 | 5 |
Interim condensed consolidated statement of financial position | 6 |
Interim condensed consolidated statement of profit and | |
loss and other comprehensive income | 7 |
Interim condensed consolidated statement of cash flows | 8 |
Interim condensed consolidated statement of changes in equity | 9 |
Selected notes to the interim condensed consolidated financial statements | |
Corporate information | 10 |
Basis of preparation of the financial statements | 11 |
Changes in accounting policies | 12 |
Significant accounting judgments and estimates | 13 |
Balances and transactions with related parties | 16 |
Business combination | 17 |
Property, plant and equipment | 20 |
Lease | 21 |
Intangible assets | 23 |
Goodwill | 24 |
Other long-term and short-term financial assets | 24 |
Inventories | 25 |
Long-term receivables, short-term trade and other receivables | 25 |
Advances paid | 26 |
Cash and cash equivalents | 26 |
Share capital, share premium and treasury shares | 27 |
Dividends declared | 28 |
Short-term trade and other payables | 28 |
Taxes payable, excluded income tax | 29 |
Loans and borrowings | 29 |
Government grants | 30 |
Short-term contract liabilities | 30 |
Revenue from contracts with customers | 30 |
Cost of sales | 31 |
Selling, general and administrative expenses | 31 |
Finance costs | 32 |
Interest income | 32 |
Other income | 32 |
Other expenses | 33 |
Income tax | 33 |
Earnings per share | 33 |
Share-based payments | 34 |
Contingencies, commitments and operating risks | 34 |
Financial risk management objectives and policies | 36 |
Subsequent events | 38 |
2
PJSC Magnit and its subsidiaries
Interim condensed consolidated statement of financial position
as at 30 June 2024
(in thousands of Russian rubles)
30 June | 31 December | ||
Notes | 2024 | 2023 | |
(unaudited) | (audited) | ||
Assets | |||
Non-current assets | |||
Property, plant and equipment | 7 | 388,390,665 | 367,049,986 |
Advances paid for the purchase and construction of property, | |||
plant and equipment | 8,585,212 | 1,360,729 | |
Right-of-use assets | 8 | 446,892,313 | 421,347,372 |
Intangible assets | 9 | 14,880,891 | 14,528,192 |
Goodwill | 10 | 102,794,422 | 73,552,409 |
Long-term receivables | 13 | 210,883 | 250,193 |
Other long-term financial assets | 11 | 973,656 | 980,759 |
Deferred tax assets | 4,553,930 | 3,677,242 | |
Other non-current assets | 8 | 2,234,657 | 2,370,980 |
969,516,629 | 885,117,862 | ||
Current assets | |||
Inventories | 12 | 243,309,168 | 233,692,709 |
Trade and other receivables | 13 | 17,330,693 | 12,843,948 |
Advances paid | 14 | 52,282,394 | 56,595,905 |
Taxes receivable, excluding income tax | 1,479,069 | 1,210,412 | |
Other short-term financial assets | 11 | 710,881 | 16,695,642 |
Advances on income tax | 349,856 | 2,100,896 | |
Cash and cash equivalents | 15 | 113,232,665 | 221,285,893 |
428,694,726 | 544,425,405 | ||
Total assets | 1,398,211,355 | 1,429,543,267 | |
Equity and liabilities | |||
Equity | |||
Share capital | 16 | 1,020 | 1,020 |
Share premium | 16 | 87,230,416 | 87,230,416 |
Treasury shares | 16 | (93,326,777) | (93,274,746) |
Share-based payments reserve | 32 | 1,523,529 | 1,269,344 |
Foreign currency translation reserve | 218,461 | 79,245 | |
Retained earnings | 151,307,969 | 163,162,053 | |
Total equity attributable to the shareholders of the | |||
parent company | 146,954,618 | 158,467,332 | |
Non-controlling interests | 5,063,842 | - | |
Total equity | 152,018,460 | 158,467,332 | |
Non-current liabilities | |||
Long-term loans and borrowings | 20 | 147,920,844 | 280,940,450 |
Long-term lease liabilities | 8 | 458,842,294 | 429,537,893 |
Long-term contract liabilities | 1,271,832 | 1,309,729 | |
Long-term government grants | 21 | 2,078,218 | 2,143,163 |
Deferred tax liabilities | 982,476 | 2,112,697 | |
611,095,664 | 716,043,932 | ||
Current liabilities | |||
Trade and other payables | 18 | 290,637,384 | 300,292,380 |
Taxes payable, excluding income tax | 19 | 26,976,117 | 30,365,965 |
Income tax payable | 2,574,738 | 4,527,157 | |
Dividends payable | 17 | 28,220,387 | 27,971,772 |
Short-term advances received | 796,391 | 838,867 | |
Contract liabilities | 22 | 5,194,912 | 6,529,542 |
Short-term government grants | 21 | 396,108 | 424,716 |
Short-term loans and borrowings | 20 | 186,349,674 | 121,194,890 |
Short-term lease liabilities | 8 | 64,709,507 | 62,886,714 |
Other liabilities | 6 | 29,242,013 | - |
635,097,231 | 555,032,003 | ||
Total liabilities | 1,246,192,895 | 1,271,075,935 | |
Total equity and liabilities | 1,398,211,355 | 1,429,543,267 | |
The accompanying notes on pages 10-38 are an integral part of these interim condensed | |
consolidated financial statements. | 6 |
PJSC Magnit and its subsidiaries
Interim condensed consolidated statement of profit and loss and
other comprehensive income
for the six months ended 30 June 2024
(in thousands of Russian rubles)
For the six months ended 30 June | |||
Notes | 2024 | 2023 | |
(unaudited) | (unaudited) | ||
Revenue | 23 | 1,460,058,332 | 1,229,455,981 |
Cost of sales | 24 | (1,131,487,720) | (948,934,910) |
Gross profit | 328,570,612 | 280,521,071 | |
Rental and sublease income | 2,520,569 | 2,481,896 | |
Selling, general and administrative expenses | 25 | (279,489,281) | (227,167,640) |
Other income | 28 | 15,517,533 | 12,174,408 |
Other expenses | 29 | (735,146) | (913,717) |
Operating profit | 66,384,287 | 67,096,018 | |
Interest income | 27 | 9,090,750 | 11,110,233 |
Finance costs | 26 | (46,476,957) | (41,371,266) |
Foreign exchange (loss)/gain | (4,969,633) | 6,136,934 | |
Profit before income tax | 24,028,447 | 42,971,919 | |
Income tax expense | 30 | (6,574,210) | (8,955,998) |
Profit for the period
Profit for the period Attributable to: Shareholders of the parent Non-controllinginterests
17,454,237 34,015,921
16,748,38234,015,921
705,855-
17,454,237 34,015,921
Earnings per share (in RUB per share) | |||
- Basic profit for the period attributable to the shareholders | |||
of the parent | 31 | 246.84 | 346.77 |
- Diluted profit for the period attributable to the shareholders | |||
of the parent | 31 | 245.27 | 344.78 |
Other comprehensive income | |||
Amounts of other comprehensive income that may be reclassified | |||
to profit or loss in subsequent periods (net of taxes) | |||
Exchange differences on translation functional currency in | |||
presentation currency | 139,216 | 5,493 | |
Other comprehensive income, net of tax | 139,216 | 5,493 | |
Total comprehensive income, net of tax | |||
Attributable to: | |||
Shareholders of the parent | 16,887,598 | 34,021,414 | |
Non-controlling interests | 705,855 | - | |
17,593,453 | 34,021,414 | ||
The accompanying notes on pages 10-38 are an integral part of these interim condensed | |
consolidated financial statements. | 7 |
PJSC Magnit and its subsidiaries
Interim condensed consolidated statement of cash flows
for the six months ended 30 June 2024
(in thousands of Russian rubles)
For the six months ended 30 June | |||
Notes | 2024 | 2023 | |
(unaudited) | (unaudited) | ||
Cash flows from operating activities | |||
Profit before income tax | 24,028,447 | 42,971,919 | |
Adjustments for: | |||
Depreciation and impairment of property, plant and equipment and | |||
right-of-use assets | 7, 8, 25 | 65,855,440 | 62,474,416 |
Amortization and impairment of intangible assets | 9, 25 | 2,819,695 | 2,853,731 |
Loss from disposal of property, plant and equipment | 29 | 256,328 | 86,147 |
Loss from disposal of intangible assets | 9, 29 | 6,043 | 68,620 |
Income from the write-off of accounts payable | (25,474) | - | |
Changes in expected credit losses for receivables | 13, 25 | (14,166) | 5,807 |
Impairment and write-offs of advances paid and capital advances | 14, 25 | 147,106 | 266,394 |
Changes in expected credit losses on financial assets | 11 | 11,542 | (6,817) |
Expenses for inventories carried at net realizable value | 12 | 2,358,928 | 3,672,408 |
Share-based payments reserve | 32 | 1,285,994 | 291,334 |
Gain from cancellation of lease contracts | 8, 28 | (362,396) | (233,751) |
Income from government grants | 21 | (136,204) | (211,795) |
Foreign exchange loss/(gain) | 4,969,633 | (6,136,934) | |
Finance costs | 26 | 46,476,957 | 41,371,266 |
Interest income | 27 | (9,090,750) | (11,110,233) |
Cash flow used in operating activities before working capital | |||
changes | 138,587,123 | 136,362,512 | |
(Increase)/decrease in long-term receivables and short-term trade and | |||
other receivables | (3,281,565) | 8,279,342 | |
Decrease/(increase) in advances paid | 4,166,405 | (25,651,666) | |
(Decrease)/increase in advances received | (42,476) | 9,533 | |
Increase in taxes receivable | (268,657) | (199,077) | |
Increase in inventories | (5,552,630) | (2,952,475) | |
Decrease in trade and other payables | (16,127,737) | (42,891,699) | |
(Decrease)/increase in taxes payable, excluding income tax | (3,870,376) | 5,356,594 | |
(Decrease)/increase in contract liabilities | (1,320,805) | 1,868,802 | |
Cash generated from operations | 112,289,282 | 80,181,866 | |
Income tax paid | (8,461,558) | (12,876,878) | |
Interest paid | (46,215,348) | (41,305,383) | |
Interest received | 10,379,107 | 10,863,039 | |
Net cash from operating activities | 67,991,483 | 36,862,644 | |
Cash flows from investing activities | |||
Purchase of property, plant and equipment | (56,952,204) | (24,298,788) | |
Purchase of intangible assets | (4,000,084) | (2,394,886) | |
Proceeds from sale of property, plant and equipment | 355,279 | 181,347 | |
Acquisition of a subsidiary, net of cash acquired | 6 | 799,064 | - |
Loans provided* | (6,383,417) | - | |
Loans repaid* | 21,219,286 | 13,422 | |
Proceeds from government grants | 21 | 58,294 | 49,467 |
Net cash used in investing activities | (44,903,782) | (26,449,438) | |
Cash flows from financing activities | |||
Proceeds from loans and borrowings | 45,033,433 | 128,307,685 | |
Repayment of loans and borrowings | (113,826,936) | (132,331,075) | |
Dividends paid | 17 | (27,713,679) | - |
Acquisition of treasury shares | 16 | (52,031) | - |
Repayment of lease liabilities | 8 | (29,860,797) | (29,150,852) |
Net cash used in financing activities | (126,420,010) | (33,174,242) | |
Effect of foreign exchange differences on cash and cash equivalents | (4,720,919) | 7,303,077 | |
Net decrease in cash and cash equivalents | (108,053,228) | (15,457,959) | |
Cash and cash equivalents at the beginning of the period | 15 | 221,285,893 | 314,912,124 |
Cash and cash equivalents at the end of the period | 15 | 113,232,665 | 299,454,165 |
- The lines of the interim condensed consolidated statement of cash flows "Loans provided" and "Loans repaid" for the six months ended 30 June 2024 include amounts of long-term deposits over 3 months classified as other financial assets that were placed on deposit and repaid during the period.
The accompanying notes on pages 10-38 are an integral part of these interim condensed | |
consolidated financial statements. | 8 |
PJSC Magnit and its subsidiaries
Interim condensed consolidated statement of changes in equity
for the six months ended 30 June 2024
(in thousands of Russian rubles)
Attributable to shareholders of the parent | ||||||||||
Foreign | Equity | |||||||||
Provision for | currency | attributable to | Non- | |||||||
Share | Share | Treasury | share-based | translation | Retained | shareholders | controlling | Total | ||
Notes | capital | premium | shares | payments | reserve | earnings | of the parent | interests | capital | |
Balance at 1 January 2023 | ||||||||||
(audited) | 1,020 | 87,230,416 | (14,403,941) | 1,807,119 | 47,390 | 132,700,300 | 207,382,304 | - | 207,382,304 | |
Profit for the period | - | - | - | - | - | 34,015,921 | 34,015,921 | - | 34,015,921 | |
Other comprehensive income, | ||||||||||
net of taxes | - | - | - | - | 5,493 | - | 5,493 | - | 5,493 | |
Total comprehensive income | ||||||||||
for the period, net of taxes | - | - | - | - | 5,493 | 34,015,921 | 34,021,414 | - | 34,021,414 | |
Share-based payment expenses | 32 | - | - | - | 291,334 | - | - | 291,334 | - | 291,334 |
Transfer of rights to equity | ||||||||||
instruments for share-based | ||||||||||
payments | 32 | - | - | - | - | - | - | - | - | |
Cash payments | 32 | - | - | - | (1,053,573) | - | (244,076) | (1,297,649) | - | (1,297,649) |
Balance at 30 June 2023 | ||||||||||
(unaudited) | 1,020 | 87,230,416 | (14,403,941) | 1,044,880 | 52,883 | 166,472,145 | 240,397,403 | - | 240,397,403 | |
Balance at 1 January 2024 | ||||||||||
(audited) | 1,020 | 87,230,416 | (93,274,746) | 1,269,344 | 79,245 | 163,162,053 | 158,467,332 | - | 158,467,332 | |
Profit for the period | - | - | - | - | - | 16,748,382 | 16,748,382 | 705,855 | 17,454,237 | |
Other comprehensive income, | ||||||||||
net of taxes | - | - | - | - | 139,216 | - | 139,216 | - | 139,216 | |
Total comprehensive income | ||||||||||
for the period, net of taxes | - | - | - | - | 139,216 | 16,748,382 | 16,887,598 | 705,855 | 17,593,453 | |
Dividends declared | 17 | - | - | - | - | - | (27,962,294) | (27,962,294) | - | (27,962,294) |
Acquisition of treasury shares | 16 | - | - | (52,031) | - | - | - | (52,031) | - | (52,031) |
Share-based payment expenses | 32 | - | - | - | 1,285,994 | - | - | 1,285,994 | - | 1,285,994 |
Cash payments | 32 | - | - | - | (1,031,809) | - | (640,172) | (1,671,981) | - | (1,671,981) |
Acquisition of a business | 6 | - | - | - | - | - | - | - | 4,357,987 | 4,357,987 |
Balance at 30 June 2024 | ||||||||||
(unaudited) | 1,020 | 87,230,416 | (93,326,777) | 1,523,529 | 218,461 | 151,307,969 | 146,954,618 | 5,063,842 | 152,018,460 | |
The accompanying notes on pages 10-38 are an integral part of these interim condensed consolidated financial statements. | 9 |
PJSC Magnit and its subsidiaries
Selected notes to the interim condensed consolidated financial statements
for the six months ended 30 June 2024
(in thousands of Russian rubles)
Corporate information
Closed Joint Stock Company Magnit was incorporated in Krasnodar, the Russian Federation, in November 2003.
In January 2006, Magnit changed its legal form to Open Joint Stock Company Magnit.
There was no change in the principal activities or shareholders as a result of the change to an Open Joint Stock Company. In 2014 Magnit changed its legal name to Public Joint Stock Company (the Company or PJSC Magnit) in accordance with changes in legislation.
PJSC Magnit and its subsidiaries (the "Group") operate in the retail and distribution of consumer goods under the Magnit, DIXY, Samberi tradenames and others. The Group's retail operations are operated through convenience stores, cosmetic stores, supermarkets and other formats, and also through its own marketplace "Magnit Market".
The majority of the Group's operational activities are conducted in the Russian Federation. The principal operating office of the Group is situated at 15/5 Solnechnaya str., 350072, Krasnodar, the Russian Federation.
The principal activities, residency, and the effective ownership percentages of the Group's main subsidiaries are as follows:
Ownership | Ownership | |||
interest as at | interest as at | |||
30 June | 31 December | |||
Company name | Principal activity | Residency | 2024 | 2023 |
JSC Tander | Food and non-food retail and wholesale | Russian Federation | 100% | 100% |
LLC Retail Import | Import operations | Russian Federation | 100% | 100% |
LLC BestTorg | Food retail in Moscow and | |||
the Moscow region | Russian Federation | 100% | 100% | |
LLC Selta | Transportation services for the Group | Russian Federation | 100% | 100% |
LLC TK Zelenaya Liniya | Greenhouse complex | Russian Federation | 100% | 100% |
LLC Alkotrading | Other operations | Russian Federation | 100% | 100% |
LLC ITM | IT services | Russian Federation | 100% | 100% |
LLC Logistika | ||||
Alternativa | Import operations | Russian Federation | 100% | 100% |
LLC TD-holding | Production and processing of food for | |||
the Group | Russian Federation | 100% | 100% | |
LLC MagnitEnergo | Buyer of electric power for the Group | Russian Federation | 100% | 100% |
LLC Kuban Confectioner | Production of food for the Group | Russian Federation | 100% | 100% |
LLC Kuban Factory of | ||||
Bakery Products | Production of food for the Group | Russian Federation | 100% | 100% |
LLC Volshebnaya | Production of household chemicals for | |||
svezhest | the Group | Russian Federation | 100% | 100% |
LLC Zelen Yuga | Production of agricultural products for | |||
the Group | Russian Federation | 100% | 100% | |
LLC Moskva na Donu | Production of agricultural products for | |||
the Group | Russian Federation | 100% | 100% | |
LLC Magnit Pharma | Pharmaceutical license holder | Russian Federation | 100% | 100% |
LLC Magnit IT Lab | Innovative software product development | Russian Federation | 100% | 100% |
LLC Gastronom Media | Marketing services | Russian Federation | 100% | 100% |
10