Moscow, August 29, 2017 PRESS RELEASE
ROSINTER REPORTS 1H 2017 OPERATING AND UNAUDITED FINANCIAL RESULTS:REVENUE in accordance with IFRS AMOUNTED TO RUB 3,446 MLN
PJSC Rosinter Restaurants Holding (Rosinter), the leading casual dining restaurants chain in Russia and CIS (Moscow Exchange MICEX-RTS ticker: ROST), announced today its operating and financial results for 1H 2017 prepared in accordance with IFRS. This press release is available on www.rosinter.com.
1H 2017 FINANCIAL HIGHLIGHTS
- EBITDA[1] before impairment and write-offs increased to RUB 133 mln from RUB 65 mln in 1H 2016, EBITDA[1] margin before impairment and write-offs increased to 3.8% from 1.8% in 1H 2016
- Gross profit margin in 1H 2017 increased to 14.0% of total revenue from 11.3% in 1H 2016
- Profit from operating activities before impairment amounted to RUB 14 mln, as against RUB 27 mln of loss from operating activities for 1H 2016 as a result of improvement in operating performance in 1H 2017
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Consolidated revenue in accordance with IFRS amounted to RUB 3,446 mln
1H 2017 OPERATING HIGHLIGHTS
- Consolidated gross operating revenue[3] in 1H 2017 amounted to RUB 3,818 mln and decreased by 3.9% in comparison with 1H 2016
- The gross operating revenue[3] in the transport hubs amounted to RUB 1,499 mln and increased by 15.5% in comparison with 1H 2016
- The gross operating revenue of all comparable stores[4] in 1H 2017 amounted to 2,798 mln and increased by 3.0%
CONSOLIDATED GROSS OPERATING REVENUE[3] PERFORMANCE (RUB MLN) | ||||||||
Total | Transport hubs | Same-Store Sales Growth[4] | ||||||
1H 2017 | 1H 2016 | % chg | 1H 2017 | 1H 2016 | % chg | 1H 2017 | 1H 2016 | % chg |
3,818 | 3,973 | (3.9)% | 1,499 | 1,298 | 15.5% | 2,798 | 2,717 | 3.0% |
Sergey Zaytsev, President and Chief Executive Officer, commented:
"In the first half of 2017 Rosinter keeps demonstrating an improvement of its financial performance. The growth of EBITDA before impairment and write-offs amounted to 102% and the ratio achieved 133 million rubles. Revenue from comparable corporate restaurants shows a rise of 3% compared to the first half of 2016.
In order to improve business performance Rosinter continues to implement the chosen strategy of focused development, in which the company withdraws from unprofitable assets, renovates the key branded restaurants and realizes selective development in regions and in locations with high commercial potential.
Development in transportation hubs remains one of the main courses of the company's business. In the first half of 2017 consolidated operating revenue of the restaurants located in railway stations and airports showed growth of 15.5% compared to the corresponding period in 2016. Today Rosinter operates 35 restaurants and cafes at the airports of Moscow, St. Petersburg, Kazan, Nizhny Novgorod, and 17 stores at the railway stations of Moscow.
Long-term mutually beneficial cooperation with suppliers has enabled the company to reduce the food cost by 12.8% in the 1st half of 2017, while maintaining high quality of food and drinks for guests in restaurants.
As a result of effective actions profit from operating activities before impairment increased 2,5 times and amounted to 14 million rubles against a loss of 27 million rubles for the corresponding period in 2016.
In the first half of 2017, the company has raised additional long-term credit facilities from Bank VTB. New borrowings will be used for restructuring of the existing loan portfolio and enhancing growth of new restaurants' openings in the midterm".
Income Statement Summary
(RUB) thousands 6M 2017 6M 2016 % Change Y-o-YNet revenue | 3,446,221 | 100.0 % | 3,564,221 | 100.0 % | (3.3)% |
Incl. Revenue from restaurants | 3,329,523 | 96.6 % | 3,454,420 | 96.9 % | (3.6)% |
Incl. Revenue from franchising | 84,093 | 2.4 % | 76,228 | 2.1 % | 10.3 % |
Cost of sales | 2,963,790 | 86.0 % | 3,160,870 | 88.7 % | (6.2)% |
Incl. Food and beverages | 756,327 | 21.9 % | 867,720 | 24.3 % | (12.8)% |
Incl. Payroll and related taxes | 738,216 | 21.4 % | 804,555 | 22.6 % | (8.2)% |
Incl. Rent | 888,060 | 25.8 % | 883,770 | 24.8 % | 0.5 % |
Gross profit | 482,431 | 14.0 % | 403,351 | 11.3 % | 19.6 % |
SG&A Expenses | 433,071 | 12.6 % | 442,433 | 12.4 % | (2.1)% |
Start-up expenses for restaurants | 25,901 | 0.8 % | 30,347 | 0.9 % | (14.7)% |
Other gains | 18,270 | 0.5 % | 49,633 | 1.4 % | (63.2)% |
Other losses | 27,632 | 0.8 % | 7,510 | 0.2 % | 268.0 % |
Incl. Loss on disposal of non-current assets | 22,175 | 0.6 % | 2,242 | 0.1 % | 889.0 % |
Reversal of impairment of operating assets (12,159) (0.4)% (45,721) (1.3)% (73.4)%
Profit from operating activities after impairment 26,256 0.8 % 18,415 0.5 % 42.6 %Financial expenses, net 186,056 5.4 % 171,722 4.8 % 8.3 %
Foreign exchange loss, net (2,000) (0.1)% (62,979) (1.8)% (96.8)%
Share of profit of JV and associates - - 10,096 0.3 % (100.0)%
Loss before income tax (161,800) (4.7)% (206,190) (5.8)% (21.5)%Income tax benefit 26,704 0.8 % 18,009 0.5 % 48.3 %
Net loss (135,096) (3.9)% (188,181) (5.3)% (28.2)%Profit/(loss) from operating activities before impairment 14,097 0.4 % (27,306) (0.8)% (151.6)%
Depreciation and amortization 96,238 2.8 % 90,426 2.5 % 6.4 %
Loss on disposal of non-current assets | 22,175 0.6 % | 2,242 0.1 % | 889.0 % |
EBITDA before impairment and write-offs | 132,510 3.8 % | 65,362 1.8 % | 102.7 % |
Consolidated revenue for 1H 2017 amounted to RUB 3,446 mln. Corporate restaurants revenue amounted to RUB 3,330 mln and decreased by 3.6% compared to 1H 2016, mainly driven by restaurants portfolio optimization. Gross revenue of comparable restaurants increased by 3.0% compared to 1H 2016. Revenue decreased by 12.2% in comparison with 1H 2016 due to exit from unprofitable locations. Increase of revenue of new restaurants by 6.3% partly compensated this effect.
Gross profit margin increased to 14.0% in 1H 2017 from 11.3% in 1H 2016, mainly driven by decrease in food and beverages cost, measured as a percentage of total revenue.
Food and beverages decreased by 240 basis points as a result of long-term oriented, flexible relationships with suppliers and reaching mutually beneficial co-operation, such as implementing of prospective payment system, this item measured as a percentage of sales.
Selling, general and administrative expenses decreased by RUB 9 mln driven mainly by actions implemented by management to improve efficiency.
Start-up expenses for restaurants have not significantly changed in 1H 2017 compared to 1H 2016. Decrease in start-up expenses for restaurants amounted to 10 basis points compared to 1H 2016, measured as a percentage of revenue.
Other gains decreased by 90 basis points as a percentage of total revenue due to the profit from sale of the share in joint venture in the Great Britain in 1H 2016.
Reversal of the loss from impairment of operating assets decreased to 0.4% of revenue for 1H 2017 compared to 1.3% for 1H 2016. Operational performance of some restaurants for 1H 2017 was better than expected and it resulted in reverse of the impairment recognized in the previous periods.
The increase of net financial expenses by 60 basis points was driven by attraction of new credit facilities, this item measured as a percentage of sales.
Forex loss amounted to RUB 2 mln in 1H 2017 compared to RUB 63 mln in 1H 2016, as a result of dynamics of RUB exchange rate to other currencies in 2017 and changing of currency of some existed liabilities into Russian Roubles.
Net Loss for 1H 2017 decreased in comparison with the corresponding period and amounted to RUB 135 instead of loss in amount of RUB 188 mln in 1H 2016. As a result, net loss margin stood at 3.9% in 1H 2017 compared to net loss margin of 5.3% in 1H 2016.
EBITDA[1] before impairment and write-offs amounted to RUB 133 mln in 1H 2017. EBITDA[1] margin before impairment and write-offs amounted to 3.8% in 1H 2017, that is 200 basis points increase from 1.8% in 1H 2016, item measured as percentage of sales.
Cash Flow Performance
(RUB) thousands 6M 2017 6M 2016 % ChangeY-o-YNet cash flow (used in)/generated from operating activities | (243,328) | 81,316 | (399.2)% |
Incl. Cash flow before changes in operating assets and liabilities | 113,499 | 33,001 | 243.9 % |
Incl. Changes in operating assets and liabilities | (194,270) | 202,117 | (196.1)% |
Incl. Financial and tax cash outflow | (162,557) | (153,802) | 5.7 % |
Net cash flow used in investing activities | (397,751) | (88,963) | 347.1 % |
Net cash flow from financing activities | 631,932 | 9,444 | 6591.4 % |
Effect of exchange rates on cash and cash equivalents | (48) | (1,479) | (96.8)% |
Net (decrease)/increase in cash and cash equivalents | (9,195) | 318 | (2993.8)% |
Cash & Cash equivalents at beginning of period | 113,421 | 101,596 | 11.6 % |
Cash & Cash equivalents at end of period | 104,226 | 101,914 | 2.3 % |
Net cash outflow from operating activities amounted of RUB 243 mln in 1H 2017 as a result of higher interest payments and decrease in working capital.
Net cash outflow used in investing activities amounted to RUB 398 mln in 1H 2017 from net cash outflow of RUB 89 mln in 1H 2016, mainly due to increase in restaurants openings and investments to non-current assets.
Net cash flow from financing activities increased to RUB 632 mln in 1H 2017 from RUB 9 mln in 1H 2016 due to receiving of additional credit facilities under new long-term credit agreements entered in 1H 2017.