"Magnet" attracted billions

The retailer took a large loan to expand business in the regions.
Krasnodar company "Thunder", which owns one of the largest in Russia chains of stores "Magnet", took a loan in Rosbank - 11.5 billion rubles. The money will be provided to the retailer in the form of tranches for a period of one year at a rate of no more than 30% per annum. These funds, according to analysts, the company can use both to refinance current operations and debt, and to expand its presence in the regions and upgrade the store network in the face of unfavorable financial results of Magnit's activities in the last year.

JSC "Thunder" has renewed a credit line in Rosbank for the amount of 11.5 billion rubles. Information about this is published on the Internet resource of the Center for the Development of Corporate Information. The guarantor of the transaction was PJSC "Magnit". According to the company, the loan is provided for a year in the form of separate tranches. The interest rate for the use of each tranche is agreed by the lender and the borrower in addition, but may not exceed 30% per annum. It is reported that the size of the transaction is 10% of the book value of the issuer's assets - 113.9 billion rubles.

The head of the department of stock market experts BCS Broker Vasily Karpunin expressed the opinion that the amount of 11.5 billion rubles. although a large, but not significant enough for such a large player in the retail market. "This amount of funds could be used to refinance current activities and company's debts," the expert suggested.

At the same time, Finam analyst Alexei Korenev believes that the need for Magnit in borrowed funds is dictated mainly by the need to finance a business expansion program in the regions, the construction of own agro-industrial and logistics complexes, the modernization of existing stores and the optimization of the management structure. "The recent trend has been the active expansion of the presence of federal food retailers in the regions where they actively buy up local networks, including them in their production and management structure. Currently, the country's seven largest food retailers control more than a quarter of the entire market. And their expansion is actively continuing, "- said the analyst.

So, according to Mr. Korenev, Magnit bought in particular the largest shopping chain Holiday in 500 stores in Siberia (22 more stores of this network went to Lente), and also built the largest in the country's Krasnodar Region, a growing complex and processing of mushrooms and a large production and logistics cluster, investments in which until 2021 should be 40 billion rubles. In November and December 2017, Magnit conducted an additional placement of its shares (SPO) in two stages, which allowed the retailer to raise about 45.5 billion rubles. However, such a rapid expansion of business and the need to renovate the acquired stores and incorporate them into a single logistics and management structure significantly affected the company's financial performance.

Earlier, Kommersant reported that Magnit's revenue growth for 2017 compared to 2016 was only 6.37% (to 1.143 trillion rubles), instead of the projected 8-10%, showing the lowest growth rates in the company's history . In addition, following the results of 2017, Magnit reduced by 3.37% comparable sales, EBITDA decreased by 14.86% (to 91.775 billion rubles), while net profit fell by 34.7% (to 35.53 billion rubles). The management of the company informed investors that in 2018 they could not receive dividends for the first time since 2011. At the same time, by the end of 2018, Magnit expects revenue growth of 7-9% and a yield in the second half of the year at comparable sales.

According to the company, in 2018, "Magnit" plans to open about 2220 stores (1500 in the format "at home", 700 cosmetics and 20 stores "Magnet Family"). Refresh plans are not less than 1200 stores. Capital expenditures of the company will amount to 55 billion rubles. against 90 billion in 2016.

"Obviously, such a large-scale investment in the expansion and modernization of the network should ultimately benefit and positively impact the company's operating and financial performance. However, the situation in many respects will depend on how quickly "Magnit" will be able to renovate and start all the assets acquired in the past year and put into operation the assets being built. The most logical solution for replenishment of funds aimed at prompt commissioning of new facilities is lending. What, actually, "Magnet" and did ", - says Mr. Korenev from the" Finam ".

The interlocutor of Kommersant also states that in terms of revenue, which amounted to 1.14 trillion rubles in 2017, Magnit lost the leadership of X5 Retail Group, which reached almost 1.29 trillion rubles. As of December 31, 2017, the network had 12,125 stores in the format "at home", 243 hypermarkets, 208 stores "Magnit Family" and 3774 stores "Magnet Cosmetic". Approximately 54% of the shares of Magnit are in free circulation. The main shareholder of the company, businessman Sergey Galitsky, in late January 2018, reduced the share in the authorized capital of the retailer from 34.26% to 31.79%.

According to Viktor Dima, senior analyst for the consumer sector of the Aton investment company, Magnit shares have good potential in the next one to two years. "The company is likely to be able to overcome the difficulties that it has faced recently. The key problem of Magnit is a high proportion (more than 60%) of unmodernized stores that are open until 2015, "the expert says.