March 6, 2014 / 4:36 PM / in 4 years

UPDATE 1-Russian retailer X5 posts forecast-beating profit

MOSCOW, March 6 (Reuters) - Russia’s second-biggest food retailer X5 posted a forecast-beating fourth-quarter net profit on Thursday, having suffered a heavy loss in the same period of 2012.

The company was overtaken as Russian market leader by Magnit last year, hit by operational and management issues after a strategy shift in 2011, but recovered to a $136 million profit in the three months to Dec. 31.

That compared with an impairments-affected loss of $273.8 million a year earlier and beat the consensus forecast for net profit of $85.8 million in a Reuters poll of analysts.

Full-year 2013 revenues stood at $16.8 billion, against Magnit’s $18.2 billion.

The turnaround of X5, part of billionaire Mikhail Fridman’s Alfa Group, has been complicated by increased competition and faltering consumer sentiment in the face of Russia’s economic slowdown last year.

Its core profit margin was slightly ahead of analysts’ expectations at 7.5 percent. The company has forecast 2014 revenue growth in a 10-12 percent range with a margin between 6.8 and 7.2 percent.

Magnit has said it expects sales to rise by 22-24 percent this year.

X5 had more than 4,500 stores in Russia at the end of 2013. It also has nine supermarkets in Kiev, one of which is under construction, and three stores in the city’s suburbs. The company did not comment in its earnings release about the impact of the situation in Ukraine.

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