March 31, 2016 / 5:05 PM / 4 years ago

Russian retailer Dixy sees 2016 sales growth

MOSCOW, March 31 (Reuters) - Russian food retailer Dixy’s sales growth accelerated in the first few months of 2016, after it saw net profit fall 87 percent in 2015 as revenue growth slowed.

Chief Financial Officer Sergei Belyakov said Dixy will increase promotional campaigns this year to help boost customer traffic while cutting labour and utility costs and renegotiating rent agreements.

“In the course of this year we plan to focus attention on the management primarily on action that can stimulate the growth of traffic,” Belyakov told a conference call on Thursday.

“We aim to increase like-for-like sales and improve profitability... We are viewing 2015 as a floor for the company for sure,” he said, adding like-for-like sales had been positive since the fourth quarter of 2015.

Dixy posted on Thursday 2015 net profit of 589 million roubles ($8.8 million) as revenue growth slowed to 19 percent from 27 percent in 2014 and core profit margin slipped to 4.9 percent from 7.1 percent.

Belyakov also said this year’s capital expenditure, seen at around 12 billion roubles, would be funded from operating cash flow rather than debt.

Dixy has lagged behind rivals such as Magnit and X5 and acknowledged last year it had been slow to react to a drop in consumer purchasing power as the country’s economy weakened.

In March, it appointed a new chief executive, Pedro Manuel Pereira Da Silva, to replace long-serving Ilya Yakubson, who was suspended in December. On Thursday, it also named Julio Marques Duarte as chief operations officer and Juan Giralt Silva as chief commercial officer. ($1 = 67.1530 roubles) (Reporting by Maria Kiselyova and Olga Sichkar; Editing by Lidia Kelly and Susan Thomas)

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