November 30, 2016 / 2:00 PM / in a year

BRIEF-Russia's Lenta adjusts 2016 guidance after buying Kesko stores

Nov 30 (Reuters) - Lenta Ltd says:

* Has completed the acquisition of Kesko’s food retail business in Russia for 11.4 billion roubles ($177.52 million);

* The acquisition is expected to add around 3-4 percentage points to Lenta’s sales growth in 2017;

* Lenta’s 2016 EBITDA margin will be negatively impacted by around 0.1 pps and net income margin will be impacted by around 0.2 pps due to one-off integration/M&A related costs;

* In 2017, the overall effect on Lenta’s EBITDA margin and net income margin is not expected to be material. The stores are expected to deliver margins at or above Lenta’s average by 2018;

* Capex costs to rebrand the stores and adapt to Lenta’s requirements are not expected to be material;

* The company’s new 2016 capex guidance is 55-60 billion roubles, including the investment in the acquisition of the Kesko stores (previous guidance: 45-50 billion roubles);

* The acquisition will be additional to Lenta’s prior hypermarket opening guidance of at least 40 new stores in 2016. Lenta therefore plans to open at least 50 hypermarkets in 2016, inclusive of acquired Kesko stores;

* If the number of store openings in 2016 significantly exceeds this new guidance, the company may adjust the pipeline for 2017 while still delivering a total of at least 90 hypermarket openings in 2016-2017. Source text for Eikon: Further company coverage: ($1 = 64.2187 roubles) (Reporting by Moscow Newsroom)

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