Sedmoi Kontinent Net Rises

Sedmoi Kontinent, the country's largest grocery chain, on Thursday posted a 15 percent rise in third-quarter net profit to $16.2 million mainly because of slower store growth.

The company said third-quarter revenue to international financial reporting standards jumped 35 percent to $295.3 million from $219.1 million a year ago. Like-for-like sales were up 18 percent in dollar terms and 12.2 percent in ruble terms.

"The results are unexpectedly good," said Natalya Milchakova, analyst at Otkrytiye financial corporation, adding that the profits growth was due to lower rates of store opening.

The retailer did not open any new outlets in the third quarter, maintaining its store network at 125 stores as of the end of September. It operated 123 stores at the start of 2007.

The chain now comprises 119 supermarkets and six hypermarkets, with total selling space of 145,000 square meters.

"Sedmoi Kontinent is certainly losing growth rates compared with other major chains. Its growth is mainly driven by a rising average salary," Milchakova said.

The average sales receipt rose 21 percent in the third quarter to $13.1, the company said.

"We note that we expect to see an improvement in sales in the fourth quarter, since it is traditionally the strongest in the retail segment. Expected new store openings should also support revenue growth," said Anna Kochkina, an analyst at Aton.