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. Last Updated: 07/27/2016

X5 Posts Big Q2 Profit on Forex Gains

X5 Retail Group, the country’s largest food-store operator, said Thursday that second-quarter profit increased 87 percent as the ruble’s gain against the dollar led to a revaluation of dollar-denominated debt.

The announcement came a day after Magnit, its largest rival, announced big gains after cutting costs at its discounter stores.

Net income rose to $130.4 million from $69.6 million a year earlier, X5 said in a statement. The ruble advanced 8.3 percent against the dollar in the quarter, resulting in an $86 million gain on exchange rate swings.

Sales fell 8 percent to $2.1 billion because of a drop in the value of the ruble compared with year-earlier levels, the company said. Revenue expressed in rubles rose 26 percent as the retailer added 20 new stores in the quarter.

“One of our current priorities is private label development, which includes realignment of X5’s private label strategy across formats with a focus on building own brands,” CEO Lev Khasis said in the statement. 

(Bloomberg, Reuters)