News

“Maxima Grupė revenue increased by almost 24% versus the same period last year and reached EUR 1.9 billion in the first half of 2019, with growth mainly coming from expansion in Poland. But the group’s profitability was down as a result of weaker results in Lithuania and Estonia,” said Maxima Grupė’s Chief Financial Officer Vitalij Rakovski.

Maxima Grupė’s consolidated revenue grew by 23.9% to EUR 1.9 billion: rapid expansion in Poland and acquisition of the Stokrotka retail chain accounted for 19% growth, while the remaining 5% growth came from higher revenue in the Baltic countries and Bulgaria. Maxima Grupė’s consolidated like-for-like (LFL) sales growth was 3.8%.

Retail revenue in the Baltics grew by 4.6%. That was mostly due to rapid expansion in Latvia, where revenue growth reached 8.2% and Maxima became the country’s market leader with retail market share exceeding 25%.

Retail revenue in the Polish market totalled EUR 424 million. Growth was due to the acquisition of the Stokrotka retail chain in Poland in April 2018. Comparing the first half of 2019 with the same period last year, Stokrotka’s pro-forma revenue growth was 14.7%.

Revenue change eliminates Group intercompany transactions
Like-for-like (LFL): same-store growth, in local-currency (not taking new or renovated stores into account)
Stokrotka’s revenue change for the first half of 2019 compared with the same period last year

For the six months ended 30 June 2019, Maxima Grupė’s consolidated EBITDA (excluding IFRS 16 effect) decreased by EUR 1.7 million, or 1.7%, compared to the same period last year.

The decrease was due to weaker results in Lithuania and Estonia. Poorer results in Lithuania were mainly due to larger discounts on industrial goods and Lithuanian made products (campaign “Lietuva, ačiū!”), the total impact of which was approximately EUR 5 million. In Estonia, EBITDA decrease was caused by slower growth of turnover and lower profitability. Negative result was partly compensated by EBITDA increase in Maxima Latvia due to expansion and higher profitability.

We would also like to point out that on 1 January 2019, Maxima Grupė adopted new International Financial Reporting Standard (IFRS) 16 Leases, which changed the treatment of leased assets in the financial statements. In applying the new standard, Maxima Grupė recognized on its balance sheet assets and liabilities arising from future payments under operating lease agreements. Under the new standard, operating lease expenses are no longer recognized in the income statement. Instead, depreciation is calculated for the right-of-use assets (recognised for the leased property on the balance sheet), and interest expenses on lease liabilities are recognized.

Due to the change of accounting principles for leased assets, Maxima Grupė’s EBITDA increased by EUR 48 million in the first six months of this year compared with the same period of 2018, while its net profit decreased by EUR 5 million. As of 30 June 2019, a total of EUR 673 million of right-to-use assets along with lease liabilities of EUR 683 million were recognized on Maxima Grupė’s consolidated balance sheet.