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Kesko has sold its grocery trade in Russia to Lenta

Mittwoch, 30.11.2016 10:05

KESKO CORPORATION STOCK EXCHANGE RELEASE 30.11.2016 AT 11.00 1(2)

Kesko has sold its grocery trade in Russia to Lenta

Kesko Food Russia Holding Oy, part of Kesko Group, has sold its grocery trade business in Russia to Lenta Ltd. The aggregate consideration for the disposal including sales price adjustment is approximately RUB 11.4 billion (approximately EUR 163 million).

On 26 October 2016, Kesko Corporation announced in a stock exchange release that Kesko Food Russia Holding Oy, part of Kesko Group, sells its grocery trade business in Russia to Lenta Ltd. The disposal includes 11 food stores operating in the St. Petersburg and Leningradskiy regions, three land plots in the Moscow and Leningradskiy regions, as well as administrative and support functions. The sold companies have a total of approximately 1,300 employees.

The Russian competition authority, The Federal Antimonopoly Service of the Russian Federation, FAS, has approved the disposal. The other terms and conditions of the transaction have also been fulfilled.

In 2015, the net sales of Kesko's grocery trade in Russia were EUR 106 million and the operating profit was EUR -14 million. The aggregate consideration for the disposal including sales price adjustment is approximately RUB 11.4 billion (approximately EUR 163 million). Kesko Corporation will record a non-recurring expense of approximately EUR 64 million on the disposal for the last quarter of 2016.

Kesko concentrates on the development of the Finnish grocery trade and disposes of the grocery trade in Russia, the growth of which would have required significant capital expenditures. The disposal will have a minor impact on Kesko's net sales, but it will improve Kesko's profitability and cash flow.

Kesko Corporation's outlook in respect of net sales and comparable operating profit for the period Q4/2016-Q3/2017 remains unchanged. The outlook according to the interim report published on 26 October 2016 was as follows: Kesko Group's net sales and comparable operating profit for the next 12 months are expected to exceed the level of the preceding 12 months.

Further information:
Jukka Erlund, EVP, Chief Financial Officer, Kesko Corporation, tel. +358 105 322 113, jukka.erlund@kesko.fi
Jorma Rauhala, EVP, President, grocery trade, tel. +358 105 322 211, jorma.rauhala@kesko.fi
Riikka Toivonen, Head of Financial Communications, Kesko Corporation, tel. +358 105 323 495, riikka.toivonen@kesko.fi

Kesko Corporation

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Source: Kesko Oyj via Globenewswire