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Where are the dividends, Magnit? History, profitability, dividend policy and prospects of Magnit
Today about saving money. magnet. However, it is not simple, but a dividend. We look at the leaders of Russian retail.
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Magnit is the leading supermarket chain by number of stores. It was founded in Krasnodar in 1994 by Sergey Galitsky, who owned and managed the company until 2018. Since 2021, the largest shareholder is Alexander Vinokurov's investment company Marathon Group. More than 30,000 stores, more than 360,000 employees. Magnit owns Dixie, as well as a number of other stores, including chains of cosmetics stores and pharmacies. KazanExpress was also recently acquired.
The problem is that the dividend policy does not have a specific formula for calculating dividends. According to this policy of Magnit, dividends are paid only from the net profit under RAS received for the corresponding period.
Magnit did not pay dividends in 2022 and 2023, but before that it paid shareholders annually, starting in 2009. Payments will resume in 2024. In 2012, the dividend was 44 rubles, and in 2024, 824 rubles will be paid per share. Not bad growth! The highest dividend yield was 13.9% (785 rubles) in 2021.
If we take 2009, we paid 0.6% (6 rubles). Whatever anyone says, Magnit attracts people who want to get rich.
Although the average yield is low, the network has now grown large enough to start generating div on an industrial scale. For comparison: the 10-year average yield of Gazprom Neft is 8.1%, Severstal - 9.47%, Lukoil - 8.22%, NLMK - 8.39%, Rosneft - 5.02%, Inter RAO - 5.32%, Tatneft-p - 9.81%, Novatek - 3.85%.
The next dividend payment is expected to take place in January for nine months, with the final dividend payment in June or July. According to analysts at Income Management, each dividend could double to approximately 410 rubles, or 7.2%. Both payments for 2023 have already been made in 2024.
Let's look at IFRS for the first half of 2024. Not everything is so clear-cut here. Retail revenue grew by 20%, total revenue grew by 19% to $146 billion, EBITDA decreased by 6%, and net profit decreased by 40%. EBITDA margin decreased to 5.3% (-1.4%). Magnit's successful marketing led to an increase in wage costs.
The productivity was also affected by the increase in net interest expenses by 12%. Interest is high, Moscow Exchange earns on interest, and debtors do not. Excluding the exchange rate difference, net profit fell by 12%, which is not as sad as 40%.
Net debt/EBITDA increased from 1 to 1.4 at the end of 2023 and to 0.7 in the first half of 2023. Although it took a lot of effort to invest in logistics and store redesign, the investments will pay dividends in the future. Magnet is focused on accelerating growth. Revenues are growing very steadily, but this requires investments.
Despite their enormous size, magnets never stop developing. While this may have a negative impact on dividends, it will have a positive impact on the stock in the medium and even long term.
I think my target share of Magnit in the stock portfolio is 5%, on par with Tatneft, Severstal, Gazprom Neft and Yandex. During periods of decline/collapse/correction, the stock looks more attractive than at the peak. I continue to buy it.
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