Russia 100527 Basic Political Developments

Reuters: BRIEF-Russia's VTB plans to increase divs by 2013

http://www.reuters.com/article/idUSLDE64Q0GS20100527
3:37am EDT

MOSCOW, May 27 (Reuters) - Russia's VTB bank

finance director Herbert Moos comments on strategy up to 2013:

* VTB plans to increase dividend payout to more than 10

percent of net profit by 2013

* Sees 2010 operating margin at over 4.6 percent

* No plans to reduce provisions in 2010; up to 2013

reduction of provisions will be "insignificant"

* Not panning early redemption of 200 billion rouble ($6.39

billion) subordinated VEB loan before 2013

* Not planning additional share issues before 2013

(Reporting by Yelena Fabrichnaya; Writing by Toni Vorobyova)

Emerging Markets: EXCLUSIVE: Sberbank hires Romaev as head of new debt unit

http://emergingmarkets.me/2010/05/exclusive-sberbank-hires-dmitry-romaev-as-head-of-new-debt-unit/
by admin on May 27, 2010

By Andrei Skvarsky

Russia’s largest lender Sberbank has hired Dmitry Romaev as head of its new debt capital markets unit for Central and Eastern Europe, the Middle East and Africa (CEEMEA) from Otkritie.

Romaev, who was previously chief financial officer at Otkritie, said the unit had already hired three other bankers to work on large sovereign debt deals within the CIS sphere.

Sberbank was appointed, along with three other western banks, to organise the sale of $2bn Eurobonds by the government of Belarus.

In an interview with EmergingMarkets.me, Romaev said: “The deal is almost ready. but unfortunately the market at the moment is extremely volatile right now.”

Sberbank’s DCM unit is also believed to be involved in other sovereign sales, including that of Albania.

Under the leadership of German Gref, the state lender is expanding aggressively into investment banking and private equity/special opportunities. Scores of bankers are believed to have been hired, according to sources.

Romaev’s career has included stints with Oleg Deripaska’s Basic Element and Russia’s KIT Finance and Petrocommerce banks.

Emerging Markets: Deutsche Bank opens second office in St. Petersburg

http://emergingmarkets.me/2010/05/deutsche-bank-opens-second-office-in-st-petersburg/

by admin on May 27, 2010

By Andrei Skvarsky

Deutsche Bank, Germany’s largest bank, has opened a second office in St. Petersburg, a facility that will house an information technology unit.

The greater part of the new office space, rented for a team of Deutsche’s Global Technology Capital Markets (GT CM) in the Severnaya Stolitsa business centre, is in use already and the rest will be ready for employees to move in in September. The office will have a total of 95 work stations initially but the bank plans to hire more software developers for the office this year, Deutsche said in a press release.

Igor Lojevsky, Deutsche’s chief country officer for Russia and the CIS, described the opening of the second office as “a sign that underlines the stable position of Deutsche Bank on the Russian and international markets”.

Deutsche has recently started hiring bankers again after many of it personnel were lured to rival institutions in Moscow.

Reuters: UPDATE 1-Russian grocer X5 trims outlook due to low inflation

http://www.reuters.com/article/idUSLDE64Q0B420100527
2:49am EDT

* Sees 2010 sales growth "in the low-20 percent range"

* Vs up to 25 pct growth outlook earlier

* Posts $79 million Q1 net profit, vs $68 million forecast

(Adds company comment on outlook, detail)

MOSCOW, May 27 (Reuters) - X5

, Russia's top grocer by sales, trimmed its 2010 sales growth outlook, citing lower than expected food price inflation, and posted forecast-beating first-quarter net profit of $79 million.

"Due to significantly lower food inflation to date and in the official forecast rate for the year, X5 provides a more conservative 2010 revenue growth outlook in the low-20 percent range in nominal rouble terms," it said on Thursday.

X5 had previously said it expected to deliver 2010 net sales growth comparable to 2009 pro-forma level, or 25 percent. [ID:nLDE60I04L]

"Actual top-line performance will depend on inflationary trends and the timing of a recovery in consumer spending."

X5, which expects consumer spending to begin to improve towards end-2010, said first-quarter net profit was helped by a $37 million foreign exchange gain and cost control.

Analysts had expected a net profit of $68 million after a net loss of $82 million a year ago. [ID:nLDE64P0T6]

Total sales rose 36 percent to $2.54 billion against a $2.55 billion forecast, while earnings before interest, taxation, depreciation and amortisation (EBITDA) increased 10 percent to $178.5 million, below expectations. (Reporting by Maria Kiselyova; Editing by Dan Lalor)

Bloomberg: X5 Swings to First-Quarter Profit of $78.9 Million After Loss

http://www.businessweek.com/news/2010-05-27/x5-swings-to-first-quarter-profit-of-78-9-million-after-loss.html
May 27, 2010, 2:22 AM EDT

By Maria Ermakova

May 27 (Bloomberg) -- X5 Retail Group NV, Russia’s largest food retailer, swung to a profit in the first quarter after a loss a year earlier when the ruble’s decline against the dollar led to the revaluation of its debt.

Net income totaled $78.9 million, compared with a net loss of $82.1 million, the Moscow-based company said in a statement today. Revenue rose 36 percent to $2.54 billion.

X5, whose chains include Perekriostok supermarkets and Pyaterochka discount stores, opened 27 outlets in the period, mostly discount stores, raising the total to 1,399. The company in December completed the acquisition of the Paterson retailer for $275 million in cash and debt, adding 80 stores to its network.

“We expect consumer spending to begin to show improvement towards the end of the year,” Chief Executive Officer Lev Khasis said in the statement. “This, in combination with new store openings and post-integration contribution from Paterson, should enable X5 to deliver top-line growth in the low-20% range.”

Earnings before interest, depreciation, taxes and amortization increased 10 percent to $178.5 million, with profitability on that basis narrowing by 1.7 percentage points to 7 percent, according to the statement.

“Paterson consolidation and investment in prices at discounter stores” hurt profitability in the quarter, analysts led by Victoria Sokolova at Troika Dialog in Moscow, said in a note to investors yesterday. They have a “buy” recommendation on the stock.

--Editors: Torrey Clark,

To contact the reporter on this story: Maria Ermakova in Moscow at [e-mail]

To contact the editor responsible for this story: Celeste Perri at [e-mail]

UralSib: Aeroflot: Rostechnologies wants stake in Aeroflot

http://www.businessneweurope.eu/dispatch_text11737

UralSib
May 27, 2010

Rostechnologies intends to become a shareholder in Aeroflot. Yesterday, Vedomosti reported that the CEO of Rostechnologies Sergey Chemezov said that the latter intends to become a shareholder in Aeroflot (AFLT - Buy) during the forthcoming consolidation of the two companies airline assets. In mid March, Vedomosti reported that Aeroflot might swap Rostechnologies airline assets with the state, after their transfer from the former to the Russian Federal Property Fund (owner of 51% in Aeroflot).

The general idea of the consolidation remains unchanged. In our view, disregarding the process of consolidation (through the swap of shares by Aeroflot with Rostechnologies or the State), the process of consolidation remains unchanged. We believe State participation in Aeroflot is more likely, and preferable. We also note that yesterday Aeroflot signed an official agreement with Rostechnologies, according to which it will get the latters airline assets. Under the agreement, Aeroflot will have the right to restructure the business, optimize the financials and modernize fleet of Rostechnologies airlines before their actual consolidation, which we estimate will happen in one year. This is clearly beneficial for Aeroflot.

News neutral. We view the news as neutral for Aeroflots stock performance. We also note that a lot of speculative newsflow on the deal with Rostechnologies can be expected before the final terms are announced. We reiterate our Buy recommendation for the stock with target price of $3.5/share.

Anna Kupriyanova

May 27, 2010, 3:00 a.m. EDT