X5 plunges as profit misses es­ti­mates on ex­ec­u­tive bonus pay­outs

The Pak Banker - - COMPANIES/BOSS -

MOSCOW: X5 Retail Group NV, Rus­sia's se­cond-largest re­tailer, fell the most in six weeks af­ter quar­terly profit missed an­a­lysts' es­ti­mates be­cause of man­age­ment bonus pay­outs. The com­pany's global de­posi­tary re­ceipts fell as much as 6.8 per­cent in Lon­don trad­ing Mon­day. Fourth-quar­ter earn­ings be­fore in­ter­est, taxes, de­pre­ci­a­tion and amor­ti­za­tion slid to 13.5 bil­lion rubles ($196 mil­lion), or 5.8 per­cent of sales, the re­tailer said in a state­ment. That missed In­ter­fax es­ti­mates for a 7.3 per­cent mar­gin.

"X5 agreed to pay about 4 bil­lion rubles to re­ward and re­tain man­agers that helped to achieve a turn­around in busi­ness and ac­cel­er­ate growth last year," said Natalya Kolu­paeva, an­a­lyst at ZAO Raif­feisen­bank in Moscow. "This is be­ing neg­a­tively per­ceived by the mar­ket." For­mer Chief Ex­ec­u­tive Of­fi­cer Stephan DuCharme -- who re­signed in Septem­ber -- re­ceived 916 mil­lion rubles in com­pen­sa­tion last year, al­most a six-fold boost from his 2014 pay, thanks largely to a 440 mil­lion ru­ble exit pay­ment and a long-term bonus of 399 mil­lion rubles. New CEO Igor Shekhter­man earned 172 mil­lion rubles last year, mostly from in­cen­tives.

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