UK markets closed

Pizza firm DP Eurasia says 'relatively small' coronavirus impact so far

(Reuters) - DP Eurasia <DPEU.L>, which runs Domino's Pizza brand in Turkey and Russia, reported a rise in its 2019 core profit, but said it could not provide an outlook for this year given uncertainty about the impact of the coronavirus outbreak on its markets.

Last week, DP Eurasia had to shut its restaurants in both Russia and Turkey following authorities' orders aimed at containing the spread of the virus and as a result total sales fell by 10-15% over that period, company executives said.

However, delivery sales have not been affected, they said. DP Eurasia said it started contactless delivery last week and has not experienced any supply or transportation problems so far.

"In the year to date, the pandemic has had a relatively small impact on the business with the exception of a reduction in dine in business in our Turkish restaurants," the company said in a statement.

The Turkish government this week imposed restrictions on grocery store opening hours and numbers of shop customers and bus passengers while Russia closed restaurants and all entertainment venues in its capital Moscow and imposed some restrictions in the regions.

The biggest pizza delivery chain in Turkey and third-largest in Russia said on Friday its adjusted earnings before interest, tax, depreciation and amortisation (EBITDA), excluding the effect of the IFRS 16 accounting standards, climbed to 124.5 million Turkish lira (15.8 million pounds)

from 110.6 million lira.

The London-listed company reported adjusted net income, excluding IFRS 16 effects, of 3.2 million lira after an adjusted net loss of 7.1 million lira in 2018.

Commenting on its performance in Russia, where like-for-like sales dropped in 2019 due to intensifying competition, DP Eurasia said it resolved issues with regional franchisees by acquiring and converting their stores to corporate ones.

In the medium term, the company has been targeting low to mid-teens percentage like-for-like growth in Russia and 40 to 60 store openings per year.

In Turkey, the pizza firm has targeted opening of 25 to 30 stores per year, expecting franchise stores to be the main driver of the expansion.


(Reporting by Anna Rzhevkina in Gdansk; Editing by Tomasz Janowski)