Eldorado has completed its reorganization efforts and is making plans to augment the company’s commercial effectiveness.

Eldorado, one of the largest retailers of consumer electronics in Russia, did not perform well in 2009, amidst widespread financial problems in the country prompted by the onset of the global economic crisis. In accordance with Russian accounting standards, the company lost around RUR 15.6 billion during the fiscal year. The company’s losses in 2008 were RUR 7.8 billion.   

During the crisis year, the company’s revenues went down from RUR 87.6 billion to RUR 72.1 billion. The gross profit figure decreased from RUR 25 billion to RUR 17.1 billion.

Previous reports from the electronics retailer indicated that the company’s consolidated revenue under International Financial Reporting Standards would be RUR 89 billion. Revenue in 2008 was RUR 101.9 billion, about 12.7 percent higher. According to the company’s director general Mr. Kakha Kobakhidze, the 2009 set of financial results constitutes the first performance report following the changeover in the company’s management. 2009 EBITDA margin was 0.4 percent. The EBITDA figure was RUR 350 million.

At the same time, Eldorado reported that the situation is improving. In the first two quarters of the current year, the company increased its sales by 7 percent to RUR 35.5 billion (excluding value-added tax). Like-for-like sales also went up by 14 percent. In June, the retail chain accounted for 35 percent of home electronics, computer, and appliance sales in Russia.

The main competitor of Eldorado, M.Video, also experienced a 7-percent increase in sales in the first half of the year. Combined sales revenue was RUR 34.88 billion. M.Video’s like-for-like sales went down by 2.5 percent.

In 2009, Eldorado suffered RUR 15.6 billion in losses under Russian accounting standards. The company’s revenues decreased from RUR 87.6 billion to RUR 72.1 billion. Part of the reason for the large losses is the company’s campaign to reorganize its operations. The losses figure was also affected by the company’s revaluation of its indebtedness. Part of this debt has been converted into shares of stock and will not have the same negative effect on the company’s bottom line in the future.

According to company officials, Eldorado has now completed its reorganization efforts and is making plans to augment the company’s commercial effectiveness.

The company now owns around 320 stores and has a sizeable franchising network. Plans for 2010 include closing down about 50 stores. The company expects to open the same number of stores with a new layout soon after closing the old ones. Eldorado’s investment program for 2010 provides for spending USD 100 million. 

Eldorado is joint-owned by the Czech company PPF, which has the controlling stake (50 percent and one share) and Mr. Igor Yakovlev. PPF’s acquisition of its ownership share in the Russian company took place in 2009, when it chose to convert USD 300 million in loans made to the company into 50 percent and one share. The company originally loaned Eldorado USD 500 million in September 2008.