1H 2011 Operating and Financial Results

Press-release

Krasnodar

August 24, 2011

OJSC "Magnit" announces 1H 2011 operating and financial results

Krasnodar, August 24, 2011: OJSC "Magnit" (the "Company"; RTS, MICEX and LSE: MGNT) is pleased to announce its 1H 2011 financial results prepared in accordance with IFRS.

During 1H 2011 the Company added (net) 405 stores (364 convenience stores, 15 hypermarkets and 26 cosmetics stores) and increased its selling space by 39.51% in comparison to 1H 2010 from 1,156.12 thousand sq. m. to 1,612.85 thousand sq. m. The total store base as of June 30, 2011 reached 4,460 stores (4,366 convenience stores, 66 hypermarkets and 28 cosmetics stores).

Revenue in rubles increased by 51.06% YoY from 103,664.61 million RUR in 1H 2010 to 156,595.52 million RUR in 1H 2011. The top line growth was due to an increase in selling space as well as to an 18.55% increase of like-for-like sales (excl. VAT). Revenue growth in dollar terms amounted to 58.68%: from US$ 3,447.72 million to US$ 5,470.74 million.[1]

Gross margin grew from 21.48% in 1H 2010 to 22.61% in 1H 2011. Gross profit in rubles increased by 59.05% from 22,265.37 million RUR (US$ 740.51 million) to 35,412.01 million RUR (US$ 1,237.14 million).

EBITDA increased by 35.73% from 7,569.95 million RUR (US$ 251.76 million) in 1H 2010 to 10,275.01 million RUR (US$ 358.96 million) in 1H 2011. EBITDA margin in 1H 2011 amounted to 6.56% which is 0.74% below the figure of 1H 2010 (7.30%). Net debt/EBITDA ratio (in ruble terms) for 1H 2011 amounted to 2.07.

1H 2011 net income grew by 1.83% and amounted to 4,017.37 million RUR (US$ 140.35 million) vs. 3,945.25 million RUR (US$ 131.21 million) in 1H 2010.

Sergey Galitskiy, the Company's CEO, provided the following comments on the published 1H 2011 results:

"In the second quarter the Company was focused on efficiency. Negative trends outlined in the beginning of the year and led to the decrease of profitability in 1Q 2011 were overcome which is reflected in the growth of EBITDA margin in 2Q. Slowdown in sales growth rates is explained by significant growth of comparable base since summer 2010. In the second half year the Company will continue to develop in two key directions - increasing of market share and improving of operating efficiency."

1H 2011 Key Operating Results

1H 2011 to 1H 2010 LFL results[2]

1H 2011 Key Financial Results

Note: net revenue in US$ terms is calculated using the daily exchange rate.

Please follow the link below to view 1H 2011 financial report in full:

http://www.magnit-info.ru/eng/investors/financial_reports/magnit/ 

For further information, please contact:

Company description:

Based in Krasnodar, in the Southern region of Russia, Open Joint Stock Company "Magnit" is the holding company for a group of entities that operate in the retail trade under the "Magnit" brand. The chain of "Magnit" stores is one of the leading food retail networks in Russia. As of June 30, 2011 the chain consisted of 4,366 convenience stores, 66 hypermarkets and 28 cosmetics stores (drogerie) in 1,286 locations in the Russian Federation.

Approximately two-thirds of the Company's stores are located in cities with a population of less than 500,000 inhabitants. Most of its stores are located in the Southern, North-Caucasian, Central and Volga regions. The Company also operates stores in the North-Western, Urals and Siberian regions.

As of June 30, 2011 the Company operated an in-house logistics system consisting of 12 distribution centers, employing automated stock replenishment systems and a fleet of 3,454 vehicles.

In accordance with the unaudited IFRS consolidated financial statements for 1H 2011, the Company recorded consolidated revenue of approximately US$5,471 million and consolidated EBITDA of around US$359 million.