April 26, 2018 / 9:21 AM / 10 months ago

REFILE-Russia's X5 reports profit drop as costs jump

(Refiles to read 0919 GMT, paragraph 8)

* Q1 net profit falls 33 pct y/y

* Costs rise across the board

* Senior manager steps down

* Shares fall 5.7 pct

MOSCOW, April 26 (Reuters) - X5 Retail Group reported a 33-percent drop in first-quarter earnings on Thursday as Russia’s biggest food retailer suffered higher costs from expanding its cut-price supermarket chain.

Net profit fell to 5.6 billion roubles ($89.2 million) in January-March from 8.4 billion a year earlier.

Revenue rose 20 percent to 351.5 billion roubles.

The company said its staff and lease expenses jumped by around 30 percent as it sped up store openings and raised wages.

Utility costs also rose on higher energy tariffs and usage as a result of a cold weather.

X5 also said its gross profitability decreased due to a higher sales contribution from regional stores and from its chain of low-cost Pyaterochka supermarkets, offsetting a positive effect from less promotional activity.

Pyaterochka General Director Olga Naumova, whom analysts had praised for helping X5 regain its leadership of the retail market, has left her post, X5 said in a statement on Wednesday, without elaborating.

X5’s London-listed shares were down 5.7 percent at 0919 GMT at $27.30.

$1 = 62.8011 roubles Reporting by Maria Kiselyova; editing by Jason Neely

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