LONDON (Alliance News) - DP Eurasia NV on Tuesday said it suffered a loss in 2018 due to higher marketing and administrative costs, despite double-digit revenue growth.
DP Eurasia, - which operates as the Domino's Pizza master franchisee in Turkey, Russia, Azerbaijan and Georgia - reported a pretax loss TRY3.9 million, about GBP537,000, for 2018, compared to a profit of TRY738,000, about GBP102,00, in 2017.
The swing to a loss was due to a rise in general administrative expenses by 25% to TRY136.1 million from TRY108.7 million, and marketing and selling costs up 26% to TRY104.3 million from TRY82.6 million the prior year.
Revenue however, grew by 37% to TRY856.9 million from TRY626.5 million in 2017. The number of stores increased to 724 from 643 the year before, with total system sales up 31% at TRY1.12 billion from TRY859.8 million.
Regionally, system sales rose by 81% in Russia, by 80% in Azerbaijan & Georgia, and by 14% in Turkey.
On a like-for-like basis, system sales in Turkey were up 9.3% in 2018, while in Russia system sales grew by 16%.
For the first two months of 2019, like-for-like system sales growth in Turkey was 2.5% and growth in Russia was 7.7%.
Looking ahead, DP Eurasia expects to open 25 to 30 new stores in Turkey, and between 40 to 60 in Russia. In the medium term, like-for-like growth in Turkey is expected to be in the high single digits, while Russia growth is forecast to come in at the low-to-mid teens.
"We are pleased to report another successful year for 2018 despite the macroeconomic volatility we have faced in Turkey. Our performance continues to be strong in both of our main markets," said Chief Executive Officer Aslan Saranga.
"Cost control measures will include stricter food and labour cost control, headquarter streamlining and logistics productivity increases. Once again, I would like to thank our dedicated team across the group who have been instrumental in delivering this strong set of results and I look forward to a successful 2019," Saranga added.
Shares in DP Eurasia were up 1.0% at 85.00 pence on Tuesday.