Lenta: revenue up 26%, but profit down 25% on O'KEY acquisition

On August 3, 2026, Lenta released its results for the first half of 2026. Revenue grew 26.2% to RUB 648.5 billion, EBITDA rose 11.9%, while net profit fell 25.5% to RUB 10.7 billion. This review examines the drivers behind the divergent trends and the impact of the O'KEY acquisition.

Key takeaways

— Revenue +26.2% driven by O'KEY and OBI acquisitions

— EBITDA margin fell from 10.1% to 9.0% due to integration and low-margin formats

— Net profit fell 25.5% due to higher interest expenses and O'KEY loss

— Debt rose by RUB 225.5 billion in six months, but Net Debt/EBITDA remains low

— Operating cash flow declined, capex increased

— Valuation: EV/EBITDA 4.1x vs 2.4x three-year average

Key figures, RUB bn

Revenue +26.2% driven by O'KEY and OBI acquisitions

In the first half of 2026, Lenta's revenue grew 26.2% to RUB 648.5 billion. The main contribution came from acquired chains: O'KEY hypermarkets (75 stores, 478 thousand sq m) and OBI Russia (25 stores, 263 thousand sq m), which after rebranding operate under the name 'Dom Lenta'.

According to the report, since the acquisition date (June 2, 2026), O'KEY added RUB 9.4 billion to revenue. If the deal had closed at the beginning of the year, half-year revenue would have been RUB 66.1 billion higher. Organic growth, therefore, is much more modest: excluding M&A, revenue would have grown by about 10%.

The OBI acquisition was completed in the first quarter, and its results have been consolidated since then. The report does not disclose the separate contribution of Dom Lenta, but the combined effect of both deals is evident: almost half of the revenue growth is driven by new assets.

EBITDA margin fell from 10.1% to 9.0% due to integration and low-margin formats

EBITDA for the half-year grew 11.9%, but slower than revenue, so the margin contracted from 10.1% to 9.0%. The reason lies in the structure of acquisitions: O'KEY and OBI operate with lower profitability than Lenta's traditional hypermarkets, and their integration requires additional costs.

The report states that since the acquisition date, O'KEY contributed a pre-tax loss of RUB 907 million. This is a direct consequence of operating losses during the transition phase, as well as depreciation and interest expenses related to the purchase.

The decline in margin is an expected M&A effect, but it raises the question of when the previous level will be restored. Management did not provide margin guidance, but synergies from combining the chains should materialize in 2027.

Net profit fell 25.5% due to higher interest expenses and O'KEY loss

Net profit for the first half was RUB 10.7 billion versus RUB 14.3 billion a year earlier. The 25.5% decline is explained by two factors: interest expenses rose from RUB 14.8 billion to RUB 19.2 billion, while operating profit was almost unchanged (RUB 31.7 billion versus RUB 31.3 billion).

The increase in interest expenses is related to higher debt after the acquisitions. Net profit also includes a loss from O'KEY of RUB 907 million before tax, which directly reduced the bottom line.

Net margin fell from 2.8% to 1.6%. This is a noticeable deterioration, but it reflects a transition period rather than a worsening of the core business. Excluding M&A and related costs, profit would have been higher.

Debt rose by RUB 225.5 billion in six months, but Net Debt/EBITDA remains low

Net debt as of June 30, 2026 stood at RUB 48.8 billion, up RUB 225.5 billion from the previous reporting date. The main reason is raising loans to finance the O'KEY and OBI acquisitions, as well as interest payments.

Net Debt/EBITDA for the trailing twelve months is 0.76x. This is a low level, leaving room for further borrowing if the company decides to continue M&A.

The report also discloses unused credit lines of RUB 283.9 billion, confirming financial flexibility. However, rising debt increases interest expenses, which already weigh on profit.

Operating cash flow declined, capex increased

Operating cash flow for the first half was RUB 20.0 billion versus RUB 26.0 billion a year earlier. The decline is due to higher interest payments (RUB 18.7 billion vs RUB 14.9 billion) and a decrease in trade payables.

Capital expenditures increased: purchases of property, plant and equipment – RUB 18.4 billion (vs RUB 16.4 billion a year earlier), plus RUB 3.8 billion for intangible assets. This reflects the program of opening new stores and renovating existing ones.

Free cash flow is negative: operating cash flow of RUB 20.0 billion does not cover capex of RUB 22.2 billion. The gap is financed by debt, increasing dependence on the credit market.

Valuation: EV/EBITDA 4.1x vs 2.4x three-year average

As of August 17, 2026, Lenta shares trade at an EV/EBITDA multiple of 4.1x for the trailing twelve months. This is notably higher than the three-year average (2.4x). The market is pricing in synergies from M&A and margin recovery.

P/E LTM is 6.9x, also below historical levels, but reflects lower profit. The share price rose after the report (+2.1% on the day of publication and +0.5% since), indicating a positive investor reception.

The question is whether the company will justify the higher valuation. If the integration of O'KEY drags on or margins do not recover, the current multiple may prove too high.

Valuation on the latest reported figures

Bottom line

Lenta reported a half-year with strong revenue growth but weak profit dynamics. The O'KEY and OBI acquisitions provided almost half of the revenue growth, but led to lower margins and higher debt. Net profit fell 25.5%, and free cash flow is negative. The 4.1x EV/EBITDA valuation is above historical levels, implying market belief in successful integration. The key question for shareholders is whether the company can restore margins to 10% or higher without increasing leverage. The next report will show how effectively the network integration is progressing.