Magnit: H1 2026 loss driven by rising finance costs despite revenue and EBITDA growth

On August 28, 2026, Magnit reported H1 2026 results: revenue grew 12.8% to RUB 1,887.2 billion, EBITDA rose 13.7%, but the company posted a net loss of RUB 9.5 billion versus a profit a year earlier. This review examines what drove the loss, how debt changed, and what it means for shareholders.

Key takeaways

— Revenue grew 12.8% in H1 to RUB 1,887.2 billion, but operating profit rose only 15.6%

— EBITDA increased 13.7%, margin nearly flat at 9.1% vs 9.0%

— Net loss of RUB 9.5 billion driven by finance costs rising to RUB 116.1 billion

— Debt increased by RUB 646.4 billion in H1, net debt at RUB 496.3 billion

— Operating cash flow of RUB 51.1 billion in H1, but capex of RUB 46.1 billion and interest of RUB 113.2 billion consumed it

— No dividends paid in the last 12 months; model estimates next payout at RUB 0 per share

— EV/EBITDA LTM at 3.9, above 3-year average of 2.3

Key figures, RUB bn

Revenue grew 12.8% in H1 to RUB 1,887.2 billion, but operating profit rose only 15.6%

In H1 2026, Magnit's revenue reached RUB 1,887.2 billion, up 12.8% year-on-year. Growth was driven by the group's retail chains, including Magnit, DIKSI, Samberi, and Azbuka Vkusa, as well as online operations.

Operating profit rose 15.6% to RUB 84.4 billion from RUB 73.0 billion a year earlier. The growth rate of operating profit outpaced revenue, indicating some improvement in operational efficiency, but this did not prevent a net loss.

EBITDA increased 13.7%, margin nearly flat at 9.1% vs 9.0%

EBITDA for H1 grew 13.7% year-on-year, with EBITDA margin at 9.1% versus 9.0% a year earlier. Thus, EBITDA growth almost fully mirrors revenue dynamics, with no significant change in operating margin.

In absolute terms, H1 EBITDA was about RUB 171.8 billion (calculated: RUB 1,887.2 billion × 9.1%). This indicates stable operating performance but no significant efficiency improvement.

Net loss of RUB 9.5 billion driven by finance costs rising to RUB 116.1 billion

Net loss for H1 was RUB 9.5 billion versus a profit of RUB 0.15 billion a year earlier. The main reason is a sharp increase in finance costs: they rose from RUB 79.9 billion to RUB 116.1 billion, up 45.3%.

Interest income increased from RUB 12.3 billion to RUB 21.6 billion, but this only partially offset the cost increase. As a result, loss before tax was RUB 9.4 billion, and after tax – RUB 9.5 billion.

Debt increased by RUB 646.4 billion in H1, net debt at RUB 496.3 billion

Net debt as of June 30, 2026 stood at RUB 496.3 billion, up RUB 646.4 billion from the previous reporting date. Over the last 12 months, the increase was RUB 712.1 billion. This is a significant rise in debt burden.

Net debt/EBITDA for the last 12 months is 3.21. This is high for a retail chain, especially given rising interest rates. The company actively borrowed: loan proceeds in H1 were RUB 344.3 billion, repayments – RUB 168.1 billion.

Operating cash flow of RUB 51.1 billion in H1, but capex of RUB 46.1 billion and interest of RUB 113.2 billion consumed it

Net operating cash flow for H1 2026 was RUB 51.1 billion versus a negative value a year earlier (–RUB 35.8 billion). The improvement is due to higher operating receipts of RUB 150.1 billion.

However, capital expenditures on property, plant, equipment and intangibles were RUB 46.1 billion, and interest paid was RUB 113.2 billion. As a result, free cash flow after interest and capex is negative, explaining the debt increase.

No dividends paid in the last 12 months; model estimates next payout at RUB 0 per share

Over the last 12 months, Magnit has not paid dividends – payments were RUB 0 per share. Our model estimates the next payout also at RUB 0 per share, reflecting the lack of free cash flow and high debt burden.

The fair yield for this stock, in our view, is 7.0%, but with zero dividend, shareholders receive no compensation for waiting. The implied payout ratio is 0.64 of profit, but this is not applicable given the loss.

EV/EBITDA LTM at 3.9, above 3-year average of 2.3

EV/EBITDA multiple for the last twelve months is 3.9, notably above the three-year average of 2.3. This indicates that the market values the company higher than the average over the past three years.

The rise in the multiple may be due to expectations of improved operating results or a general market trend, but given the current debt level and loss-making, such valuation looks optimistic.

Valuation on the latest reported figures

Bottom line

Magnit posted solid revenue and EBITDA growth in H1 2026, but the operating result was fully offset by rising finance costs, leading to a net loss. Debt burden increased significantly, and free cash flow is negative. For shareholders, the key question is whether the company can stabilize debt and return to profitability; otherwise, the current valuation looks stretched.