How to get billions in profit during the crisis: Euroset reduces revenue, but profits increase

Photo: A. Astakhov / Vedomosti

Despite the crisis, Euroset was able to receive 1.09 billion rubles in just nine months of this year. net profit. Last year, for the same period, the company received 175.5 million rubles. net loss, write "Vedomosti". The profit was a surprise even for management, because according to the plan, the company should have received a net loss in the amount of 82.9 million rubles. Interestingly, the company's revenue this year is lower than in the past - the decline is estimated at 15%.

The main factor in revenue decline is the fall in sales of gadgets from Samsung, which previously brought up to 54% of revenue from all sales of phones and smartphones by Euroset. So far, it has not been possible to compensate sales by gadgets from other manufacturers, but the refusal to cooperate with Samsung had a positive effect on the margin.

The company refused to sell Samsung mobile devices in June of this year, justifying its decision by a high defect rate in the South Korean company’s products. After some time, they stopped selling Samsung phones and Svyaznoy stores. Another reason for the refusal to sell devices from Samsung is the lack of profitability when trading these devices. The fact is that MTS reduced the prices for mobile electronics by several tens of percent at once (up to 30%), and Euroset with Svyaznoy simply could not bear the cost of replacing and guaranteeing repair of defective Samsung mobile devices.
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“A surprising thing happened: the refusal of Samsung, although it reduced the sales revenue, ultimately brought us an extra profit,” says Euroset President Alexander Malis. He also said that it was always more profitable for the retailer to sell devices of local brands (B-brands) and not gadgets of world-famous manufacturers (A-brands).

Currently, Euroset does not publish its financial data. Recall that in 2012, Euroset became owned by VimpelCom and Megaphone on a parity basis. At the same time, the company's business model has changed significantly after the change of ownership.