Pizza firm DP Eurasia evaluates Russia presence

Domino's Pizza

DP Eurasia, which runs the Domino’s Pizza brand in Turkey and Russia, on Wednesday said it was still weighing options for its Russian business after reporting a rise in its annual core profit as it hiked prices to offset high inflation.

The company said it continued to evaluate its presence in Russia, including a possible divestment, after starting the process in December last year. It said the business is now a discontinued operation.

It shut 29 stores in 2022, bringing the number of closed outlets to 159 as of December 31.

DP’s adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) rose 5.3 percent to 311 million Turkish lira ($16.1 million) in 2022. Excluding the impact of hyperinflation in Turkey, the earnings rose 93.1 percent.

The figure excludes the Russian business, DP said.

The company has been hiking prices and introducing new more affordable products such as Pizzetta, priced at about $1, in response to Turkey’s high inflation.

DP, the largest pizza delivery company in Turkey by store count, said 12 out of the total 655 Domino’s Pizza stores, mostly franchisee owned, were still not operational after the February 6 earthquake.

Fifty stores in 10 cities were affected by the earthquake, it said, but added the impact on operations was not expected to be material to 2023.

DP said it was working on several options for the stores that were still shut, including moving them to other cities.

The company expects to maintain its organic and like-for-like sales growth momentum in 2023 driven by network growth, volume expansion and targeted price hikes.

It said its system sales, which includes sales both from its own and franchised stores, rose 11.5 percent on a like-for-like basis in Turkey in the first 11 weeks of 2023.

After adding 48 stores in Turkey in 2022, it plans to open 35 to 40 stores this year and 50 to 60 outlets of its new coffee chain Coffy.