KRASNODAR, September 4, 2007: OJSC “Magnit” (the “Company”; RTS: MGNT), Russia’s leading retail chain in terms of number of stores and customers, is pleased to release its 1H2007 financial results prepared in accordance with IFRS.

During 1H2007 the Company opened 116 stores and increased its selling space by 9% relative to FY2006 from 522, 92 thousand sq. m. to 570, 70 thousand sq. m. at the end 1H2007.

Net revenue of the Company increased by 44, 07% YoY in rouble terms, from 29, 66 billion rubles in 1H2006 to 42, 73 billion rubles in 1H2007. Net revenue increase was due to increase of selling space by 27, 25% in 1H2007 relative to 1H2006 as well as 15, 79% increase of like-for-like sales in rouble terms (ex. VAT). Like-for-like sales increase in its turn was driven by 1, 83% traffic inflow (LFL) and 13, 70% average ticket increase.

Net revenue in USD terms increased by 52, 53% YoY, from 1 074, 01 million USD in 1H2006 to 1 638, 23 million USD in 1H2007.

Gross margin improved from 17, 6% in 1H2006 to 18, 8% in 1H2007 due to the better purchasing terms as well as an in-house logistics improvement. EBITDA increased by 71, 49% from 48, 37 million USD in 1H2006 to 82, 95 million USD in 1H2007.

In 1H2007 the Company increased by 81, 14% and amounted to 37, 88 million USD of net income vs. 20, 91 million USD in 1H2006. Sergey Galitsky, the Company’s CEO, provided the following comments on the published 1H2007 results:

“We consider the Company’s operational results to be satisfactory. Most of the figures are within the schedule. We continue to work on the effectiveness of our business reducing the logistics costs, increasing the number of Private Label products in retail revenue and improving the purchasing conditions of the products sold via the retail chain. Considerable part of capital expenditures is due to the realization of the hypermarket development program, which is a new format for the Company. We hope that the hypermarket sales will significantly influence the total results of the Company already by the end of 3Q2008”.

Alexander Prisyazhnyuk, CFO was kind to add the following:

“About a half of the convenience stores opened during this period are owned by the Company. We can clearly see the dynamics of our customers’ income growth which allows us to build own new stores considerably larger than average. On the whole I am pleased with the results achieved by the Company during the first half and hope to keep the above trends within the next six months”.

1H2007 audited financial and operating results