KRASNODAR, 22 November, 2006: OJSC “Magnit” (the “Company”; RTS: MGNT), Russia’s leading retail chain in terms of both number of stores and customers, is pleased to release its 9M06 unaudited financial and operating results prepared in accordance with IFRS.

During 9M06 Magnit opened 261 stores and increased its selling space by 35.57% YoY, from 354 thousand. sq. metres at the end of 9M05 to 480 thousand. sq. metres at the end of 9M06.

Net revenue of the Company in rouble terms increased by 52.60% (excl. VAT) YoY, from 31.11 billion roubles in 9M05 to 47.48 billion roubles in 9M06. The net revenue increase was due to both an increase in the selling space and a 12.77% increase in like-for-like sales in rouble terms. The like-for-like sales increase was in turn driven by both a traffic inflow of 2.97% and the increase in the average ticket of 9.17% in rouble terms (12.32% in USD)

Net revenue in USD terms increased by 55.84% YoY, from USD1 113.30mln in 9M05 to USD1 734.92 million in 9M06.

The gross margin increased from 15.81% in 9M05 to 17.91% in 9M06 due to better purchasing terms, as well as an improvement in in-house logistics.

The EBITDA margin improved considerably, from 2.41% in 9M05 to 4.40% in 9M06, due to an expansion in the gross margin, while offset by higher wages and rent costs. EBITDA in absolute terms almost tripled, having increased from USD26.69 million in 9M05 to USD76.30 million in 9M06.

Over 9M06 the Company earned USD42.23 million in net income vs. USD5.88 million in 9M05.

Commenting on the Company’s 9M06 results, its CEO Sergey Galitskiy said: “We have achieved good results over 9M06. The Company will continue improving its operating efficiency, combining it with regional expansion. All our effort and energy will be concentrated in three main directions: Firstly, we will continue developing our chain of convenience shops (where the share of owned shops exceeds 20%). Secondly, we will be further developing our logistics: in November our rented DC in Orel will move into our own newly-built one. We are also installing cooling and freezing equipment in our Tver DC. Two more DCs, in Bataysk and Chelyabinsk, are at the project development and construction stage at the moment. And, thirdly, we will continue preparation for operating in the hypermarket sector. At the moment we have already started building 6 hypermarkets and in 4Q06 we are starting 6 more”.

9M2006 unaudited financial and operating results