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S&P Global Ratings downgrades Magnit to BB

S&P Global Ratings on Dec. 15 downgraded PJSC Magnit to BB from BB+ on expectations of lower profitability due to the Russian retailer's likeliness to experience poor trading conditions.

The ratings downgrade stemmed from weaker margins related to weak economic conditions in Russia, a decline in same-store sales growth and rising cost pressures, S&P said.

The company's outlook is stable, however, on the expectation that its margins will stabilize and Magnit will put in place a policy to balance investment and dividends, according to the S&P note.

"The stable outlook reflects our expectation that over the next 12 months, despite a highly challenging trading environment, Magnit will sustain its market leading position in the Russian food retail sector," S&P analysts said.

S&P Global Market Intelligence and S&P Global Ratings are owned by S&P Global Inc.