Last update: 18.01.2021 02:35 (GMT+2)

Baltika: Commentary to the financial results 09/99

08.11.1999, Baltika, TLN
AS BALTIKA
ANNOUNCEMENT
08.11.99

COMMENTARY TO THE FINANCIAL RESULTS 09/1999

The 9-months 1999 and 9-months 1998 financial statements reflect
the results of the following subsidiaries and affiliated companies:

30.09.1999 holding % 30.09.1998 holding %
AS Baltika (parent) AS Baltika (parent)
AS Virulane 55.15% -
AS Elina STC 37.5 % AS Elina 50.0 %
AS Baltman 100.0 % AS Baltman 100.0 %
Baltmano Prekiba 90.0 % Baltmano Prekiba 90.0 %
SIA Baltman 100.0 % SIA Baltman 100.0 %
Baltika Sweden AB 100.0 % Baltika Sweden 100.0 %
- Lviv-Baltman 100.0 %


AS Baltika 9-months unaudited and consolidated net turnover was
212.5 million EEK, providing 12.4 million EEK (6%) increase on
annual basis (9-months 1998 net turnover 200.1 million EEK). Net
turnover from sale of goods produced was 152.1 million EEK, whereas
the share of subcontracting works was 55.8 million EEK. The
respective figures in 1998 were 154.4 million EEK and 44.3 million
EEK.
The exports amounted to 146.2 million EEK, providing 13.0 million
EEK increase on y-o-y basis.
Sale of good produced and subcontracting works by markets (thousand
EEK):

99/9 98/9 change
Estonia 64177 65683 (1506)
Latvia, Lithuania 46223 42603 3620
Russia, Ukraine 7154 26610 (19456)
Finland, Sweden 73235 38480 34755
UK, Germany 16767 25335 (8568)

AS Baltika continues to lead conservative sales policy with Russia
and Ukraine, decreasing the sales volumes in the Russian region on
y-o-y basis by 19.5 million EEK.
According to the strategic development plan, the company made
preparations for entrance to the Poland's market: a subsidiary
Baltika Poland (importer) was established and cooperation contract
was concluded with Poland's largest department store chain Domy
Towarove "Centrum".

The share of AS Baltika's subsidiary AS Baltman of consolidated
turnover was 20.2% (43.0 million EEK) and AS Virulane 17.1% (36.3
million EEK). AS Baltman group accounted for 26.0% of 1998 turnover
(52.1 million EEK).

AS Virulane results are not reflected in 9-months 1998 consolidated
statements as the company merged with the group in October 1998,
thus the changes in the income statement are not fully comparable.
In 9 months of 1999 AS Baltika personnel expenses totaled 41.9
million EEK, providing 2.9% (1.2 million EEK) decrease on annual
basis. AS Virulane personnel expenses totaled 16.4 million EEK,
providing annual decrease of 7.5% (1.3 million EEK).

AS Baltika 9-months 1999 unaudited and consolidated net profit
amounted to 1063 thousand EEK, of which the share of parent company
AS Baltika was 280 thousand EEK, and consolidated profit of
subsidiaries and affiliated companies 783 thousand EEK.
9-months 1998 consolidated net profit totaled 5711 thousand EEK, of
which the share of parent company AS Baltika was 5711 thousand EEK
and consolidated loss of subsidiaries and affiliated companies 510
thousand EEK.

AS Baltika 9-months 1999 consolidated pre-tax profit from normal
operations totaled 8407 million EEK; the profit figure was lower
due to the following extraordinary factors:

- active and planned realization of inventories from Russian crisis
in fall 1998 to increase liquidity, as a result of which the
company posted 1.5 million EEK loss;
- realization of previous seasons' products inventories (effect on
profit: -2.0 million EEK)
- higher than usual discounts in stores of subsidiary AS Baltman to
decrease inventories in Q1 (effect on profit: -1.5 million EEK);
- opening of new stores in Lithuania; renovations to operating
stores (1.0 million EEK)
- investments to enter Poland's market (0.6 million EEK)

As of 30.09.99 AS Baltika consolidated assets stood at 208.9
million EEK (214.5 million EEK during the same period last year).
Total inventories have decreased by 16.2 million EEK on annual
basis, and by 26.3 million EEK from the beginning of the year,
whereas AS Baltika has annually decreased the inventories by 18.4
million EEK, and AS Virulane by 5.5 million EEK. Compared to the
beginning of the year AS Baltika has decreased loans from credit
institutions by 12.8 million EEK and AS
Virulane by 3.7 million EEK. AS Baltika group employs 1491 people.


Ülle Järv
Member of the Management Board
+372 63 02 741

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