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