AS BALTIKA

ANNOUNCEMENT

23.07.1999

 

COMMENTARY TO 1999/6 CONSOLIDATED FINANCIAL RESULTS

 

H1 1999 and H1 1998 financial statements reflect the results of the following 

subsidiaries and affiliated companies:

 

     30.06.1999         holding %               30.06.1998         

holding %

AS Baltika (parent)                     AS Baltika (parent)

Production:                             

AS Virulane               55.15%        

AS Elina STC               37.5%

        

Retailing:                              Trading:

AS Baltman                  100%        AS Baltman                      100%

Baltmano Prekiba (Lithuania) 90%        Baltmano Prekiba (Lithuania)     90%

Baltika Sweden AB (Sweden)  100%        Baltika Sweden (Sweden)         100%

Sia Baltman (Latvia)        100%        AS Sander                        68.3%

                                        Lviv-Baltman (Ukraine)          100%

 

The merger of AS Virulane and the group brought along several significant 

changes on both balance sheet and income statement. As of 30.06.1999, the 

balance sheet size of AS Baltika totals 209.7 million EEK, i.e. 20.6 million 

EEK more than on 30.06.1998.

                

AS Baltika H1 1999 unaudited and consolidated net turnover was 139.9 million 

EEK, which is 12.0 million EEK (9%) more than during the same period in 1998 

(net turnover 127.9 million EEK).

 

In H1 1999, the share of goods produced of net turnover was 70.13% (98.2 million 

EEK) and in 1998 77.91% (99.7 million EEK), whereas the share of subcontracting 

works in 1999 was 27.33% (38.2 million EEK) and in 1998 21.41% (27.4 million EEK). 

The H1 1999 export volume amounted to 93.3 million EEK, whereas the respective 

figure during the same period 1998 was 87.7 million EEK. 

 

Sales of good produced and subcontracting works by markets:

 

(thousand EEK)

                        1999/6                  1998/6          

Change

Estonia                 45127                   39446            14.4%

Latvia, Lithuania       32777                   25754            27.3%

Russia, Ukraine          4058                   18831           (78.5%)

Finland, Sweden         43847                   25436            72.4%

UK, Germany             11376                   17599           (35.4%)

 

AS Baltika continues to lead conservative sales policy with Russia and Ukraine, 

decreasing the sales volumes on these markets in H1 1999 by 14.8 million EEK. 

AS Baltika has substantially increased its market share in Finland and Sweden,

where the company’s sales increased by 18.4 million EEK, compared to the respective 

last year’s levels. The share of AS Baltika’s subsidiary AS Baltman of consolidated 

turnover was 18.9% (26.4 million EEK) and AS Virulane 13.5% (18.9 million EEK).    

 

AS Baltika H1 1999 unaudited and consolidated net profit amounted to 114 thousand 

EEK, of which the share of parent company AS Baltika was 597 thousand EEK, and 

consolidated loss of subsidiaries and affiliated companies 483 thousand EEK. 

H1 1998 consolidated net profit totaled 5842 thousand EEK, of which the share 

of parent company AS Baltika was 5772 thousand EEK and consolidated profit of 

subsidiaries and affiliated companies 52 thousand EEK.

Several significant factors have influenced the group’s H1 1999 net profit:

- active realization of inventories to increase liquidity (reflected on the 

income statement account of “change in inventories”, which totaled last year 

18.7 million EEK, incl. change in inventories of goods produced 14.3 million EEK). 

The company had 1.3 million EEK loss from realization of inventories.

- decrease in sales of coat producer AS Virulane in Q2 due to seasonal nature 

of business (Q1 net turnover 12.9 million EEK, Q2 net turnover 6 million EEK), 

as a result of which AS Virulane had 0.9 million EEK loss in H1 (H1 1998 loss 

0.4 million EEK).

- changes in the company’s structure have increased the personnel expenses by 

14.3 million EEK (in 1999, addition of personnel expenses of AS Virulane ja 

AS Elina STC of 11.7 and 5.0 million EEK, respectively); compared to the same 

figures in 1998, the parent company’s personnel expenses decreased by 1.0 million 

EEK (27.1 million EEK in 1999 and 28.1 million EEK in 1998).

 

 

Meelis Milder

Chairman of the Management Board