AS KALEV 

ANNOUNCEMENT

07.06.1999

 

COMMENTARY TO Q1 1999 CONSOLIDATED BALANCE SHEET

 

The Q1 1999 consolidated balance sheet of AS Kalev includes the 

consolidated results of subsidiary Tšarodeika (located in 

Kaliningrad), Ukrainian Center of Logistics and subsidiary Kim 

Amsterdam Team Ltd., which holds 50% shareholding of confectionery 

Bogatõr in Moscow.

 

The consolidated balance sheet size of AS Kalev increased in Q1 by 

7.3 million EEK or 2.8%, amounting to 255.2 million EEK at the end of 

Q1.

 

Due to 35.2% lower turnover in Q1 1999, as compared to the respective 

figure in 1998, the volume of accounts receivable has declined by 

38.1 million EEK, or 46.3%. Inventories of raw materials decreased in 

Q1 by ca 0.4 million EEK, but annually 10.5 million EEK or 16.3%, 

which also results from lower turnover.

Compared to the standings in the beginning of the year, the company’s 

current assets account has increased by 27 million EEK (incl. 

proceeds from disposal of shareholding in Vilniaus Pergale of 18 

million EEK, increase of accounts receivable of 2.7 million EEK and 

short-term loans to subsidiaries).

 

Other short-term receivables have increased annually by 4.2 million 

EEK, proceeding mainly from increased receivables from confectionery 

Bogatõr.

 

Prepaid expenses increased by 1.7 million EEK due to increase in the 

prepaid corporate income tax.

 

The company made no substantial investments in fixed assets during 

the first quarter of 1999. 

 

On the account of long-term financial investments, AS Kalev disposed 

in January 1999 its shareholding in confectionery AS Vilniaus Pergale 

for 16.5 million EEK. The rest of the changes on the account of 

investments in subsidiaries occurred in 1998.

 

Supplier payables have decreased annually by 20 million EEK, incl. 

6.3 million EEK in Q1 1999. Changes occurred due to lower turnover 

and new supply conditions, i.e. better prices for shorter payment 

terms.

 

Tax liabilities have increased from the beginning of the year by 0.8 

million EEK, resulting from the amendments to the law on social tax 

(effective as of February) regarding the payment of taxes withheld 

from salaries. Due to utilization of employee lay-off reserves, the 

salary-related payables have decreased by 0.7 million EEK. Compared 

to Q1 last year, the tax liabilities have decreased by 5.9 million 

EEK, as the corporate income tax was not reflected due to net loss of 

in 1998.

 

In Q1 1999, the owners’ equity of AS Kalev has increased on the 

account of net profit for the year by 2 million EEK (2.86%) to the 

level of 59.6 million EEK. The owners’ equity account decreased 

annually by 88.1 million EEK, which is mainly due to 73.4 million EEK 

loss in 1998.

 

 

 

COMMENTARY TO Q1 1999 CONSOLIDATED INCOME STATEMENT

 

The consolidated Q1 1999 net sales of AS Kalev amounted to 80.5 

million EEK and net profit 2 million EEK. 

The company sold in Q1 2167 tons of confectioneries, the share of 

exports was 35%. The volume of domestic sales were comparable to Q1 

1998, exports to the Latvian market increased. The volume of sales to 

Ukrainian market decreased, and there were no exports to Russia in 

Q1, as a result of which the volume of export has dropped by 68% from 

the level of 1998. Due to decreased sales volume, net sales declined 

by 35.2% from Q1 1998, and gross profit by 33.7%. The company’s 

consolidated operating profit amounted to 8.5 million EEK. 

 

Compared to Q1 1998, the company’s administrative expenses increased 

by 0.9 million EEK, and marketing expenses decreased by 2.6 million 

EEK.

 

Compared to Q1 1998, the company’s revenues increased by 5.2 million 

EEK. Extraordinary income from disposal of shareholding in AS 

Vilniaus Pergale amounted to 2.3 million EEK. Gains from foreign 

exchange (stronger USD vs. DEM) amounted to 4.7 million EEK, incl. 

3.25 million EEK receivables from subsidiaries and affiliated 

companies.

 

Compared to Q1 1998, the company’s expense account increased by 0.8 

million EEK, mainly due to provisions on the receivables from 

subsidiaries.

 

Compared to Q1 1998, the company’s operating profit decreased by 

27.4% or 3.2 million EEK, whereas the operating profit margin 

increased by 1.1%.

 

Decrease of financial income compared to Q1 1998 proceeded from the 

fact that AS Kalev earned no income from equity holding in Q1 1999. 

Increase in financial expenses occurred mainly due to interest 

expenses related to syndicate loan. Financial expenses increased 

mainly due to financial losses of subsidiaries and affiliated 

companies (which was intensified due to strengthening of USD in 

relation to other currencies) and risen interest expenses from 

increased borrowings in comparison with Q1 1998.

 

Decrease of pre-tax profit from the Q1 1998 level of 9.5 million EEK 

to 2 million EEK in Q1 1999 proceeds from the financial losses 

related to subsidiaries and affiliated companies.

 

 

Tiina Altmets

Information manager

+372 6508 711