AS EMV

ANNOUNCEMENT

23.02.99

 

PRELIMINARY 1998 FINANCIAL RESULTS OF AS EMV 

 

The 1998 unaudited consolidated net sales of EMV affiliated group 

amounted to 785 million EEK, and loss 2 million EEK. In 1997, the 

company had net sales of 536 million EEK, and gross profit of 25.9 

million EEK. 

 

The following factors affected the financial results in 1998:

 

- in I half year, the extraordinary expenses of AS EMV exceeded the 

planned amount by 4.8 million EEK. The share of retirement 

compensations for AS EMV management was 2.2 million EEK, and 

consultation and legal expenses related with the merger negotiations 

with AS Merko Ehitus amounted to 0.5 million EEK. Development expenses 

totaled 0.8 million EEK, and at the end of I quarter, 1.3 million EEK 

was paid for extraordinary bonuses.

- in 1998, the amount of financial expenses increased significantly in 

comparison with the planned volume, totaling 12.6 million EEK

- the volume of borrowings, accounting for 78.9 million EEK as of 9 

months of 1998, decreased in the last quarter by 18.5 million EEK to 

60.4 million EEK

- the reserve fund established to cover the guarantee works and 

deficiencies on finished projects increased the expenses of 1998 by 3.4 

million EEK

- the expenses of AS EMV related with the bankruptcy of German 

subsidiary totaled 6.4 million EEK 

- EMV wrote off uncollectible debts in the amount of 4.5 million EEK, 

of which the share of 1998 of 1.6 million EEK consisted primarily of 

the liabilities of the concrete factory sold, and the liabilities of 

previous periods of 2.9 million EEK

- in the course of restructuring, started in the II half year of 1998, 

the number of employees of EMV has decreased by 230 people to 531 

employees. Total amount of lay-off compensations paid was 0.7 million 

EEK.

- the extraordinary income of EMV from the sale of the fixed assets of 

concrete factory amounted to 5.4 million EEK.

 

The volume of AS EMV official 1998 sales forecast amounted to 818 

million EEK, including the return on equity of 25%, which was not met 

primarily due to extraordinary expenses and reorganization (finished in 

1998) expenses. EMV has not changed its strategy to increase the return 

on equity to at least 25%. As of the end of 1998, the volume of 

construction works for 1999 secured by contracts totaled 310 million 

EEK. At present, the most substantial contracts for the coming year 

also include the II stage construction works on Ilmarise quarter 

totaling 41 million EEK, 1999 construction-installation works on Eesti 

Telefon investment objects totaling 88.6 million EEK, and 

reconstruction works on Haapsalu water system in the amount of 13 

million EEK. As of today, the volume of construction works for 1999 

secured by contracts is 460 million EEK.

 

AS EMV will publish its audited income statement, balance sheet and 

commentaries on Tuesday, 30.03.1998. 

 

 

Marko Kaha

Financial analyst

Tel: +372 640 3310