Andmed seisuga: 22.07.2024 09:08 (GMT+3)
Baltika FINANCIAL RESULTS 11/12/2003
FINANCIAL RESULTS 3Q 2003
Comments on AS Baltika financial results for third quarter of 2003
The retail strategy implementation plan of AS Baltika prescribes the
following main goals for 2003:
- to improve the efficiency of operation of retail sales space;
- to reduce the percentage of old (older than one season) inventories in the
system;
- to increase sales (particularly in the retail system);
- to ensure a positive cash flow and strengthen it.
General results
The unaudited consolidated net sales of AS Baltika in the first nine months
of 2003 were EEK 144.27m (EUR 9.22m) and the net loss was EEK 6.97m (EUR
0.45m). Compared to the same period of 2002, the net sales increased by 11.2%
(the net sales were EEK 129.78m or EUR 8.29m), loss increased by EEK 3.1m
(EUR 0.19m) (the loss for the third quarter of 2002 was EEK 3.86m/EUR 0.25m).
"Owing to strong retail sales, the third quarter proved to be the best of
this year," said Meelis Milder, Chairman of the Management Board of Baltika,
about the third quarter results.
Sales
Owing to the good sales results of the third quarter, the sales for the first
nine months of the year increased by EEK 3.86m (EUR 0.25m) compared to the
same period of the previous year (1.1%) and amounted to EEK 365.24m (EUR
23.24m); the net sales for the first nine months of 2002 were EEK 361.38 (EUR
23.1m).
Retail sales increased in the third quarter by 57% compared to the same
period of the previous year and amounted to EEK 81.9m (EUR 5.23m). The retail
sales of the third quarter of 2002 amounted to EEK 52.02m (EUR 3.32m); the
retail sales of the first nine months formed 62% of total sales (total EEK
226.5m / EUR 12.48m); the percentage for the same period of the previous year
was 47% (EEK 171.17m / EUR 10.93m),
The sales of the Monton retail brand, which celebrated its first anniversary
in 2003, formed 75.3% of the first nine months’ retail sales of Baltika
Group, totalling EEK 170.58m (EUR 10.90m). As of 30 September 2003, 36,560
members in five countries had joined the Monton customer programme; 9360 new
customers were added during the third quarter.
CHR/EV and Baltman, the other retail concepts of Baltika Group, which were
renewed in the first half of the year, have established themselves well.
Three new CHR/EV shops were opened in response to the market demand in the
third quarter: one in Latvia and two in the Ukraine.
Baltika Group had 8870 m2 of retail sales space in Estonia, Latvia,
Lithuania, the Ukraine, Poland, and Sweden (56 shops) at the end of
September; the sales space including controlled retail space totals 10,174 m2
(71 shops).
The wholesale sales of Baltika’s own products in the third quarter, of which
CHR/EV and Baltman brand products accounted for 55%, totalled EEK 47.28m (EUR
3.02m), which was less than in the previous year by EEK 11.5m (EUR 0.74m);
yet, the volume of wholesale contracts approved in the second half of the
year was greater than in the first half.
The sales volumes of subcontracted products decreased by 5% in the third
quarter. Subcontracting sales totalled EEK 14.36 (EUR 0.92m) in the third
quarter; the result of the same period of the previous year was EEK 15.18m
(EUR 0.97m).
Financial results
The autumn season sales that began in August show that the first half-year’s
decisions and actions for improving the income basis are becoming reality.
For the first time this year, Baltika Group earned a total of EEK 5.67m (EUR
0.36m) of profit in August and September on a monthly basis. The total net
loss of Baltika for the third quarter was EEK 6.97m (EUR 0.45m). The net loss
for the same period of the previous year was EEK 3.86m (EUR 0.25m).
The negative result of the third quarter was influenced by the exceptionally
hot July and August on all the five retail markets of Baltika Group, which is
why the sale of end-of-season inventories continued in order to start the
autumn season with a lower inventory level of a higher quality. Fluctuations
in the retail margins and efficiency by market also influenced the third
quarter’s results. The best results have been achieved on the Lithuanian
market; efficiency indicators have significantly improved also in the
Ukraine, compared to the first half of the year. The efficiency indicators
(sales/m2) are lower than expected on the Polish market.
The net loss for the nine months totalled EEK 30.40m (EUR 1.94m); the result
for the same period of the previous year was a profit of EEK 5.72m (EUR
0.37m), which included EEK 4.9m (EUR 0.31m) of income from the sale of real
estate. Operating costs have increased in proportion to the entire system’s
growth when compared to the first nine months of the previous year.
Depreciation costs have increased because of the large investments of 2002 in
retail sale, production, and information technology. The fall of EURIBOR and
achievement of better loan agreement conditions has reduced interest costs by
EEK 0.6m (EUR 0.04m) compared to the first nine months of the previous year.
Exchange rate fluctuations have also had an impact on the results of Baltika
Group.
Balance sheet
The consolidated balance sheet total of Baltika was EEK 391.55m (EUR 25.02m)
as of 30.09.2003; the decrease compared to the beginning of the year was EEK
18.61m (EUR 1.19m). Inventories have decreased in the system by EEK 14.6m
(EUR 0.93m) since the beginning of the year.
Inventories worth EEK 5.4m (EUR 0.35m) have been recorded at net sales value;
a write-down reserve of EEK 0.72m has been formed for these inventories.
The reason for the increase in cash balances and short-term and long-term
debts was the formation of funds for financing the redemption of commercial
papers in October, of which EEK 17.5m (EUR 1.12m) was used to issue long-term
bonds and increase a long-term bank loan by EEK 9.0m (EUR 0.58m).
Cash flow
The cash flow from operations was +EEK 9.3m (EUR 0.59m) for the first nine
months; the cash flow was negative in the same period of the previous year:
-EEK 29.7m (-EUR 1,90m). The activities that BG uses to ensure a stronger
cash flow are: reduction of investments, more exact planning of financing
activities, and improvement of the inventories management system.
The concern employed dated by end of September was 1778 employees, from that
417 in retail, 1078 in manufacturing and in foreign countries totally 292
employees.
The main ratios of AS Baltika Group as of 30.09.2003 were:
30.09.2003 30.09.2002
Increase in turnover 11,2 9,4
% quarter
Increase in turnover 1,1 19,3
% from beginning of
the year
Share of retail sales 62 47
in net turnover %
Number of shops 71 65
Retail premises 10 174 8 361
managed (m2)
Markets managed 6 6
through own retail
organisations
Operating profit to -6,6 4,0
net sales %
Net profit to net -8,3 1,6
turnover %
Return on equity ROE -18,8 8,5
(net profit/average
equity capital of 12
months) %
Return on assets (net -8,0 3,7
profit/average cost
of assets of 12
months) %
Income Statement BG 9m 2003 (consolidated)
th. EEK
IIIQ 2003 IIIQ 2002 9m 2003 9m 2002
Revenue
Net sales 144 267 129 779 365 237 361 381
Other revenue 232 50 485 5 952
Total revenue 144 499 129 829 365 722 367 333
Expenses
Materials, raw (64 072) (34 510) (149 465) (136 452)
materials and services
Change in inventories (2 915) (16 386) (3 124) (733)
Other operating (34 817) (35 332) (99 057) (88 695)
expenses
Personnel expenses (42 986) (37 237) (120 512) (110 394)
Depreciation of fixed (3 951) (5 448) (16 553) (14 587)
assets
Other expenses (359) (725) (1 264) (2 095)
Total expenses (149 100) (129 638) (389 975) (352 956)
Operating profit (4 601) 191 (24 253) 14 377
(loss)
Financial income 211 54 546 285
Financial expenses (1 725) (2 535) (6 161) (7 110)
Profit (loss) before (6 115) (2 290) (29 868) 7 552
taxes
Income tax expense - (3) (21) (268)
Profit (loss) before (6 115) (2 293) (29 889) 7 284
minority interest
Minority interest 859 1 571 506 1 568
Net profit (loss) (6 974) (3 864) (30 395) 5 716
Basic earnings per (1,27) (0,79) (5,55) 1,18
share
Diluted earnings per (1,27) (0,79) (5,55) 1,17
share
Income Statement BG 9m 2003 (consolidated)
th. EUR
III Q 2003 III Q 9m 2003 9m 2002
2002
Revenue
Net sales 9 220 8 294 23 343 23 096
Other revenue 15 3 31 380
Total revenue 9 235 8 298 23 374 23 477
Expenses
Materials, raw (4 095) (2 206) (9 553) (8 721)
materials and services
Change in inventories (186) (1 047) (200) (47)
Other operating (2 225) (2 258) (6 331) (5 669)
expenses
Personnel expenses (2 747) (2 380) (7 702) (7 055)
Depreciation of fixed (253) (348) (1 058) (932)
assets
Other expenses (23) (46) (81) (134)
Total expenses (9 529) (8 285) (24 924) (22 558)
Operating profit (294) 12 (1 550) 919
(loss)
Financial income 13 3 35 18
Financial expenses (110) (162) (394) (454)
Profit (loss) before (391) (146) (1 909) 483
taxes
Income tax expense - (0) (1) (17)
Profit (loss) before (391) (147) (1 910) 466
minority interest
Minority interest 55 100 32 100
Net profit (loss) (446) (247) (1 943) 365
Basic earnings per (0,08) (0,05) (0,35) 0,08
share (EUR)
Diluted earnings per (0,08) (0,05) (0,35) 0,07
share (EUR)
Balance sheet BG 30.09.03 (consolidated)
th.EEK
ASSETS 30.09.03 30.09.02 31.12.02
Current assets
Cash and bank 32 254 16 269 10 010
Shares and other 357 476 542
securities
Customer receivables 64 863 71 851 47 609
Other receivables and 20 302 18 534 19 456
prepaid expenses
Inventories 161 258 174 687 175 857
Total current assets 279 034 281 817 253 474
Non-current assets
Long-term investments 6 022 2 566 6 160
Tangible fixed assets 92 647 101 784 108 382
Intangible fixed assets 13 844 4 258 4 921
Total non-current 112 513 108 608 119 463
assets
TOTAL ASSETS 391 547 390 425 372 937
LIABILITIES AND OWNER`S
EQUITY
Current liabilities
Debt obligations 94 537 68 435 90 633
Customer prepayments 150 126 149
for goods and services
Accounts payable 53 933 53 337 33 708
Other tax liabilities 10 842 4 966 8 086
Accrued expenses 11 196 11 809 7 769
Total current 170 658 138 673 140 345
liabilities
Non-current liabilities
Long-term debt 72 397 74 199 55 469
Other long-term 141 - 141
liabilities
Total non-current 72 538 74 199 55 610
liabilities
TOTAL LIABILITIES 243 196 212 872 195 955
Minority interest 7 438 8 701 7 049
OWNER`S EQUITY 140 913 168 852 169 933
Share capital (par 54 995 48 000 54 444
value)
Unregistered share - 23 200 -
capital
Share premium 42 490 24 910 41 665
Other restricted equity 22 885 22 885 22 885
Retained profit 50 938 44 141 44 141
Profit (loss) for the (30 395) 5 716 6 798
accounting period
TOTAL LIABILITIES AND 391 547 390 425 372 937
OWNER`S EQUITY
Balance sheet BG 30.09.03 (consolidated)
th.EEK
ASSETS 30.09.03 30.09.02 31.12.02
Current assets
Cash and bank 32 254 16 269 10 010
Shares and other 357 476 542
securities
Customer receivables 64 863 71 851 47 609
Other receivables and 20 302 18 534 19 456
prepaid expenses
Inventories 161 258 174 687 175 857
Total current assets 279 034 281 817 253 474
Non-current assets
Long-term investments 6 022 2 566 6 160
Tangible fixed assets 92 647 101 784 108 382
Intangible fixed 13 844 4 258 4 921
assets
Total non-current 112 513 108 608 119 463
assets
TOTAL ASSETS 391 547 390 425 372 937
LIABILITIES AND
OWNER`S EQUITY
Current liabilities
Debt obligations 94 537 68 435 90 633
Customer prepayments 150 126 149
for goods and services
Accounts payable 53 933 53 337 33 708
Other tax liabilities 10 842 4 966 8 086
Accrued expenses 11 196 11 809 7 769
Total current 170 658 138 673 140 345
liabilities
Non-current
liabilities
Long-term debt 72 397 74 199 55 469
Other long-term 141 - 141
liabilities
Total non-current 72 538 74 199 55 610
liabilities
TOTAL LIABILITIES 243 196 212 872 195 955
Minority interest 7 438 8 701 7 049
OWNER`S EQUITY 140 913 168 852 169 933
Share capital (par 54 995 48 000 54 444
value)
Unregistered share - 23 200 -
capital
Share premium 42 490 24 910 41 665
Other restricted 22 885 22 885 22 885
equity
Retained profit 50 938 44 141 44 141
Profit (loss) for the (30 395) 5 716 6 798
accounting period
TOTAL LIABILITIES AND 391 547 390 425 372 937
OWNER`S EQUITY
Ülle Järv
Financial Director
+372 6302 731
Sisukaart