AS NORMA

ANNOUNCEMENT

23.03.99

 

COMMENTARY TO THE CONSOLIDATED 1998 FINANCIAL RESULTS OF AS NORMA

 

The consolidated reports of Norma group reflect the financial results 

of the following companies:

 

 

AS Norma                             shareholding of AS Norma, parent 	

				     company of the group

Eksamo Automaatika AS                100%

AS Metaprint                         100%

AS Norma Maja                        100%

Norma Osvar Ltd.                     100%  

AS Tööriistavabrik                   100%

AS Norsafe                            50%

 

The financial reports of AS Norma are compiled in accordance with the 

principles of the International Accounting Standards (IAS), and are 

based on the principle of acquisition cost.

 

The 1998 net turnover of Norma group amounted to 482.7 million EEK, the 

respective figure of 1997 was 559.8 million EEK; the business activities

of AS Norma accounted for 85.7% of the off-group sales revenues, AS Metaprint 

8.8% and Norma-Osvar Ltd. 2.8%. The main fields of activity of the 

group are production and sales of seat belts, vehicle accessories and 

supplies, also sheet iron lithography and real estate administration.

 

Compared with the previous periods, the company’s sales structure by 

regions has remained the same. The exports accounted for 99% of the 

sales of the parent company. 88% of production was sold to the Eastern 

markets and 11% to the Western markets; the remaining share of the 

sales was made to the Estonian and Baltic regions. The largest buyers 

of AS Norma products in the East are Russian automobile factories 

AVTOVAZ and GAZ. The total sales to the Eastern markets amounted to 

363.5 million EEK, and 39.3 million EEK to the Western markets.

 

The company has improved significantly the balance of the accounts 

receivable, which decreased during the year by 15.6 million EEK. The 

total volume of the group’s accounts receivable was 136.7 million EEK. 

 

Total loss from the currency exchange differences was 42.3 million EEK.

The main reasons behind the respective loss were decrease in the exchange

rate of USD and Russian rouble, and revaluation of assets proceeding from 

that. Main source of the Russian rouble-related exchange loss was the 

revaluation of investments made to the Russian subsidiary Norma Osvar;

USD-related loss occurred mainly due to the revaluation of accounts 

receivable.

 

The pre-tax profit of the group totaled 66.1 million EEK and net profit 

47.6 million EEK. In comparison with the previous year, the volume of 

net profit has decreased by 99.1 million EEK; however, the profit of 

1997 included extraordinary revenues in the amount of 24.0 million EEK. 

The revenues were lower in 1998 due to decrease in turnover and 

unfavorable currency exchange rates. Among the subsidiaries, the 

greatest share to profit was contributed by AS Norma Maja (8.4 million 

EEK) and AS TRV (1.8 million EEK). 

 

To recover the production capacities and earn future revenues, the 

group made additional investments in the amount of 79.7 million EEK 

during the year, including investments in new equipment in the 

amount of 46.6 million EEK, computer systems 3.3 million EEK, 

product development 8.6 million EEK, and building reconstruction

20.4 million EEK.

 

The group's balance sheet volume totaled 454.0 million EEK. The 

group's capital structures was changed due to changes in financing 

of the group's business activities and inclusion of foreign capital, 

The loan from EBRD has increased the non-current liabilities 7

times, amounting to 81.2 million EEK (17.9% of balance sheet volume). 

Total liabilities amounted to 136.0 million EEK. The share of 

owners' equity has decreased from 80.5% to 70.0%. The annual return 

on owners' equity is 15.0%.

 

 

Raivo Harand

Controller

+372 650 0482