Pēd. atjaunots: 01.03.2021 02:29 (GMT+2)

Baltika: Commentary to the financial results, 9m 2000

25.10.2000, Baltika, TLN
BALTIKA
COMMENTARY TO FINANCIAL RESULTS

COMMENTARY TO THE FINANCIAL RESULTS, 9M 2000

The 9m 2000 consolidated reports reflect the results of the following
subsidiaries and associated companies:

30.09.2000 30.09.1999
holding % holding %
AS Baltika (parent)
AS Virulane (Estonia) 55.15% 55.15%
AS Baltman (Estonia) 100% 100%
SIA Baltman (Latvia) 100% 100%
Baltmano Prekiba (Lithuania) 100% 90%
Baltika Sweden (Sweden) 100% 100%
AS Elina STC (Estonia) 37.5% 37.5%
Baltika Poland (Poland) 100% -
Baltinia OY (Finland) 100% -

AS Elina STC is treated as subsidiary since AS Baltika controls the
financial activities of AS Elina STC. On 01.03.2000 AS Baltika bought
an additional 10% holding in Baltmano Prekiba, thus increasing its
holding to 100%.

AS Baltika 9m 2000 consolidated and unaudited net sales amounted to
EEK 260.9 mln, providing EEK 48.4 mln (23%) annual growth. Sales of
manufactured output amounted to EEK 195.3 mln (EEK 44.1 mln or 29%
more than in 9m 1999) and turnover of subcontracting works EEK 63.8
mln (EEK 7.2 mln or 13% more than in 9m 1999).

Exports accounted for 66% (EEK 173.5 mln) of net sales, providing EEK
27.2 mln annual growth; manufactured output accounted for 7% of net
sales.

Sales by markets:
(EEK mln)
Q3 2000 9m 2000 Q3 1999 9m 1999
Estonia 32.5 85.6 18.6 64.1
Latvia, Lithuania 20.8 53.7 13.4 46.2
Scandinavia 30.8 70.2 29.5 73.2
Russia, Ukraine 11.8 21.1 3.1 7.1
Great Britain 8.7 20.7 4.9 15.0
Germany 0.5 3.7 1.3 1.7
Poland 0.8 2.6 0.3 0.3
USA 1.5 1.5 - -


General improvement in the economic environment have boosted the
sales in most of the markets. 29% increase in sale s of manufactured
output is also due to opening of new stores and expansion of sales
premises. In 9m 2000 the company opened altogether 3 of its own
stores (2 in Poland, 1 in Sweden), and 4 "shop-in-shop" type stores
in Poland and 5 franchises (2 in Latvia, 3 in Russia).

AS Baltika 9m 2000 consolidated and unaudited net profit was EEK
13.2 mln (EEK 12.1 mln y-o-y growth), incl. group's profit EEK 10.7
mln (EEK 10.4 mln y-o-y growth).

Also the expenses made for purchase of raw materials and goods
increased due to higher sales of manufactured output. The
aforementioned expense articles, however, are not comparable to the
last year's results, since the manufactured output was then sold also
from the stock and the related expenses were reflected on changes in
inventories account on the income statement.

Compared with 9 m 1999 the operating expenses grew by EEK 12.3 mln or
37%. The major factor behind the increased expenses is development of
sales and management during the whole period, due to which the rental
expenses (opening of new stores), advertising and marketing expenses,
expenses related with entrance to new markets, and also
transportation costs (due to tightened schedule of delivery of goods)
grew substantially.

Weak Euro has not had a negative impact on Baltika group's financial
activities in year 2000. In 9 months the company showed EEK 1.9 mln
in foreign exchange gain. Financial expenses are 36.3% or EEK 2.1 mln
lower than in 9m 1999 (incl. EEK 1.2 mln drop in interest expenses).

Consolidated balance sheet size stood at EEK 239 mln, having
increased by EEK 20.8 mln since the beginning of the year. The
current assets grew by EEK 19.6 mln. Customer receivables also grew
substantially, mainly due to high sales in Q3 (EEK 108.4 mln); at
end-September the customer receivables stood at EEK 65.9 mln (EEK
29.7 mln growth since the beginning of the year). Supply of raw
materials and goods inventories that the company acquired to support
the sales of manufactured output, and investments made into opening
of new sales premises decreased the cash account by 11.1 mln EEK, and
increased inventories (+3.5 mln EEK) and loans (+ 5.6 mln EEK).

AS Baltika financial ratios as of 30.09.2000:

9m 2000 9m 1999
- gross margin (gross profit/net sales) 5.6% 3.2%
- profit margin (net profit/net sales) 5.0% 0.5%
- ROE (net profit/owners equity) 8.6% 0.2%
- ROA(net profit/average cost of assets) 4.5% 0.1%
- Quick ratio 0.94 0.85
((current assets - inventories)/current liabilities)


Ülle Järv
Management Board member
+372 63 02 741

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