TALLINNA KAUBAMAJA AS

ANNOUNCEMENT

23.04.99

 

COMMENTARY TO FINANCIAL RESULTS 03/99

 

The Q1 1999 unaudited income statement and balance sheet of Tallinna 

Kaubamaja AS are consolidated row-by-row. Affiliated companies are 

consolidated based on equity method. The income statement and balance 

sheet reflect the parent company’s and all subsidiaries and affiliated 

companies’ financial results. 

 

The Q1 1999 net sales of Tallinna Kaubamaja AS amounted to 204.6 

million EEK, increasing by 30.5 million EEK, or 17.5%, in comparison 

with the same period last year. The share of parent company in the 

group’s Q1 net sales amounted to 57.5%. In Q1 1998, share of parent 

company was 71.9%. The increase in the relative importance of the 

subsidiaries’ turnover by 14.4% from the last year occurred due to 

expansion of Selver grocery store chain, which increased considerably 

the share of subsidiary A-Selver in group. The 1999 profit forecast of 

Tallinna Kaubamaja AS anticipated net profit in the amount of 1.2 

billion EEK, of which 21% was met during Q1.

 

The activities of Tallinna Kaubamaja AS during Q1 1999 resulted in 1.6 

million EEK loss. Upon calculating the results, 2.1 million EEK 

accounting loss from the share option was also considered. Based on 

three-months financial results, the amount of loss per share is 0.24 

EEK. This loss was also addressed in the budget, being significantly 

lower than anticipated. The financial result of the first quarter was 

related to the worsened economic climate in the second half of 1998, 

and voluminous investments of Kaubamaja, which increased the need to 

include foreign capital in amounts larger than usual. Proceeding from 

the above, the financial expenses increased by 2.8 million EEK, or 2.1 

times compared to the previous year. According to the forecast, the 

company plans to end the first half year with profit. The group 

forecast anticipates to earn net profit for the year in the amount of 

25 million EEK, not considering the results of share option.

 

The group’s balance sheet volume, as opposed to the standings on 

31.12.98, have decreased by 19.3 million EEK, or 4.9%, amounting to 

374.55 million EEK as of 31.03.99. during Q1 there were no substantial 

changes in the balance sheet structure. The share of owners’ equity of 

the balance sheet volume is 33.7% (31.12.98 - 33%). 

 

On January 15, the Management Board of Tallinna Kaubamaja AS signed the 

establishment documents of a new subsidiary, Tallinna Kaubamaja 

Kinnisvara AS. The establishment entry to the Commercial Registry was 

made on 05.04.99. All the estates owned by Kaubamaja and non-fixed 

assets inseparable from these were assigned to the subsidiary. The 

subsidiary was established for better and more effective administration 

of the real estate objects owned by Kaubamaja, and also to arrange the 

structure of Kaubamaja group. The first financial year of Tallinna 

Kaubamaja Kinnisvara AS started on 01.04.99 and will end on 31.12.99.

 

The subsidiary of Kaubamaja, Rävala Parkla, discontinued its contract 

with operator company AS Estpark in mid-February. From now on, the 

parking services are arranged by Rävala Parkla AS.

 

On 19.02.1999, Tallinna Kaubamaja issued via Hansabank Markets 13 

million EEK worth of short-term commercial papers at 13% annual 

interest rate. The duration of the issue is 3.5 months, and the purpose 

of it was to include foreign capital at more favorable interest rate 

than the banks offer in order to replace current liabilities. On the 

account of funds received through the issue, the company decreased the 

volume of its credit line by 7.5 million EEK, and by 5.5 million EEK 

current liabilities to Hansapank. Redemption of the commercial papers 

will take place on 02.06.1999. The current issue is the third one 

conducted by Tallinna Kaubamaja. The previous issues have been 

repurchased on schedule.

 

 

Urmo Vallner

Member of the Management Board

Tel. +372 64 00 200