AS BALTIKA

ANNOUNCEMENT

20.11.98

 

COMMENTARY TO THE 09/98 CONSOLIDATED FINANCIAL RESULTS 

 

The consolidated financial statements of the Baltika affiliated 

group reflect the financial results of the following business 

units:

			1998/9			    1997/9

                        (shares)		    (shares)

 

AS Baltika              parent company		parent company

AS Baltman              100%                            100%

Baltmano Prekiba         90%                             90%

AS Villero               -                               75%

AS Sander                -                               68,3%

AS Valik                 -                               80%

Lviv-Baltman            100%                            100%

Baltman Finland OY       -                              100%

Baltika Sweden          100%                            100%

AS Elina STC             50%                             -

 

 

The 1998 9 months consolidated unaudited net sales of AS Baltika 

were  217 million EEK, which is 9% (17.6 million EEK) more than 

during the same period last year. The net sales of AS Baltika’s 

largest subsidiary AS Baltman were 52.1 million EEK, which counts 

for 24% of the consolidated net sales. 67% (133.4 million EK) of 

the net sales were exports. Compared with the same period last 

year, the consolidated operating expenses decreased by 6.1 

million EEK, since the 1997 9 months consolidated financial 

statements reflected the 4.7 million EEK income from the sale of 

a real estate. Other operating revenues increased by 2.3 million 

EEK, of which 2.0 million EEK came from the foreign exchange 

losses from the transactions with suppliers and customers. Due to 

the provision on the Russian clients’ doubtful accounts and the 

write-off of the other uncollectible receivables in the amount of 

4.6 million EEK, the operating expenses of AS Baltika have 

increased by 19%. 

 

AS Baltika’s 1998 9 months consolidated unaudited gross profit 

was 6.2 million EEK, which is 12% (0.7 million EEK) more than 

during the same period last year, but 1 million EEK less than the 

parent company’s 1998 9 months gross profit calculated based on 

the equity method. This difference occurred due to the Ukrainian 

subsidiary’s Lviv-Baltman 9 months loss, which made the owners’ 

equity negative.

 

The consolidated balance sheet volume of AS Baltika increased by 

15% (28 million EEK), being 214.5 million EEK. The change was 

mainly caused by the 19% increase in the inventory (16.4 million 

EEK), including the 68% increase in the inventory of the finished 

goods (16.7 million EEK). The reasons behind the increase in the 

inventories were temporary suspension of sending the products to 

the clients connected with the Russian market, and the influence 

of meeting the terms of the seasonal orders. Accounts receivable 

increased by 29% (11.6 million EEK), which was due to the 

extension of the payment terms of the clients connected with the 

Eastern market. Some of the receivables are provisioned in 

accordance with the principle of conservatism, and the respective 

expenses are reflected in the income statement of the affiliated 

group.

 

 

Meelis Milder

Chairman of the Management Board