TALLINNA KAUBAMAJA

COMMENTARY TO FINANCIAL RESULTS

 

COMMENTARY TO THE FINANCIAL STATEMENTS 1999

 

Tallinna Kaubamaja AS consolidated net sales in 1999 amounted to 

EEK 996.1 thousand, increasing 18% y-o-y, of which the parent 

company's share was 57.8%. In 1999 the group's revenues exceeded 

EEK 1 billion level for the first time in the company's history. 

The group earned EEK 34.3 million of net profit, increasing more 

than 4 times on annual basis. The 1999 net profit figure gained EEK 

11.4 million from transfer of deferred income tax liability amount 

to net profit account due to changes in Income Tax Law, and EEK 3.0 

million accounting profit from revaluation of share option claim.

 

In 1999 the average number of group's employees was 1050 people, 

and total salary expenses at EEK 68.1 million. The average number 

of parent company's employees was 596 people, with total salaries 

of EEK 44 million.

 

As of 31.12.1999 Tallinna Kaubamaja consolidated total assets stood 

at EEK 377.2 million, decreasing by EEK 16.6 million on annual 

basis. Current liabilities grew by 16.2 million, whereas 

non-current liabilities dropped by EEK 57.9 million. Owners' equity 

grew by EEK 24.1 million, to EEK 154.1 million.

 

In 1999 Kaubamaja group made EEK 14.9 million of investments into 

fixed assets.

 

On 15.01.1999 the Management Board signed the establishment 

documents of new subsidiary, Tallinna Kaubamaja Kinnisvara AS. The 

Commercial Register made a respective entry on 05.04.1999. All 

estates owned by Kaubamaja and assets inseparable from these were 

assigned to the subsidiary as non-monetary deposit. The subsidiary 

was established to improve the administration of real estate 

objects owned by Kaubamaja, and to arrange the structure of 

Kaubamaja group. Tallinna Kaubamaja Kinnisvara AS financial year 

ended on 31.12.1999.

 

On February 19 and June 2 Tallinna Kaubamaja conducted two issues 

of commercial papers to replace higher-interest current 

liabilities. Volume of the first issue was EEK 13 million, issued 

at 13% interest rate; volume of the second issue was EEK 15 

million, issued at 7% annual interest rate. Both issues were 

redeemed in 1999, according to the schedule. The issues were 

organized by Hansabank Markets.

 

In 1999 Kaubamaja prepared the opening of new "Selver" stores. In 

June Tallinna Kaubamaja group bought 5623 m2 of land in Pirita, 

Rummu Rd. 2 (Tallinn), to build a new store. Pirita Selver will be 

opened in May 2000; the owner of real estate will be Tallinna 

Kaubamaja Kinnisvara AS. 

In October Kaubamaja signed a rent agreement to build a shopping 

center to Järve (Pärnu Rd. 238, Tallinn), with 5500 of selling 

premises. Järve Selver will be opened in October 2000. Both Selver 

stores will also provide drive-in service, where a customer has an 

option to pre-order the goods via phone or Internet. The trade 

center also has 1500 m² of office premises, to be occupied by the 

Kaubamaja group.

 

Tallinna Kaubamaja will also expand its premises at Gonsiori 2, 

Tallinn. In March Kaubamaja opened a new department for young 

people; until October 1999 the named premises were used for storage 

and office premises. In H2 Kaubamaja intends to complete the sixth 

floor of A-building, to be occupied by food court.

 

Tallinna Kaubamaja intends to continue sponsoring Tallinn Zoo and 

Estonian Puppet Theater. Kaubamaja is the main sponsor of Puppet 

Theater since 1995. 

 

Prices of Tallinna Kaubamaja AS shares on Tallinn Stock Exchange 

fluctuated between EEK 35.90 and EEK 17.20. On the last trading day 

of 1999 the closing price of Kaubamaja shares was EEK 31.90, having 

increased 86.5% annually. As of end-1999 the market value of 

Tallinna Kaubamaja was EEK 216.5 million. Earnings per share in 

1999 stood at EEK 5.05.

 

 

Urmo Vallner

Member of the Management Board

+372 64 00 200