FAKTO

COMMENTARY TO FINANCIAL RESULTS



COMMENTARY TO FINANCIAL RESULTS, H1 2000



AS Fakto and its subsidiaries form a group, the main fields of 

activity of which are sale of vehicles, car accessories and car 

parts, and car maintenance and repair works. 

 

AS Fakto group consists of the following companies:

            AS Fakto holding		 Address

AS Fakto                        Osmussaare tee 10, TALLINN

AS Nissan Balti          65%    Osmussaare tee 10, TALLINN

AS Itaalia Auto         100%     Tammsaare tee 53, TALLINN

OÜ Nempe                100%    Osmussaare tee 10, TALLINN



The group's companies have concentrated on sale and maintenance of 

cars of Nissan and Fiat group (Fiat, Alfa Romeo and Lancia).

 

In H1 2000 the companies of AS Fakto group sold a total of 661 new 

Nissan, Fiat and Alfa Romeo cars (202 more than in H1 1999).



Sale of new cars by companies:



                      2000	  1999  Change      (%)

Nissan Balti	       590	   390     200	 51.28%

incl. AS Fakto	       284	   231	    53	 22.94%

AS Itaalia Auto	        71	    69       2	  2.90%

Total		       661	   459     202	 44.01%



In H1 2000 the company's net sales totaled EEK 188.9 million (EEK 

48.7 million or 34.7% y-o-y growth). 

Net sales by fields of activity:



                               2000	    1999      Change    (%)

Vehicles	        153,404,228  105,450,399  47,953,829  45.48%

Services		  6,265,382    6,166,939      98,442   1.60%

Car parts 		 23,817,659   24,601,362    -783,703  -3,19%

Garage equipment          2,569,008    2,496,512      72,496   2.90%

Car rental services	    232,877      205,480      27,397  13.33%

Other sales     	  2,659,295    1,338,835   1,320,460  98.63%

Total         	        188,948,448  140,259,528  48,688,920  34.71%



Net sales by companies:

                     Fakto    N-Balti  It.Auto  Nempe	  Group

Vehicles 	    70,149    126,313   15,376      0	153,404

Services 	     5,685          0    1,551    144     6,265

Car parts 	    10,961     14,280    4,702  2,808	 23,818

Car rental services     52          1        0    942       233

Garage equipment     2,575          0        0      0	  2,569

Other sales 	     2,915      1,350       97    140     2,659

Total               92,337    141,944   21,726  4,034   188,948



 

Change in net sales on annual basis, by companies:

                    Fakto  	N-Balti  It.Auto  Nempe	    Group

Vehicles	   11,736	 46,411    1,289      0	   47,954

Services 	      121             0      318     21	       98

Car parts 	   -1,007          -678      495     49	     -784

Car rental services   -40	    -12        0    131	       27

Garage equipment       79	      0        0      0	       72

Other sales   	      -44	  1,008       36     51     1,320

Total              10,845        46,730    2,137    252    48,689

Change(%)           3.31%	 49.08%    10.91%  6.67%   34.71%



Data in the above table includes intra-group net sales figure.





Sale of vehicles



Initial registration of vehicles at ARK (vehicle registration center) 

in H1 2000: 



                           2000    1999     Change         %

Total cars registered	 10,149	 13,720	   -3,571      -26.0%

incl. new cars		  4,590	  3,404	    1,186       34.8%



The above table indicates that even the initial registration of new 

cars has increased y-o-y by 34.8%, the total initial registration of 

vehicles at ARK has dropped by 26%. Decrease in imports of used 

vehicles (initial registration) might be due to sufficient supply of 

3-4 years old cars on the Estonian car market (mainly cars that were 

bought as brand new 3-4 years ago, and that are now being replaced).

 

Registration of new cars at ARK (vehicle registration center) in H1 

2000, by models:



Model		   2000   share  1999   share  1998   share  1997   share

Toyota	            473  10.31%	  311   9.14%   501  10.84%   411   0.68%

Peugeot             439   9.56%   239   7.02%   202   4.37%   140   3.64%

Volkswagen          414   9.02%   348  10.22%   471  10.19%   237   6.16%

Nissan	            347   7.56%   225   6.61%   357   7.72%   277   7.20%

Mazda		    340   7.41%   225   6.61%   302   6.53%   297   7.72%

Opel		    263   5.73%   104   3.06%   283   6.12%   248   6.45%

Honda		    256   5.58%   286   8.40%   434   9.39%   471  12.24%

Seat		    206   4.49%    61   1.79%    25   0.54%    13   0.34%

Lada		    198   4.31%     0   0.00%     0   0.00%     0   0.00%

Suzuki	            159   3.46%   266   7.81%   140   3.03%   177   4.60%

Other		  1,495   32.6% 1,339   39.3% 1,907   41.3% 1,576   41.0%

Total		  4,590         3,404	      4,622  	    3,847		 

Fakto 

group		    402    8.76%  274   8.05%   479  10.36%   425  11.05%



The market share on cars sold by companies in Fakto group has grown 

by 0.71% since H1 1999.



 

Services and sale of car parts.



In H1 2000 the consolidated net turnover from sale of services stood 

at EEK 6.3 million, which is EEK 98 thousand more than during the 

same period last year.

Sale of services by companies in H1 2000:

	              2000       1999	 Change	   %

AS Fakto	 5,157,648  5,091,307    66,341	  1.0%

AS Itaalia Auto	 1,547,028  1,230,920   316,108	 25.8%

OÜ Nempe	   137,461    116,226    21,235	 18.7%

Concern		 6,265,382  6,166,939    98,442	  1.0%



The group's net turnover from sale of services and car parts 

decreased by EEK 685 thousand y-o-y, incl. EEK 781 thousand drop in 

turnover from sale of car parts.



Sale of car parts by companies:



	               2000        1999     Change        %

AS Fakto	 10,871,870  11,894,040 -1,022,170   -8.59%

AS Nissan Balti	 10,540,100  11,264,732   -724,632   -6.43%

AS Itaalia Auto	  4,603,040   3,943,982    659,059   16.71%

OÜ Nempe	  2,332,353   2,411,797    -79,444   -3.29%

Concern		 28,347,363  29,514,551 -1,167,188   -3.95%



Other activities



Other activities include income from sales of car rental services, 

garage equipment, income from rent of premises and income from other 

sales that are not related with the company's main activity fields. 

In H1 the income from sales of other services totaled EEK 5.5 

million, i.e. EEK 1.4 million more than in H1 1999.





Operating costs

 

Operating costs grew by EEK 1,519,802 compared with H1 1999. 

Changes by expense accounts:

		                2000	      1999         Change

Personnel expenses        14,759,276    14,119,372	   639,905

Other operating expenses  10,240,858     8,466,537	 1,774,321

Depreciation  		   3,012,539     3,483,830	  -471,291

Total operating expenses  13,257,554    11,737,752	 1,519,802



On the operating expenses account, the volume of other operating 

expenses has increased the most, mainly due to increased advertising 

expenses.

The advertising expenses have mainly increased on the account of this 

spring's car fair "Motorex 2000", where all companies of the group 

participated this year. 



 

Commentary to balance sheet.



As at 30.06.2000 the group balance sheet volume stood at EEK 142,241 

thousand (EEK 9.3 million growth in 6 months). 

No substantial changes have taken place in the structure of AS Fakto 

balance sheet since 31.12.99. The balance sheet growth was mainly due 

to increase in supplier payables (EEK 13.4 million), since the volume 

of inventories is higher due to increased sales. In addition to 

higher inventories to support the sales, substantial changes were 

also made in AS Itaalia Auto order of supply. As of the current year 

the company maintains its inventories in Estonia, as a result of 

which the volume of inventories on the balance sheets assets account 

and payables to suppliers on liabilities accounts have grown. Effect 

of Itaalia Auto results on increased liabilities is EEK 5.1 million.

On the current assets account the customer receivables (EEK 8.5 

million) and inventories (EEK 5.6 million) grew the most. On the non-

current assets account the other long-term payables have decreased by 

EEK 2 million (on OÜ Nempe balance sheet: receivables from clients 

related with rental of cars based on finance and operating lease).



Owners equity is lower by EEK 2 million due to payment of dividends, 

income tax paid on dividends and loss posted in year 2000.

 

In H1 2000 earnings per share stood at -1.09 EEK.





Toivo Urva

Management Board chairman

+372 63 89 222