Pēd. atjaunots: 30.11.2024 18:10 (GMT+2)
Baltika FINANCIAL RESULTS 08/04/2003
FINANCIAL RESULTS FOR Q2/2003
Comments to AS Baltika interim report for the second quarter of 2003
The implementation plan of retailing strategy prescribed the following
main objectives for 2003:
– Increasing the efficiencies of the retail operations;
– Decrease of previous (older than one season) stocks in the system;
– Increase in turnover (above all, in the retailing system);
– Guarantee and strengthening of positive cash flow.
General results
The unaudited consolidated net turnover of Baltika in the second quarter
of 2003 was EEK 108,4 mil (EUR 6,9 mil) and the net losses were EEK 9,3
mil (EUR 0,6 mil). When compared to the same period of 2002, the net
turnover increased by 1,0% (net turnover EEK 107,3 mil; EUR 6,9 mil,
respectively) and profit decreased by EEK 11 mil (EUR 0,7 mil) (in 2002
II quarter profit EEK 1.8 mil; EUR 0,1mil, respectively).
"Even though we were not able to demonstrate positive results in the
second quarter, positive trends are showing us that we are on the right
track. Indicators like selling during the 2. quarter more than last year
the same time, the constant decrease in old stock and cutting business
costs has ensured us positive operating cash flow for the period," Mr.
Meelis Milder noted commenting the results of the 2. quarter of 2003.
"The results for the first halt of 2003 were in line with the boards
budgets," declared Mr. Miles Burger, Chairman of the Supervisory Board of
AS Baltika. "The well publicised company decision to move to become the
leading specialist clothing retailers in Central and Eastern Europe will
not be achieved without some growing pains," Mr. Burger added , noting
that the Board does not envisage the 2nd half 2003 financials to be
spectacular but are confident the retail strategy is the best course for
the long term prosperity of Baltika's staff and shareholders.
"We are optimistic, though cautious in the matter, concerning the 2. half
of the year. Especially because during the first half we managed to renew
and prepare two of Baltika’s smaller retail conceptions – Baltman and
CHR/Evermen, which contribution in the business can not be
underestimated" Mr Milder appended commenting the results.
Sales
When compared to the same period of the previous year, retail sales
increased by 24,4%, amounting to EEK 78 mil (EUR 4,99 mil) in the second
quarter. Retail sales were EEK 62,7 mil (EUR 4,01mil) in the second
quarter of 2002. The share of retail sales of the first half of the year
in total turnover was 65% (total EEK 144,6 mil, EUR 9,25 mil), whereas
during the same period of the previous year, it reached 49% (EEK 112,5
mil, EUR 7,19 mil).
New retail brand Monton sales composed EEK 114,13 mil (EUR 7,29 mil) of
Baltika Group six months turnover, so. 78,9 %. Compared to first quarter
Monton sales increased by EEK 12,13 mil (23,8%). Dated 30.06.03. the
number of Monton World members was 27 200, encompassing 5 countries,
during 2. quarter 4000 new members registered. Dated by the end of June
Baltika owned 8649 m2 of own retail space (53 shops) in Estonia, Latvia,
Lithuania, Ukraine, Poland and Sweden, totally with operated retail space
9953 m2 (68 shops). During the second quarter the differences of the new
retail concept Monton in different markets started to clear off. While in
the two biggest markets – Estonia and Lithuania – the results have
started to approach expected levels, in Poland and Ukraine the process
will take at least another season. During the next six months the retail
buying and merchandising team will also be greatly strengthened allowing
current staff to focus more on the strengths and weaknesses of the retail
operations.
Wholesale trends present that the negative difference in revenues to the
last year result diminished during the second quarter. Second quarter own
wholesale turnover totalled to EEK 20,5 mil (EUR 1,31 mil), which was EEK
8,5 mil (EUR 0,54 mil) less compared to last year, in first quarter the
backlog was EEK 32 mil.
Positive trend can be seen in production, since the manufacturing
division is currently enjoying record order books.
Profit
The net loss of Baltika in the first quarter was EEK 9,3 mil (EUR 0,6
mil). The net profit earned during the same period in the previous year
amounted to EEK 1,8 mil (EUR 0,1 mil). Six months total net losses
amounted to EEK 23,4 mil (EUR 1,5 mil), last year same period the profit
was in amount EEK 9,6 mil (EUR 0,61 mil), which included an income of EEK
4.9 mil (EUR 0.31mil) from the sale of property. The second quarter
results have been influenced mostly by the lower margins in retail sale
and by the fluctuation in efficiency in most markets, which is caused by
the general depression on garment markets, including most of Baltika
Groups operated markets. During the 1st half 2003 stocks of previous
brands had to be cleared which had an adverse effect on profits but gave
a positive cash flow. One off costs were also incurred in this period
related to the launch of two new brand concepts CHR/EM and Baltman.
Retail income earned in March, April and May, started to decrease in
June, influenced by regular seasonal stock realization actions (sales).
The stock in system has decreased from the beginning of the year by EEK
12,5 mil (EUR 0,8 mil).
Operating costs increased proportionally with whole system, actually
personnel costs compared to last period same period decreased by EEK 0,56
mil (EUR 0,04 mil). Amortization decreased caused by gross investments
into retail, manufacturing and info technology in 2002.
Balance sheet
The consolidated balance sheet total of Baltika was EEK 340,5 mil (EUR
21,8 mil) as of 30.06.2003; the decrease compared to the beginning of the
year was EEK 32,5 mil (EUR 2,1 mil). The stocks in the system decreased
by EEK 12,5 mil (EUR 0,8 mil) when compared to the beginning of the year.
The assets recorded in net realisable value amounted to EEK 5,65 mil (EUR
0,36 mil), with a discount reserve of EEK 0,65 mil (EUR 0,04mil). The
loans repaid to banks amounted to EEK 3,34 mil (EUR 0,21 mil) from
beginning of the year.
Cash flow
The cash flow from operations in the first half year was EEK 7,6 mil (EUR
0,48 mil), whereas in the same period last year, it was negative EEK
–14,46 mil (EUR –0,92 mil). The activities by which BG ensures a stronger
cash flow are: reduction in the volume of investments, a more precise
planning of financial activities and improvement in the stock management
system
The concern employed dated by end of June average 1738 employees, from
that 402 in retail, 1086 in manufacturing and in foreign countries
totally 274 employees.
The main ratios of AS Baltika Group as of 30.06.2003 were:
30.06.2003 31.03.2003 30.06.2002
Increase in turnover % 1,0 -9,4 44,4
quarter
Increase in turnover % -4,6 -9,4 25,8
from beginning of the
year
Share of retail sales in 65 59 49
net turnover %
Number of shops 68 68 60
Retail premises managed 9 953 10 101 8 649
(m2)
Markets managed through 6 6 6
own retail organisations
Operating profit to net -8,9 -10,5 6,1
sales %
Net profit to net -10,8 -12,6 4,1
turnover %
Return on equity ROE (net -16,6 -9,7 11,2
profit/average equity
capital of 12 months) %
Return on assets (net -7,1 -4.1 5,4
profit/average cost of
assets of 12 months) %
Income Statement BG 6m
2003
consolidated, unaudited
th. EEK
II Q 2003 II Q 2002 6m 2003 6m 2002
Revenue
Net sales 108 407 107 296 220 970 231 602
Other revenue 141 872 253 5 902
Total revenue 108 548 108 168 221 223 237 504
Expenses
Materials, raw materials (44 028) (43 232) (85 393) (101 942)
Change in inventories 3 614 10 338 (209) 15 653
Other operating expenses (31 708) (27 338) (64 240) (53 363)
Personnel expenses (37 385) (37 947) (77 526) (73 157)
Depreciation of fixed (6 458) (4 803) (12 602) (9 139)
assets
Other expenses (436) (1 057) (905) (1 370)
Total expenses (116 401) (104 039) (240 875) (223 318)
Operating profit (loss) (7 853) 4 129 (19 652) 14 186
Financial income (259) 113 335 231
Financial expenses (1 916) (2 407) (4 436) (4 575)
Profit (loss) before (10 028) 1 835 (23 753) 9 842
taxes
Income tax expense (21) (265) (21) (265)
Profit (loss) before
minority interest (10 049) 1 570 (23 774) 9 577
Minority interest (780) (182) (353) (3)
Net profit (loss) (9 269) 1 752 (23 421) 9 580
Basic earnings per share -1,69 0,37 -4,28 2,00
(EEK)
Diluted earnings per -1,69 0,36 -4,28 1,97
share
(EEK)
Income Statement BG 6m
2003
consolidated, unaudited
th. EUR
II Q 2003 II Q 2002 6m 2003 6m 2002
Revenue
Net sales 6 928 6 857 14 123 14 802
Other revenue 9 56 16 377
Total revenue 6 937 6 913 14 139 15 179
Expenses
Materials, raw materials (2 814) (2 763) (5 458) (6 515)
Change in inventories 231 661 (13) 1 000
Other operating expenses (2 027) (1 747) (4 106) (3 411)
Personnel expenses (2 389) (2 425) (4 955) (4 676)
Depreciation of fixed (413) (307) (805) (584)
assets
Other expenses (28) (68) (58) (88)
Total expenses (7 439) (6 649) (15 395) (14 273)
Operating profit (loss) (502) 264 (1 256) 907
Financial income (17) 7 21 15
Financial expenses (122) (154) (284) (292)
Profit (loss) before (641) 117 (1 518) 629
taxes
Income tax expense (1) (17) (1) (17)
Profit (loss) before
minority interest (642) 100 (1 519) 612
Minority interest (50) (12) (23) (0)
Net profit (loss) (592) 112 (1 497) 612
Basic earnings per share -0,11 0,02 -0,27 0,13
(EUR)
Diluted earnings per -0,11 0,02 -0,27 0,13
share
(EUR)
Balance sheet BG 30.06.03
consolidated, unaudited
th.EEK
ASSETS 30.06.03 30.06.02 31.12.02
Current assets
Cash and bank 9 451 11 280 10 010
Shares and other securities 291 476 542
Customer receivables 39 959 57 415 47 609
Other rec. and prepaid exp. 14 612 14 328 19 456
Inventories 163 323 166 391 175 857
Total current assets 227 636 249 890 253 474
Non-current assets
Long-term investments 6 005 2 454 6 160
Tangible fixed assets 93 788 94 302 108 382
Intangible fixed assets 13 043 4 643 4 921
Total non-current assets 112 836 101 399 119 463
TOTAL ASSETS 340 472 351 289 372 937
LIABILITIES
AND OWNER`S EQUITY
Current liabilities
Debt obligations 78 017 59 120 90 633
Customer prepayments 134 141 149
Accounts payable 26 539 45 654 33 708
Other tax liabilities 8 834 7 811 8 086
Accrued expenses 7 593 8 220 7 769
Total current liabilities 121 117 120 946 140 345
Non-current liabilities
Long-term debt 64 749 74 199 55 469
Other long-term liabilities 141 - 141
Total non-current liab. 64 890 74 199 55 610
TOTAL LIABILITIES 186 007 195 145 195 955
Minority interest 6 578 6 629 7 049
OWNER`S EQUITY 147 887 149 515 169 933
Share capital (par value) 54 600 48 000 54 444
Unregistered share capital 395 - -
Share premium 42 490 24 910 41 665
Other restricted equity 22 885 22 885 22 885
Retained profit 50 938 44 141 44 141
Profit (loss)
for the accounting period (23 421) 9 580 6 798
TOTAL LIABILITIES
AND OWNER`S EQUITY 340 472 351 289 372 937
Balance sheet BG 30.06.03
consolidated, unaudited
th.EUR
ASSETS 30.06.03 30.06.02 31.12.02
Current assets
Cash and bank 604 721 640
Shares and other securities 19 30 35
Customer receivables 2 554 3 669 3 043
Other rec. and prepaid exp. 934 916 1 243
Inventories 10 438 10 634 11 239
Total current assets 14 549 15 971 16 200
Non-current assets
Long-term investments 384 157 394
Tangible fixed assets 5 994 6 027 6 927
Intangible fixed assets 834 297 315
Total non-current assets 7 212 6 481 7 635
TOTAL ASSETS 21 760 22 451 23 835
LIABILITIES
AND OWNER`S EQUITY
Current liabilities
Debt obligations 4 986 3 778 5 792
Customer prepayments 9 9 10
Accounts payable 1 696 2 918 2 154
Other tax liabilities 565 499 517
Accrued expenses 485 525 497
Total current liabilities 7 741 7 730 8 970
Non-current liabilities
Long-term debt 4 138 4 742 3 545
Other long-term liabilities 9 - 9
Total non-current liabilities 4 147 4 742 3 554
TOTAL LIABILITIES 11 888 12 472 12 524
Minority interest 420 424 451
OWNER`S EQUITY 9 452 9 556 10 861
Share capital (par value) 3 490 3 068 3 480
Unregistered share capital 25 - -
Share premium 2 716 1 592 2 663
Other restricted equity 1 463 1 463 1 463
Retained profit 3 256 2 821 2 821
Profit (loss) (1 497) 612 434
for the accounting period
TOTAL LIABILITIES
AND OWNER`S EQUITY 21 760 22 451 23 835
Ülle Järv
Member of the Board
+372 6302 731
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