OREANDA-NEWS. November 19, 2012. Baltika ended the third quarter with a net profit of 201 thousand euros. This is an improvement by 1,373 thousand euros on a year ago and a second quarterly profit of the year.

In the third quarter, Baltika succeeded in evening up growth in its market portfolio. The Baltic region continued to post strong results with the Latvian and Estonian markets maintaining their former growth rates. In addition the Lithuanian market, which had been slower to recover, showed very good growth rates. Third quarter sales per square metre increased in all the markets and the average increase of 15% was 1 percentage point better than the 9 month total. The 18% increase achieved in the Russian market is highly significant, as it reflects a more profitable development of the Russian market.

In addition to sales growth, which was in line with expectations, the notable improvement in Baltika's third quarter performance was underpinned by the gross margin, which rose to 52%, three percentage points up on the comparative period. Gross profit per square metre increased in the third quarter by 20% and in 9 months total on average by 18%. The reason for the increase is strong collections and better inventory and sales discount management. Meanwhile the cost control continued and both third quarter and 9 months distribution expense increased per square metre only by 2%.

Good sales results and significantly improved gross margin helped Baltika achieve in the third quarter 728 thousand euros EBITDA (2011 third quarter EBITDA -103 thousand euros). All performance indicators including nine-month EBITDA, which was 1,851 thousand euros, show that Baltika is on track to meet its financial targets for 2012 even though the property sale, which has reduced rental income and has increased rental costs, is rendering this more complicated.

The company's liquidity and financial position were strengthened by a property sale carried out in the third quarter. As at the end of September, net debt was 6,010 thousand euros, an 11,439 thousand euros decrease compared with 31 December 2011.

The investment loan received in third quarter provides the means for further development. As per the investment plan that foresees implementation of new store concepts, the company has remodelled the first Monton and Mosaic stores, where sales have improved rapidly.In addition, the company is making preparations for opening the first stores with a completely new concept in the first half of 2013.

Consolidated statement of financial position

 

30 Sep 2012

31 Dec 2011

ASSETS

 

 

Current assets

 

 

Cash and bank

1,260

863

Trade and other receivables

2,579

2,189

Inventories

11,838

10,048

Total current assets

15,677

13,100

Non-current assets

 

 

Deferred income tax asset

838

838

Other non-current assets

1,196

629

Investment property

0

8,549

Property, plant and equipment

2,224

8,031

Intangible assets

3,522

3,665

Total non-current assets

7,780

21,712

TOTAL ASSETS

23,457

34,812

 

 

 

EQUITY AND LIABILITIES

 

 

Current liabilities

 

 

Borrowings

1,369

3,178

Trade and other payables

7,072

6,785

Total current liabilities

8,441

9,963

Non-current liabilities

 

 

Borrowings

5,930

15,144

Other liabilities

33

83

Total non-current liabilities

5,963

15,227

TOTAL LIABILITIES

14,404

25,190

 

 

 

EQUITY

 

 

Share capital at par value

7,159

25,056

Share premium

31

89

Reserves

1,182

2,494

Retained earnings

1,667

-11,592

Net loss for the period

-271

-5,863

Currency translation differences

-715

-727

Total equity attributable to equity holders of the parent

9,053

9,457

Non-controlling interest

0

165

TOTAL EQUITY

9,053

9,622

TOTAL LIABILITIES AND EQUITY

23,457

34,812

Consolidated statement of comprehensive income

 

Q3 2012

Q3 2011

9M 2012

9M 2011

 

 

 

 

 

Revenue

14,344

13,511

40,144

37,924

Cost of goods sold

-6,906

-6,834

-18,506

-18,041

Gross profit

7,438

6,677

21,638

19,883

 

 

 

 

 

Distribution costs

-6,353

-6,720

-19,172

-20,283

Administrative and general expenses

-620

-628

-1,988

-2,122

Other operating income

17

20

90

23

Other operating expenses

-168

-81

-77

-427

Operating profit (loss)

314

-732

491

-2,926

 

 

 

 

 

Finance income

53

-14

70

1

Finance costs

-165

-411

-799

-1,030

 

 

 

 

 

Profit (loss) before income tax

202

-1,158

-238

-3,955

 

 

 

 

 

Income tax expense

-1

-15

-32

-25

 

 

 

 

 

Net profit (loss)

201

-1,172

-270

-3,980

Profit (loss) attributable to:

 

 

 

 

 Equity holders of the parent company

201

-1,172

-271

-3,980

 Non-controlling interest

0

0

1

0

 

 

 

 

 

 

 

 

 

 

Other comprehensive income (loss)

 

 

 

 

Currency translation differences

128

-156

12

50

 

 

 

 

 

Total comprehensive income (loss)

329

-1,328

-258

-3,930

Comprehensive income (loss) attributable to:

 

 

 

 

 Equity holders of the parent company

329

-1,328

-259

-3,930

 Non-controlling interest

0

0

1

0

 

 

 

 

 

 

 

 

 

 

Basic earnings per share, EUR

0.01

-0.03

-0.01

-0.13

Diluted earnings per share, EUR

0.01

-0.03

-0.01

-0.13