TKM: Unaudited consolidated interim accounts for the second quarter and first six months of 2015
Unaudited consolidated interim accounts for the second quarter and first six months of 2015
| Segments (EURm) | Q2/15 | Q2/14 | yoy | 6m/15 | 6m/14 | yoy |
| Supermarkets | 96.0 | 93.7 | 2.5% | 182.3 | 176.1 | 3.5% |
| Department stores | 23.5 | 22.6 | 3.6% | 45.3 | 43.2 | 4.7% |
| Cars | 16.0 | 16.1 | -0.9% | 28.3 | 28.6 | -0.8% |
| Footwear | 3.1 | 3.4 | -10.1% | 5.3 | 6.8 | -22.2% |
| Real Estate | 0.8 | 0.8 | -5.7% | 1.6 | 1.6 | -2.7% |
| Total sales | 139.3 | 136.7 | 1.9% | 262.8 | 256.4 | 2.5% |
| Supermarkets | 2.0 | 1.3 | 53.9% | 0.8 | 0.3 | 216.0% |
| Department stores | 1.2 | 1.2 | -2.7% | -0.1 | 0.8 | -117.6% |
| Cars | 0.6 | 0.7 | -6.8% | 0.6 | 0.2 | 182.4% |
| Footwear | -0.2 | -0.1 | 48.2% | -0.9 | -0.9 | -0.4% |
| Real Estate | 2.2 | 2.3 | -1.9% | 4.4 | 4.4 | -0.9% |
| Total net profit | 5.9 | 5.4 | 9.8% | 4.8 | 4.8 | -0.4% |
The unaudited consolidated sales revenue of the 2nd quarter of 2015 of Tallinna Kaubamaja Group was 139.3 million euros, which exceeded the year-on-year sales revenue by 1.9%. The sales revenue of the first half year of 2015 increased by 2.5% to 262.8 million euros compared to the first half year of 2014, when the sales revenue was 256.4 million euros. The unaudited consolidated net profit of the 2nd quarter of 2015 of the group was 5.9 million euros, which exceeded the year-on-year profit by 9.8%. The net profit of the first six months of 2015 of the group was 4.8 million euros. Compared to the same period in the previous year, the profit has decreased by 0.4%. The pre-tax profit was 8.6 million euros in the first half-year, which is a 41.4% increase in a year-on-year comparison. The net profit was affected by a dividend payment, on which 3.9 million euros of income tax was paid in the 1st quarter of 2015. In the previous year, 1.3 million euros of income tax was paid.
In the 2nd quarter, the growth of the sales revenue of the group slightly slowed down, but this was in line with the overall retail sales statistics trend in Estonia. Selvers and the department stores, the largest retail sales segments of the group, showed a stable growth in sales. The segment of car trade was in a small decline compared to the same period of the previous year resulting from a substantially lower percentage of fleet sales in Latvia. The decrease in the sales revenue of the segment of footwear trade, which has languished in a complicated market situation for a long time, has come to a halt in the last months, demonstrating the rightness of brand and assortment innovation previously undertaken. An increase in the gross margin has contributed to the pre-tax profit of the group the most, which, in turn, was achieved through a greater efficiency of the main process of supermarkets, both by structuring the commercial activities, as well as with the support of IT systems. On the other hand, aggressive seasonal discount campaigns have started increasingly earlier on the highly competitive market of fashion items, and the pressure on the margin exerted by these has carried over to the results of the 2nd quarter of the fashion items of the group. Alike to the entire Estonian economy, increased labour costs affected the commercial profit of the group, which was 7.7% in the 2nd quarter. This was a result of an increase in the number of employees that joined at the opening of a store (3.6%), as well as an increase in the average labour cost per employee (4.2%).
Selver supermarkets
The consolidated sales revenue of the first half-year of 2015 of the business segment of supermarkets was 182.3 million euros, having grown by 3.5% in a year-on-year comparison. The consolidated sales revenue of the 2nd quarter was 96.0 million euros, indicating a 2.5% growth in a year-on-year comparison. The sales revenues of Selver's subsidiaries Kulinaaria O? and SIA Selver remained at the level of the previous year both in the 2nd quarter of the year and the first half. 17.2 million purchases were made in Selvers in the first half of 2015, remaining at the level of the previous year. The consolidated pre-tax profit of the segment of supermarkets was 3.1 million euros in the first half of 2015 and the net profit 0.8 million euros, having grown by 2.4 and 0.6 million euros respectively compared to the previous year, whereof pre-tax profit earned in Estonia formed 4.3 million euros and net profit 2.1 million euros. The pre-tax profit and net profit were 2.0 million euros in the 2nd quarter, indicating a growth of 0.7 million euros (increase of 53.9%), of which profit earned in Estonia formed 2.6 million euros. The difference between the net profit and the profit before income tax arises from the income tax paid on dividends – in 2014, the income tax of dividends was 0.37 million euros; in 2015, it was 2.22 million euros. The pre-tax loss and net loss incurred in Latvia in the first half-year were 1.2 million euros, of which the share of the 2nd quarter was 0.6 million euros. The loss remained at the level of the previous year.
The comparison basis of the figures of 2015 does not yet include Astri Selver (opened in June 2014) in full, the addition of which has also influenced increases in the turnover. As a counterbalance, the Torupilli Selver hypermarket was closed for 2.5 weeks in June because of renovation works. It is positive that customers have remained loyal to Selver in an increasingly intensifying market situation, where new stores are constantly being opened. This is confirmed by the fact that the number of purchases has remained at the level of the previous year. The average purchase of customers has increased in size. Successful marketing campaigns have supported an increased turnover in the 2nd quarter of 2015. It has also been supported by prompt reactions to the expectations of customers as well as activities concerning the assortment of goods and management of categories. In Estonia, the greatest impact on the profit earned has been the achievement of more efficiency regarding the main process, which is the sale of goods. Stock has been managed more capably and, as a result, the need for discounting and writing off goods has decreased. The cost-effective level of the previous year has been maintained successfully regarding the operating costs.
Department stores
The sales revenue of the first six months of 2015 of the business segment of department stores was 45.3 million euros, having increased by 4.7% in a year-on-year comparison. The sales revenue of the 2nd quarter formed 23.5 million euros of this amount, which surpasses the revenue of the 2nd quarter of 2014 by 3.6%. The pre-tax profit of the department stores in the first half of 2015 was 1.0 million euros, which is 17.4% lower than the result of the previous year. The pre-tax profit was 1.2 million euros in the 2nd quarter, which was 2.7% lower in a year-on-year comparison. The sales result of the department stores in the 2nd quarter was influenced by the weather in June, which was colder than the average. This did not contribute to the sale of seasonal items. Considering the locations of the department stores at city centres, the record-low number of tourists had a negative impact on the sales revenue of the 1st quarter. The sales revenue of the 2nd quarter of 2015 of O? TKM Beauty Eesti, which operates the I.L.U. cosmetics stores, was 1.1 million euros, having increased by 9.6% compared to the same period in 2014. The loss was 0.1 million euros in the 2nd quarter of 2015, which is 0.2 million euros less in a year-on-year comparison. The sales revenue of the first half-year of 2015 was 2.2 million euros, having grown by 9.3% in a year-on-year comparison. The loss was 0.2 million euros in the first half of 2015, which is 0.2 million euros less than the loss of the same period of 2014. The sales revenue was affected positively, primarily by a more attractive location and assortment of the I.L.U. store in the ?lemiste Centre, as well as changes made in the brand portfolio, and successful marketing campaigns.
Car Trade
The sales revenue of the first half-year of 2015 of the segment of car trade was 28.3 million euros. The sales revenue was 0.8% lower compared to the revenue of the same period of the previous year, including an increase of 8.4% in the sales revenue of KIAs. The sales revenue of 16.0 million euros of the 2nd quarter was 0.9% lower than the figure of the same period of the previous year, including an increase of 9.9% in the sales revenue of KIAs. Altogether 1,405 new vehicles were sold in the first half year, whereof 805 vehicles were sold in the 2nd quarter. The net profit of the first half-year of 2015 of the segment was 0.6 million euros, surpassing the profit of the same period of the previous year by nearly three times. The pre-tax profit of the first half of 2015 of the segment was 1.1 million euros, surpassing the profit of the first half of 2014 by 47.3%. The net profit of the 2nd quarter of 2015 was 0.6 million euros, 6.8% less compared to the same period of the previous year. A lower percentage of fleet sales in Latvia in the first half year has hampered the turnover, but favourably impacted the profit margin.
Footwear trade
The sales revenue of the first half-year of 2015 of the segment of footwear trade was 5.3 million euros, dropping by 22.2% in a year. The sales revenue was 3.1 million euros in the 2nd quarter, dropping by 10.1% compared to the same period in 2014. The loss incurred in the first half year was 0.9 million euros, which is a 0.4% decrease compared to the same period of the previous financial year. The loss incurred in the 2nd quarter was 0.2 million euros, surpassing the result of the 2nd quarter of 2014 by 0.1 million euros. Several unfavourable coinciding circumstances were the reason for unsatisfactory sales results. For the second year in a row, the weather conditions did not favour the sale of winter boots. Furthermore, the competitive situation has substantially intensified. The behaviour of consumers is changing as well, which is increasingly need-based. However, it is positive to see the negative trend of the segment of footwear trade coming to a halt in the 2nd quarter. At the close of the quarter, we could even see an improvement in the sales revenue, which has a positive effect on profitability as well. There is reason to believe that the applied changes in the brand portfolio are beginning to yield results in the highly intensive competitive situation.
Real estate
The sales revenue of the first half of 2015 of the business segment of real estate outside the group was 1.6 million euros, which is 2.7% less in a year-on-year comparison. The sales revenue of the 2nd quarter outside the group was 0.8 million euros, which is 5.7% less in a year-on-year comparison. The pre-tax profit of the first half of 2015 of the segment of real estate was 4.4 million euros, which is 0.9% less compared to the same period of the previous financial year. The pre-tax profit of the 2nd quarter was 2.2 million euros, which is 1.9% less compared to the same period of the previous financial year. The drop in the sales revenue and profit is due to the renovation works in the department store of Tartu, which will result in changes to the composition of the rental area and an addition of new brands to the shopping centre. The general areas of the shopping centre as well as the exterior of the building are also renovated. Construction works of the Viimsi Shopping and Entertainment Centre are currently in the final stages. The Viimsi Centre is to be opened on 13 August.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
In thousands of euros
| 30.06.2015 | 31.12.2014 | |
| ASSETS | ||
| Current assets | ||
| Cash and cash equivalents | 7,926 | 24,626 |
| Trade and other receivables | 13,799 | 17,938 |
| Inventories | 56,038 | 56,876 |
| Total current assets | 77,763 | 99,440 |
| Non-current assets | ||
| Long-term trade and other receivables | 339 | 338 |
| Investments in associates | 1,866 | 1,778 |
| Investment property | 3,035 | 3,035 |
| Property, plant and equipment | 231,396 | 227,914 |
| Intangible assets | 10,185 | 10,402 |
| Total non-current assets | 246,821 | 243,467 |
| TOTAL ASSETS | 324,584 | 342,907 |
| LIABILITIES AND EQUITY | ||
| Current liabilities | ||
| Borrowings | 11,645 | 20,405 |
| Trade and other payables | 67,074 | 70,317 |
| Total current liabilities | 78,719 | 90,722 |
| Non-current liabilities | ||
| Borrowings | 82,880 | 77,663 |
| Provisions for other liabilities and charges | 690 | 692 |
| Total non-current liabilities | 83,570 | 78,355 |
| TOTAL LIABILITIES | 162,289 | 169,077 |
| Equity | ||
| Share capital | 16,292 | 16,292 |
| Statutory reserve capital | 2,603 | 2,603 |
| Revaluation reserve | 66,430 | 67,159 |
| Currency translation differences | -255 | -255 |
| Retained earnings | 77,225 | 88,031 |
| TOTAL EQUITY | 162,295 | 173,830 |
| TOTAL LIABILITIES AND EQUITY | 324,584 | 342,907 |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
In thousands of euros
| II quarter 2015 | II quarter 2014 | 6 months 2015 | 6 months 2014 | |
| Revenue | 139,342 | 136,709 | 262,800 | 256,360 |
| Other operating income | 160 | 216 | 391 | 364 |
| Cost of sales | -104,613 | -103,742 | -197,648 | -195,267 |
| Other operating expenses | -13,022 | -12,758 | -25,946 | -25,818 |
| Staff costs | -12,737 | -11,830 | -24,453 | -23,081 |
| Depreciation, amortisation and impairment losses | -2,852 | -2,682 | -5,701 | -5 392 |
| Other expenses | -101 | -173 | -330 | -437 |
| Operating profit | 6,177 | 5,740 | 9,113 | 6,729 |
| Finance income | 2 | 6 | 10 | 11 |
| Finance costs | -298 | -402 | -581 | -735 |
| Finance income on shares of associates | 41 | 51 | 88 | 97 |
| Profit before tax | 5,922 | 5,395 | 8,630 | 6,102 |
| Income tax expense | 0 | 0 | -3,873 | -1,324 |
| NET PROFIT FOR THE FINANCIAL YEAR | 5,922 | 5,395 | 4,757 | 4,778 |
| Other comprehensive income: | ||||
| Items that may be subsequently reclassified to profit or loss | ||||
| Currency translation differences | 0 | 0 | 0 | 2 |
| Other comprehensive income for the financial year | 0 | 0 | 0 | 2 |
| TOTAL COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR | 5,922 | 5,395 | 4,757 | 4,780 |
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