The consolidated non-audited revenue of Tallinna Kaubamaja for the first nine
months of 2008 was 4.7 billion kroons (301.4 million euros). The return on
sales of the Group of the first nine months in 2007 was 4.2 billion kroons
(267.2 million euros). The growth in turnover was 13%. Net profit was 46% less
than that of the first three quarters last year, totalling 151.7 million kroons
(9.7 million euros), which is 128.6 million kroons (8.2 million euros) less
compared to the same period in 2007 when net profit amounted to 280.3 million
kroons (17.9 million euros).
The influence of factors that slowed down net profit in the first half of the
year continued to have their impact in the third quarter as well. There are
19.0million kroons (1.2 million euros) non-capitalized development costs in the
operating expenses for the first nine months in 2008. In the same period in
2007, the corresponding costs were 11.6 million kroons (0.7 million euros). The
decrease in net profit was mostly caused by shops that were fully or partially
closed for reconstruction works (bearing operating costs) and by pre-opening
costs of new Selver shops. In the third quarter retail sales volumes ceased to
increase, which also had an impact on profit. Other factors for decrease in
profit were expected growth of maintenance and labour costs, increase in
depreciation resulting from the revaluation of fixed assets, undertaken at the
end of 2007, also the income tax 21.7 million kroons (1.4 million euros, 2007:
11.5 million kroons, 0.7 million euros) expense on the dividends distributed
for the prior financial years.
As of 30 September 2008, the balance sheet total of the Tallinna Kaubamaja
Group was 4.3 billion kroons (271.6 million euros), which means an increase by
1.4 billion kroons (88.6 million euros) compared to the end of the third
quarter of 2007. In the first nine months of 2008, assets and shareholders'
equity increased by 28% and 4% respectively.
Sales revenue of the first nine months of 2008 of the business segment of the
Kaubamaja department stores was 1 098.6 million kroons (70.2 million euros),
showing a growth of 4% in comparison with the same period of the previous year,
regardless of decrease in retail sales in stores selling manufactured goods in
whole Estonia. Net profit of the Kaubamaja department stores during the first
nine months in 2008 was 85.9 million kroons (5.5 million euros), which fell
behind the result achieved a year ago by 10.1 million kroons (0.6 million
euros). Financing cost used for acquisitions and growth of maintenance costs
have had the most negative impact on the profit of Kaubamaja department stores.
OÜ TKM Beauty, the subsidiary founded in autumn 2007, continued preparing for
the launch of the chain of beauty shops operating under the trademark I.L.U.
Opening of the shops depends on the opening times of shopping centres. The
company planned to open the first shop in Pärnu in late autumn of 2008, but the
project will be late owing to delays by shopping centre developers and will
therefore be opened in spring 2009. Lease contracts have also been signed with
shopping centre developers in Tartu. In Tallinn the shops will be opened in
Rocca al Mare and Kristiine shopping centres in the second half of 2009. The
first shop in Latvia will be opened in 2010.
Net turnover of Selver for the first nine months in 2008 was 3.0 billion kroons
(194.7 million euros), which exceeds that of the same period of last year by
14%. The turnover for the same period last year was 2.7 billion kroons (171.2
million euros). The pre-tax profit of A-Selver for the first nine months in
2008 was 73.7 million kroons (4.7 million euros), decreasing by 82.5 million
kroons (5.3 million euros) compared to the same period in 2007. Because of
reconstruction works Pirita and Anne Selver were closed for customers for one
and a half months and Krooni Selver for two weeks, which had a negative impact
on net profit. In Järve Selver the reconstruction works were carried out during
four months, which affected sales. In 2008 seven new shops were opened: in
February a shop in Narva was opened, in March in Kohtla-Järve, in May in
Hiiumaa, in June in Tallinn Mustamäe, in July in Põlva and Pärnu and in August
in Paide. A total of 10,856 m2 selling space was added. Extensive
reconstructions were carried out and additional selling space was obtained in
four shops: Järve and Pirita Selver in Tallinn, Krooni Selver in Rakvere and
Anne Selver in Tartu. A total of 18,437 m2 selling space was added through
opening of new shops and reconstruction.
Sales revenue for the first nine months of 2008 of the real estate segment was
89.9 million kroons (5.7 million euros), and in comparison with the same period
of 2007, sales revenue increased by 23%. Sales revenue for the first nine
months of 2008 of the real estate segment without inter-segmental sales was
30.3 million kroons (1.9 million euros), increasing by 1% in comparison with
last year. Net profit for the first nine months of 2008 was 22.3 million kroons
(1.4 million euros), decreasing by 8.7 million kroons or 28% compared to the
previous year. The decrease in net profit was caused by the increase in
financial costs and the depreciation of fixed assets.
The sales revenue of the car trade segment for the first nine months of 2008
was 437.0 million kroons (27.9 million euros). In the first nine months, 1 719
new vehicles were sold, which exceeds the number of vehicles sold during the
same period a year ago by 113. KIA has a 3.3% market share in the Baltic
countries (growth by 23% compared to the same period last year). The net loss
of the car trade segment of the first nine months of 2008 amounted to 2.4
million kroons (0.2 million euros). The net profit of the first nine months of
2007 was 8.5 million kroons (0.54 million euros). The market share growth took
its toll on declining margins and growing advertising costs. Establishing the
Latvian subsidiary SIA KIA Automobiles and entering the Latvian market fell in
the same period with rapidly diminishing car market of Latvia in 2007 and had
its negative impact on profit in the first nine months of the year. Gained
market share allows to expect better results in the future.
The sales revenue of Suurtüki NK AS and Suurtuki SIA, acquired on 1 April 2008,
made up 51.9 million kroons (3.3 million euros) of the sales for the nine
months in group total. In addition to 20 already existing stores in Estonia and
Latvia, two new stores were opened. In the fourth quarter Väike-Karja store in
Tallinn will be closed. Reporting period ended with a loss of 6.3 million
kroons (0.4 million euros). The result was influenced by costs for opening new
stores and accumulated goods in stock that were sold at final sale at the end
of summer and at closing down sale in Väike-Karja store.
On 30 June 2008 Tallinna Kaubamaja group acquired ABC King AS with its
subsidiary ABC King SIA and OÜ ABC Saare footwear stores. At the end of the
third quarter, Tallinna Kaubamaja group had 16 footwear stores in Estonia and
Latvia. Sales of ABC King companies in group's total amounted to 50.5 million
kroons (3.2 million euros). Their profit was 1.0 million kroons (0.6 million
euros). The result was influenced by costs for opening new stores in Tasku
Keskus in Tartu, Põhjakeskus in Rakvere and Auriga Keskus (will be opened in
October) in Saaremaa .
Work on new concepts for footwear stores and brand innovation has begun, which
according to plans will be finalised in the second half of 2009. In addition,
the group has taken preparatory steps to open new office and warehouse premises
for footwear business in Tallinn and has made respective investments. The
premises should accommodate the group's whole footwear business and should
improve management performance, offer synergies for the efficiency of footwear
stores, minimise costs and contribute to better results in the future.
CONSOLIDATED BALANCE SHEET
thousand kroons/euros
--------------------------------------------------------------------------------
| | 30. September 2008 | 31 December 2007 |
--------------------------------------------------------------------------------
| | EEK | EUR | EEK | EUR |
--------------------------------------------------------------------------------
| ASSETS | | | | |
--------------------------------------------------------------------------------
| Current | | | | |
| assets | | | | |
--------------------------------------------------------------------------------
| Cash at bank | 45,201 | 2,889 | 282,635 | 18,064 |
| and in hand | | | | |
--------------------------------------------------------------------------------
| Trade | 77,342 | 4,943 | 50,966 | 3,257 |
| receivables | | | | |
--------------------------------------------------------------------------------
| Other | 27,9 | 1,784 | 50,755 | 3,244 |
| receivables | | | | |
--------------------------------------------------------------------------------
| Prepaid | 46,259 | 2,956 | 20,133 | 1,287 |
| expenses | | | | |
--------------------------------------------------------------------------------
| Inventories | 873,986 | 55,858 | 519,63 | 33,209 |
--------------------------------------------------------------------------------
| Total | 1,070,688 | 68,43 | 924,119 | 59,061 |
| current | | | | |
| assets | | | | |
--------------------------------------------------------------------------------
| Fixed assets | | | | |
--------------------------------------------------------------------------------
| Prepaid | 36,931 | 2,36 | 37,291 | 2,383 |
| expenses | | | | |
--------------------------------------------------------------------------------
| Shares in | 16,469 | 1,053 | 14,201 | 908 |
| affiliated | | | | |
| companies | | | | |
--------------------------------------------------------------------------------
| Other | 2,828 | 181 | 2,828 | 181 |
| long-term | | | | |
| receivables | | | | |
--------------------------------------------------------------------------------
| Tangible | 2,930,797 | 187,312 | 2,300,878 | 147,053 |
| fixed assets | | | | |
--------------------------------------------------------------------------------
| Intangible | 69,852 | 4,464 | 0 | 0 |
| fixed assets | | | | |
--------------------------------------------------------------------------------
| Goodwill | 121,783 | 7,783 | 49,388 | 3,156 |
--------------------------------------------------------------------------------
| Total | 191,635 | 7,783 | 49,388 | 3,156 |
| intangible | | | | |
| assets | | | | |
--------------------------------------------------------------------------------
| Total fixed | 3,178,660 | 203,153 | 2,404,586 | 153,681 |
| assets | | | | |
--------------------------------------------------------------------------------
| TOTAL ASSETS | 4,249,348 | 271,583 | 3,328,705 | 212,742 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| LIABILITIES | | | | |
| AND OWNERS' | | | | |
| EQUITY | | | | |
--------------------------------------------------------------------------------
| Current | | | | |
| liabilities | | | | |
--------------------------------------------------------------------------------
| Debts | 225,513 | 14,413 | 120,626 | 7,709 |
--------------------------------------------------------------------------------
| Prepayments | 7,926 | 507 | 11,673 | 745 |
| received for | | | | |
| goods and | | | | |
| services | | | | |
--------------------------------------------------------------------------------
| Trade | 698,814 | 44,663 | 611,454 | 39,08 |
| payables | | | | |
--------------------------------------------------------------------------------
| Other | 116,703 | 7,458 | 166,756 | 10,657 |
| current | | | | |
| payables | | | | |
--------------------------------------------------------------------------------
| Total | 1,048,956 | 67,041 | 910,509 | 58,191 |
| current | | | | |
| liabilities | | | | |
--------------------------------------------------------------------------------
| Long-term | | | | |
| liabilities | | | | |
--------------------------------------------------------------------------------
| Debts | 1,234,848 | 78,921 | 522,214 | 33,375 |
--------------------------------------------------------------------------------
| Long term | 1,647 | 105 | 2,075 | 132 |
| reserve | | | | |
--------------------------------------------------------------------------------
| Total | 1,236,495 | 79,026 | 524,289 | 33,507 |
| long-term | | | | |
| liabilities | | | | |
--------------------------------------------------------------------------------
| TOTAL | 2,285,451 | 146,066 | 1,434,798 | 91,698 |
| LIABILITIES | | | | |
--------------------------------------------------------------------------------
| Owners' | | | | |
| equity | | | | |
--------------------------------------------------------------------------------
| Share | 407,292 | 26,031 | 407,292 | 26,031 |
| capital | | | | |
--------------------------------------------------------------------------------
| Statutory | 40,729 | 2,603 | 40,729 | 2,603 |
| reserve | | | | |
--------------------------------------------------------------------------------
| Fixed assets | 733,306 | 46,867 | 759,721 | 48,555 |
| revaluation | | | | |
| reserve | | | | |
--------------------------------------------------------------------------------
| Retained | 782,817 | 50,032 | 686,155 | 43,854 |
| earnings | | | | |
--------------------------------------------------------------------------------
| Currency | -247 | -16 | 10 | 1 |
| exchange | | | | |
| differences | | | | |
--------------------------------------------------------------------------------
| TOTAL | 1,963,897 | 125,517 | 1,893,907 | 121,044 |
| OWNERS' | | | | |
| EQUITY | | | | |
--------------------------------------------------------------------------------
| TOTAL | 4,249,348 | 271,583 | 3,328,705 | 212,742 |
| LIABILITIES | | | | |
| AND OWNERS' | | | | |
| EQUITY | | | | |
--------------------------------------------------------------------------------
CONSOLIDATED INCOME STATEMENT
thousand kroons/euros
--------------------------------------------------------------------------------
| | 9 months 2008 | 9 months 2007 |
--------------------------------------------------------------------------------
| | EEK | EUR | EEK | EUR |
--------------------------------------------------------------------------------
| | | | | |
--------------------------------------------------------------------------------
| Operating | | | | |
| revenue | | | | |
--------------------------------------------------------------------------------
| Sales | 4,716,246 | 301,423 | 4,181,198 | 267,227 |
| revenue | | | | |
--------------------------------------------------------------------------------
| Other | 117,503 | 7,509 | 90,814 | 5,803 |
| operating | | | | |
| revenue | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cost of | -3,559,099 | -227,468 | -3,136,776 | -200,477 |
| goods sold | | | | |
--------------------------------------------------------------------------------
| Other | -501,878 | -32,076 | -383,1 | -24,484 |
| operating | | | | |
| expenses | | | | |
--------------------------------------------------------------------------------
| Staff costs | -474,232 | -30,309 | -358,74 | -22,928 |
--------------------------------------------------------------------------------
| Depreciation | -99,635 | -6,368 | -75,145 | -4,803 |
| and | | | | |
| impairment | | | | |
| of fixed | | | | |
| assets | | | | |
--------------------------------------------------------------------------------
| Other | -8,558 | -546 | -14,913 | -953 |
| operating | | | | |
| expenses | | | | |
--------------------------------------------------------------------------------
| Operating | 190,347 | 12,165 | 303,338 | 19,385 |
| profit | | | | |
--------------------------------------------------------------------------------
| Financial | -23 312 | -1490 | -27 073 | -1730 |
| expenses | | | | |
--------------------------------------------------------------------------------
| Financial | 4 056 | 259 | 14 146 | 904 |
| income | | | | |
--------------------------------------------------------------------------------
| Financial | 2 268 | 145 | 1 356 | 87 |
| income from | | | | |
| shares in | | | | |
| affiliated | | | | |
| companies | | | | |
--------------------------------------------------------------------------------
| Total | -16,988 | -1,086 | -11,571 | -739 |
| financial | | | | |
| income and | | | | |
| expenses | | | | |
--------------------------------------------------------------------------------
| Profit | 173,359 | 11,079 | 291,767 | 18,646 |
| before | | | | |
| income tax | | | | |
--------------------------------------------------------------------------------
| Income tax | -21,653 | -1,384 | -11,487 | -734 |
--------------------------------------------------------------------------------
| NET PROFIT | 151,706 | 9,695 | 280,28 | 17,912 |
| FOR | | | | |
| ACCOUNTING | | | | |
| PERIOD | | | | |
--------------------------------------------------------------------------------
Raul Puusepp
Chairman of the Board
Phone: +372 731 5000
