The consolidated unaudited revenue of Tallinna Kaubamaja in 2008 was 6.6
billion kroons (419.1 million euros). The net sales of the Group in 2007 were
5.9 billion kroons (376.6 million euros). The growth in turnover was 11%. Net
profit was 80% less than that of the last year, totaling 83 million kroons (5.3
million euros), which is 327.8 million kroons (20.9 million euros) less
compared to 2007 when net profit amounted to 410.8 million kroons (26.3 million
euros).
In the fourth quarter retail sales volumes decreased, which had a strong an
impact on profit. Growth in retail sales volumes slowed down in the first nine
months of 2008. In the fourth quarter the respective volumes fell remarkably.
There are 23.7 million kroons (1.5 million euros) non-capitalized development
costs in the operating expenses for the financial year. In 2007 the
corresponding costs were 12.2 million kroons (0.8 million euros). This was
mostly caused by Selver stores that were fully or partially closed for
reconstruction works (bearing operating costs) and by pre-opening costs of new
Selver stores. Based on the current economic situation the write down of
Group's fixed assets was carried out at the end of the year in the amount of
146.6 million kroons (9.4 million euros), of which 59.8 million kroons (3.8
million euros) write down was made using the fixed assets revaluation reserve
in equity. As a result of goodwill tests the footwear trade goodwill write down
was 4.7 million kroons (0.3 million euros). 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 31 December 2008, the balance sheet total of the Tallinna Kaubamaja Group
was 4.3 billion kroons (274.2 million euros), which means an increase by 0.96
billion kroons (61.5 million euros) compared to the end of 2007. In 2008,
assets increased by 34%.
Sales revenue for 2008 of the business segment of the Kaubamaja department
stores was 1 549.7 million kroons (99.0 million euros), decreasing by 0.7%
compared to previous year. According to the Statistical Office of Estonia,
retail sales of manufactured goods in Estonia as a whole decreased by
approximately 10 times more. Net profit of the Kaubamaja department stores in
2008 was 119.2 million kroons (7.6 million euros), which fell behind the result
achieved a year ago by 37.7 million kroons (2.4 million euros). The decrease in
sales revenue in the fourth quarter (-11%) had the most negative impact on the
profit of Kaubamaja department stores. In the fourth quarter, retail sales in
stores selling mostly manufactured goods decreased by 14.3% in Estonia as a
whole. In addition, growth of maintenance costs has had their impact on the
profit of Kaubamaja department stores.
The consolidated net turnover of Selver supermarkets in 2008 was 4.3 billion
kroons (274.5 million euros), which exceeds that of the same period last year
by 15%. The consolidated net turnover in the 4th quarter of 2008 was 1.2
billion kroons (79.8 million euros), which represents a growth by 20% compared
to the same period last year. In 2008, net turnover of Selver in the sector of
non-specialised stores in Estonia (food products prevailing) constituted 15.2%
of their total retail sales, increasing by 0.5% during the year. In 2008 Selver
opened 8 new stores in Estonia and 2 in Latvia. In addition, new selling space
in five existing stores was obtained through reconstructions. A total of 24.3
thousand m2 selling space was added in 2008. The total growth in selling space
was 56%, including both Estonia and Latvia. The consolidated pre-tax profit of
Selver in 2008 was 85.4 million kroons (5.5 million euros), decreasing by 125.6
million kroons (8.0 million euros) compared to the same period in 2007. The
pre-tax profit for the 4th quarter in 2008 was 11.7 million kroons (0.7 million
euros), decreasing by 78.7% compared to the same period last year. Extensive
reconstructions in five stores in Estonia, pre-opening
costs of ten new stores and costs related to the start-up of the Latvian
subsidiary had negative impact on net profit. In addition, the general economic
recession and decrease in consumption had their impact on net profit. In 2009
Selver plans to open 2 stores in Estonia and 4 in Latvia.
Sales revenue for 2008 of the real estate segment was 127.0 million kroons (8.1
million euros), and in comparison with the same period of 2007, sales revenue
increased by 28%. Sales revenue for 2008 of the real estate segment without
inter-segmental sales was 41.1 million kroons (2.6 million euros), increasing
by 1.5% in comparison with last year. Net loss for 2008 was 58.4 million kroons
(3.7 million euros), decreasing by 99.2 million kroons or 243% over the year.
The loss is attributable to the property write down at the end of the year,
financial expenses and the rise in depreciation.
The sales revenue of the car trade segment for 2008 was 520.5 million kroons
(33.3 million euros), which is 11% less than in 2007. In 2008, 2,056 new
vehicles were sold, which is 151 vehicles less than a year ago. KIA has a 3.3%
market share in the Baltic countries (growth by 24% compared to the same period
last year). The net loss of the car trade segment in 2008 amounted to 24
million kroons (1.5 million euros). The net profit for the same period in 2007
was 13.7
million kroons (0.9 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 at the end of 2007, which
along with growth in costs had negative impact on profit for 2008.
The sales revenue of Suurtüki NK OÜ and Suurtuki SIA, acquired on 1 April 2008,
made up 79.3 million kroons (5.1 million euros) of the sales for 2008 in group
total. Loss of the group companies OÜ Suurtüki NK and Suurtuki NK SIA amounted
to 13 million kroons (0.8 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. Sales of ABC King companies in
group's total amounted to 98.3 million kroons (6.3 million euros) and loss to
4.6 million kroons (0.3 million euros). The result was influenced by costs for
opening new stores in Tasku Keskus in Tartu, Põhjakeskus in Rakvere and Auriga
Keskus in Saaremaa.
Raul Puusepp
Chairman of the Board
Phone: +372 7 315 000
CONSOLIDATED BALANCE SHEET
thousand kroons/euros
--------------------------------------------------------------------------------
| | 31 December 2008 | 31 December 2007 |
--------------------------------------------------------------------------------
| | EEK | EUR | EEK | EUR |
--------------------------------------------------------------------------------
| ASSETS | | | | |
--------------------------------------------------------------------------------
| Current | | | | |
| assets | | | | |
--------------------------------------------------------------------------------
| Cash at bank | 58,836 | 3,760 | 282,635 | 18,064 |
| and in hand | | | | |
--------------------------------------------------------------------------------
| Trade | 138,745 | 8,867 | 50,966 | 3,257 |
| receivables | | | | |
--------------------------------------------------------------------------------
| Other | 36,718 | 2,348 | 50,755 | 3,244 |
| receivables | | | | |
--------------------------------------------------------------------------------
| Prepaid | 47,068 | 3,009 | 20,133 | 1,287 |
| expenses | | | | |
--------------------------------------------------------------------------------
| Inventories | 781,170 | 49,927 | 519,630 | 33,209 |
--------------------------------------------------------------------------------
| Total current | 1,062,537 | 67,910 | 924,119 | 59,061 |
| assets | | | | |
--------------------------------------------------------------------------------
| Fixed assets | | | | |
--------------------------------------------------------------------------------
| Prepaid | 31,075 | 1,986 | 37,291 | 2,383 |
| expenses | | | | |
--------------------------------------------------------------------------------
| Shares in | 17,505 | 1,119 | 14,201 | 908 |
| affiliated | | | | |
| companies | | | | |
--------------------------------------------------------------------------------
| Other | 3,801 | 243 | 2,828 | 181 |
| long-term | | | | |
| receivables | | | | |
--------------------------------------------------------------------------------
| Tangible | 2,997,540 | 191,578 | 2,300,878 | 147,053 |
| fixed assets | | | | |
--------------------------------------------------------------------------------
| Intangible | 68,431 | 4,374 | 0 | 0 |
| fixed assets | | | | |
--------------------------------------------------------------------------------
| Goodwill | 109,499 | 6,998 | 49,388 | 3,156 |
--------------------------------------------------------------------------------
| Total | 177,930 | 11,372 | 49,388 | 3,156 |
| intangible | | | | |
| assets | | | | |
--------------------------------------------------------------------------------
| Total fixed | 3,227,851 | 206,298 | 2,404,586 | 153,681 |
| assets | | | | |
--------------------------------------------------------------------------------
| TOTAL ASSETS | 4,290,388 | 274,208 | 3,328,705 | 212,742 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| LIABILITIES | | | | |
| AND OWNERS' | | | | |
| EQUITY | | | | |
--------------------------------------------------------------------------------
| Current | | | | |
| liabilities | | | | |
--------------------------------------------------------------------------------
| Debts | 275,799 | 17,627 | 120,626 | 7,709 |
--------------------------------------------------------------------------------
| Prepayments | 5,236 | 334 | 11,673 | 745 |
| received for | | | | |
| goods and | | | | |
| services | | | | |
--------------------------------------------------------------------------------
| Trade | 803,336 | 51,344 | 611,454 | 39,080 |
| payables | | | | |
--------------------------------------------------------------------------------
| Other current | 153,894 | 9,835 | 166,756 | 10,657 |
| payables | | | | |
--------------------------------------------------------------------------------
| Total current | 1,238,265 | 79,140 | 910,509 | 58,191 |
| liabilities | | | | |
--------------------------------------------------------------------------------
| Long-term | | | | |
| liabilities | | | | |
--------------------------------------------------------------------------------
| Debts | 1,215,409 | 77,679 | 522,214 | 33,375 |
--------------------------------------------------------------------------------
| Long term | 1,462 | 93 | 2,075 | 132 |
| reserve | | | | |
--------------------------------------------------------------------------------
| Total | 1,216,871 | 77,772 | 524,289 | 33,507 |
| long-term | | | | |
| liabilities | | | | |
--------------------------------------------------------------------------------
| TOTAL | 2,455,136 | 156,912 | 1,434,798 | 91,698 |
| LIABILITIES | | | | |
--------------------------------------------------------------------------------
| Owners' | | | | |
| equity | | | | |
--------------------------------------------------------------------------------
| Share capital | 407,292 | 26,031 | 407,292 | 26,031 |
--------------------------------------------------------------------------------
| Statutory | 40,729 | 2,603 | 40,729 | 2,603 |
| reserve | | | | |
--------------------------------------------------------------------------------
| Fixed assets | 663,695 | 42,418 | 759,721 | 48,555 |
| revaluation | | | | |
| reserve | | | | |
--------------------------------------------------------------------------------
| Retained | 723,916 | 46,268 | 686,155 | 43,854 |
| earnings | | | | |
--------------------------------------------------------------------------------
| Currency | -380 | -24 | 10 | 1 |
| exchange | | | | |
| differences | | | | |
--------------------------------------------------------------------------------
| TOTAL OWNERS' | 1,835,252 | 117,296 | 1,893,907 | 121,044 |
| EQUITY | | | | |
--------------------------------------------------------------------------------
| TOTAL | 4,290,388 | 274,208 | 3,328,705 | 212,742 |
| LIABILITIES | | | | |
| AND OWNERS' | | | | |
| EQUITY | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CONSOLIDATED INCOME STATEMENT
thousand kroons/euros
--------------------------------------------------------------------------------
| | 12 months 2008 | 12 months 2007 |
--------------------------------------------------------------------------------
| | EEK | EUR | EEK | EUR |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating | | | | |
| revenue | | | | |
--------------------------------------------------------------------------------
| Sales revenue | 6,556,766 | 419,054 | 5,892,423 | 376,594 |
--------------------------------------------------------------------------------
| Other operating | 166,164 | 10,620 | 117,781 | 7,527 |
| revenue | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cost of goods | -4,964,340 | -317259 | -4,414,842 | -282,160 |
| sold | | | | |
--------------------------------------------------------------------------------
| Other operating | -705,287 | -45,076 | -516,846 | -33,032 |
| expenses | | | | |
--------------------------------------------------------------------------------
| Staff costs | -669,179 | -42,768 | -528,638 | -33,786 |
--------------------------------------------------------------------------------
| Depreciation | -232,766 | -14,876 | -102,416 | -6,546 |
| and impairment | | | | |
| of fixed assets | | | | |
--------------------------------------------------------------------------------
| Other operating | -15,709 | -1,004 | -11,536 | -736 |
| expenses | | | | |
--------------------------------------------------------------------------------
| Operating | 135,649 | 8,669 | 435,926 | 27,861 |
| profit | | | | |
--------------------------------------------------------------------------------
| Financial | -42,363 | -2,707 | -27,446 | -1,754 |
| expenses | | | | |
--------------------------------------------------------------------------------
| Financial | 8,056 | 515 | 11,072 | 708 |
| income | | | | |
--------------------------------------------------------------------------------
| Financial | 3,304 | 211 | 2,772 | 177 |
| income from | | | | |
| shares in | | | | |
| affiliated | | | | |
| companies | | | | |
--------------------------------------------------------------------------------
| Total financial | -31,003 | -1,981 | -13,602 | -869 |
| income and | | | | |
| expenses | | | | |
--------------------------------------------------------------------------------
| Profit before | 104,646 | 6,688 | 422,324 | 26,992 |
| income tax | | | | |
--------------------------------------------------------------------------------
| Income tax | -21,653 | -1,384 | -11,487 | -735 |
--------------------------------------------------------------------------------
| NET PROFIT FOR | 82,993 | 5,304 | 410,836 | 26,257 |
| ACCOUNTING | | | | |
| PERIOD | | | | |
--------------------------------------------------------------------------------
| Earnings per | | | | |
| share | | | | |
--------------------------------------------------------------------------------
| (EEK/EUR) | 2.04 | 0.13 | 10.09 | 0.64 |
--------------------------------------------------------------------------------
| Diluted | | | | |
| earnings per | | | | |
| share | | | | |
--------------------------------------------------------------------------------
| (EEK/EUR) | 2.04 | 0.13 | 10.09 | 0.64 |
--------------------------------------------------------------------------------
