Income statement
Consolidated net sales of first quarter 2010 was 49.0 mil. kroons/3.1 mil. euros
(53.1 mil. kroons/3.4 mil. euros in same period of 2009) representing a 8%
decrease on the first quarter compared to Q1 2009. The Group's gross margin in
the first quarter of 2010 was 24.5% compared to 19.5% in the first quarter of
2009. Consolidated operating profit amounted to 3.4 mil. kroons/219 thousand
euros (0.3 mil. kroons/17 thousand euros in same period 2009). The consolidated
operating margin of net sales was 7.0% (0.5% in Q1 2009).
Consolidated net profit amounted to 3.0 mil. kroons/191 thousand euros, compared
to net loss 0.6 mil. kroons/43 thousand euros in Q1 2009), and the net margin
was 6.1% (-1.3% in Q1 2009). In Q1 2010, the Group's return on equity was 4.0%
(-1.0% in Q1 2009) and return on assets was 2.2% (-0.4% in Q1 2009).
Position of financial statement
As of 31.3.2010 the total assets of Viisnurk amounted to 135.1 mil. kroons/8.6
mil. euros (31.12.2009: 132.8 mil. kroons/8.5 mil. euros). The liabilities of
the company accounted for 44.9% (31.12.2009: 46.2%) thereof, i.e. 60.7 mil.
kroons/3.9 mil. euros (31.12.2009: 61.3 mil. kroons/3.9 mil. euros).
Receivables and prepayments have increased by 5.0 mil. kroons/0.3 mil. euros
i.e. 26% decrease with 3 months. The reason of increase of receivables is small
sales in December 2009, which essentially lowered the amount of receivables at
the end of December.
Inventories decreased by 2.1 mil. kroons/0.1 mil. euros to reach 44.1 mil.
kroons/2.8 mil. euros on 31.3.2010. (31.12.2009: 41.9 mil. kroons/2.7 mil.
euros). Property, plant and intangibles decreased by 1.6 mil. kroons/0.1 mil.
euros mainly as a result of depreciation.
Short-term loans decreased by 1.5 mil. kroons/0.1 mil. euros and amounted to 6.5
mil. kroons/0.4 mil. euros in 31 March 2010 (31.12.2009: 8.0 mil. kroons/0.5
mil. euros). Supplier payables, tax liabilities, other payables, including
payables to employees, and provisions amounted to 23.9 mil. kroons/1.5 mil.
euros (31.12.2009: 22.9 mil. kroons/1.5 mil. euros). Current and non-current
liabilities decreased by 0.6 mil. kroons/38 thousand euros to 60.7 mil.
kroons/3.9 mil. euros (31.12.2009: 61.3 mil. kroons/3.9 mil. euros).
Divisional review:
Net sales by business segments
--------------------------------------------------------------------------------
| | th. EEK | th. EUR | % of net sales |
--------------------------------------------------------------------------------
| | Q1 2010 | Q1 2009 | Q1 2010 | Q1 2009 | Q1 2010 | Q1 2009 |
--------------------------------------------------------------------------------
| Furniture | 26,086 | 27,598 | 1,667 | 1,764 | 53.2% | 52.0% |
| Factory | | | | | | |
--------------------------------------------------------------------------------
| Skano | 6,528 | 8,934 | 417 | 571 | 13.3% | 16.8% |
--------------------------------------------------------------------------------
| Building | 19,422 | 20,387 | 1,242 | 1,303 | 39.6% | 38.4% |
| Materials | | | | | | |
| Division | | | | | | |
--------------------------------------------------------------------------------
| Elimination | (3,034) | (3,833) | (194) | (245) | (6.1)% | (7.2)% |
--------------------------------------------------------------------------------
| TOTAL | 49,012 | 53,086 | 3,132 | 3,393 | 100.0% | 100.0% |
--------------------------------------------------------------------------------
Net sales by geographical segments
--------------------------------------------------------------------------------
| | th. EEK | th. EUR | % of net sales |
--------------------------------------------------------------------------------
| | Q1 2010 | Q1 2009 | Q1 2010 | Q1 2009 | Q1 2010 | Q1 2009 |
--------------------------------------------------------------------------------
| Finland | 22,692 | 21,704 | 1,450 | 1,387 | 46.3% | 40.9% |
--------------------------------------------------------------------------------
| Russia | 9,722 | 12,514 | 622 | 799 | 19.8% | 23.6% |
--------------------------------------------------------------------------------
| Estonia | 7,110 | 7,871 | 454 | 503 | 14.5% | 14.8% |
--------------------------------------------------------------------------------
| Ukraine | 2,385 | 2,894 | 152 | 185 | 4.9% | 5.5% |
--------------------------------------------------------------------------------
| Sweden | 2,110 | 559 | 135 | 36 | 4.3% | 1.1% |
--------------------------------------------------------------------------------
| Lithuania | 1,442 | 2,218 | 92 | 142 | 2.9% | 4.2% |
--------------------------------------------------------------------------------
| Latvia | 762 | 2,368 | 49 | 151 | 1.6% | 4.5% |
--------------------------------------------------------------------------------
| Germany | 690 | 743 | 44 | 48 | 1.4% | 1.4% |
--------------------------------------------------------------------------------
| Kazakhstan | 639 | 629 | 41 | 40 | 1.3% | 1.2% |
--------------------------------------------------------------------------------
| India | 226 | 0 | 14 | 0 | 0.5% | 0.0% |
--------------------------------------------------------------------------------
| Belarusian | 104 | 119 | 7 | 8 | 0.2% | 0.2% |
--------------------------------------------------------------------------------
| Portugal | 0 | 1,245 | 0 | 79 | 0.0% | 2.3% |
--------------------------------------------------------------------------------
| Other countries | 1,130 | 222 | 72 | 15 | 2.3% | 0.4% |
--------------------------------------------------------------------------------
| TOTAL | 49,012 | 53,086 | 3,393 | 3,393 | 100.00% | 100.00% |
--------------------------------------------------------------------------------
Regarding the markets, turnover has increased in Sweden, Finland and Kazakhstan.
Turnover has decreased in most in Portugal, Russia and Latvia.
Profit by business segments
--------------------------------------------------------------------------------
| | th. EEK | th. EUR |
--------------------------------------------------------------------------------
| | Q1 2010 | Q1 2009 | Q1 2010 | Q1 2009 |
--------------------------------------------------------------------------------
| Furniture Factory | 2,330 | 1,616 | 149 | 103 |
--------------------------------------------------------------------------------
| Skano | (68) | (778) | (4) | (50) |
--------------------------------------------------------------------------------
| Building Materials | 1,543 | (248) | 98 | (16) |
| Division | | | | |
--------------------------------------------------------------------------------
| Elimination | (379) | (325) | (24) | (20) |
--------------------------------------------------------------------------------
| TOTAL | 3,426 | 265 | 219 | 17 |
--------------------------------------------------------------------------------
| Net financial costs | (440) | (938) | (28) | (60) |
--------------------------------------------------------------------------------
| NET PROFIT | 2,986 | (673) | 191 | (43) |
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Furniture Division
The net sales of AS Viisnurk Furniture Division in the first quarter amounted to
29.6 mil. kroons/1.9 mil. euros (2009: 32.7 mil. kroons/2.1 mil. euros). As
compared to the Q1 of previous year the turnover of the division has decreased
by 3.1 mil. kroons/0.2 mil. euros (9.5%).
Furniture Retail - Skano
AS Viisnurk retail business is operated by a private limited company OÜ Skano
and its subsidiaries in Latvia, Lithuania and Ukraine. Skano has totally 10
stores in Tallinn, Pärnu, Riga, two in Vilnius, Kaunas, two in Kiev, Donetsk and
Kharkiv at the end of the first quarter. There were opened one store in Kiev and
decided to close one store in Vilnius.
Retail sales by countries
--------------------------------------------------------------------------------
| | th. EEK | th. EUR | % of net sales | Number of stores |
--------------------------------------------------------------------------------
| | Q1 | Q1 | Q1 | Q1 | Q1 | Q1 | 31.03. | 31.03.0 |
| | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 10 | 9 |
--------------------------------------------------------------------------------
| Estonia | 2,443 | 2,200 | 156 | 141 | 37.4% | 24.6% | 2 | 2 |
--------------------------------------------------------------------------------
| Latvia | 387 | 1,730 | 24 | 110 | 5.9% | 19.4% | 1 | 1 |
--------------------------------------------------------------------------------
| Lithuan | 1,427 | 2,110 | 91 | 135 | 21.9% | 23.6% | 3 | 3 |
| ia | | | | | | | | |
--------------------------------------------------------------------------------
| Ukraine | 2,271 | 2,894 | 145 | 185 | 34.8% | 32.4% | 4 | 4 |
--------------------------------------------------------------------------------
| TOTAL | 6,528 | 8,934 | 416 | 571 | 100.0% | 100.0% | 10 | 10 |
--------------------------------------------------------------------------------
The retail sale drastically decreased in Latvia. The readiness for purchase is
very low in Latvia. The sale in Estonia has increased and in Lithuania and
Ukraine decreased. Within the first quarter this year the retail sale has
decreased by 26.9% as compared to the same period last year.
Furniture Factory
The Furniture Factory's sales in the first quarter in one of the company's basic
target market in Finland has increased and on other - In Russia, decreased. Also
there is smaller sales to Skano. Our clients does not estimate demands
recovering in near future.
The net sales of the Furniture Factory in the first quarter amounted to 26.1
mil. kroons/1.7 mil. euros and profit to 2.3 mil. kroons/149 thousand euros. In
the same period last year, the turnover of the factory totalled to 27.6 mil.
kroons/1.8 mil. euros and the profit 1.6 mil. kroons/103 thousand euros. As
compared to the previous year the turnover of the factory has decreased by 1.5
mil. kroons/97 thousand euros and the profit has increased by 0.7 mil. kroons/46
thousand euros.
Furniture Factory sales by countries
--------------------------------------------------------------------------------
| | th EEK | th EUR | % of net sales |
--------------------------------------------------------------------------------
| | Q1 2010 | Q1 2009 | Q1 2010 | Q1 2009 | Q1 2010 | Q1 2009 |
--------------------------------------------------------------------------------
| Russia | 13,329 | 10,328 | 852 | 660 | 51.1% | 37.4% |
--------------------------------------------------------------------------------
| Finland | 7,977 | 11,691 | 510 | 747 | 30.6% | 42.4% |
--------------------------------------------------------------------------------
| Kazakhstan | 639 | 629 | 41 | 40 | 2.4% | 2.3% |
--------------------------------------------------------------------------------
| Estonia | 494 | 306 | 32 | 20 | 1.9% | 1.1% |
--------------------------------------------------------------------------------
| Germany | 451 | 620 | 29 | 40 | 1.7% | 2.2% |
--------------------------------------------------------------------------------
| Belarusian | 104 | 119 | 7 | 8 | 0.4% | 0.4% |
--------------------------------------------------------------------------------
| Others | 66 | 72 | 4 | 5 | 0.3% | 0.3% |
--------------------------------------------------------------------------------
| Subsidiarie | 3,026 | 3,833 | 193 | 245 | 11.6% | 13.9% |
| s | | | | | | |
--------------------------------------------------------------------------------
| TOTAL | 26,086 | 27,598 | 1,668 | 1,765 | 100.0% | 100.0% |
--------------------------------------------------------------------------------
Building Materials Division
The net sales of the Building Materials Division in the first quarter amounted
to 19.4 mil. kroons/1.2 mil. euros and profit to 1.5 mil. kroons/98 thousand
euros. In the same period last year, the turnover of the division totalled to
20.4 mil. kroons/1.3 mil. euros and the loss 0.2 mil. kroons/16 thousand euros.
As compared to the previous year the turnover of the division has decreased by
1.0 mil. kroons/62 thousand euros and the profit has increased by 1.8 mil.
kroons/114 thousand euros.
Net sales by geographical segments
--------------------------------------------------------------------------------
| | th. EEK | th. EUR | % of net sales |
--------------------------------------------------------------------------------
| | Q1 2010 | Q1 2009 | Q1 2010 | Q1 2009 | Q1 2010 | Q1 2009 |
--------------------------------------------------------------------------------
| Finland | 9,363 | 11,376 | 598 | 727 | 48.2% | 55.8% |
--------------------------------------------------------------------------------
| Estonia | 4,173 | 5,365 | 267 | 343 | 21.5% | 26.3% |
--------------------------------------------------------------------------------
| Sweden | 2,110 | 559 | 135 | 36 | 10.9% | 2.7% |
--------------------------------------------------------------------------------
| Russia | 1,745 | 823 | 112 | 53 | 9.0% | 4.0% |
--------------------------------------------------------------------------------
| Latvia | 375 | 638 | 24 | 41 | 1.9% | 3.1% |
--------------------------------------------------------------------------------
| Germany | 239 | 123 | 15 | 8 | 1.2% | 0.6% |
--------------------------------------------------------------------------------
| India | 226 | 0 | 14 | 0 | 1.2% | 0.0% |
--------------------------------------------------------------------------------
| Ukraine | 114 | 0 | 7 | 0 | 0.6% | 0.0% |
--------------------------------------------------------------------------------
| Lithuania | 15 | 108 | 1 | 7 | 0.1% | 0.5% |
--------------------------------------------------------------------------------
| Portugal | 0 | 1,245 | 0 | 80 | 0.0% | 6.1% |
--------------------------------------------------------------------------------
| Other countries | 1,064 | 150 | 68 | 10 | 5.4% | 0.7% |
--------------------------------------------------------------------------------
| TOTAL | 19,424 | 20,387 | 1,241 | 1,305 | 100.0% | 100.0% |
--------------------------------------------------------------------------------
The biggest growth has been in sales to Sweden, There were no sales to Portugal.
The sales in our biggest market, in Finland has decreased.
Forecast and development
Skano. According to preliminary plans Skano do not plan openings of new stores
in 2010. Company needs to minimize risks related to expanding in cool economical
situation and keep sufficient liquidity. Management consider about new openings
in Ukraine - two stores in Dnipropetrovs'k and one store in Kiev.
Furniture Factory. For 2010 management forecasts continuously small sales in
retail market, also in markets not related in Skano retail business, and it
means continously small production volume in furniture factory. Agreements with
employees to use shortened working time are effective until 31.03.2011.
Building Materials Division. Based on low demand for building materials in
target markets management continues with decreased production volume. In main
production line factory continues with three shifts instead of four. In Isotex
line are used one or two shifts accordingly the demand of clients.
In all business segments management looking for new markets and main tension is
focused into Near- and Far-East countries.
Consolidated balance sheet
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| | Th EEK | Th EEK | Th EUR | Th EUR |
--------------------------------------------------------------------------------
| | 31.3.2010 | 31.12.200 | 31.3.2010 | 31.12.2009 |
| | | 9 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash and bank | 2,875 | 6,091 | 184 | 389 |
--------------------------------------------------------------------------------
| Receivables and | 23,784 | 18,810 | 1,520 | 1,202 |
| prepayments | | | | |
--------------------------------------------------------------------------------
| Inventories | 44,058 | 41,912 | 2,816 | 2,680 |
--------------------------------------------------------------------------------
| Total current assets | 70,717 | 66,813 | 4,520 | 4,271 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Investment property | 2,893 | 2,893 | 185 | 185 |
--------------------------------------------------------------------------------
| Tangible fixed assets | 61,469 | 63,083 | 3,928 | 4,031 |
--------------------------------------------------------------------------------
| Intangible fixed assets | 12 | 14 | 1 | 1 |
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| Total fixed assets | 64,374 | 65,990 | 4,114 | 4,217 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| TOTAL ASSETS | 135,091 | 132,803 | 8,634 | 8,488 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Debt obligations | 6,537 | 8,048 | 418 | 514 |
--------------------------------------------------------------------------------
| Payables and prepayments | 23,864 | 22,742 | 1,525 | 1,454 |
--------------------------------------------------------------------------------
| Short-term provisions | 79 | 118 | 5 | 8 |
--------------------------------------------------------------------------------
| Total current liabilities | 30,480 | 30,908 | 1,948 | 1,976 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current debt | 27,084 | 27,084 | 1,731 | 1,731 |
| obligations | | | | |
--------------------------------------------------------------------------------
| Non-current provisions | 3,132 | 3,303 | 200 | 211 |
--------------------------------------------------------------------------------
| Total non-current | 30,216 | 30,387 | 1,931 | 1,942 |
| liabilities | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total liabilities | 60,696 | 61,295 | 3,879 | 3,918 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Share capital at nominal | 44,991 | 44,991 | 2,875 | 2,875 |
| value | | | | |
--------------------------------------------------------------------------------
| Issue premium | 5,698 | 5,698 | 364 | 364 |
--------------------------------------------------------------------------------
| Statutory capital reserve | 4,499 | 4,499 | 288 | 288 |
--------------------------------------------------------------------------------
| Currency translation | 307 | 406 | 20 | 26 |
| reserve | | | | |
--------------------------------------------------------------------------------
| Retained profits | 15,914 | 15,759 | 1,017 | 1,007 |
--------------------------------------------------------------------------------
| Net profit for the year | 2,986 | 155 | 191 | 10 |
--------------------------------------------------------------------------------
| Total equity | 74,395 | 71,508 | 4,755 | 4,570 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| TOTAL LIABILITIES AND | 135,091 | 132,803 | 8,634 | 8,488 |
| EQUITY | | | | |
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Consolidated income statement
--------------------------------------------------------------------------------
| | Th EEK | Th EEK | Th EUR | Th EUR |
--------------------------------------------------------------------------------
| | 1st | 1st | 1st | 1st quarter |
| | quarter | quarter | quarter | 2009 |
| | 2010 | 2009 | 2010 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| RETURN ON SALES | 49,012 | 53,086 | 3,132 | 3,393 |
--------------------------------------------------------------------------------
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| Cost of production sold | (37,027) | (42,728) | (2,366) | (2,731) |
--------------------------------------------------------------------------------
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| Gross profit | 11,985 | 10,358 | 766 | 662 |
--------------------------------------------------------------------------------
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| Marketing expenses | (7,208) | (8,878) | (460) | (567) |
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| General administrative | (1,482) | (1,516) | (95) | (97) |
| expenses | | | | |
--------------------------------------------------------------------------------
| Other income | 501 | 1,058 | 32 | 67 |
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| Other expenses | (370) | (756) | (24) | (48) |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit | 3,426 | 266 | 219 | 17 |
--------------------------------------------------------------------------------
| Financial income and | (440) | (939) | (28) | (60) |
| financial expenses | | | | |
--------------------------------------------------------------------------------
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| Profit (loss) before | 2,986 | (673) | 191 | (43) |
| taxes | | | | |
--------------------------------------------------------------------------------
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| NET PROFIT (LOSS) FOR | 2,986 | (673) | 191 | (43) |
| THE PERIOD | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Basic earnings per | 0.66 | (0.15) | 0.04 | (0.01) |
| share | | | | |
--------------------------------------------------------------------------------
| Diluted earnings per | 0.66 | (0.15) | 0.04 | (0.01) |
| share | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Currency translation | (99) | (123) | (6) | (6) |
| differences | | | | |
--------------------------------------------------------------------------------
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| TOTAL COMPREHENSIVE | 2,887 | (796) | 185 | (49) |
| INCOME | | | | |
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Einar Pähkel
CFO
+372 447 8331
einar.pahkel@viisnurk.ee
