| Segments (EURm) | Q2/13 | Q2/12 | yoy | 6m/13 | 6m/12 | yoy |
| Supermarkets | 84.5 | 84.1 | 0.5% | 164.0 | 161.3 | 1.7% |
| Department stores | 21.4 | 21.0 | 1.6% | 41.4 | 40.0 | 3.3% |
| Cars | 13.0 | 9.4 | 39.2% | 22.1 | 15.5 | 42.5% |
| Footwear | 4.1 | 3.6 | 12.5% | 6.8 | 6.6 | 3.6% |
| Real Estate | 0.8 | 0.7 | 11.2% | 1.6 | 1.4 | 7.7% |
| Total sales | 123.8 | 118.8 | 4.2% | 235.8 | 224.9 | 4.9% |
| Supermarkets | 0.4 | -0.1 | -461.9% | -1.3 | 1.8 | -175.7% |
| Department stores | 1.0 | 0.8 | 21.3% | -0.5 | 0.5 | -198.6% |
| Cars | 0.8 | 0.6 | 32.2% | 1.0 | 0.9 | 8.2% |
| Footwear | 0.3 | 0.2 | 55.4% | -0.3 | -0.3 | -7.6% |
| Real Estate | 2.2 | 0.8 | 163.8% | 3.4 | 2.6 | 31.4% |
| Total net profit | 4.6 | 2.3 | 100.6% | 2.4 | 5.5 | -57.4% |
The consolidated unaudited sales revenue of the Tallinna Kaubamaja Group in the first half-year of 2013 was 235.8 million euros, having grown by 4.9% compared to the result of the first half-year of 2012, when the sales revenue was 224.9 million euros. In the 2nd quarter, the sales revenue of the Group was 123.8 million euros, thus exceeding the sales revenue of a year before by 4.2%. The consolidated unaudited net profit of the Group in the first six months of 2013 was 2.4 million euros, which is more than twice as low as the profit of the same period of the previous year, i.e. 5.5 million euros. The net profit of the Group in the 2nd quarter was 4.6 million euros, which is twice as much as the profit of the comparable period of last year. The net profit of the quarter was significantly influenced by the 3.8 million euro income tax on dividends; in 2013, it was recorded in the first quarter results, in 2012, however, in the 2nd quarter results in the same amount. The pre-tax profit of the first half-year was 6.1 million euros, having decreased by 34.1% in a year. In the 2nd quarter, the pre-tax profit reached 4.6 million euros, but was 23.6% lower compared to the same period of the previous year.
The net profit was significantly smaller than last year’s result, but corresponded to the enterprise’s plans in the most part – considering both expansions and the changes in competition and the business environment. As planned, compared to the year earlier, 1.3 million euros additional bonus points were awarded to customers through a loyalty program, which reduced the Group's half-year gross profit. This in turn caused a decrease in the gross profit margin. The updated loyalty programme launched in May 2012 has been successful and supports the turnover of the Group’s various retail segments. 0.3 million euros of non-capitalised development costs related to the opening of new stores are recorded in the operating costs of the first half-year. Other factors causing the profit decrease were the expected increase of heating, electricity and labour expenses (in the first half-year, heating and electricity costs grew by 20.0% and labour costs by 13.3%). The turnover increase was smaller than expected. Many newly added retail stores in the market give customers great choices, and people have come to deem the freshness, quality, price and availability of goods and fast and competent service in stores more and more important. Thus, in order to improve the management of goods, the Group has started updating the trade software in the supermarket chain, training service and support personnel and improving supply processes. In the first half of 2013, Läänemere Selver was opened in Tallinn and Aardla Selver in Tartu, and Saare Selver in Saaremaa was expanded. The SelveEkspress service was added to seven Selver stores and a Shu shoe store was opened in Jõhvi.
Selver supermarkets
The consolidated sales revenue of the supermarket business segment in the first half of 2013 was 164.0 million euros, having increased by 1.7% compared to the period of a year before. The consolidated sales revenue of the 2nd quarter was 84.5 million euros, having grown by 0.5% compared to the same period of the previous year. The average monthly sales revenue of goods per a square metre of the sales area was 0.35 thousand euros in the first half of 2013 and 0.36 thousand euros in the 2nd quarter, remaining 6.6% and 8.1% lower compared to the previous year, respectively. The sales revenue of goods in comparable stores per a square metre of the sales area was an average of 0.36 thousand euros in the first half of 2013 and 0.37 thousand euros in the 2nd quarter, indicating a decrease of 4.0% and 5.6%, respectively. 16.4 million purchases were made from Selver stores in the first half of 2013, exceeding the number of purchases made during the period of a year earlier by 2.0%. This year, the growth of the sales revenue of Selver stores has been lower than the turnover growth of the market segment (non-specialised stores predominantly selling food, alcohol and tobacco). An increase in the sales revenue of goods has been supported by the opening of new stores. Foodstuffs, whose proportion of the total turnover has increased, have indicated more positive sales results in the first half-year. The sale of industrial goods remained smaller than in the previous year. The results of comparable stores have been influenced by the changed competitive situation. New stores have been opened both by competitors and Selver itself, as a result of which, customers are constantly redistributed between existing and new stores. The sales revenue basis of the previous year is higher thanks to certain campaigns that were not organised this year. In accounting terms, the sales revenue was negatively influenced by additional bonus points awarded to customers; this impact did not exist before May last year. In addition, the reference basis of 2012 was higher due to the loss of turnover from Saare Selver, which was closed for three weeks in the first half of 2013 for renovation works.
The consolidated pre-tax profit of the supermarket segment in the first half of 2013 was 0.4 million euros. After taxes, the first half-year ended with a loss of 1.3 million euros. The consolidated pre-tax profit and net profit of the 2nd quarter was 0.4 million euros. The net profit of the 2nd quarter exceeded the net loss earned a year earlier by 0.5 million euros; the net loss of the first half of the year remained 3.1 million euros lower than the year before. The pre-tax profit and net profit earned in Estonia in the 2nd quarter was 1.0 million euros. In the first half-year, the profit before income tax was 1.6 million euros, the half-year ended with a loss of 0.1 million euros. The difference between net profit and profit before income tax was caused by the income tax paid on dividends – the income tax on 2012 dividends had been recorded in the 2nd quarter. The pre-tax loss and net loss incurred in Latvia in the first half-year was 1.2 million euros, of which, the share of the 2nd quarter made up 0.6 million euros. The loss remained on the same level with the year before. Business in Latvia has been frozen. The decrease of margins had a significant negative impact on the economic results of Selvers in the first half-year. The main reason for this was an increase in the percentage of food products, as the margin thereof is lower than that of industrial goods. The proportion of products sold at a discount has increased; in addition, the bonus points accompanying the loyalty programme, which was launched in May 2012, have had an impact on the margin drop. Continued cost-effective activities have had a positive effect on the profit earned in Estonia. The increase in heating and electricity costs has had a decreasing effect on profit. Furthermore, generating profit was influenced by the costs related to opening and launching new stores and renovating existing ones. There are plans to open three new stores in the fourth quarter of 2013 – in the Baltic Station in Tallinn, in Peetri Small Town and in Viljandi city centre.
Department stores
The sales revenue of the department stores business segment in the first six months of 2013 was 41.4 million euros, having grown by 3.3% compared to the same period of the previous year. Of that, the sales revenue of the 2nd quarter was 21.4 million euros, which was 1.6% higher than the revenue of the 2nd quarter of 2012. The pre-tax profit of department stores in the first half of 2013 was 0.7 million euros, which is 37.3% better than the result achieved a year ago. In the 2nd quarter, the pre-tax profit was 1.0 million euros, which was 21.3% or 0.2 million euros higher than the profit of 2012. The sales revenue of department stores per a square metre of sales area in the first half-year was 0.27 thousand euros per month, which is 2.1% more than in the same period of the previous year. In the 2nd quarter, the sales results of Kaubamaja were influenced by the competitors' summertime discount campaigns, which were launched considerably sooner than previously. The department stores’ operating profit of the first six months of 2013 was 0.6 million euros, which was 41.0% or 0.2 million euros better than the result of the previous year. The results of department stores were negatively influenced by the final campaign of the Music Department that began at the end of January in both Tallinn and Tartu. The sales revenue of OÜ TKM Beauty Eesti, which operates the I.L.U. beauty stores, was 2.0 million euros, having increased by 17.0% compared to the same period of the previous year. The net loss of the I.L.U. chain in the first half-year was 0.3 million euros, which is an improvement of 3.3% compared to the result of a year ago. Compared to the first half of the past year, in August 2012 the I.L.U. chain also opened a sixth store in the Tasku Centre in Tartu.
Car Trade
The sales revenue of the car trade segment in the first half of 2013, excluding intra-segment transactions, was 22.1 million euros. The sales revenue exceeded the revenue of the same period of the previous year by 42.5%; among that, the sales revenue of KIAs increased by 17.2%. The sales revenue of 13.0 million euros earned in the 2nd quarter exceeded the sales revenue of a year before by 39.2%, and the sales revenue of KIAs had increased by 15.0%. A total of 1,100 cars were sold in the first half-year, 642 of them in the 2nd quarter. The net profit earned in the segment in the first half of 2013 reached 1.0 million euros and the net profit of the 2nd quarter was 0.8 million euros. The results of the same period of the previous year were exceeded by 8.2% and 32.2%, respectively. The reorganisation of the legal structure of the car segment began in the first half of 2013. The structural changes are planned to be completed in third quarter and as a result, the holdings of KIA Auto AS in the Latvian subsidiary Forum Auto SIA and in the Lithuanian subsidiary UAB KIA Auto will be transferred to TKM Auto OÜ, with the car business undertaken by the Group in Estonia being joined under AS Viking Motors.
Footwear trade
The turnover of the footwear trade segment in the first half of 2013 was 6.8 million euros, having increased by 3.6% in a year. In the 2nd quarter, the turnover was 4.1 million euros, which is 12.5% higher than the turnover of the same period of 2012. Compared to the weak first quarter result, there were signs of stabilisation in the 2nd quarter and the new stores (three Shu stores and one ABC store) opened in the fourth quarter of 2012 and the first quarter of 2013 also yielded results. The loss of the first half-year reached 0.3 million euros, which is decreased 0.02 million euros compared to the same period of the previous reporting year. The profit of the 2nd quarter was 0.3 million euros, which is 0.1 million euros more than the result of the second quarter of 2012. The reorganisation of the legal structure of the footwear segment was completed in the 2nd quarter of 2013. As a result of the structural changes, AS Tartu Kaubamaja and OÜ Suurtüki NK were joined under AS ABC King. As of 17 May 2013, the business name of AS ABC King has been AS TKM King. At the end of the second quarter of 2013, the footwear store chain of the Group included 28 stores with a total area of 8.8 thousand square metres.
Real Estate
The sales revenue of the business segment of real estate outside the Group totalled to 1.6 million euros in the first half of 2013 (1.4 million euros in the first half of 2012), having grown 7.7% compared to the same period of the previous year. The extra-Group sales revenue of the second quarter was 0.8 million euros (0.7 million euros in the second quarter of 2012), showing an increase of 11.2% from the same period of the previous year. The sales revenue has increased thanks to the rental spaces added in 2012 and 2013. The pre-tax profit of the real estate segment in the first half-year was 4.3 million euros, which is 0.7 million euros more than in the same period of the previous year (the profit of the first half-year of 2012 was 3.6 million euros), having increased by 19.4% compared to the same period of the previous year. The pre-tax profit of the real estate segment in the second quarter of 2013 was 2.2 million euros (in the 2nd quarter of 2012, the pre-tax profit was 1.8 million euros), which is 0.4 million euros more than in the same period of last year – an increase of 22.8%. A new Peetri Selver in Rae Parish will be completed in 2013, and there are plans to reconstruct a building in Ulmana Street in Riga in order to turn it into a modern car showroom.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
In thousands of euros
| 30.06.2013 | 31.12.2012 | |
| ASSETS | ||
| Current assets | ||
| Cash and bank | 12,000 | 13,494 |
| Trade receivables and prepayments | 11,676 | 18,497 |
| Inventories | 48,727 | 48,264 |
| Total current assets | 72,403 | 80,255 |
| Non-current assets | ||
| Receivables and prepayments | 674 | 667 |
| Investments in associates | 1,714 | 1,628 |
| Investment property | 3,756 | 3,756 |
| Property, plant and equipment | 200,816 | 190,298 |
| Intangible assets | 10,900 | 11,236 |
| Total non-current assets | 217,860 | 207,585 |
| TOTAL ASSETS | 290,263 | 287,840 |
| LIABILITIES AND EQUITY | ||
| Current liabilities | ||
| Borrowings | 15,440 | 17,210 |
| Trade payables and other liabilities | 62,372 | 64,151 |
| Total current liabilities | 77,812 | 81,361 |
| Non-current liabilities | ||
| Borrowings | 77,346 | 59,781 |
| Provisions and prepayments | 1,049 | 519 |
| Total non-current liabilities | 78,395 | 60,300 |
| TOTAL LIABILITIES | 156,207 | 141,661 |
| Equity | ||
| Share capital | 24,438 | 24,438 |
| Statutory reserve capital | 2,603 | 2,603 |
| Revaluation reserve | 50,521 | 51,079 |
| Currency translation differences | -235 | -7 |
| Retained earnings | 56,729 | 68,066 |
| TOTAL EQUITY | 134,056 | 146,179 |
| TOTAL LIABILITIES AND EQUITY | 290,263 | 287,840 |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
In thousands of euros
| II quarter 2013 | II quarter 2012 | 6 months 2013 | 6 months 2012 | |||
| Revenue | 123,771 | 118,833 | 235,781 | 224,867 | ||
| Other operating income | 201 | 102 | 415 | 250 | ||
| Materials, consumables used and services | -93,041 | -87,986 | -178,609 | -167,879 | ||
| Other operating expenses | -12,839 | -11,627 | -25,249 | -23,133 | ||
| Staff costs | -10,298 | -9,101 | -20,008 | -17,663 | ||
| Depreciation, amortisation and impairment losses | -2,744 | -3,571 | -5,495 | -6,109 | ||
| Other expenses | -123 | -65 | -214 | -205 | ||
| Operating profit | 4,927 | 6,585 | 6,621 | 10,128 | ||
| Finance income | 9 | 33 | 17 | 88 | ||
| Finance costs | -335 | -579 | -594 | -988 | ||
| Finance income on shares of associates | 46 | 40 | 86 | 79 | ||
| Profit before tax | 4,647 | 6,079 | 6,130 | 9,307 | ||
| Income tax | 2 | -3,762 | -3,770 | -3,766 | ||
| NET PROFIT FOR THE FINANCIAL YEAR | 4,649 | 2,317 | 2,360 | 5,541 | ||
| Other comprehensive income: | ||||||
| Items that will be reclassified subsequently to profit or loss | ||||||
| Currency translation differences | -33 | 169 | -228 | 138 | ||
| Other comprehensive income/loss for the financial year | -33 | 169 | -228 | 138 | ||
| TOTAL COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR | 4,616 | 2,486 | 2,132 | 5,679 | ||
Raul Puusepp
Chairman of the Board
Phone +372 731 5000
