| Segments (EURm) | Q1/14 | Q1/13 | yoy |
| Supermarkets | 82.4 | 79.6 | 3.6% |
| Department stores | 20.6 | 20.0 | 3.2% |
| Cars | 12.4 | 9.0 | 37.6% |
| Footwear | 3.4 | 2.7 | 25.9% |
| Real Estate | 0.8 | 0.8 | 10.2% |
| Total sales | 119.7 | 112.0 | 6.8% |
| Supermarkets | -1.0 | -1.7 | -39.0% |
| Department stores | -0.4 | -1.5 | -69.8% |
| Cars | -0.5 | 0.3 | -277.7% |
| Footwear | -0.8 | -0.6 | 29.1% |
| Real Estate | 2.1 | 1.2 | 73.5% |
| Total net profit | -0.6 | -2.3 | -73.0% |
In the first quarter of 2014, the consolidated unaudited sales revenue of Tallinna Kaubamaja Group was 119.7 million euros. The growth was 6.8%, compared to the sales revenue of 112.0 million euros earned in the first quarter of 2013. The sales revenue increased in all business segments of the Group, with the highest growth in the car trade and footwear segments. The amount of income tax calculated on dividends was 1.3 million euros, resulting in a net loss of 0.6 million euros in the reporting period. Loss earned in the first quarter of 2013 was 2.3 million euros, including income tax in the amount of 3.8 million euros. Profit before taxes was 0.7 million euros, which is half of the profit earned in the same period year earlier.
Although there were several adverse factors that influenced the sales compared to the situation a year earlier, we are satisfied with the Group`s sales revenue earned in the first quarter of 2014. While an exceptionally warm winter enabled clients to save on heating costs and contribute to retail sales, they did not spend their extra money on winter clothes and footwear, the sales of which usually account for a large portion of the sales revenue earned by the Group in the first quarter of a year. The results of the supermarket segment by quarters deviated from the norm because the Easter holidays are in April (in March in 2013) and the Laadapäevad sales campaign was moved to the second quarter (in the first quarter in 2013). The margin was slightly lower due to larger discounts on winter goods and clearance sales of two footwear stores compared to the previous year. The growth of labour costs (15.9%) had a strong impact on the profit numbers. The number of employees increased (9.6%) due to additional selling space and the average labour cost per employee increased as well (5.7%). New commercial software was introduced in Selver stores in the beginning of the year, which will make handling of goods easier and increase the efficiency of labour force after its launch period.
Selver supermarkets
The consolidated sales revenue of the supermarket business segment was 82.4 million euros in the first quarter of 2014, a growth of 3.6% compared to the same period of the previous year. The sales revenue of the Selver subsidiary Kulinaaria OÜ increased in the first quarter of 2014, demonstrating a growth of 19.1% year-over-year. In the first quarter of 2014, 8.2 million purchases were made in Selver stores, exceeding the year-over-year number of purchases by 4.3%. The consolidated pre-tax loss of the supermarket segment was 0.7 million euros in the first quarter of 2014, of which the loss earned in Estonia was 0.1 million euros – an increase of 0.7 million euros year-over-year. The consolidated net loss of the supermarket segment was 1.0 million euros, an improvement of 0.7 million euros compared to last year’s loss of 1.7 million euros. The net loss earned in the first quarter of 2014 in Estonia was 0.4 million euros, an improvement of 0.7 million euros year-over-year. The reason for the difference between the amount of net profit and pre-tax profit is the income tax paid on dividends: income tax of 1.7 million euros was calculated on dividends in 2013 and 0.4 million euros in 2014. The loss earned in Latvia was 0.6 million euros, remaining at the same level as in the previous year. Business activities have been frozen in Latvia.
New stores opened in 2013 supported the growth of sales revenue in the first quarter of 2014. New Selver stores have had a negative impact on the results of comparable stores, causing a constant re-allocation of clients between stores. Profit earned in Estonia has been affected by the continuing cost-efficiency of operations, as well as changes in the labour market that have resulted in an increase in average wages. On 1 January, new commercial software was introduced in Selver, which has caused one-time uncapitalised costs.
Department stores
The sales revenue of the department store segment in the first three months of 2014 was 20.6 million euros, a year-over-year growth of 3.2%. The warmer than usual winter months had a negative impact on the sales revenue, reducing the sales of outerwear. Although the department stores earned zero pre-tax profit in the first quarter of 2014, the result was still a 0.3 million euro increase year-over-year. The reduced utility charges resulting from the softer winter and efficiently managed discount campaigns had a positive impact on the result of Kaubamaja. The sales revenue of OÜ TKM Beauty Eesti, the company operating I.L.U. cosmetics stores, was 1.0 million euros in the first quarter of 2014, showing a year-over-year growth of 0.6%. Loss earned in the first quarter was 0.1 million euros, a decrease of 0.01 million euros compared to the same period in 2013. Internet stores that sell cosmetics at more favourable prices have become a major competition to I.L.U stores, although they do not provide any guarantees to the quality of goods.
Car Trade
The sales revenue of the car trade segment was 12.4 million euros in the first quarter of 2014. The sales revenue exceeded the year-over-year results by 37.6%. The pre-tax profit earned in this segment in the first quarter of 2014 was 0.1 million euros. Profit earned in the first quarter of 2014 was 76.7% lower than the same period last year. The significantly higher share of fleet-sales influenced the margins in the first quarter of 2014. Due to supply problems of the new KIA Sportage model, the retail sales of Sportages suffered in the first quarter of 2014. The new car dealership opened in Latvia at the end of 2013 started to sell Peugeot and Cadillac cars in addition to KIAs; on the other hand, the new dealership increased rent and utility costs and also marketing costs to promote the new models compared to last year.
Footwear trade
The sales revenue of footwear was 3.4 million euros in the first quarter of 2014, a growth of 25.9% compared to the same period of 2013. The loss in the first quarter of 2014 was 0.8 million euros, an increase of 0.2 million euros compared to the loss in the first quarter of 2013. The significantly higher sales revenue compared to the previous year as well as the increased loss were primarily related to the clearance sales of ABC King and Shu stores in Viru Keskus in Tallinn. The stock of previous seasons was also reduced during the clearance sales.
Real Estate
The sales revenue of the real estate business segment earned outside of the Group was 0.8 million euros in the first quarter of 2014, an increase of 0.1 million euros or 10.2% year-over-year. The pre-tax profit of the real estate segment was 2.1 million euros in the first quarter of 2014, an increase of 0.1 million or 3.2% compared to the same period in the previous financial year. Spaces added in 2013 that are rented to other segments of the Group account for the growth of profit. By the end of 2013, Peetri Selver in Rae rural municipality and a car dealership in Ulmana Street in Riga were completed.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
In thousands of euros
| 31.03.2014 | 31.12.2013 | |
| ASSETS | ||
| Current assets | ||
| Cash and bank | 6,901 | 14,766 |
| Trade receivables and prepayments | 20,754 | 15,991 |
| Inventories | 54,837 | 51,937 |
| Total current assets | 82,492 | 82,694 |
| Non-current assets | ||
| Receivables and prepayments | 313 | 313 |
| Investments in associates | 1,757 | 1,711 |
| Investment property | 3,035 | 3,035 |
| Property, plant and equipment | 228,842 | 229,406 |
| Intangible assets | 10,515 | 10,636 |
| Total non-current assets | 244,462 | 245,101 |
| TOTAL ASSETS | 326,954 | 327,795 |
| LIABILITIES AND EQUITY | ||
| Current liabilities | ||
| Borrowings | 13,742 | 14,300 |
| Trade payables and other liabilities | 69,318 | 67,725 |
| Total current liabilities | 83,060 | 82,025 |
| Non-current liabilities | ||
| Borrowings | 81,941 | 77,104 |
| Provisions and prepayments | 889 | 878 |
| Total non-current liabilities | 82,830 | 77,982 |
| TOTAL LIABILITIES | 165,890 | 160,007 |
| Equity | ||
| Share capital | 24,438 | 24,438 |
| Statutory reserve capital | 2,603 | 2,603 |
| Revaluation reserve | 68,253 | 68,617 |
| Currency translation differences | -255 | -257 |
| Retained earnings | 66,025 | 72,387 |
| TOTAL EQUITY | 161,064 | 167,788 |
| TOTAL LIABILITIES AND EQUITY | 326,954 | 327,795 |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
In thousands of euros
| 3 months 2014 | 3 months 2013 | |
| Revenue | 119,651 | 112,010 |
| Other operating income | 148 | 214 |
| Materials, consumables used and services | -91,525 | -85,568 |
| Other operating expenses | -13,060 | -12,410 |
| Staff costs | -11,251 | -9,710 |
| Depreciation, amortisation and impairment losses | -2,710 | -2,751 |
| Other expenses | -264 | -91 |
| Operating profit | 989 | 1,694 |
| Finance income | 5 | 8 |
| Finance costs | -333 | -259 |
| Finance income on shares of associates | 46 | 40 |
| Profit before tax | 707 | 1,483 |
| Corporate income tax | -1,324 | -3,772 |
| NET LOSS FOR THE FINANCIAL YEAR | -617 | -2,289 |
| Other comprehensive income: | ||
| Items that subsequently might be reclassified to profit or loss | ||
| Currency translation differences | 2 | -195 |
| Other comprehensive income/loss for the financial year | 2 | -195 |
| TOTAL COMPREHENSIVE LOSS FOR THE FINANCIAL YEAR | -615 | -2,484 |
Raul Puusepp
Chairman of the Board
Phone +372 731 5000
