Tallinna Vesi's sales increased by 2.4% in 2022, reaching €54.6 million. Growth in sales resulted from the increased consumption of water services by commercial customers. In the 4th quarter of 2022, Tallinna Vesi earned 16 million euros in sales.
In 2022, the sales from water services increased by 8.5% compared to 2021.
Sales from water services provided to commercial customers in the main service area increased by 11.6% in the 4th quarter, reaching €4.32 million. „Sales for the 4th quarter grew due to the increase in water consumption of capital’s hospitality and leisure establishments. The increase in sales was also affected by the change in the price for water services from 1 October due to the increase in electricity prices,” said Aleksandr Timofejev, Chief Executive Officer of Tallinna Vesi. Sales from water services provided to private customers increased by 20.1% in the 4th quarter compared to a year ago, reaching €6.1 million.
The Company's gross profit for the 4th quarter was €4.52 million, down by €0.28 million year-on-year. “The decrease in gross profit is linked to the cost of goods and services sold, which increased by 13.6% compared to the same period last year,” Timofejev explained. The biggest impact came from the increase in the market price of electricity, which increased by 48.2% compared to the 4th quarter of last year. The Company's results were also affected by the sharp increase in the price of chemicals. The total gross profit for 2022 was €16.9 million, compared to 2021, the gross profit decreased by €3.68 million.
The Company’s operating profit in the 4th quarter was €2.8 million, which was €0.62 million less compared to the same period last year. The operating profit for the twelve months of 2022 was €11.32 million, showing a decrease of 39.7% compared to the previous year. The decrease in operating profit was driven by both the increased electricity costs and the retaining of the provision for potential third-party claims at third-quarter levels of 2021.
The Company’s net profit was €2.36 million in the 4th quarter of 2022, which is €0.85 down from the same period in 2021. As for the twelve months of 2022, the net profit was €8.41 million, compared to €16.2 million in 2021.
Compared to the 4th quarter of the previous year, sales from construction services provided by the subsidiary Watercom decreased by 14.5% or €0.4 million. The total sales from construction services in 2022 amounted to €4.8 million, decreasing by 34.4% or €2.5 million compared to the same period of the previous year. The decrease in revenues is mainly linked to the decrease in construction volumes in 2022 due to the uncertainty in the road construction market.
To secure the sustainable infrastructure and the service continuity, Tallinna Vesi has increased investments in fixed assets. Last year, investments made in pipelines amounted to €10.3 million and a total of almost 19 km of water and sewage pipes were reconstructed. Investments will continue in 2023 to ensure the reliability of the assets.
The investment plan for the following years is prepared based on the Tallinn Public Water Supply and Sewerage Development Plan for the next 12 years, which will be completed this year in cooperation with the City of Tallinn. "Investments made today and in the future will continue to secure high quality drinking water for the people of Tallinn and help to keep the natural environment clean", Timofejev said.
Tallinna Vesi is gradually switching to remote water meters. Customers who have a smart water meter installed, will no longer have to report their monthly water meter readings. The first thousand customers already received new smart meters at the end of last year, and the installation will continue this year at an increased pace. “The main advantage of smart meters is the speed and accuracy of data transmission, as well as security and reliability. In addition to consumption data, the smart meter also communicates information about any failures and possible leakages,” explained Timofejev. By the end of 2026, all existing water meters in Tallinna Vesi's service area will be replaced with smart meters.
In addition to investments in water and wastewater networks, the Company has started to reduce its environmental impact by continuing to map its CO2 footprint. In order to reduce the footprint, 100% of the electricity used at Tallinna Vesi’s facilities and in treatment processes is now produced from renewable sources. At the end of last year, Tallinna Vesi signed a contract for the construction of a combined heat and power plant on the Wastewater Treatment Plant at Paljassaare, which will use biogas from the wastewater treatment process to reduce heating and electricity costs. Biogas produced from sewage sludge covers up to 70% of the plant’s current average annual electricity demand. The cogeneration plant will be operational by the end of this year.
The Company plans to use additional loan capital to finance investments and to continue with the dividend policy established.
KEY FINANCIAL INDICATORS
| € million, except key ratios | 4th quarter | Change 2022/ 2021 | 12 months | Change 2022/ 2021 | ||||
| 2022 | 2021 | 2020 | 2022 | 2021 | 2020 | |||
| Sales | 16.03 | 14.93 | 13.17 | 7.3% | 54.56 | 53.29 | 51.72 | 2.4% |
| Gross profit | 4.52 | 4.80 | 5.64 | -5.9% | 16.90 | 20.58 | 22.23 | -17.9% |
| Gross profit margin % | 28.21 | 32.17 | 42.78 | -12.3% | 30.97 | 38.61 | 42.97 | -19.8% |
| Operating profit before depreciation and amortisation | 4.65 | 5.10 | 7.41 | -8.9% | 18.14 | 25.30 | 28.07 | -28.3% |
| Operating profit before depreciation and amortisation margin % | 29.00 | 34.17 | 56.23 | -15.1% | 33.24 | 47.47 | 54.27 | -30.0% |
| Operating profit | 2.80 | 3.42 | 5.76 | -18.2% | 11.32 | 18.78 | 21.78 | -39.7% |
| Operating profit - main business | 2.50 | 2.91 | 5.51 | -13.9% | 10.31 | 17.52 | 20.88 | -41.2% |
| Operating profit margin % | 17.45 | 22.89 | 43.71 | -23.8% | 20.75 | 35.23 | 42.12 | -41.1% |
| Profit before taxes | 2.44 | 3.31 | 5.64 | -26.3% | 10.65 | 18.40 | 21.34 | -42.1% |
| Profit before taxes margin % | 15.24 | 22.19 | 42.85 | -31.3% | 19.52 | 34.52 | 41.27 | -43.5% |
| Net profit | 2.36 | 3.21 | 5.39 | -26.5% | 8.41 | 16.17 | 16.73 | -48.0% |
| Net profit margin % | 14.71 | 21.47 | 40.91 | -31.5% | 15.41 | 30.33 | 32.35 | -49.2% |
| ROA % | 0.94 | 1.26 | 2.12 | -25.6% | 3.30 | 6.32 | 6.45 | -47.8% |
| Debt to total capital employed % | 56.26 | 54.94 | 56.09 | 2.4% | 56.26 | 54.94 | 56.09 | 2.4% |
| ROE % | 2.15 | 2.82 | 4.92 | -23.8% | 7.43 | 14.20 | 14.69 | -47.7% |
| Current ratio | 1.24 | 2.83 | 3.85 | -56.2% | 1.24 | 2.83 | 3.85 | -56.2% |
| Quick ratio | 1.17 | 2.79 | 3.80 | -58.1% | 1.17 | 2.79 | 3.80 | -58.1% |
| Investments into fixed assets | 9.47 | 5.43 | 5.65 | 74.5% | 25.13 | 15.38 | 19.42 | 63.4% |
| Payout ratio % | - | 80.42 | 77.70 | 0.0% | - | 80.42 | 77.70 | 0.0% |
Gross profit margin – Gross profit / Net sales
Operating profit before depreciation and amortisation – Operating profit + depreciation and amortisation
Operating profit before depreciation and amortisation margin – Operating profit before depreciation and amortisation / Net sales
Operating profit margin – Operating profit / Net sales
Net profit margin – Net profit / Net sales
ROA – Net profit / Average Total assets for the period
Debt to Total capital employed – Total liabilities / Total capital employed
ROE – Net profit / Average Total equity for the period
Current ratio – Current assets / Current liabilities
Quick ratio – (Current assets – Stocks) / Current liabilities
Payout ratio - Total Dividends per annum/ Total Net Income per annum
Main business – water services related activities, excl. connections profit and government grants, construction services, doubtful receivables
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
| € thousand | Quarter 4 | for the year ended 31 December | |||||||
| Note | 2022 | 2021 | 2022 | 2021 | |||||
| Revenue | 7 | 16,025 | 14,931 | 54,558 | 53,294 | ||||
| Cost of goods and services sold | 9 | -11,503 | -10,127 | -37,660 | -32,715 | ||||
| GROSS PROFIT | 4,522 | 4,804 | 16,898 | 20,579 | |||||
| Marketing expenses | 9 | -169 | -130 | -703 | -462 | ||||
| General administration expenses | 9 | -1,208 | -1,047 | -4,399 | -4,438 | ||||
| Other income (+)/ expenses (-) | 10 | -347 | -209 | -476 | 3,099 | ||||
| OPERATING PROFIT | 2,798 | 3,418 | 11,320 | 18,778 | |||||
| Financial income | 11 | 5 | 1 | 8 | 8 | ||||
| Financial expenses | 11 | -363 | -104 | -682 | -387 | ||||
| PROFIT BEFORE TAXES | 2,440 | 3,315 | 10,646 | 18,399 | |||||
| Income tax | 12 | -85 | -108 | -2,240 | -2,234 | ||||
| NET PROFIT FOR THE PERIOD | 2,355 | 3,207 | 8,406 | 16,165 | |||||
| COMPREHENSIVE INCOME FOR THE PERIOD | 2,355 | 3,207 | 8,406 | 16,165 | |||||
| Attributable profit to: | |||||||||
| Equity holders of A-shares | 2,355 | 3,207 | 8,406 | 16,165 | |||||
| Earnings per A share (in euros) | 13 | 0,12 | 0,16 | 0,42 | 0,81 | ||||
CONSOLIDATED STATEMENT OF CASH FLOWS
| € thousand | for the year ended 31 December | |||||
| Note | 2022 | 2021 | ||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||
| Operating profit | 11,320 | 18,778 | ||||
| Adjustment for depreciation/amortisation | 4,5,9,10 | 6,817 | 6,520 | |||
| Adjustment for revenues from connection fees | 10 | -544 | -510 | |||
| Other non-cash adjustments | 6 | 0 | -3,610 | |||
| Profit (-) / loss (+) from sale of property, plant and equipment, and intangible assets | -32 | -29 | ||||
| Change in current assets involved in operating activities | -2,841 | 380 | ||||
| Change in liabilities involved in operating activities | 309 | 938 | ||||
| TOTAL CASH FLOWS FROM OPERATING ACTIVITIES | 15,029 | 22,467 | ||||
| CASH FLOWS USED IN INVESTING ACTIVITIES | ||||||
| Acquisition of property, plant, and equipment, and intangible assets | -20,701 | -13,734 | ||||
| Compensations received for construction of pipelines, incl. connection fees | 1,593 | 2,892 | ||||
| Proceeds from sale of property, plant and equipment, and intangible assets | 53 | 29 | ||||
| Interest received | 9 | 11 | ||||
| TOTAL CASH FLOWS USED IN INVESTING ACTIVITIES | -19,046 | -10,802 | ||||
| CASH FLOWS USED IN FINANCING ACTIVITIES | ||||||
| Interest paid and loan financing costs, incl. swap interests | -616 | -460 | ||||
| Lease payments | -524 | -408 | ||||
| Repayment of loans | -3,636 | -3,636 | ||||
| Dividends paid | 12 | -12,835 | -12,842 | |||
| Withheld income tax paid on dividends | 12 | -165 | -158 | |||
| Income tax paid on dividends | 12 | -2,116 | -2,116 | |||
| TOTAL CASH FLOWS USED IN FINANCING ACTIVITIES | -19,892 | -19,620 | ||||
| CHANGE IN CASH AND CASH EQUIVALENTS | -23,909 | -7,955 | ||||
| CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD | 3 | 36,559 | 44,514 | |||
| CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD | 3 | 12,650 | 36,559 | |||
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
| € thousand | as of 31 December | ||||||||
| ASSETS | Note | 2022 | 2021 | ||||||
| CURRENT ASSETS | |||||||||
| Cash and cash equivalents | 3 | 12,650 | 36,559 | ||||||
| Trade receivables, accrued income and prepaid expenses | 8,989 | 6,637 | |||||||
| Inventories | 1,197 | 702 | |||||||
| TOTAL CURRENT ASSETS | 22,836 | 43,898 | |||||||
| NON-CURRENT ASSETS | |||||||||
| Property, plant, and equipment | 4 | 229,869 | 211,546 | ||||||
| Intangible assets | 5 | 688 | 729 | ||||||
| TOTAL NON-CURRENT ASSETS | 230,557 | 212,275 | |||||||
| TOTAL ASSETS | 253,393 | 256,173 | |||||||
| LIABILITIES AND EQUITY | |||||||||
| CURRENT LIABILITIES | |||||||||
| Current portion of long-term lease liabilities | 883 | 421 | |||||||
| Current portion of long-term loans | 3,630 | 3,630 | |||||||
| Trade and other payables | 10,225 | 7,835 | |||||||
| Prepayments | 3,749 | 3,604 | |||||||
| TOTAL CURRENT LIABILITIES | 18,487 | 15,490 | |||||||
| NON-CURRENT LIABILITIES | |||||||||
| Deferred income from connection fees | 39,150 | 37,241 | |||||||
| Leases | 1,607 | 1,236 | |||||||
| Loans | 76,708 | 80,336 | |||||||
| Provision for possible third-party claims | 6 | 6,018 | 6,018 | ||||||
| Deferred tax liability | 496 | 372 | |||||||
| Other payables | 101 | 60 | |||||||
| TOTAL NON-CURRENT LIABILITIES | 124,080 | 125,263 | |||||||
| TOTAL LIABILITIES | 142,567 | 140,753 | |||||||
| EQUITY | |||||||||
| Share capital | 12,000 | 12,000 | |||||||
| Share premium | 24,734 | 24,734 | |||||||
| Statutory legal reserve | 1,278 | 1,278 | |||||||
| Retained earnings | 72,814 | 77,408 | |||||||
| TOTAL EQUITY | 110,826 | 115,420 | |||||||
| TOTAL LIABILITIES AND EQUITY | 253,393 | 256,173 | |||||||
Maria Tiidus
Head of Communications
AS Tallinna Vesi
Ph: 626 2271
E-mail: maria.tiidus@tvesi.ee
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