Income statement
Despite of difficult economical situation in target markets and considerable
sales decrease, the Group had positive economic result in second quarter.
Consolidated net profit in Q2 amounted to 82 thousand kroons/5 thousand euros
(2008: 3.0 mil. kroons/192 thousand euros), and the net margin was 0.2% (down
from 3.8% in Q2 2008). In Q2 2009, the Group's return on equity was 0.0% (down
from 4.0% in Q2 2008) and return on assets was 0.0% (down from 1.6% in Q2 2008).
Consolidated net sales of second quarter 2009 was 51.1 mil. kroons/3.3 mil.
euros (78.2 mil. kroons/5.0 mil. euros in same period of 2008) representing a
34.6% decrease on the second quarter compared to Q2 2008. The Group's gross
margin in the second quarter of 2009 was 23.1% compared to 22.7% in the second
quarter of 2008. Consolidated operating profit amounted to 0.8 mil. kroons/52
thousand euros (5.6 mil. kroons/358 thousand euros in 2008), representing a
85.5% down compared to Q2 2008. The consolidated operating margin of net sales
was 1.6% (down from 7.2% in Q2 2008). Profit before tax amounted to 82.0
thousand kroons/5 thousand euros in Q2 2009 (4.7 mil. kroons/299 thousand euros
in Q2 2008).
In 2009 dividends were not distributed. The same period in 2008, dividends were
distributed in the amount of 6.3 mil. kroons/0.4 mil. euros, i.e. 1 kroon 40
cents/8.95 euro cents per share. Corresponding income tax expense in 2008
amounted to 1.7 mil. kroons/107 thousand euros.
The main reason for low sales is continuing cool economical situation in target
markets. Compared to Q1, sales decreased only 3.7% and indicate stabilization.
Lowering of costs has been effective and helped avoid loss in second quarter.
Balance sheet
As of the end of June 2009 the total assets of Viisnurk amounted to 148.9 mil.
kroons/9.5 mil. euros (31.12.2008: 163.8 mil. kroons/10.5 mil. euros). The
liabilities of the company accounted for 52% (31.12.2008: 57%) thereof, i.e.
78.1 mil. kroons/5.0 mil. euros (31.12.2008: 92.6 mil. kroons/5.9 mil. euros).
Receivables and prepayments have increased by 6.3 mil. kroons/0.4 mil. euros
i.e. 32% increase with 6 months. The reason of increase of receivables is very
small sales in December 2008, which essentially lowered the amount of
receivables at the end of December.
Inventories decreased by 13.6 mil. kroons/0.9 mil. euros to reach 54.5 mil.
kroons/3.5 mil euros at 30 June 2009 (31.12.2008: 68,1 mil. kroons/4,4 mil.
euros). The decrease of amount of inventory is one of the main targets to pass
crisis and assure liquidity. Property, plant and intangibles decreased by 3.7
mil. kroons/0.2 mil. euros mainly caused by depreciation.
Current liabilities decreased by 4.9 mil. kroons/0.3 mil euros and amounted in
30 June 2009 12.8 mil. kroons/0.8 mil. euros (31.12.2008: 17.7 mil. kroons/1.1
mil. euros). Supplier payables, tax liabilities, other payables, including
payables to employees, and provisions amounted to 34.1 mil. kroons/2.2 mil.
euros (31.12.2008: 43.8 mil. kroons/2.8 mil. euros). Current and non-current
liabilities decreased by 14.6 mil. kroons/0.9 mil. euros to 78.1 mil. kroons/5.0
mil. euros (31.12.2008: 92.6 mil. euros/5.9 mil kroons).
Divisional review:
Net sales by business segments
--------------------------------------------------------------------------------
| | th. EEK | th. EUR | % of net sales |
--------------------------------------------------------------------------------
| | Q2 2009 | Q2 2008 | Q2 2009 | Q2 2008 | Q2 2009 | Q2 2008 |
--------------------------------------------------------------------------------
| Furniture | 26,157 | 39,176 | 1,671 | 2,503 | 51.2% | 50.1% |
| Factory | | | | | | |
--------------------------------------------------------------------------------
| Skano | 9,396 | 8,596 | 601 | 549 | 18.4% | 11.0% |
--------------------------------------------------------------------------------
| Building | 19,721 | 34,996 | 1,260 | 2,237 | 38.6% | 44.8% |
| Materials | | | | | | |
| Division | | | | | | |
--------------------------------------------------------------------------------
| Elimination | (4,137) | (4,607) | (264) | (294) | (8.1%) | (5.9%) |
--------------------------------------------------------------------------------
| TOTAL | 51,137 | 78,161 | 3,268 | 4,995 | 100.0% | 100.0% |
--------------------------------------------------------------------------------
Net sales by geographical segments
--------------------------------------------------------------------------------
| | th. EEK | th. EUR | % of net sales |
--------------------------------------------------------------------------------
| | Q2 2009 | Q2 2008 | Q2 2009 | Q2 2008 | Q2 2009 | Q2 2008 |
--------------------------------------------------------------------------------
| Finland | 24,225 | 34,372 | 1,548 | 2,197 | 47.4% | 44.0% |
--------------------------------------------------------------------------------
| Russia | 6,329 | 16,795 | 406 | 1,074 | 12.4% | 21.5% |
--------------------------------------------------------------------------------
| Estonia | 9,421 | 15,194 | 602 | 971 | 18.4% | 19.4% |
--------------------------------------------------------------------------------
| Ukraine | 2,788 | 1,862 | 178 | 119 | 5.5% | 2.4% |
--------------------------------------------------------------------------------
| Lithuania | 2,763 | 1,787 | 176 | 115 | 5.4% | 2.3% |
--------------------------------------------------------------------------------
| Latvia | 1,628 | 3,456 | 104 | 220 | 3.2% | 4.4% |
--------------------------------------------------------------------------------
| Kazakhstan | 1,125 | 578 | 72 | 37 | 2.2% | 0.7% |
--------------------------------------------------------------------------------
| Sweden | 877 | 2,147 | 56 | 137 | 1.7% | 2.7% |
--------------------------------------------------------------------------------
| Germany | 872 | 1,694 | 55 | 108 | 1.7% | 2.2% |
--------------------------------------------------------------------------------
| Portugal | 781 | 0 | 50 | 0 | 1.5% | 0.0% |
--------------------------------------------------------------------------------
| Other countries | 328 | 276 | 21 | 17 | 0.6% | 0.4% |
--------------------------------------------------------------------------------
| TOTAL | 51,137 | 78,161 | 3,268 | 4,995 | 100.00% | 100.00% |
--------------------------------------------------------------------------------
Concerning the markets, turnover has been decreased in all bigger markets.
Stores opened in 2008, which were in first half year of 2008 in launching mode,
cause the increase of sales in Ukraine. The sales into Portugal is restarted and
sales to Kazakhstan is increased. Sales in Lithuania increased after removing
the stores onto new premises at the end of 2008 and beginning of 2009.
Gross profit by business segments
--------------------------------------------------------------------------------
| | th. EEK | th. EUR |
--------------------------------------------------------------------------------
| | Q2 2009 | Q2 2008 | Q2 2009 | Q2 2008 |
--------------------------------------------------------------------------------
| Furniture Factory | 3,107 | 5,542 | 199 | 354 |
--------------------------------------------------------------------------------
| Skano | 4,215 | 4,465 | 269 | 285 |
--------------------------------------------------------------------------------
| Building Materials | 4,500 | 7,848 | 288 | 502 |
| Division | | | | |
--------------------------------------------------------------------------------
| Elimination | (10) | (131) | (1) | (8) |
--------------------------------------------------------------------------------
| TOTAL | 11,812 | 17,724 | 755 | 1,133 |
--------------------------------------------------------------------------------
The main reason for decreased gross margin in Building Material Division is
changes in product portfolio and growth of cost value due to small production
volume and big fixed costs.
Profit by business segments
--------------------------------------------------------------------------------
| | th. EEK | th. EUR |
--------------------------------------------------------------------------------
| | Q2 2009 | Q2 2008 | Q2 2009 | Q2 2008 |
--------------------------------------------------------------------------------
| Furniture Factory | 1,579 | 3,198 | 101 | 204 |
--------------------------------------------------------------------------------
| Skano | (1,609) | (972) | (103) | (63) |
--------------------------------------------------------------------------------
| Building Materials | 636 | 3,510 | 41 | 225 |
| Division | | | | |
--------------------------------------------------------------------------------
| Elimination | 208 | (133) | 13 | (8) |
--------------------------------------------------------------------------------
| TOTAL | 814 | 5,603 | 52 | 358 |
--------------------------------------------------------------------------------
| Net financial costs | (732) | (930) | (47) | (59) |
--------------------------------------------------------------------------------
| PROFIT BEFORE TAXES | 82 | 4,673 | 5 | 299 |
--------------------------------------------------------------------------------
| Income tax | 0 | (1,674) | 0 | (107) |
--------------------------------------------------------------------------------
| NET PROFIT | 82 | 2,999 | 5 | 192 |
--------------------------------------------------------------------------------
Furniture Division
The net sales of AS Viisnurk Furniture Division in second quarter amounted to
31.5 mil. kroons/2.0 mil. euros (2008: 43.2 mil. kroons/2.8 mil. euros) and the
economic result 0.2 mil. kroons/14 thousand euros as a profit (2008 profit 1.7
mil. kroons/111 thousand euros). As compared to the Q2 of previous year the
turnover of the division has decreased by 11.7 mil. kroons/472 thousand euros
(26.9%).
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, Vilnius, Kaunas, Klaipeda, Kiev, Donetsk,
Kharkiv and Odessa at the end of the second quarter.
As a result of unexpected economical situation, openings of new stores are
freezed.
Retail sales by countries
--------------------------------------------------------------------------------
| | th. EEK | th. EUR | % of net sales | Number of |
| | | | | stores |
--------------------------------------------------------------------------------
| |Q2 2009|Q2 2008|Q2 2009|Q2 2008 | Q2 2009| Q2 2008| 30.6.09| 30.6.08|
--------------------------------------------------------------------------------
| Estonia | 2,878 | 3,248 | 184 | 208 | 30.6% | 37.8% | 2 | 2 |
--------------------------------------------------------------------------------
| Latvia | 1,149 | 2,634 | 73 | 168 | 12.2% | 30.6% | 1 | 1 |
--------------------------------------------------------------------------------
|Lithuania| 2,585 | 1,697 | 165 | 108 | 27.5% | 19.7% | 3 | 3 |
--------------------------------------------------------------------------------
| Ukraine | 2,784 | 1,018 | 178 | 65 | 29.6% | 11.8% | 4 | 4 |
--------------------------------------------------------------------------------
| TOTAL | 9,396 | 8,597 | 600 | 549 | 100.0% | 100.0% | 10 | 10 |
--------------------------------------------------------------------------------
The retail sale of the Furniture Division decreased most in Latvia. The sale in
Ukraine has increased due to stores opened in 2008. Within the second quarter
this year the retail sale has increased by 9.3% as compared to the same period
last year.
Furniture Factory
The Furniture Factory's sales in the second quarter in the company's basic
target market in Russia and Finland have decreased and clients does not estimate
sales recovering in near future.
Furniture Factory sales by countries
--------------------------------------------------------------------------------
| | th EEK | th EUR | % of net sales |
--------------------------------------------------------------------------------
| | Q2 2009 | Q2 2008 | Q2 2009 | Q2 2008 | Q2 2009 | Q2 2008 |
--------------------------------------------------------------------------------
| Finland | 14,868 | 17,492 | 950 | 1118 | 56.8% | 44.6% |
--------------------------------------------------------------------------------
| Russia | 5,296 | 14,825 | 338 | 947 | 20.2% | 37.8% |
--------------------------------------------------------------------------------
| Kazakhstan | 1,125 | 578 | 72 | 37 | 4.3% | 1.5% |
--------------------------------------------------------------------------------
| Germany | 382 | 1,085 | 24 | 69 | 1.5% | 2.8% |
--------------------------------------------------------------------------------
| Others | 349 | 589 | 22 | 38 | 1.3% | 1.5% |
--------------------------------------------------------------------------------
| Subsidiaries| 4,137 | 4,607 | 263 | 294 | 15.8% | 11.8% |
--------------------------------------------------------------------------------
| TOTAL | 26,157 | 39,176 | 1,669 | 2,503 | 100.0% | 100.0% |
--------------------------------------------------------------------------------
Building Materials Division
The net sales of the Building Materials Division in second quarter amounted to
19.7 mil. kroons/1.3 mil. euros and profit to 0.6 mil. kroons/41 thousand euros.
In the same period of the last year, the turnover of the division totalled 35.0
mil. kroons/2.2 mil. euros and the net profit 3.5 mil. kroons/225 thousand
euros. As compared to the previous year the turnover of the division has
decreased by 15.3 mil. kroons/977 thousand euros and the profit has decreased by
2.9 mil. kroons/184 thousand euros.
Net sales by geographical segments
--------------------------------------------------------------------------------
| | th. EEK | th. EUR | % of net sales |
--------------------------------------------------------------------------------
| | Q2 2009 | Q2 2008 | Q2 2009 | Q2 2008 | Q2 2009 | Q2 2008 |
--------------------------------------------------------------------------------
| Finland | 9,357 | 16,880 | 598 | 1,079 | 47.4% | 48.2% |
--------------------------------------------------------------------------------
| Estonia | 6,271 | 11,409 | 401 | 729 | 31.8% | 32.6% |
--------------------------------------------------------------------------------
| Russia | 1,033 | 1,970 | 66 | 126 | 5.2% | 5.6% |
--------------------------------------------------------------------------------
| Sweden | 877 | 2,147 | 56 | 137 | 4.4% | 6.1% |
--------------------------------------------------------------------------------
| Portugal | 781 | 0 | 50 | 0 | 4.0% | 0.0% |
--------------------------------------------------------------------------------
| Germany | 490 | 609 | 31 | 39 | 2.5% | 1.7% |
--------------------------------------------------------------------------------
| Latvia | 479 | 822 | 31 | 53 | 2.4% | 2.3% |
--------------------------------------------------------------------------------
| Lithuania | 179 | 90 | 11 | 6 | 0.9% | 0.3% |
--------------------------------------------------------------------------------
| Ukraine | 4 | 844 | 0 | 54 | 0.0% | 2.4% |
--------------------------------------------------------------------------------
| Other countries | 250 | 225 | 16 | 14 | 1.3% | 0.6% |
--------------------------------------------------------------------------------
| TOTAL | 19,721 | 34,996 | 1,260 | 2,237 | 100.0% | 100.0% |
--------------------------------------------------------------------------------
Building Boards
The product group that makes up the biggest proportion in general building
boards are wind protection boards. Compared to last year, decrease of sales is
the biggest in this segment. This is caused by decrease of the building sector
in Estonia and Finland, two main markets for the product. Sale of products to
companies operating outside the building sector is same as previous year.
Interior Finishing Boards
The biggest market of Isotex interior finishing boards in the second quarter was
Finland. The smallest decrease of sales was in Finland, bigger decrease was in
Estonia and Russia. In connection with the increase of production capacity
potential, activities have been continued in order to find new markets.
Consolidated balance sheet
--------------------------------------------------------------------------------
| | Th EEK | Th EEK | Th EUR | Th EUR |
--------------------------------------------------------------------------------
| | 30.6.2009 | 31.12.2008| 30.6.2009 | 31.12.2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash and bank | 3,014 | 6,913 | 193 | 442 |
--------------------------------------------------------------------------------
| Receivables and | 25,821 | 19,568 | 1,650 | 1,250 |
| prepayments | | | | |
--------------------------------------------------------------------------------
| Inventories | 54,465 | 68,096 | 3,481 | 4,351 |
--------------------------------------------------------------------------------
| Total current assets | 83,300 | 94,577 | 5,324 | 6,043 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Investment property | 2,893 | 2,893 | 185 | 185 |
--------------------------------------------------------------------------------
| Tangible fixed assets | 62,680 | 66,333 | 4,006 | 4,239 |
--------------------------------------------------------------------------------
| Intangible fixed assets | 17 | 21 | 1 | 1 |
--------------------------------------------------------------------------------
| Total fixed assets | 65,590 | 69,247 | 4,192 | 4,425 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| TOTAL ASSETS | 189,238 | 163,824 | 9,516 | 10,468 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Debt obligations | 12,799 | 17,722 | 818 | 1,132 |
--------------------------------------------------------------------------------
| Payables and prepayments | 34,070 | 43,646 | 2,178 | 2,790 |
--------------------------------------------------------------------------------
| Short-term provisions | 48 | 115 | 3 | 7 |
--------------------------------------------------------------------------------
| Total current liabilities | 46,917 | 61,483 | 2,999 | 3,929 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current debt | 27,720 | 27,720 | 1,772 | 1,772 |
| obligations | | | | |
--------------------------------------------------------------------------------
| Non-current provisions | 3,421 | 3,421 | 219 | 219 |
--------------------------------------------------------------------------------
| Total non-current | 31,141 | 31,141 | 1,991 | 1,991 |
| liabilities | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total liabilities | 78,058 | 92,624 | 4,990 | 5,920 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 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 | 476 | 253 | 30 | 14 |
| reserve | | | | |
--------------------------------------------------------------------------------
| Retained profits | 15,759 | 9,717 | 1,007 | 621 |
--------------------------------------------------------------------------------
| Net profit for the year | (591) | 6,042 | (38) | 386 |
--------------------------------------------------------------------------------
| Total equity | 70,832 | 71,200 | 4,526 | 4,548 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| TOTAL LIABILITIES AND | 148,890 | 163,824 | 9,516 | 10,468 |
| EQUITY | | | | |
--------------------------------------------------------------------------------
Consolidated income statement
--------------------------------------------------------------------------------
| Th EEK | Q2 2009 | Q2 2008 | 6 m 2009 | 6 m 2008 |
| | | (adjusted) | | (adjusted) |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| RETURN ON SALES | 51,137 | 78,161 | 104,223 | 152,028 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cost of production sold | (39,325) | (60,437) | (82,052) | (116,621) |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Gross profit | 11,812 | 17,724 | 22,171 | 35,407 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Marketing expenses | (8,937) | (11,025) | (17,816) | (20,947) |
--------------------------------------------------------------------------------
| General administrative | (1,517) | (1,673) | (3,032) | (3,258) |
| expenses | | | | |
--------------------------------------------------------------------------------
| Other income | 275 | 1,079 | 1,332 | 1,258 |
--------------------------------------------------------------------------------
| Other expenses | (820) | (501) | (1,576) | (936) |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit | 813 | 5,604 | 1,079 | 11,524 |
--------------------------------------------------------------------------------
| Financial income and | (731) | (931) | (1,670) | (1,718) |
| financial expenses | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit/loss before taxes | 82 | 4,673 | (591) | 9,806 |
--------------------------------------------------------------------------------
| Prepaid income tax | 0 | (1,674) | 0 | (1,674) |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| PROFIT/LOSS FOR THE | 82 | 2,999 | (591) | 8,132 |
| PERIOD | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Currency translation | 346 | 988 | 223 | 1,076 |
| differences | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| TOTAL COMPREHENSIVE | 428 | 3,987 | (368) | 9,208 |
| INCOME | | | | |
--------------------------------------------------------------------------------
| Basic earnings per share | 0.02 | 0.67 | (0.13) | 1.81 |
--------------------------------------------------------------------------------
| Diluted earnings per | 0.02 | 0.67 | (0.13) | 1.81 |
| share | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Th EUR | Q2 2009 | Q2 2008 | 6 m 2009 | 6 m 2008 |
| | | (adjusted) | | (adjusted) |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| RETURN ON SALES | 3,268 | 4,995 | 6,661 | 9,716 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cost of production sold | (2,513) | (3,863) | (5,244) | (7,454) |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Gross profit | 755 | 1,132 | 1,417 | 2,262 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Marketing expenses | (571) | (704) | (1,138) | (1,338) |
--------------------------------------------------------------------------------
| General administrative | (97) | (107) | (194) | (208) |
| expenses | | | | |
--------------------------------------------------------------------------------
| Other income | 17 | 69 | 85 | 80 |
--------------------------------------------------------------------------------
| Other expenses | (52) | (32) | (101) | (60) |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit | 52 | 358 | 69 | 736 |
--------------------------------------------------------------------------------
| Financial income and | (47) | (59) | (107) | (109) |
| financial expenses | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit/loss before taxes | 5 | 299 | (38) | 627 |
--------------------------------------------------------------------------------
| Prepaid income tax | 0 | (107) | 0 | (107) |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| PROFIT/LOSS FOR THE | 5 | 192 | (38) | 520 |
| PERIOD | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Currency translation | 22 | 63 | 16 | 68 |
| differences | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| TOTAL COMPREHENSIVE | 27 | 255 | (22) | 588 |
| INCOME | | | | |
--------------------------------------------------------------------------------
| Basic earnings per share | 0.00 | 0.04 | (0.01) | 0.12 |
--------------------------------------------------------------------------------
| Diluted earnings per | 0.00 | 0.04 | (0.01) | 0.12 |
| share | | | | |
--------------------------------------------------------------------------------
Einar Pähkel
CFO
+372 447 8331
einar.pahkel@viisnurk.ee
