Profits Consolidated net sales of third quarter 2009 was 47.4 mil. kroons/3.0 mil. euros (66.0 mil. kroons/4.2 mil. euros in same period of 2008) representing a 28.1% decrease on the third quarter compared to Q3 2008. The Group's gross margin in the third quarter of 2009 was 19.9% compared to 21.7% in the third quarter of 2008. Consolidated operating loss amounted to 0.8 mil. kroons/53 thousand euros (operating profit 3.5 mil. kroons/223 thousand euros in 2008). The consolidated operating margin of net sales was -1.7% (5.3% in Q3 2008). Consolidated net loss amounted to 0.8 mil. kroons/53 thousand euros, compared to net profit 3.5 mil. kroons/223 thousand euros in Q3 2008), and the net margin was -3.2% (3.5% in Q3 2008). In Q3 2009, the Group's return on equity was -2.2% (3.2% in Q3 2008) and return on assets was -1.1% (1.3% in Q3 2008). The relocation of furniture store in Latvia had the biggest impact for the result of Q3 . The sum of write off of building costs of the store was 904 thousand kroons/58 thousand euros. Depreciation of the Ukrainian hryvnia against euro resulted in a foreign exchange loss in the amount of 746 thousand kroons/48 thousand euros. Position of financial statement As of the end of September 2008 the total assets of Viisnurk amounted to 142.7 mil. kroons/9.1 mil. euros (31.12.2008: 163.8 mil. kroons/10.5 mil. euros). The liabilities of the company accounted for 51% (31.12.2008: 57%) thereof, i.e. 73.1 mil. kroons/4.7 mil. euros (31.12.2008: 92.6 mil. kroons/5.9 mil. euros). Receivables and prepayments have increased by 6.8 mil. kroons/0.4 mil. euros i.e. 35% increase with 9 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 19.5 mil. kroons/1.2 mil. euros to reach 48.6 mil. kroons/3.1 mil euros at 30 September 2009 (31.12.2008: 68,1 mil. kroons/4,4 mil. euros). The decrease of amount of inventory wass one of the main targets to pass crisis and assure liquidity. Property, plant and intangibles decreased by 4.9 mil. kroons/0.3 mil. euros mainly caused by depreciation. Current liabilities decreased by 6.6 mil. kroons/0.4 mil euros and amounted in 30 September 2009 11.1 mil. kroons/0.7 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 30.9 mil. kroons/2.0 mil. euros (31.12.2008: 43.8 mil. kroons/2.8 mil. euros). Current and non-current liabilities decreased by 19.5 mil. kroons/1.2 mil. euros to 73.1 mil. kroons/4.7 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 | -------------------------------------------------------------------------------- | | Q3 2009 | Q3 2008 | Q3 2009 | Q3 2008 | Q3 2009 | Q3 2008 | -------------------------------------------------------------------------------- | Furniture | 22,232 | 32,321 | 1,422 | 2,066 | 46.9% | 49.0% | | Factory | | | | | | | -------------------------------------------------------------------------------- | Skano | 5,898 | 9,655 | 376 | 618 | 12.4% | 14.6% | -------------------------------------------------------------------------------- | Building | 22,218 | 28,701 | 1,420 | 1,834 | 46.8% | 43.5% | | Materials | | | | | | | | Division | | | | | | | -------------------------------------------------------------------------------- | Elimination | (2,901) | (4,685) | (186) | (300) | (6.1%) | (7.1%) | -------------------------------------------------------------------------------- | TOTAL | 47,447 | 65,992 | 3,032 | 4,218 | 100.0% | 100.0% | -------------------------------------------------------------------------------- Net sales by geographical segments -------------------------------------------------------------------------------- | | th. EEK | th. EUR | % of net sales | -------------------------------------------------------------------------------- | | Q3 2009 | Q3 2008 | Q3 2009 | Q3 2008 | Q3 2009 | Q3 2008 | -------------------------------------------------------------------------------- | Finland | 21,661 | 26,388 | 1,385 | 1,686 | 45.7% | 40.0% | -------------------------------------------------------------------------------- | Estonia | 10,379 | 14,287 | 663 | 913 | 21.9% | 21.6% | -------------------------------------------------------------------------------- | Russia | 7,417 | 13,564 | 474 | 866 | 15.6% | 20.6% | -------------------------------------------------------------------------------- | Ukraine | 1,801 | 3,397 | 115 | 218 | 3.8% | 5.1% | -------------------------------------------------------------------------------- | Lithuania | 1,610 | 1,977 | 103 | 126 | 3.4% | 3.0% | -------------------------------------------------------------------------------- | Latvia | 1,382 | 3,077 | 89 | 197 | 2.9% | 4.7% | -------------------------------------------------------------------------------- | Sweden | 1,184 | 1,148 | 75 | 74 | 2.5% | 1.7% | -------------------------------------------------------------------------------- | Kazakhstan | 1,115 | 1,106 | 71 | 70 | 2.3% | 1.7% | -------------------------------------------------------------------------------- | Germany | 308 | 544 | 20 | 35 | 0.6% | 0.8% | -------------------------------------------------------------------------------- | Byelorussia | 89 | 0 | 5 | 0 | 0.2% | 0.0% | -------------------------------------------------------------------------------- | Portugal | 0 | 320 | 0 | 20 | 0.0% | 0.5% | -------------------------------------------------------------------------------- | Other countries | 501 | 186 | 32 | 13 | 1.1% | 0.3% | -------------------------------------------------------------------------------- | Total | 47,447 | 65,994 | 3,032 | 4,218 | 100.00% | 100.00% | -------------------------------------------------------------------------------- Concerning the markets, turnover has been decreased in all bigger markets. Relatively is the biggest increase into Finland and decrease into Russia. Gross profit by business segments -------------------------------------------------------------------------------- | | th. EEK | th. EUR | -------------------------------------------------------------------------------- | | Q3 2009 | Q3 2008 | Q3 2009 | Q3 2008 | -------------------------------------------------------------------------------- | Furniture Factory | 1,668 | 3,926 | 107 | 251 | -------------------------------------------------------------------------------- | Skano | 2,725 | 5,271 | 174 | 337 | -------------------------------------------------------------------------------- | Building Materials | 5,022 | 4,968 | 321 | 318 | | Division | | | | | -------------------------------------------------------------------------------- | Elimination | 40 | (37) | 3 | (2) | -------------------------------------------------------------------------------- | TOTAL | 9,455 | 14,128 | 605 | 904 | -------------------------------------------------------------------------------- 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 | -------------------------------------------------------------------------------- | | Q3 2009 | Q3 2008 | Q3 2009 | Q3 2008 | -------------------------------------------------------------------------------- | Furniture Factory | 370 | 1,915 | 24 | 123 | -------------------------------------------------------------------------------- | Skano | (3,044) | (76) | (194) | (5) | -------------------------------------------------------------------------------- | Building Materials | 1,507 | 1,691 | 96 | 108 | | Division | | | | | -------------------------------------------------------------------------------- | Elimination | 341 | (36) | 21 | (2) | -------------------------------------------------------------------------------- | TOTAL | (826) | 3,494 | (53) | 224 | -------------------------------------------------------------------------------- | Net financial costs | (682) | (1,195) | (43) | (77) | -------------------------------------------------------------------------------- | PROFIT BEFORE TAXES | (1,508) | 2,299 | (96) | 147 | -------------------------------------------------------------------------------- | Income tax | 0 | 0 | 0 | 0 | -------------------------------------------------------------------------------- | NET PROFIT | (1,508) | 2,299 | (96) | 147 | -------------------------------------------------------------------------------- Furniture Division The net sales of AS Viisnurk Furniture Division in third quarter amounted to 25.2 mil. kroons/1.6 mil. euros (2008: 37.3 mil. kroons/2.4 mil. euros) and the economical result 2.3 mil. kroons/149 thousand euros as a loss (2008 profit 1.8 mil. kroons/116 thousand euros). As compared to the Q3 of previous year the turnover of the division has decreased by 12.1 mil. kroons/772 thousand euros (32.3%). 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 inVilnius, Kaunas, Kiev, Donetsk, Kharkiv and Odessa at the end of the third 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 | -------------------------------------------------------------------------------- | | Q3 | Q3 | Q3 | Q3 | Q3 | Q3 | 30.9.09| 30.9.08| | | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | | | -------------------------------------------------------------------------------- | Estonia | 1,883 | 2,814 | 120 | 180 | 31.9% | 29.1% | 2 | 2 | -------------------------------------------------------------------------------- | Latvia | 831 | 2,257 | 53 | 144 | 14.1% | 23.4% | 1 | 1 | -------------------------------------------------------------------------------- | Lithuan | 1,508 | 1,848 | 96 | 118 | 25.6% | 19.1% | 3 | 3 | | ia | | | | | | | | | -------------------------------------------------------------------------------- | Ukraine | 1,675 | 2735 | 107 | 175 | 28.4% | 28.3% | 4 | 5 | -------------------------------------------------------------------------------- | TOTAL | 5,897 | 9,654 | 376 | 617 | 100.0% | 100.0% | 10 | 11 | -------------------------------------------------------------------------------- The retail sale of the Furniture Division decreased most in Latvia. The furniture store in Kaunas has removed into Vilnius. Within the third quarter this year the retail sale has decreased by 38.9% as compared to the same period last year. Furniture Production The Furniture factory's sales in the third quarter in the company's basic target market in Russia and Finland have decreased and clients do not estimate sales recovering in near future. Furniture factory sales by countries -------------------------------------------------------------------------------- | | th EEK | th EUR | % of net sales | -------------------------------------------------------------------------------- | | Q3 2009 | Q3 2008 | Q3 2009 | Q3 2008 | Q3 2009 | Q3 2008 | -------------------------------------------------------------------------------- | Finland | 11,257 | 13,415 | 720 | 857 | 50.6% | 41.5% | -------------------------------------------------------------------------------- | Russia | 6,336 | 12,374 | 406 | 792 | 28.5% | 38.3% | -------------------------------------------------------------------------------- | Kazakhstan | 1,115 | 1,106 | 71 | 70 | 5.0% | 3.4% | -------------------------------------------------------------------------------- | Germany | 197 | 315 | 13 | 20 | 0.9% | 1.0% | -------------------------------------------------------------------------------- | Others | 426 | 426 | 24 | 27 | 1.9% | 1.3% | -------------------------------------------------------------------------------- | Subsidiaries| 2,901 | 4,685 | 188 | 300 | 13.0% | 14.5% | | | | | | | | | -------------------------------------------------------------------------------- | TOTAL | 22,232 | 32,321 | 1,422 | 2,066 | 100.0% | 100.0% | -------------------------------------------------------------------------------- Building Materials Division The net sales of the Building Materials Division in third quarter amounted to 22.2 mil. kroons/1.4 mil. euros and profit to 1.5 mil. kroons/96 thousand euros. In the same period of the last year, the turnover of the division totalled 28.7 mil. kroons/1.8 mil. euros and the net profit 1.7 mil. kroons/108 thousand euros. As compared to the previous year the turnover of the division has decreased by 6.5 mil. kroons/414 thousand euros and the profit has decreased by 0.2 mil. kroons/12 thousand euros. Net sales by geographical segments -------------------------------------------------------------------------------- | | th. EEK | th. EUR | % of net sales | -------------------------------------------------------------------------------- | | Q3 2009 | Q3 2008 | Q3 2009 | Q3 2008 | Q3 2009 | Q3 2008 | -------------------------------------------------------------------------------- | Finland | 10,404 | 12,973 | 665 | 829 | 46.8% | 45.2% | -------------------------------------------------------------------------------- | Estonia | 8,280 | 11,083 | 529 | 708 | 37.3% | 38.6% | -------------------------------------------------------------------------------- | Portugal | 0 | 320 | 0 | 20 | 0.0% | 1.1% | -------------------------------------------------------------------------------- | Russia | 1,081 | 1,190 | 68 | 75 | 4.9% | 4.1% | -------------------------------------------------------------------------------- | Latvia | 551 | 816 | 35 | 51 | 2.5% | 2.8% | -------------------------------------------------------------------------------- | Sweden | 1,184 | 1,148 | 75 | 74 | 5.3% | 4.0% | -------------------------------------------------------------------------------- | Germany | 111 | 229 | 7 | 15 | 0.5% | 0.8% | -------------------------------------------------------------------------------- | Lithuania | 101 | 129 | 7 | 8 | 0.5% | 0.4% | -------------------------------------------------------------------------------- | Ukraine | 126 | 662 | 8 | 43 | 0.6% | 2.3% | -------------------------------------------------------------------------------- | Other countries | 380 | 151 | 24 | 10 | 1.7% | 0.5% | -------------------------------------------------------------------------------- | TOTAL | 22,218 | 28,701 | 1,418 | 1,833 | 100.0% | 100.0% | -------------------------------------------------------------------------------- Consolidated statement of financial position -------------------------------------------------------------------------------- | | Th EEK | Th EEK | Th EUR | Th EUR | -------------------------------------------------------------------------------- | | 30.9.2009 | 31.12.200 | 30.9.2009 | 31.12.2008 | | | | 8 | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cash and bank | 3,439 | 6,913 | 220 | 442 | -------------------------------------------------------------------------------- | Receivables and | 26,325 | 19,568 | 1,682 | 1,250 | | prepayments | | | | | -------------------------------------------------------------------------------- | Inventories | 48,637 | 68,096 | 3,109 | 4,351 | -------------------------------------------------------------------------------- | Total current assets | 78,401 | 94,577 | 5,011 | 6,043 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Investment property | 2,893 | 2,893 | 185 | 185 | -------------------------------------------------------------------------------- | Tangible fixed assets | 61,415 | 66,333 | 3,925 | 4,239 | -------------------------------------------------------------------------------- | Intangible fixed assets | 16 | 21 | 1 | 1 | -------------------------------------------------------------------------------- | Total fixed assets | 64,324 | 69,247 | 4,111 | 4,425 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | TOTAL ASSETS | 142,725 | 163,824 | 9,122 | 10,468 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Debt obligations | 11,113 | 17,722 | 711 | 1,132 | -------------------------------------------------------------------------------- | Payables and prepayments | 30,863 | 43,646 | 1,972 | 2,790 | -------------------------------------------------------------------------------- | Short-term provisions | 25 | 115 | 1 | 7 | -------------------------------------------------------------------------------- | Total current liabilities | 42,001 | 61,483 | 2,684 | 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 | 73,142 | 92,624 | 4,675 | 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 | 735 | 253 | 47 | 14 | | reserve | | | | | -------------------------------------------------------------------------------- | Retained profits | 15,759 | 9,717 | 1,007 | 621 | -------------------------------------------------------------------------------- | Net profit for the year | (2,099) | 6,042 | (134) | 386 | -------------------------------------------------------------------------------- | Total equity | 69,583 | 71,200 | 4,447 | 4,548 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | TOTAL LIABILITIES AND | 142,725 | 163,824 | 9,122 | 10,468 | | EQUITY | | | | | -------------------------------------------------------------------------------- Consolidated statement of comprehensive income -------------------------------------------------------------------------------- | Th EEK | Q3 2009 | Q3 2008 | 9 m 2009 | 9 m 2008 | | | | (adjusted) | | (adjusted) | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | RETURN ON SALES | 47,447 | 65,994 | 151,670 | 218,022 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cost of production sold | (37,992) | (51,649) | (120,044) | (168,269) | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Gross profit | 9,455 | 14,345 | 31,626 | 49,753 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Marketing expenses | (8,559) | (10,097) | (26,374) | (31,044) | -------------------------------------------------------------------------------- | General administrative | (1,021) | (1,526) | (4,054) | (4,785) | | expenses | | | | | -------------------------------------------------------------------------------- | Other income | 390 | 1,260 | 1,722 | 2,518 | -------------------------------------------------------------------------------- | Other expenses | (1,090) | (491) | (2,666) | (1,427) | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Operating profit | (825) | 3,491 | 254 | 15,015 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Financial income and | (683) | (1,192) | (2,353) | (2,910) | | financial expenses | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit/loss before taxes | (1,508) | 2,299 | (2,099) | 12,105 | -------------------------------------------------------------------------------- | Prepaid income tax | 0 | 0 | 0 | (1,674) | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | PROFIT/LOSS FOR THE | (1,508) | 2,299 | (2,099) | 10,431 | | PERIOD | | | | | -------------------------------------------------------------------------------- | Basic earnings per share | (0.34) | 0.51 | (0.47) | 2.32 | -------------------------------------------------------------------------------- | Diluted earnings per | (0.34) | 0.51 | (0.47) | 2.32 | | share | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Currency translation | 259 | (1,377) | 482 | (301) | | differences | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | TOTAL COMPREHENSIVE | (1,249) | 922 | (1,617) | 10,130 | | INCOME | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Th EUR | Q3 2009 | Q3 2008 | 9 m 2009 | 9 m 2008 | | | | (adjusted) | | (adjusted) | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | RETURN ON SALES | 3,032 | 4,218 | 9,693 | 13,934 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cost of production sold | (2,428) | (3,301) | (7,672) | (10,755) | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Gross profit | 604 | 917 | 2,021 | 3,179 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Marketing expenses | (547) | (645) | (1,686) | (1,983) | -------------------------------------------------------------------------------- | General administrative | (65) | (98) | (259) | (306) | | expenses | | | | | -------------------------------------------------------------------------------- | Other income | 25 | 80 | 110 | 160 | -------------------------------------------------------------------------------- | Other expenses | (70) | (31) | (170) | (91) | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Operating profit | (53) | 223 | 16 | 959 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Financial income and | (43) | (76) | (150) | (185) | | financial expenses | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit/loss before taxes | (96) | 147 | (134) | 774 | -------------------------------------------------------------------------------- | Prepaid income tax | 0 | 0 | 0 | (107) | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | PROFIT/LOSS FOR THE | (96) | 147 | (134) | 667 | | PERIOD | | | | | -------------------------------------------------------------------------------- | Basic earnings per share | (0.02) | 0.03 | (0.03) | 0.15 | -------------------------------------------------------------------------------- | Diluted earnings per | (0.02) | 0.03 | (0.03) | 0.15 | | share | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Currency translation | 17 | (88) | 33 | (20) | | differences | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | TOTAL COMPREHENSIVE | (79) | 59 | (101) | 647 | | INCOME | | | | | -------------------------------------------------------------------------------- Einar Pähkel CFO +372 447 8331 einar.pahkel@viisnurk.ee
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