Management report
Field of activity
The enterprise was founded in 1900, but the actual name it has got in 1970. AS “Latvijas balzams” is a leading producer of alcoholic beverages in the Baltic States that produces more than 100 different kinds of alcoholic drinks. AS “Latvijas balzams” major shareholder is “SPI Regional Business Unit BV” which owns 89.53% of the company’s equity capital.
The activity of enterprise in 9 month of 2011
AS “Latvijas balzams” is the biggest producer of alcoholic beverages in Latvia, as well as one of the largest taxpayers in Latvia. During 9 month of 2011 AS “Latvijas balzams” paid 27,2 millions lats to the state budget, including excise tax amounting to 19,4 millions lats.
The unaudited turnover of the company in the 9 month of year 2011 was 46,7 million lats, which is by 11% less than in the 9 month of 2010. Turnover in the domestic market has fallen by 5%, in the export market has fallen by 2%, while export orders of "S.P.I. Group" has decreased by 20%. During the 9 month of year 2011, sales to the EU countries decreased by 7%, sales to Estonia increased by 2%, sales to Lithuania decreased by 3%. Decrease of sales is related to the increase of excise tax, illegal alcohol trade and decrease of economical activity in the main markets. During the 9 month of year 2011 the top focus sales markets were Baltic States, Russia, Norway, Poland, Ukraine and Netherlands. Meanwhile new export markets were actively acquired, for example, Bulgaria, China, Australia, USA and Kazakhstan.
The Company has paid great attention to production cost control and improvement of productivity, as a result reaching 2,14 million lats unaudited profit, that is 1% less than in the 9 month of 2010, despite the 11% decrease in turnover.
Future perspectives of activity
Despite the critical economic situation and low purchasing power in Latvia, the objectives of the Company is to maintain the existing market share and to continue new market acquirement by improving product portfolio. In 2011 the priorities of AS Latvijas balzams will be further control of production and logistics costs, optimization and improvement of production efficiency, rise of Company's competitiveness.
AS Latvijas balzams will continue to support nature friendly solutions, persistently improving activities that decrease Company's negative impact on the environment, establishing high requirements for itself and Company's partners.
AS Latvijas balzams
Per procura Ronalds Žarinovs
Riga, November 29, 2011
