Announcement View
Company AS Ekspress Grupp
Type Company Release
Category Management interim statement or quaterly financial report
Publicize date 30 Apr 2024 08:00:00 +0300
Attachments
EG_I_kvartal_2024_ENG.pdf
EG_I_kvartal_2024_EST.pdf
Languages
Kell English
Currency
Title AS Ekspress Grupp: Consolidated unaudited interim report for Q1 of 2024
Content
The  revenue of  AS Ekspress  Grupp for  the 1(st) quarter  of 2024 totalled EUR
16.2 million,  EBITDA totalled  EUR 0.4 million  and net  loss totalled EUR 1.2
million.  Digital revenue  increased by  2% as compared  to the same period last
year  and made  up 84% of  the Group's  total revenue.  The digital subscription
revenue  of the Group's  media companies and  the number of  people with digital
subscriptions  grew strongly year-over-year in  all three countries. The revenue
from  ticket sales  platforms and  the advertising  revenue from outdoor screens
have also increased strongly.

As  expected, the Group's results for  the 1(st) quarter were primarily impacted
by  seasonality as a result of which the company's profitability is always under
the  greatest pressure in  the 1(st) quarter each  year. On the  other hand, the
advertising  revenue in the 1(st) quarter this year was impacted by lower demand
caused  by the weak economic environment,  which was exacerbated by the election
cycles taking place in later quarters.

The  revenue of Ekspress Grupp for  the 1(st) quarter totalled EUR 16.2 million,
decreasing by 3% as compared to the same period last year. The reasons for lower
revenue  also  include  last  year's  higher  base  of comparison: parliamentary
elections were held both in Lithuania and Estonia in the 1(st) quarter of 2023,
which  additionally  boosted  advertising  revenue.  This year, elections in the
Baltic  States will be held in the second  and third quarter and for this reason
the  impact on revenue is to be expected later. At the same time, the decline in
the  advertising  market  due  to  the  general weak economic environment in the
Baltic States also plays a role in the annual comparison, the greatest impact of
which  can be felt in Estonia. In the 1(st) quarter's results, this also impacts
EBITDA.  The decrease in advertising revenue is also compensated by the increase
in  the volume of ticket sales platforms  and digital outdoor screens as well as
the increase in digital subscription revenue.

In  a  year-over-year  comparison,  the  Group  received  nearly  50 000 digital
subscriptions  in the Baltic States, i.e. 31% more than at the end of March last
year.  At  the  end  of  March 2024, digital subscriptions totalled 211 000. The
Group's  digital  revenue  is  increasingly  based  on  the revenue from digital
subscriptions  and it  makes up  an increasingly  larger recurring  revenue base
without the need for additional sales activity (and costs). We have enhanced the
quality  and volume  of the  content offered  by the  Group's media companies in
order  to be the leader in the  digital subscription field in all Baltic States.
The  Group is gradually moving towards  its financial strategic goals and wishes
to offer paid digital content to at least 340 000 subscribers by the year 2026.

In  the  1(st) quarter,  the  earnings  before  interest,  tax, depreciation and
amortisation  (EBITDA) of Ekspress Grupp totalled EUR 0.4 million, decreasing by
-62%.  Although the quarterly  profitability fell against  the background of the
advertising market cooldown and the increasing pressure of input costs caused by
the  overall economic  environment, the  Group's earnings  before interest, tax,
depreciation  and amortisation of the trailing  12-month period increased by EUR
0.1 million.

The net loss for the 1(st) quarter of 2024 amounted to EUR 1.2 million, which is
67% higher  as compared to last year. Higher  net loss is also primarily related
to  higher interest rates due to the increase in Euribor and higher depreciation
expenses arising from the Group's investments.

The Group's liquidity continues to be strong. The Management Board considers it
important to maintain liquidity reserves both for the use of potential new
acquisitions and for situations related to further cooling of the economy. As of
31 March 2024, the Group's available cash totalled EUR 8.8 million (31.03.2023:
EUR 7.3 million). The regular general meeting of shareholders to be held on 3
May 2024 will vote on the profit allocation proposal, according to which regular
dividends of 6 euro cents per share will be paid to the shareholders in the
total amount of EUR 1.8 million.


Q1 RESULTS


REVENUE

In the 1(st) quarter of 2024, the consolidated revenue totalled EUR 16.2 million
(Q1  2023: EUR 16.8 million). The revenue for the 1(st) quarter decreased by -3%
year-over-year.  The  Group's  results  for  the  1(st) quarter  were  primarily
impacted  by seasonality  as a  result of  which the  company's profitability is
always  under the greatest pressure in the 1(st )quarter each year. On the other
hand,  the advertising  revenue in  the 1(st) quarter  this year was impacted by
lower  demand caused by the weak  economic environment, which was exacerbated by
the  election  cycles  taking  place  in  later  quarters. The reasons for lower
revenue  also  include  last  year's  higher  base  of comparison: parliamentary
elections were held both in Lithuania and Estonia in the 1(st) quarter of 2023,
which  additionally  boosted  advertising  revenue.  This year, elections in the
Baltic  States will be held in the second  and third quarter and for this reason
the  impact on revenue is to be expected later. At the same time, the decline in
the  advertising  market  due  to  the  general weak economic environment in the
Baltic States also plays a role in the annual comparison, the greatest impact of
which  can be felt in Estonia. In the 1(st) quarter's results, this also impacts
EBITDA.  The decrease in advertising revenue is also compensated by the increase
in  the volume of ticket sales platforms  and digital outdoor screens as well as
the  increase in digital subscription revenue.  The share of the Group's digital
revenue in total revenue was 84% at the end of the 1(st) quarter of 2024 (at the
end  of Q1 2023: 80% of total revenue). Digital revenue for the 1(st) quarter of
2024 increased by 2% as compared to the same period last year.

PROFITABILITY

In  the 1(st) quarter of 2024, the  consolidated EBITDA totalled EUR 0.4 million
(Q1  2023: EUR 1.2 million). EBITDA  decreased by -62%  as compared to last year
and  the EBITDA  margin was  3% (Q1 2023: 7%). The  decrease in profitability is
impacted  by  the  decline  in  the  advertising  market due to the general weak
economic  environment in the Baltic States  and the increasing pressure of input
costs.

The  consolidated  net  loss  for  the  1(st) quarter  of 2024 totalled EUR -1.2
million (Q1 2023: EUR -0.7 million). In addition to expected seasonality, higher
net  loss is also primarily related to higher interest rates due to the increase
in  Euribor  rates  and  higher  depreciation  expenses arising from the Group's
investments.

EXPENSES

In the 1(st) quarter of 2024, the cost of goods sold, marketing, and general and
administrative  costs  totalled  EUR  17.3 million  (Q1 2023: EUR 16.8 million).
Operating  expenses increased by  EUR 0.5 million (+3%)  as compared to the same
period last year. Labour costs increased the most, by EUR 0.4 million (+5%).

CASH POSITION

At  the end of the reporting period, the  Group had available cash in the amount
of  EUR 8.8 million and equity  in the amount of  EUR 55.7 million (53% of total
assets).  The comparable data  as of 31 March  2023 were EUR 7.3 million and EUR
53.7 million  (53%  of  total  assets),  respectively.  As of 31 March 2024, the
Group's net debt was EUR 10.8 million (31 March 2023: EUR 13.6 million).

In  the 1(st) quarter of 2024, the Group's  cash flows from operating activities
totalled EUR 0.9 million (Q1 2023: EUR 2.4 million).

In  the 1(st) quarter of 2024, the Group's  cash flows from investing activities
totalled EUR -0.9 million (Q1 2023: EUR -0.7 million), of which EUR -1.1 million
was  related to development and acquisition of property, plant and equipment and
intangible assets, indicating higher investments in products and technologies.

In  the 1(st) quarter of 2024, the Group's  cash flows from financing activities
totalled  EUR -0.8 million (Q1 2023: EUR -1.9 million, of which EUR -1.0 million
was  the  share  buy-back).  Financing  activities  also include a net change in
borrowings in the amount of EUR -0.6 million and lease liabilities in the amount
of EUR -0.6 million.

DIVIDENDS

In March 2024, the Group's Management Board proposed to pay 6 euro cents per
share as dividends to shareholders from the net profit of the financial year
2023 in the total amount of EUR 1.8 million. The profit allocation proposal will
be made at the ordinary general meeting of shareholders on 3 May 2024.


SEGMENT OVERVIEW


Key financial indicators for segments

 (EUR thousand)                         Sales

                                        Q1 2024 Q1 2023 Change % 12 months 2023

 Media segment                          16 205  16 867  -4%      73 365

  advertising revenue                   8 800   9 681   -9%      42 074

 subscriptions (incl. single-copy
 sales)                                 5 043   4 560   11%      19 016

 marketplaces                           910     636     43%      3 434

 outdoor screens                        783     688     14%      3 530

 sale of other goods and services       669     1 302   -49%     5 311

 Corporate functions                    170     1 226   -86%     2 642

 Inter-segment eliminations             (155)   (1 339)          (2 920)

 TOTAL GROUP                            16 220  16 755  -3%      73 086

  incl. revenue from all digital
 channels                               13 668  13 384  2%       60 460

  % of revenue from all digital
 channels                               84%     80%              83%


  (EUR thousand)               EBITDA

                               Q1 2024   Q1 2023   Change %   12 months 2023

  Media segment                914       1 478     -38%       11 695

  Corporate functions          (477)     (321)     -48%       (1 477)

  Inter-segment eliminations   4         (3)                  (1)

  TOTAL GROUP                  442       1 153     -62%       10 217


  EBITDA margin   Q1 2024   Q1 2023   12 months 2023

  Media segment   6%        9%        16%

  TOTAL GROUP     3%        7%        14%


Consolidated statement of financial position (unaudited)

  (EUR thousand)                      31.03.2024   31.12.2023
--------------------------------------------------------------
  ASSETS
--------------------------------------------------------------
  Current assets
--------------------------------------------------------------
  Cash and cash equivalents                8 761        9 606
--------------------------------------------------------------
  Trade and other receivables             12 772       13 143
--------------------------------------------------------------
  Corporate income tax prepayment             93           24
--------------------------------------------------------------
  Inventories                                332          321
--------------------------------------------------------------
  Total current assets                    21 958       23 094
--------------------------------------------------------------
  Non-current assets
--------------------------------------------------------------
  Other receivables and investments        1 624        1 628
--------------------------------------------------------------
  Deferred tax asset                         132          130
--------------------------------------------------------------
  Investments in joint ventures              890          851
--------------------------------------------------------------
  Investments in associates                2 175        2 197
--------------------------------------------------------------
  Property, plant and equipment           10 440       10 384
--------------------------------------------------------------
  Intangible assets                       67 749       67 482
--------------------------------------------------------------
  Total non-current assets                83 011       82 672
--------------------------------------------------------------
  TOTAL ASSETS                           104 968      105 766
--------------------------------------------------------------
  LIABILITIES
--------------------------------------------------------------
  Current liabilities
--------------------------------------------------------------
  Borrowings                               3 766        4 353
--------------------------------------------------------------
  Trade and other payables                23 648       23 046
--------------------------------------------------------------
  Corporate income tax payable                38           39
--------------------------------------------------------------
  Total current liabilities               27 453       27 438
--------------------------------------------------------------
  Non-current liabilities
--------------------------------------------------------------
  Long-term borrowings                    21 829       21 765
--------------------------------------------------------------
  Other long-term liabilities                 22           22
--------------------------------------------------------------
  Total non-current liabilities           21 851       21 787
--------------------------------------------------------------
  TOTAL LIABILITIES                       49 304       49 225
--------------------------------------------------------------
  EQUITY
--------------------------------------------------------------
  Share capital                           18 478       18 478
--------------------------------------------------------------
  Share premium                           14 277       14 277
--------------------------------------------------------------
  Treasury shares                          (147)      (1 057)
--------------------------------------------------------------
  Reserves                                 2 242        2 285
--------------------------------------------------------------
  Retained earnings                       20 814       22 558
--------------------------------------------------------------
  TOTAL EQUITY                            55 664       56 541
--------------------------------------------------------------
  TOTAL LIABILITIES AND EQUITY           104 968      105 766
--------------------------------------------------------------


Consolidated statement of comprehensive income (unaudited)

 (EUR thousand)                                Q1 2024   Q1 2023 12 months 2023
-------------------------------------------------------------------------------
 Sales                                          16 220    16 755         73 086
-------------------------------------------------------------------------------
 Cost of sales                                (13 569)  (13 641)       (55 046)
-------------------------------------------------------------------------------
 Gross profit                                    2 652     3 114         18 040
-------------------------------------------------------------------------------
 Other income                                      156        70            581
-------------------------------------------------------------------------------
 Marketing expenses                              (858)     (571)        (2 803)
-------------------------------------------------------------------------------
 Administrative expenses                       (2 834)   (2 551)        (9 582)
-------------------------------------------------------------------------------
 Other expenses                                   (21)      (20)          (737)
-------------------------------------------------------------------------------
 Operating profit /(loss)                        (906)        42          5 499
-------------------------------------------------------------------------------
 Interest income                                    36         9             60
-------------------------------------------------------------------------------
 Interest expenses                               (457)     (330)        (1 499)
-------------------------------------------------------------------------------
 Other finance income/(costs)                     (11)      (11)           (55)
-------------------------------------------------------------------------------
 Net finance cost                                (432)     (331)        (1 494)
-------------------------------------------------------------------------------
 Profit/(loss) on shares of joint ventures          39     (553)          (661)
-------------------------------------------------------------------------------
 Profit/(loss) on shares of associates              80       128            239
-------------------------------------------------------------------------------
 Profit /(loss) before income tax              (1 218)     (715)          3 583
-------------------------------------------------------------------------------
 Income tax expense                                (4)      (16)          (232)
-------------------------------------------------------------------------------
 Net profit /(loss) for the reporting period   (1 221)     (730)          3 351
-------------------------------------------------------------------------------
 Net profit /(loss) for the reporting period
 attributable to
-------------------------------------------------------------------------------
 Equity holders of the parent company          (1 221)     (733)          3 349
-------------------------------------------------------------------------------
 Minority interest                                   0         3              2
-------------------------------------------------------------------------------
 Total comprehensive income /(loss)            (1 221)     (730)          3 351
-------------------------------------------------------------------------------
 Comprehensive income /(loss) for the reporting period attributable to
-------------------------------------------------------------------------------
 Equity holders of the parent company          (1 221)     (733)          3 349
-------------------------------------------------------------------------------
 Minority interest                                   0         3              2
-------------------------------------------------------------------------------
 Earnings per share (euro)
-------------------------------------------------------------------------------
 Basic earnings per share                     (0.0404)  (0.0243)         0.1113
-------------------------------------------------------------------------------
 Diluted earnings per share                   (0.0404)  (0.0235)         0.1081
-------------------------------------------------------------------------------


Consolidated cash flow statement (unaudited)

 (EUR thousand)                                  Q1 2024 Q1 2023 12 months 2023
-------------------------------------------------------------------------------
 Cash flows from operating activities
-------------------------------------------------------------------------------
 Operating profit /(loss) for the reporting year   (906)      42          5 499
-------------------------------------------------------------------------------
 Adjustments for (non-cash):
-------------------------------------------------------------------------------
 Depreciation and amortisation                     1 353   1 112          4 719
-------------------------------------------------------------------------------
 (Gain)/loss on sale, write-down and impairment
 of property, plant and equipment                      4     (2)            387
-------------------------------------------------------------------------------
 Change in value of share option                       0       8             26
-------------------------------------------------------------------------------
 Cash flows from operating activities:
-------------------------------------------------------------------------------
 Trade and other receivables                         367   (441)        (1 539)
-------------------------------------------------------------------------------
 Inventories                                        (11)       7           (35)
-------------------------------------------------------------------------------
 Trade and other payables                            469   1 960          4 921
-------------------------------------------------------------------------------
 Income tax paid                                    (73)    (44)          (263)
-------------------------------------------------------------------------------
 Interest paid                                     (336)   (262)        (1 476)
-------------------------------------------------------------------------------
 Net cash generated from operating activities        867   2 380         12 239
-------------------------------------------------------------------------------
 Cash flows from investing activities
-------------------------------------------------------------------------------
 Acquisition of subsidiaries/ associates (less
 cash acquired) and other investments /
 cash paid-in equity-accounted investees               0   (387)        (1 469)
-------------------------------------------------------------------------------
 Receipts of other investments                         0       0             13
-------------------------------------------------------------------------------
 Interest received                                    36       0             28
-------------------------------------------------------------------------------
 Purchase of property, plant and equipment and
 intangible assets                               (1 082)   (495)        (3 391)
-------------------------------------------------------------------------------
 Proceeds from sale of property, plant and
 equipment and intangible assets                       3       2            275
-------------------------------------------------------------------------------
 Loan repayments received                              4       0              8
-------------------------------------------------------------------------------
 Dividends received                                  102     199            674
-------------------------------------------------------------------------------
 Net cash used in investing activities             (937)   (681)        (3 862)
-------------------------------------------------------------------------------
 Cash flows from financing activities
-------------------------------------------------------------------------------
 Dividends paid                                        0       0        (1 488)
-------------------------------------------------------------------------------
 Payment of lease liabilities                      (557)   (456)        (2 004)
-------------------------------------------------------------------------------
 Repayments of bank loans                          (561)   (420)        (1 727)
-------------------------------------------------------------------------------
 Proceeds from sale of treasury shares               343       0              0
-------------------------------------------------------------------------------
 Purchases of treasury shares                          0 (1 000)        (1 000)
-------------------------------------------------------------------------------
 Net cash used in financing activities             (775) (1 876)        (6 219)
-------------------------------------------------------------------------------
 NET (DECREASE)/INCREASE IN CASH AND CASH
 EQUIVALENTS                                       (845)   (176)          2 158
-------------------------------------------------------------------------------
 Cash and cash equivalents at the beginning of
 the period                                        9 606   7 448          7 448
-------------------------------------------------------------------------------
 Cash and cash equivalents at the end of the
 period                                            8 761   7 272          9 606
-------------------------------------------------------------------------------


Argo Rannamets
CFO
AS Ekspress Grupp
Email: argo.rannamets@egrupp.ee (mailto:argo.rannamets@egrupp.ee)


AS Ekspress Grupp is the leading Baltic media group whose key activities include
web media content production, and publishing of newspapers, magazines and books.
The Group also operates an electronic ticket sales platform and ticket sales
offices and offers outdoor screen service in Estonia and Latvia. Ekspress Grupp
launched its operations in 1989 and employs almost 1,100 people